IT vendors, ISPs need to woo SME market

Johannesburg, 02 Jul 2004
Read time 2min 50sec

Small to medium-sized (SME) companies today form the backbone of the South African economy, with up to 50% of the revenue of IT vendors coming from this market sector - a figure that is arguably set to grow, said Gary Sweidan, director of premier Internet service provider, DataPro.

"This is one of the reasons why we have launched a concerted SME campaign as we believe this market is still relatively untapped. If you consider that the average company size in this country is around seven people, then there are a lot of companies out there that are going to need to invest in clever, business-enabling technology - and that are going to need good support."

Sweidan said many of the larger companies are, in fact, cutting back on IT budgets. The revenue emanating from the big business market sector is more than likely going to decline in real terms over the next few years, he said.

"Certainly in the ISP market space, as bandwidth becomes more of a commodity, ISPs are going to have to differentiate themselves from their competitors. "They are going to have to look at offering value-added services that allow customers to communicate better and more cheaply. They need to become involved in their customers` overall communication strategies. In addition, as bandwidth becomes more of a commodity, ISPs will also have to differentiate themselves at the application layer by providing software or content services that make their customers` businesses run more effectively. They also seriously need to look at filtering traffic to reduce the number of viruses and the amount of spam pummelling users on the desktop.

"Up until now, ISPs usually removed themselves from this problem, believing it to be the responsibility of the user as they were primarily the bandwidth provider."

Sweidan said vendors - including ISPs - who want to capture a larger slice of the more lucrative SME business are going to have to consider expanding beyond their core areas of expertise in an effort to bundle solutions for companies. He said business solutions required by the marketplace will, in many instances, require collaboration with consultants or application suppliers.

"The Internet, over the last 10 years - despite the dot-com crash - has become the central cog of business. But it is no longer simply about bandwidth, it is about wringing out as many business solutions as possible which are able to work using Internet technology in order to increase efficiency and enable things like getting products to market that much faster."

He said another big potential area is application service provider (ASP). This," she said, "is a technology offering that is perfectly suited to the SME market. The ASP market has not really caught on fire yet, but it is certainly warming up. More and more companies, including a lot of SMEs, are turning to this method of outsourcing services as a means of boosting efficiencies and cutting capital and operational costs."

Editorial contacts
BE Agency Bryn Evans (012) 346 3005
DataPro Carine Conradie (011) 809 1500
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