SMEs in the virtual market

By Anthony Cooper, Pearlfinders Managing Director.
It's certainly not news that the number of SMEs installing virtualised solutions is steadily increasing, but what is news, is that the rate of increase could and should be a lot faster. We think ICT resellers should change tactics fast to capitalise on this opportunity. My company Pearlfinders, interviews over 4,000 senior IT buyers every year to determine their purchasing programme. By the end of quarter two of 2010 we charted that interest in server virtualisation among smaller companies had increased from 55% at the end of Q1 to 67%; a massive 12-point increase in just 3 months.

Larger companies are usually the early adopters of new technologies, and we've spoken to BBC Worlwide, Thomson Reuters and Tesco who all operate highly virtualised infrastructures. However, this quarter we're also seeing significant percentages of smaller companies (which we classify as those under 1,000 users) that are also now looking at an early adoption. During Q2, the majority (57%) of all companies who were looking at this technology area were from these smaller companies (this has risen from 37% in Q1).
And so we see a significant, newfound opportunity for IT resellers to reach out to smaller companies about their virtualised plans, although propensity to purchase depends very much upon the vertical they're in. We have observed that the professional and business services sector is the most buoyant for opportunities with smaller companies for both desktop and server virtualisation. In the first half of 2010, of all the UK SMEs we found to be looking at server virtualisation, over 19% come from this sector and over 14% of those were looking at desktop. Many companies in this sector have relatively low user numbers, though spread across multiple sites. There's also additional storage and back-up legislation meaning companies in this category, such as law and accountancy firms, have led early adoption. Many professional firms are also tightening up corporate responsibility policies, which are also increasing an exploration of virtualisation technologies. Those that sell ICT know well that this sector notoriously "runs in packs" with IT Directors taking strong influence from their sector peers, so we expect to see this early take-up increase.
Another sector whose smaller companies are keen to embrace this area is the industrial and manufacturing sector, with 12% of all UK SMEs exploring virtualised servers in the first half of the year, and many also looking into desktop. Within this sector the drivers for this interest are unique - the main one being the need for scalability. Production line 'stress' fluctuates quite rapidly, meaning the number of actual users needs to quickly adapt to the current workload. Moreover we term companies in this sector as SME'S because of their low "user" number, although this sometimes doesn't represent their investment potential. Factories and plants with thousands of employees may only have a small percentage dubbed "users", meaning they are actually large companies with cutting-edge investment attitudes.
We should add that smaller companies are avoiding cloud solutions due to security, plus the cost associated with a private cloud is prohibitive for many. SMEs are adopting virtualised technology as a stepping-stone towards a less complicated IT department.
The opportunity for virtualisation resellers is growing quickly and in different ways in different markets. An understanding of specific market environments as well as the internal pressures and challenges your potential clients' face, are essential to ensure your share of success with a precocious SME market.

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