SMBs force vendor rethink

In order to tap into the potentially lucrative SMB segment, the IT industry’s key players will have to modify their business models and product lines.

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By  Matthew Southwell Published  January 28, 2004

The increasingly saturated enterprise market is forcing software vendors to pay more attention to the small-to-medium sized business (SMB) market. In order to tap into this potentially lucrative segment, Meta Group believes the industry’s key players will have to modify their business models and product lines. However, the vendors are not the only ones that need to change as the software landscape changes. Meta Group suggests that the SMBs will have to hone their negotiating skills if they are to cope with and get the best deals from vendors. For instance, the analyst house says SMBs must adapt their negotiating skills to include an understanding of flaws and thereby get the best deals from vendors that offer complete or partial software, services, and maintenance proposals. "It is important for SMB buyers to leverage the interest in their market and negotiate maintenance agreements based on 'as sold' prices, or contract deliverables in return for their business,” says Carl Lehmann, vice president with Meta Group's technology research services. With their newly found leverage, Lehmann believes SMBs could negotiate down to or below the 18% average, or they could add maintenance contract deliverables such as support and future releases to their agreements.

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