The hard work of writing a blog worth it when you get comments like yours! thanks.
I wish that more people will look at the market with a magnifying glass. We tend to take any market and generalize it because it works better on slides but not in the real world.

Gadi

This is the best dissection of the SMB market I’ve ever seen and my work involves working with CEOs of SMB companies (my definition is <$100mm revenue) stop throwing money down a marketing black hole and generate new business fast. But you’ve made me rethink – and perhaps resegment – my own efforts in this arena!!

You are 1000% right about the Fortune 500 mindset of lumping 55 million SMB’s together in one segment – that’s nuts.

AND – you’re totally right again about SMB vs. the various levels of micro-business. The soloists, families, Italian families, and so on. Huge differences in mindset, buying habits, and even the goals, wants, needs, and emotional triggers of the decision-makers.

Thank you for this terrific piece.

– David

Thank you,
Brian Williams

I do disagree, in part, with one of your statements. You wrote “The problem is that there is absolutely nothing in common between a company with 12 employees and a company with 300 employees.”

Perhaps if we restrict ourselves to a discussion about buying habits and the scale of IT needs, that statement would be correct. However, commonalities often transcend buying habits and scale. HEre are two examples from one of my recent reports about small office data protection – attorneys and healthcare professionals:

I wrote, “In 2002, The Census Bureau counted over 488,000 ambulatory healthcare service establishments in the US, employing nearly 5 million people. The 50 largest firms were spread across an incredible 10640 locations employing little more than 400,000 people. The American Bar Association counted more than 1.1 million attorneys in 2006 employed by fewer than 50,000 firms. And, according to American Lawyer Media, nearly 90% of those firms employed fewer than ten attorneys. Only about 1,000 law firms consist of 40 attorneys or more.”

Clearly there is an enormous number of smaller firms in both verticals, and within each vertical – and this is especially true for heavily regulated industries – companies share a bond of certain obligations to their customers, communities and governments. A 10 attorney law firm and a 12 physician healthcare facility should [and oftentimes must] adhere to the same ethics, policies and guidelines as law firms and hospitals 20x their size. The difference lies in how they do so.

Scale aside, many enterprise and SMB products and services share the same underlying industry-specific requirements.

In any case, I found your segmentation interesting. It is definitely food for thought. Thank you for sharing.

As Stefan Schaffer says, you have taken an intersting stab at breaking down the S companies into five separate categories. Apart from needing a companion definition of M companies, I think it’s important to acknowledge another group of organizations within the bastard “SMB” definition: These are the divisions, subsidiaries, regional offices, distribution centers, and departments of larger organizations that often think and act like “SMB”s with respect to their IT requirements and even their purchase decisions and implementation needs.

Congratulations on your new blog!

Best regards,

Philip