Gates terrifies SMEs

It seems SMEs are having sleepless nights these days. It's not the economy that's bringing on the Horlicks and Nytol - it's Bill Gates. Small businesses are apparently worried about their over-fondness for the big man's software.

Around half of small and medium-sized businesses with fewer than 500 employees are plagued by the fear that Microsoft's products are their only viable software option, and 72 per cent are already looking into the other alternatives, says a report from the Yankee Group.

It's an issue that troubles everyone, from tiny family businesses to larger industrial concerns, believes Michael Lauricella, from the analyst group's small and medium business strategies advisory service. "While we expected some apprehension about over-dependence on Microsoft, we were surprised at the extent of this concern throughout the... market. Whether a five-person pizza shop or a 400-employee manufacturing facility, [SMEs] reported similar anxiety about Microsoft," he said in a statement.

The analysts expect that the main benefactors of small business' software insomnia will be other major players, such as SAP, Oracle, Siebel and IBM.

When it comes to the operating system itself, however, SMEs are generally looking in one direction - towards Redmond. Peter Scargill, national IT chairman for the Federation of Small Businesses, told silicon.com that in his experience, the vast majority of small businesses use Microsoft operating systems.

He added that while the in-house skills of bigger companies might include Linux expertise, the majority of business minnows "use the operating system that comes with the deal - and that's mostly Microsoft. They're far more concerned about security and compatibility - and for the end user right now, the options are very limited."

Open source isn't really an option either, it seems. "Despite the hype, Linux and Mac have very small user bases" said Scargill. "Microsoft's success story may well be flawed but it is there for all to see in the quantity of compatible packages out there."

There's no denying that Microsoft is eyeing up small business as a potential cash cow. Speaking at the Microsoft Developers Conference on Monday, Gates revealed that: "Small business should be able to use [Microsoft software] as well as big business and overcome difficulties of scale." Gates and chums might want to buck their ideas up, with an estimated $10bn on the table by 2010 for the company if it secures the trust and, more importantly, the budgets of the SME market.