With the economy turning a corner, analysts expect small-company technology spending to follow suit. Hewlett-Packard (HPQ), Dell (DELL) and Cisco (CSCO) are among the technology vendors positioning themselves to be there when the wallets reopen.
The small business has a better growth rate than some of the large enterprises, said Kathy Chou, Hewlett-Packard vide president of worldwide SMB strategy and commercial sales. “It's very, very attractive because it’s the first to start to see a recovery.”
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During the downturn in the economy small businesses put off spending in every category, including technology. So today many companies are using antiquated systems that need to be upgraded.
"A lot of small and medium businesses haven’t bought a server yet or may be still using old versions of Windows," said Laurie McCabe, partner at Hurwitz & Associates, an IT consulting company. "There’s going to be some pent-up demand."
That demand, according to McCabe, could benefit small businesses as technology vendors are forced to compete for their business. McCabe said that while it’s always been a buyer’s market for tech gear, even more deals may abound this year.
“Everybody has negotiating power,” said McCabe. “It’s a great time if you’re a small business and can invest now to get ahead of the curve.”
According to Hewlett-Packard, the total addressable market in the U.S. for small-and medium-sized businesses is $54 billion. It’s a group that can react more quickly to new product launches, like Microsoft Windows 2007, and one that hasn’t done much refreshing, which spells opportunity for companies like H-P.
Still, while one might expect the end of a recession to spark an immediate resurgence of tech spending by small businesses, it's not that simple.
Small business owners across the country say they need and want to buy new technology gear, but the lack of available credit is making it difficult. To address that, technology heavy hitters are offering financing and lowering the minimums needed for purchases.
Take Hewlett-Packard. It’s reported seeing a doubling of credit applications since it started offering 0% financing and lowered the minimum purchase required – from $150,000 to $3,500. Fred Bullock, vice president for marketing at H-P, said the company is tailoring financing packages to meet the needs of small-and medium-sized businesses.
Dell offers small businesses the ability to lease hardware and services, paying monthly rather than buying the equipment for a hefty upfront cost. Cisco also lowered the minimum for financing to $5,000 from $10,000 and offers 0% financing.
But making credit available isn’t the only thing tech companies are bringing to the table for small businesses, they are also making specialized products and offering online services to meet their needs.
Since collaboration is a expected to be a big trend in the New Year, Hewlett-Packard is offering small businesses the ability to collaborate with customers online at its HP Skyroom. There users can access professional-quality video conferencing tools to hold meetings and collaborate with partners and customers. The company is also focused on virtualization and cloud computing, two areas of technology heavily used by small businesses.
“Small business owners don’t have an IT department, H-P is working with channel partners to be that,” said Bullock at H-P.
Dell, for its part, is making sure the company has a local presence with its small business customers, either directly or through its network of partners. The tech company is also increasing its ability to service today’s increasingly mobile businesses, whether the companies are using a mobile phone or a laptop.
“How to manage my mobile devices when it goes haywire on the road and how to get all the services are challenges small businesses have, “ said Erik Dithmer, vice president and general manager of Dell's Small and Medium Business group for North America.
Cisco is also introducing products, such as a tech-support center at www.cisco.com/smb, with the small-and medium-sized business in mind. They also "get it."
“The small business market needs products built for them,” said Rick Moran, vice president, Small Business Solutions Marketing.