SMB Partners Hedge Their Bets

Attendees at SMB Nation 2009 assert their independence from Microsoft amid slowly improving market conditions.

Are Microsoft and partners who focus on small and midsize businesses (SMBs) growing apart?

Perhaps, based on the seventh annual SMB Nation Fall Conference, held Oct. 2-4. The popular show, which targets the mostly smaller VARs, solution providers and integrators that serve SMBs, has been literally and figuratively distancing itself from Microsoft for the past two years. Once staged annually at Microsoft headquarters in Redmond, the conference relocated to a convention hall in downtown Seattle last year. This year it was held at the Riviera Conference Center in Las Vegas.

According to Harry Brelsford, CEO of SMB Nation Inc., the Bainbridge Island, Wash.-based company that hosts SMB Nation, the change was based largely on feedback from prior attendees weary of Microsoft's dominating presence at the event. "They wanted to have a broader conversation," Brelsford says. And indeed, this year's list of conference sponsors includes two conspicuous newcomers: IBM Corp. and Google Inc. "They wouldn't have been here in the past," Brelsford notes.

Not that Microsoft's profile at the conference was anything less than prominent. The company focused particular attention on Windows 7, then just weeks away from release. "It's the best thing Microsoft has done in a long time," says Dave Waldrop, Microsoft's U.S. director of strategic alliances and local engagement, adding that partner interest in the new operating system has been running high. That certainly squares with the buzz from conference goers, who attended Windows 7-related sessions in large numbers. "These guys are real excited," Brelsford observes. "There's a hunger for knowledge."

Robust sales of Windows 7 would be a welcome boost for the SMB channel. 2009 has been a challenging year for many at the conference, though some see business beginning to rebound.

"It's been picking up," says Selene Bainum, chief architect at RiteTech LLC. The Herndon, Va.-based solution provider and Registered Member of the Microsoft Partner Network (MPN) is typical of many firms at SMB Nation that have spent the last year hustling up new revenue sources amid declining IT outlays. In RiteTech's case, that meant tapping into rising demand for Voice over IP (VoIP) solutions by marketing homemade management and analytics applications for users of Microsoft's Response Point VoIP phone platform. Though that system's future has been in question since the spring, when Microsoft laid off an unspecified number of product team members and canceled future release plans, RiteTech's solution has been gaining traction with customers.

However, one recently reliable income stream for SMB partners may be about to dry up. According to numerous conference presenters, managed services, in which partners remotely handle tasks such as desktop management and e-mail administration in exchange for a monthly fee, is headed for a collision with cloud computing. As more and more SMBs consume their applications, processing and storage over the Web, managed service providers (MSPs) may find themselves with fewer on-premises resources to support.

"We really see the channel being threatened," says Mike O'Brien, director of business development at Zenith Infotech Ltd., a managed services software maker and Registered Member of the MPN based in Warrendale, Pa. O'Brien was one of several speakers who urged conference goers to begin formulating a cloud strategy of their own immediately. "The smart solution providers are going to be the ones who take advantage of the cloud," says Bob Godgart, CEO of Autotask Corp., an East Greenbush, N.Y.-based Gold Certified partner that makes professional services-automation software for MSPs and other service providers.

However, Paul Leonhardt is among many SMB Nation attendees in no rush to the cloud. Leonhardt is president of G.A.C. Computer Services Inc., an integrator and Registered Member of the MPN in Tinley Park, Ill. He thinks of all the SMBs that rely on already overtaxed DSL lines for their Internet connectivity and wonders what would happen if they added mission-critical application traffic to the mix. "It's risky," Leonhardt says.

Still, Leonhardt and speakers like Godgart agree on one thing at least: Recession or no recession, there's opportunity ahead in the SMB space. As Microsoft's Waldrop put it, echoing many at SMB Nation: "There has never been a better time to sell to SMBs."

About the Author

Rich Freeman is a Seattle, Wash.-based freelance writer specializing in business and technology.