UK VARs snub SME sector

UK VARs are less focused on the SME space than those in mainland Europe, claims research from market intelligence firm CompuBase.

CompuBase's study, How to address the SMB market in the ICT channel? claims there are 1.6m SMEs in the UK, 86 per cent of which have fewer than 10 employees. Forty per cent of their total budget is spent on IT and telecoms technology.

The report claims that there are more than 23 million SMEs across Europe and that, globally, they account for 95 per cent of all companies. It claims that eastern Europe could provide rich pickings for the IT channel as many countries still have low adoption rates for technology.

A recent study from IDC indicated that, in western Europe, there are three priority levels when it comes to businesses' IT investments. High-priority areas include security, content management, collaborative technologies, business process management and analytics.

Medium-priority areas include enterprise resource planning and technologies specific to individual industries. Low-priority issues include data warehousing, CRM and, for larger SMEs, supply chain management.

CompuBase claimed key decision-making factors for SME spending on technology include its cost and a personalised approach from the company deploying it. For larger companies, the report claims buying technology from well-known brands is important, as is the ability to delegate project management of the installation.

The report finds that 11 per cent of all EMEA resellers' sales come from international clients and 37 per cent from national customers. Regional custom accounts for 32 per cent of sales and local businesses account for 20 per cent.

UK resellers are far less focused on the SME space than their western European counterparts, with just 74 per cent serving the market. This compares with more than 90 per cent in Germany, the Netherlands, Italy, Ireland, Spain and a number of others.

The report claims that there are pros and cons to selling into the SME market. One section reads: "One of the disadvantages concerns the lack of customer loyalty when purchasing consumables. SMEs can buy their products pretty much anywhere. They are also much more price-sensitive, which makes it difficult to establish customer loyalty."

But it goes on to outline the positive side of working in the SME sector. Another section reads: "SMEs are not as demanding as larger firms; they want simpler products which are easier to sell, deliver, understand, and deploy. Due to their small size, SMEs cannot apply much pressure on their suppliers."