Understanding the new age Indian SMB

Jagdish Mahapatra, Vice-President Commercial (West), Cisco India & SAARC

Small and medium-sized businesses in India today have unprecedented access to new markets, suppliers, and customers; it's truly a global marketplace today. They are constantly looking at shaping industry conditions and understanding total/ holistic solutions that their customers seek in order to help them pursue a quantum leap in value to dominate the market.

According to an AMI Partners report, there are more than 7.6 million SMBs in India and it is these companies that are taking the country's economic prowess to new highs. A report by FICCI and E&Y has thrown up an astonishing statistic which shows that for over half of the 46 deals (where Indian companies acquired US companies) in 2006-07, the acquisitions were made by the SMB sector. Hence, it is easy to see how increased competition and expansion have driven Indian SMBs to reach out for IT and the Internet as a basic infrastructural requirement for optimizing efficient operations/ businesses.

Until some time ago it was not uncommon to hear IT companies lament that SMBs did not want to invest in IT. Budgets were mainly being spent on applications and servers. Today that has radically changed and the SMB sector is in fact considered to be the growth driver for many IT companies. New-age SMBs are demanding more advanced technologies and access to the worldwide web. As these SMBs whet their appetite, the demand for video conferencing, IP telephony, Wi-fi and other technology will surge. As SMBs in India adopt technology and make it a part of their daily operations, it is important to bear in mind that their needs are often different from those of larger organizations.

SMBs have different needs
Many SMBs have limited in-house IT expertise and want to have some or all of their network management provided by a partner or provider. Some of them want the flexibility of servicing their own network with the assurance that fast, expert technical support is easily available when a problem arises. For most SMB customers, cost containment is crucial. To address these different needs, IT companies often develop individualized suites of services and products from ground-up that helps SMBs realize the full potential of their investments with the right types and levels of services for their businesses.

While SMBs benefit from solutions that are simple to install, use and maintain, they also benefit from solutions tailored specifically for their industry, from retail to real estate. That's where a value added re-seller or trusted technology partner that understands a specific industry and its unique business needs can help an SMB maximize the business value of its technology investments. For SMBs investing in one system that can handle many tasks, such as managing voice and data communications, wireless mobility, and integrated network security, would allow for lowering of capital expenditures. Moreover, consolidation eases operational expenses due to fewer network devices to install, configure, maintain, and update. Smaller companies are also less likely to have a dedicated IT staff to stay up to date with complex products or to train others. Additionally, SMB business leaders are usually most passionate about the core focus of their business, and don't have the time or inclination to learn about the inner workings of networked systems. That's why ease of installation, use, and management are absolutely essential for SMBs.

Security is a key concern as it is becomes a crucial element of the network. When networks grow in complexity especially managing numerous partners, suppliers, consultants, vendors and growing employees across various locations, SMBs need to focus on comprehensive security products and solutions. Irrespective of size, organizations face a need to protect their businesses against business interruption that takes place through theft of information, virus outbreak prevention, and application abuse with limited additional cost and manageability issues. According to the latest study by AMI Partners, Indian SMBs will spend $161 million on beefing up their IT security solutions this year which is 41 per cent higher over last years spends. SMBs should keep a few basic pointers in mind while planning their networks:

Network importance
The importance of the network to the customer's business can determine the level of service that the customer needs.

  • When the network is important but not critical, the business typically needs an entry-level service that helps keep operating costs low.
  • When the network is critical, businesses often place a high value on uptime and need a service that provides rapid problem resolution.
  • When the network (or a device within it) is mission-critical, businesses usually need parts replacement in 2 or 4 hours, as well as rapid problem resolution.

Need for SMB specific products and solutions
While new-age SMBs require cost-effective, reliable, secure IT networks that would enable them to achieve their business plans and goals, they also need products that are easy to adopt and maintain. Thus, leading technology vendors are increasingly developing products designed specifically with SMBs in mind. Hence, products integrating multiple functions into an easy-to-use solution are economically appealing to smaller businesses. Many SMBs today are opting for integrated security appliances that combine a host of functions such as anti-virus, firewall, VPN, content filtering, IDS/IPS in addition to providing network monitoring tools. In recent times these solutions have been seeing good adoption within the Indian SMB market as they offer value for money and ease of manageability.

Research tells us that collaboration and personalization will be important differentiators to the businesses of the future, and because SMBs are naturally more flexible, they are uniquely positioned to take advantage of these opportunities. Those that adapt to this changing environment will find new opportunities around every corner.


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