Home | TrendTracker | PowerBlog Reviews | The Experts | Newsletter
SMALL BUSINESS TRENDS brings you daily updates on trends that influence the global small business market.
Anita Campbell, Editor
Past life: CEO, corporate executive, tech entrepreneur, retailer, general counsel, marketer, HR ... (more)
email me
free business magazines
Trade publications FREE to qualified professionals. No hidden offers and no purchase necessary.
On Wall Street
The Deal
Computing Canada
Employee Benefit
Oracle Magazine
100+ additional titles. Click to browse.
Previous Small Business Trends articles can be found at the links below:
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
Or, use the search box below to find a
specific post:

Sign up for our FREE Small Business Trends newsletter. (View Current)

We publish regularly and promise we won't share your email address with anyone. (Privacy Policy)
* Don’t have time to read several dozen blogs a day? Pick two or three. Your brain will thank you for it.

Small Business Trends Radio
Tuesdays, 1:00 PM Eastern U.S. time
on Voice America network
Click to listen

November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Thursday, October 14, 2004
Segmenting "Small Business" for IT Needs
With so many small businesses worldwide, it's no wonder that large IT providers are going after the small business market.

CRN magazine has an interesting piece about Cisco's efforts to move down market and sell to small businesses. Cisco will be competing -- at least in part -- against lower priced vendors including its own Linksys division.

I think Cisco has taken a very smart approach to this market (although I may be the only one other than Cisco who thinks so -- the article itself sounded doubtful). Cisco has segmented the small business market according to buying behaviors -- instead of the more typical employee size and/or revenue size. CRN magazine (subscribe free) says:
Cisco is targeting the SMB segments that are looking for high value and high feature sets, he said. Cisco breaks the market into four tiers: enterprise adopters, or small businesses that behave like enterprises; cutting-edge adopters that value technology and use it as a strategic advantage; value-price adopters that use technology but are driven by price; and "laggers," companies that adopt technology late in the cycle because they have to remain competitive.

According to research from AMI Partners, the 470,000 enterprise-type companies that comprise the first group account for about 45 percent of annual IT spending by SMBs; the 1.3 million companies in the second group, the cutting-edge adopters, represent about 31 percent of the money spent; the 1.8 million price-driven companies in the third group account for 16 percent of the market; and the 3.6 million companies in the latecomers group represent just 8 percent of the market.

Cisco's SMB offerings will be targeted at the first two groups, Mountford said, while Linksys is aimed at the third.

"We can talk about a 20-seat company, and we have, but what really matters is what tier that company falls into," Mountford said. "A 20-person financial services firm will require more sophisticated technology than a car wash with 200 people."
Meanwhile, as Cisco approaches the SMB market from the high end, its Linksys division is making headway moving up from the low end. Linksys seems to be proving a philosophy I've long held: that it is easier to take a low-end tech product and move up market, than to adapt a full-featured premium-priced product to move down market.

For a crisp explanation of this behavior-based segmentation visit the AMI Partners website. [UPDATE: link now fixed]
More news... more trends... more insight...

Home | Privacy | Terms | SmallBizTrends
(c) Copyright 2003 - 2005, Small Business Trends LLC. All rights reserved.