Channel Watch

Small Business Specialists Find Hopeful Signs

Microsoft surveyed more than 600 Small Business Specialists to see where partners were finding glimmers of light at the end of this dark economic tunnel.

• By Scott Bekker
• May 01, 2009

The resulting survey, called the "2009 Microsoft SMB Insight Report" and published in late March, turned up two interesting pieces of data.

One was that partners are shifting more heavily toward pushing virtualization solutions than they have in the past. One question asked: "Which of the following do you see as the best cost-saving technology?" Virtualization and the related option of IT consolidation tied for first out of more than a dozen options with 25 percent each. Software as a Service (SaaS) was the next closest selection, with 10 percent of respondents saying that it was the best cost-saving option.

A similar question with the same answer options read: "What do you see as the best technical investment for business growth given the current economic situation?" Virtualization came in first at 21 percent and IT consolidation was a close second at 20 percent. The next closest answer was Customer Relationship Management at 13 percent.

Ross Brown, vice president of solution and ISV partners in the Microsoft Worldwide Partner Group, finds the virtualization answer striking. "For a while, virtualization has really been an upper midmarket and enterprise play," Brown says. "SMB-focused partners are latching onto virtualization as a technology for saving their customers money."

If you're persuaded by Microsoft's findings on the resonance of virtualization with your peers and you want to start selling the technology, tread carefully with the word "virtualization" itself. It's not a magic keyword that unlocks sales among the generally non-tech savvy SMB customer base, cautions Dave Sobel, CEO of Evolve Technologies, a Gold Certified Partner in Fairfax, Va., and a major proponent of selling virtualization to small businesses.

"We don't run around saying virtualize your servers," Sobel says. "Our messaging has always been around cost savings. We'll say, 'We're good at consolidating your servers to save you money.' We've actually been doing two virtualization projects in April, where the word virtualization was used maybe once, or maybe twice."

The other interesting data point in the new survey is that while Small Business Specialists report very little traction to date on SaaS among their base of small business customers, they're expecting usage of SaaS/hosted applications among that customer segment to grow quickly by the end of 2009.

The way this question is structured in Microsoft's survey, it's possible to read way too much into the results. How many businesses can really answer accurately in the context of a survey whether the percentage of their clients using SaaS/hosted applications is 1 percent to 5 percent, 6 percent to 10 percent, 11 percent to 15 percent and so on? Nonetheless, adding up averages for all the categories reveals that roughly 10 percent of respondents' customers were using SaaS or hosted applications at the time of the survey. Doing the same for the percentage expected to be using SaaS/hosted applications at the end of 2009, it's in the ballpark of 17 percent.

Overall, the data in the survey indicates that Small Business Specialists are seeing opportunity right now in virtualization, IT consolidation, SaaS and Customer Relationship Management.