You have all seen the ads by software vendors touting their software solutions and their benefits. Some of you might have even been directly pitched by some. Some focus their communications towards only large organizations, while others communicate the same offerings indiscriminately towards SMBs and large organizations alike. Those that target SMBs typically deviate their offerings with subscription-based pricing and/or delivery via software-as-a-service (SaaS). Here is the question. Where software is concerned, is the difference between large organizations and SMBs just about price and delivery? Are software solutions interchangeable between large organizations and SMBs with simple changes to price and delivery? The answer to this question is no as the differences are far more complex. I’ll lay out the differences with seven things an SMB can look at to find the right solutions.
Let’s back up a minute and define who SMBs are. The SMB market, identified as organizations with 1-999 employees, represents over 80% of businesses in the U.S. and in the world, and they represent 44% of total IT spending worldwide. According to Gartner, SMBs are forecast to spend $938 billion on IT in 2014 with it projected to cross the trillion dollar mark in 2016. SMBs represent a majority of businesses and they are a huge market that is very appealing to software vendors, but there are significant requirement differences between them and large organizations besides size. The understanding of these differences needs to be incorporated in every facet of a solution from development, marketing and sales to delivery, implementation and maintenance.
While many of you will cite size as the main difference between large and SMB organizations, and you would be right, however this main difference translates into several other important differences that are often overlooked by software vendors. The following list will help in separating out those vendor solutions that were developed with SMBs in mind and those that were not. I hope you will recognize Vallum Software and the Halo Manager as one solution that had SMBs in mind from the beginning.
- Price: Sounds pretty simple – How much does it cost? However, you need to dig a little deeper. Many vendors bury some pricing gotchas deep into the product. How exactly is the product licensed? Are there any per/seat, per/user pricing or per/anything charges? Are there any threshold levels where additional licensing costs kick in? Is there any additional hardware or software required to run the solution such as database licenses etc.? Separate and consider those vendors with straightforward perpetual licensing agreements.
- Functionality: How much functionality do you need? While more functionality would seem better than less, more can come with some unforeseen downsides. More functionality can not only increase the hardware requirements, but it can also increase the complexity of the product as well as its implementation and ongoing maintenance. Determine what exactly you need and how that translates into solution functionality. A solution with less functionality, but more of what you use on a regular basis will be easier to implement, use and maintain. Sometimes less is more.
- Infrastructure: What kind of hardware and software is required to run the solution? Many vendors provide solution requirements, but be aware that many are minimum requirements just to get the product up and running and are not production install requirements. Request an infrastructure spreadsheet from the vendor to determine infrastructure requirements. If one does not exist, ask for requirements from an existing customer that can be used to extrapolate the requirements up or down for your requirements. Calculate the requirements with your metrics from the beginning as well as projected future growth. Be on the watch for solutions that don’t scale well and those that require additional software and hardware requirements as they scale.
- Network Capacity: Many vendors offer cloud or SaaS implementations of their solutions, but they were never designed for it from the beginning. The network traffic for these solutions can be very large and the response times very slow. The question is, do you have the proper network bandwidth to effectively use a SaaS solution? What happens if you grow and/or expand the use of the solution down the road? Request a network capacity spreadsheet or baseline from the vendor that you can use to calculate network bandwidth usage. Take note of what is currently available in your network capacity vs. what is currently being used. What would it cost to increase your network capacity? Make note of this in your cost analysis.
- Implementation: What exactly is involved in installing the solution (time, resource and cost)? There are many solutions that have gone through many release cycles and the implementations can be very long and complex. Get a hold of an implementation manual and look it over carefully. Do you have the in-house technical expertise to implement the solution by yourself or do you need to bring some experts in to do it for you? If you have to being someone in, can the vendor provide this or is it third party? If it is an additional cost, factor it into the cost of the solution. Also note, if the implementation is complex and expensive, what is the ongoing maintenance going to be like?
- Ongoing Maintenance: This is often an overlooked element in software purchases that can come back to bite you hard. As software vendors enhance their solutions from release to release, there can be major changes that can make these upgrades very complex and unpleasant. If you are an organization that typically is several releases behind, pay close attention. Find out historically how often the vendor has put out new releases? When is the next release of the solution? When is the next major release? What is involved in upgrading the solution? Go back and review the release notes and upgrade process for the last release. Note the process of upgrading across multiple releases if you have the tendency of skipping releases. Also note that an infrequent release cycle may be indicative of a solution that the vendor is not paying much attention to.
- Support: What kind of support does the vendor provide? Phone, email or support ticket. Is support included in the price of the software or is it separate? Many vendors are adopting a support pricing model that is based on number of tickets per/year, which can get very expensive. How far back does the vendor provide support for their releases? Search the internet for forums related to the vendor and solution. You can find allot of insightful information about the vendor and its solution, its stability and how well the vendor supports it. Regardless of the support model, if the vendor is not responsive it will significantly degrade the solution support and should be taken into account.
The differences between large organizations and SMBs go far beyond delivery and price and encompass a variety of different metrics. While there are some solutions that are interchangeable between large organizations and SMBs, many are not. A solution that is being marketed to SMBs should have been designed from the beginning with SMBs in mind. With a little effort and analysis you can weed out the solutions that were not.
About the Author:
Lance Edelman is a technology professional with 25+ years of experience in enterprise software, security, document management and network management. He is co-founder and Director of Technology at Vallum Software and currently lives in Atlanta, GA.