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Can IBM really do SMB?

IBM, the world's biggest computer company, thinks it can successfully advise the world's smallest businesses. Don't count on it, The Value Manager says.

While IBM has dubbed this year's marketing theme "On Demand Computing," a second, very strong theme has also been heard: a focus on serving small and medium businesses or SMBs.

As an IT manager at a small company, it's interesting to hear IBM tell me what I need and what it can do for me. Here we have the world's largest computer company trying to direct and advise the world's smallest businesses. Can IBM bridge the gap and successfully do this? I'm not convinced.

What IS SMB?
First question. What IS SMB? If you work for a smaller business, you already know the answer. 'Nuff said. If you work for IBM or one of the other large companies, you'll need a Harvard MBA, three years of intense customer surveys, as well as statistical and market analysis. At which point you still will know almost nothing about SMB -- only what you've defined as a "market opportunity."

Is SMB based on size? According to IBM, yes. I heard a few IBMers at the recent fall COMMON conference say that "small" business was any company of 1,000 employees or more. That means in the county I live in, there are NO small businesses. The largest company in the county has about 800 employees. What does that make those companies? Non-existent?

Call me crazy, but many of the non-existent companies in my county actually own Microsoft servers. Believe it or not, some even own iSeries servers! One actually has three iSeries servers, including a large 840!

Is SMB an attitude?
Maybe SMB ISN'T based on size alone. It's as much an attitude, a perspective, even a way of life. If you think "like an owner," you or your business may be operating as an SMB. You most likely


  • Place quality customer service at the top
  • Believe value propositions are measured on results
  • Need to know the total value, costs, risks and keys to success on a project
  • Look to identify and manage all the risks in a project
  • Build stable service teams of committed personnel
  • Want committed business partners for long-term relationships
  • Don't oversell expectations
  • Expect to build off your customer's success
  • Take direct responsibility for failure to meet deliverables
  • Communicate clearly and often
  • Don't understand the term "spin"

Can IBM really understand small companies?
IBM creates BIG solutions for BIG businesses. And it does it very well. It's clear many big companies are generally very happy with the value proposition, the solutions and the business model they receive from IBM.

IBM has 300,000 employees more or less. It's an easy bet that less than 1% of its employees have worked for small businesses professionally for any length of time. So 99 out of 100 IBMers aren't really qualified to tell me what I need.

It's ironic when you hear IBM, the world's largest computer company, talk about SMB. The world's largest services company is also IBM. IBM "manages" customer relations through an ever-stretching partner channel, Web sites, billable phone support lines and e-mail blasts. IBM also gets guidance from outside consulting companies, which, of course, are also mostly large companies.

Attending COMMON this month gave me a great opportunity to get this message directly from a number of IBMers. They explained how IBM's Software Group has actually hired someone to focus on SMB. His qualifications include working at IBM and other large companies. Of course.

Why does IBM always assume it can market things effectively that it doesn't really understand? Why doesn't the company outsource the PLANNING and MARKETING for SMB to a real small company? Is that something you can expect in the future? Probably not.

The IBM partner channel also challenged by SMB
IBM's partner channels are supposed to deliver custom solutions to the SMB market. The problem, however, is that IBM's partner program encourages consolidation toward a few, successful, larger partners over time. It's not like the old days with Lotus. They grew a partner channel quickly that accommodated both new and older partners reasonably well.

In man y cases, the larger IBM partners don't really operate under an SMB model. They also face many of the same communications and relationship challenges IBM faces.

On the other hand, many systems integrators are small businesses as well. Some of them are in IBM's partner programs. Some aren't. They often are reasonably effective in helping small companies like ours get value from different technologies. The ones we've worked with understand the partner relationship and haven't changed personnel every year on us.

E-business for SMBs
What does IBM's SMB initiative mean for us in e-business? Honestly, not much. More IBM marketing. More IBM products. More IBM certifications for partners on the products. And for IBM to sell more products and services.

In our case, we'll talk to our local integrator to figure out where we can get some value in e-business. Who knows? We might even use some IBM software in addition to the open-source software our partner has helped us implement.

Let me know your thoughts on IBM's SMB initiatives. Will they help you or not? Write me at

About the author: The Value Manager is an IBM iSeries IT manager trying to make the right decisions to deliver better value for his company. He welcomes your comments and feedback. E-mail him at



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