According to US Census bureau, there are more than 5 Million small businesses in the US with less than 20 employees and spanning all industry verticals including, services, manufacturing, non-profits, etc.
With technology changing at a rapid pace and resource constraints at these organizations, need for “pay per use” technology solutions has been gaining momentum. In a recent Parks Associates survey (2011), 50% or more of the respondents indicated that they would prefer hosted solutions in one or more of;
- Online security
- Back-up and recovery
- Site hosting, design and management
- Email, hosted exchange and other
The market need is for a portfolio that can not only be branded and managed, but also is affordable to the target small business market. Verizon, AT&T, Comcast and others have several bundles/pricing, but with a large set of options available, small businesses are finding it difficult to make the right choices – although, that may only explain part of the hesitation and low adoption currently seen.
Based on my recent engagements, I believe service providers should;
- Understand the needs of the target market segments, since one size probably will "not" fit all
- Build a simple portfolio of products that does not require an expert to be evaluated
- Minimize the number of integration points from various solution providers
- Include business class customer support as a key component of the bundle
The challenge for the service providers is to understand that there are few small businesses that will buy or, can afford the bundle of services on offer, at least in the current environment. However, pricing a-la-carte for the client may not be ROI positive, given the nature of diversified services as outlined above. It will be interesting to see the business models evolve over the next 1-2 years, where an “a-la-carte bundle” is not encumbered by licensing and integration challenges, as well as, is cost-friendly to service provider and price-friendly to customers at the same time.
