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Software Giants Help Channel Serve Lucrative SMB Market
By Hailey Lynne McKeefry , Ziff Davis Internet

Small and midsize businesses spend little on security initiatives, but resellers willing to educate their customers can make that percentage grow, according to a recent survey by Forrester Research.

The bad news is that the high spenders—about 28 percent of the total number of North American SMBs surveyed—spend between 2 percent and 4 percent of their budgets on IT security.


Another 28 percent spent less than 2 percent, according to the July 2005 report from Forrester, a market research firm based in Cambridge, Mass.

The survey also cited that about 12 percent of decision makers for the SMBs do not know how much their companies spent on security.

"Small businesses tend not to see the broader economics of security," said Michael Roy, president of Blue World Information Technology, a technology reseller based in Vancouver, British Columbia. "Managing security is largely an operations issue, and, if it is done right, customers can save a lot of money."

However, for resellers willing to take the time to court and educate SMB customers, there's a huge potential upside.

PointerClick here to read about the uneasy partnership between technology and security.

"If you have the right business model, there is a huge opportunity out there with SMBs," said Kevin Hooper, director for worldwide SMB sales and business development at IBM in Somers, N.Y.

According to Forrester, SMBs will account for 48 percent of all IT spending in the United States, up from 44 percent in 2004.

Meanwhile, a recent report from the Yankee Group, a market research firm based in Boston, found that SMBs are similarly underspending on e-commerce projects.

The Channel Insider Special Report: Making Security a Business

"The slow adoption rate of e-commerce, online marketing tools and hosting services is leaving a key revenue channel underutilized by SMBs," said Sanjeev Aggarwal, Yankee Group senior analyst.

The economics of e-commerce for SMBs and fear of new forms of business are the main reasons, he said.

"One of the biggest challenges in getting small and midsize businesses on board with e-commerce is that it goes altogether deeper than putting up a Web site and developing the ability to sell," said Robert Green, president of Crossroads Business Solutions, a VAR based in Indianapolis, Ind.

Next Page: Serving the SMB market.

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