Leader: SMEs no Holy Grail

Over the past couple of years, there's been plenty of talk about the promise of the small to mid-sized enterprise (SME) market, particularly from IT vendors who feel they've just about fulfilled the need for their wares among larger organisations and are looking for somewhere to grow.

But SMEs aren't the sales hotbed they're often made out to be.

This isn't to say these businesses - we're talking about the 20 to 499-employee range - aren't becoming more tech-savvy. They are. A good percentage of even the smallest companies, with less than 10 people, have an IT department and organisations with up to 250 staff generally employ a number of IT professionals, according to recent research from the Institute of Directors (IoD) and Dell.

So what's the problem?

Smaller organisations may use IT but that doesn't mean they invest in it very often - and when they do invest, the value of their orders is as low as their headcount.

In fact, more than half of SMEs are unlikely to invest in IT over the next 12 months, according to a research report released yesterday from IDC.

Another hurdle for vendors: they may have to change their sales pitch because many SMEs don't give IT personnel buying power - those decisions are more often made by the less-technical MDs or FDs, says the IoD research.

It all comes down to the fact that SMEs have different needs and priorities than larger organisations. When one bad IT deal could sink a company, for instance, the buyers are likely to be more demanding about ROI than their larger siblings and more willing to walk away if they don't get what they want.

Yes, there are opportunities here. When SMEs do open up their chequebooks, they spend on web hosting and security. If vendors in these areas have zero SME customers and would be happy to get just a few, that makes sense.

But to win them over, you can't just treat them like their big brothers.