The issue is complicated further by the lack of industry specific solutions. Most IT solutions are not customized to vertical/cluster specific problem of SMBs. In most cases, the solutions that are offered to the clients is merely a run-down version of the professional version that is offered to the big players. Since these systems are not attuned to the need of the player, there is increased reluctance on the part of the player. Some of the vendors are trying to address the issue by building specific micro-vertical solutions. One such vendor is HP that is taking an ecosystem approach by offering solutions for both hardware and software, consulting the client, etc.

Another factor is trust. Most SMBs make the purchase decision based on the guidance and advise of a trusted channel partner. In spite of numerous high-profile launches of direct portals, etc, the average SMB prefers to route his purchase through a distributor whom he can trust and hold accountable. This is the very reason why even LFRs or large format retail stores haven't been able to directly impact the channel business in India.

Vendors have also come to realize the same and are charting special strategies around it. Dell, which at first was more focused on the retail approach, is now realigning its strategy to effectively target the SMB segment. The company is fairly aggressive on the channel front for the past few years and now has a reach of around 150 cities in India.

“We firmly believe that the most effective way to reach SMBs is through partnerships - be it resellers, SIs or ISVs. We have recently enhanced our partner ecosystem to drive market momentum on software and entry products in the mid market segment. It will not only help us to extend the reach of our software and volume products, specifically in mid-markets, but also help us build a new framework to empower open source software and volume channels, emphasizes,” Ravi Bharadwaj, head of SMB SBU, Dell India.

Another company that is very strong on the channel front is Cisco, which has a channel network of over 1,000 resellers in 100 cities. The company plans to boost this network by adding 600 new partners specifically certified to cater to SMB customers in tier-2 and tier-3 markets.

“To enhance the technological assistance that our channel partners can provide SMB customers across India, Cisco's focus currently is on building the advanced technology channel in India. We constantly endeavor to encourage and enable our partners selling foundation technologies to equip themselves in our advanced technology portfolio. We work with our channel partners to align them with our new goals, thus imparting training and awarding specializations and certifications,” says Pramodh Menon, Senior VP, South & Sri Lanka, Cisco India & SAARC.

In the Coming Days

Despite all the challenges and the issues, Indian SMB segment is still a big lucrative business for many. And even in the slowdown a lot of people are hopeful that instead of a cutback, there might be a spurt in spending as SMBs try to be more cost-efficient. Since most of the SMBs are still at primitive levels of IT infrastructure, low capital investments like virtualization, open source, and SaaS might be just the thing that the doctor prescribed. As a vendor quips rather optimistically, “In the current economic situation, SMBs with a forward-thinking approach and a solid grasp of technology trends will have a distinct competitive advantage.”

Hopefully, the SMB players will buy his advice and continue to grow, slowdown or no slowdown.