Budgetary constraints
Given these competing challenges of high levels of service and low levels of expenditure, it's understandable that many IT resellers feel they have to balance conflicting demands when it comes to SMB customer requirements.
The key challenge, according to Haddock, is the tendency towards reactive rather than strategic spending in this cash-strapped sector. As he assesses the market, the challenges created by SMB micro-budgets are twofold. The first is the tendency to skimp on the initial investment, leading to problems further down the track, and the second is to skimp on maintenance leading to reactive and ultimately costly spending patterns.
"We often get called in when there has been some sort of disaster," Haddock said. "If we can get in then and demonstrate that a lack of ongoing maintenance is actually costing the company money, then the response is, 'OK what do I need to do to avoid this happening again?'."
The strategic goal of SMB reselling, according to Haddock, is to get the customer past focusing on the initial spend, to begin to see IT as an ongoing investment in their company's continued success.
However, a greater challenge for SMB-focused resellers is that the vast majority of companies in the sector they target don't budget for IT at all, Phrixus' Giles said.
"Because they don't have any budget for IT, they immediately think of it as an expense rather than an investment, which makes it very difficult to justify spending a bit more to purchase a more reliable technology," Giles said. "And they almost never consider the ongoing cost of support, even if you explain how important this is to keeping their systems in tip-top condition."
Giles' tactic is to resort to referring to the metaphor of cars, and how ridiculous it would be to buy a new car and run it into the ground.
"A lot of our clients run small fleets of cars and understand the economics behind keeping their vehicles on the road," Giles said. "Sometimes this helps in getting them to shift their thinking about IT as well."
Hupseld has adopted a similar approach of working with customers to explain the relationship between the small ongoing costs of maintaining a solid network infrastructure, and the sudden large costs of a poorly maintained IT infrastructure.
"If you can get your customers into a properly planned network environment you can minimise their ongoing costs by spending more time and money on planning upfront," Hupseld said. "The key is to take the time to find out about their issues and where their pain points really are."
