The SME market is where all the networking profits will be found over the next three to five years, according to integrator NetStar which is making a serious tilt at the market with a dedicated business unit.
NetStar is the new name of Anixter's networking integration business.
With the enterprise market stagnating somewhat and being characterised by cutthroat deals and vicious discounting, the SME market represents an as-yet unplundered pot of gold, according to former Gartner Group analyst Mitch Radomir who will now head up the new division.
"This is a market that is simply too big an opportunity to ignore," Radomir said.
Quoting research he has done in conjunction with the University of Technology in Sydney, Radomir said that by the year 2000, the SME market will grow from being just a small fraction of the total market, to representing a third of the total market. According to ABS statistics, there are 770,000 small-to-medium enterprises which Radomir classes as those organisations having below 250 users.
According to the UTS study, around 40 per cent of those will want network connectivity in the next five years. The driver for that demand will be electronic commerce as larger suppliers and governments force smaller organisations to trade with them electronically.
"The vendors have woken up to this market - they're all setting up SME units. It's just the reseller community that hasn't," Radomir said.
NetStar has. It already has four dedicated pre-sales staff working solely in the SME segment of the market and is ramping up its back-end services infrastructure to cope with the increased number of customers.
This commitment to the market is what will stand NetStar apart, Radomir claimed.
"No other major channel player is focusing on this market like we are," he said.
Also key to NetStar's ability to service the SME market will be its ability to cable up small businesses though its relationship with its sister company, cabling distributor Anixter, and its broad range of networking skills up to the networking operating system (NOS) level.
"The SME sell is a complex sell because the customer wants a complete solution," Radomir said.
"However, you can't sell it by talking technology. You're typically talking to a general manager, managing director or owner of the business so you need to understand their business pretty well and talk to them in business terms."
NetStar managing director Kent Brooks believes PC resellers will have a hard time scaling up to cope with their existing customers' future networking needs. "To do this takes a big commitment to resources and skills," he said.