Definitions: SMBs

Definition

SMB stands for small and medium-sized businesses. In the United States, a company qualifies as a small business when it has less than 100 employees. A medium-sized company would employ fewer than 500 employees.

In the European Union, the term used is small and medium-sized  enterprises, and the head-counts are a bit different. Any company with less than 50 employees is considered to be a small company, while an enterprise that employs fewer than 250 workers would be called medium-sized.

According to the Small Business Administration, businesses with fewer than 500 employees employ more than half of all workers in the private sector. These same businesses pay nearly 44 percent of the total private payroll in the United States. This growing segment of U.S. business also accounted for 64 percent of the new jobs created from 1993 through 2008.

SMB Market

Although SMBs may not employ large numbers of people, many large  companies provide business services and equipment just for this important  business segment. Companies such as Hewlett-Packard, Lenovo, Dell and Cisco have all realized the money to be made in this market and have thus begun offering SMB-specific products.

SMBs also have different business needs than their larger enterprise counterparts. In many ways, SMBs’ technical needs mirror those of consumers because such companies may not  buy in larger volumes, probably do not have as large storage or server needs, and have much smaller, tighter budgets.

That being said, many market experts believe that unlike larger  corporations, SMBs would not make deep cuts to their IT spending budgets during the recession. Also, the U.S. Small Business Administration charges SMBs with the task of leading the country out of the recession through efficiencies created via  technology that enable such companies to maximize profits during the down economy.

Business Concerns for SMBs

Some of the same issues that plague large enterprises are also big  concerns for SMBs. According to the 2009 SMB Insights Report from Microsoft, key issues for SMBs in the coming year will most likely be IT investments, cost containment, customer retention, cloud-computing solutions, and partnerships with value-added resellers (VARs).

Other issues that SMBs should be concerned with, but may not identify as a top priority include security and disaster recovery. In the case of IT security, experts believe that hackers may target SMBs for attacks  because they believe that such smaller entities are easier targets. To proactively  prevent such attacks, SMBs should consider creating a multi-layered security strategy that includes not only antivirus software and anti-spyware programs, but also firewalls.

Effective security policies should be created, explained, and enforced with all employees. Workers who use computers and the Internet should be knowledgeable on how to create and use effective passwords and how to identify and avoid possible malicious e-mail and websites.

Also, SMBs must have a plan for disaster recovery and business  continuity. In the event of a major disaster, a company should know that  its data is secure and that a process is in place for getting the business back up and running in an acceptable amount of time—without losing money or customers.

Technology and SMBs

Although it was previously believed that SMBs held back on adopting new technology until enterprises proved it to be worth the investment, in recent months, studies have shown that large numbers of SMBs have become the first adopters of software-as-a-service (SaaS). Also, SMBs have identified green technologies as a priority to their businesses.

As mentioned previously, many technological needs of SMBs are similar to consumer  solutions. Since SMBs are supplying IT to a smaller group of workers, they often gravitate toward items that can be purchased on a smaller scale.

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