A handful of PC makers have indicated that their strategic play for 2009 as the world remains mired in a recession is to target SMBs. Yet market research shows SMBs are pulling back their IT spending even more than their larger counterparts are.
A handful of PC makers plan to renew their efforts to target small and midmarket businesses this year with products and programs designed to grow in that space.
But when they get there, those PC makers will find the market even more crowded with competitors trying to serve a group of customers that have been most severely hit by the credit crunch, sapping their access to capital for IT purchasing.
Hewlett-Packard, Lenovo and Toshiba have all announced intentions, in one way or another, to target the crowded small and midsize business market for IT hardware in 2009, a field that also includes other heavy hitters such as Dell and Acer.
HP recently told partners that it will extend deal registration to small business partners, and also that it has created an Elite certification for partners who serve SMBs. Toshiba dropped the price of its Satellite Pro S300 line of PCs in January—a product line that the company had created for SMB customers and the channel. The entry-level price is now $529 (£372). And Lenovo said it will introduce a new line of PCs that will bridge the gap between its enterprise-class ThinkPad computers and its IdeaPad consumer PC line out of China.
All this additional focus comes to the SMB market at the same time businesses there are struggling with the ongoing credit crunch and curtailing their IT spending as a result.
The Channel Insider Market Pulse survey of IT solution providers showed that their small business customers have become the toughest customers out there in 2009. Specifically, the survey showed that while the small business sector makes up nearly 50 percent of sales, 28 percent of solution providers—the largest percentage—identified the market as showing the greatest signs of a slowdown in IT spending.
Separately, the most recent CDW IT Monitor survey of end-customers found sharp declines in confidence from the small business sector. The survey showed that only 32 percent of small businesses say they plan to buy IT hardware in the next six months, down 8 percent from the last CDW IT Monitor survey two months earlier. That’s in contrast to 78 percent of midsized businesses and 82 percent of large enterprises saying they plan to buy IT hardware in the next six months.
In addition, Gartner recently released an updated forecast for PC unit sales in 2009 that predicted the worst decline in sales in history—nearly 12 percent.
But for its part, HP says it is pursuing the SMB space because its own internal forecasts, culled from several market data sources, show that SMB is one of the fastest growing IT market opportunities, with 4 percent to 7 percent growth expected in 2009 for a total available market opportunity of $68 billion (£48 billion). HP believes that SMBs will spend double what big business spends in 2009.
Still, that doesn’t mean that sales to SMBs will be easy. Far from it. That’s why so many vendors and distributors are coming out with more attractive financing options, such as HP’s zero percent financing.
Meanwhile, solution providers may very well find themselves more entrenched than ever in the break/fix business as their small business customers look to repair older PCs instead of replacing them.