LinuxWorld: Small vendors on right track with SMB focus

By Jan Stafford, Editor 10 Aug 2005 | SearchOpenSource.com

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I spent my first day at LinuxWorld with Samba co-founder John H. Terpstra, my fellow judge in the LinuxWorld Excellence Awards. After spending the day meeting nominees on the Expo floor and talking with several other vendors and users, we sat down for this interview. -- Jan Stafford, Editor.

Wouldn't it be wonderful if the next LinuxWorld was entirely focused around meeting the needs of the small to medium-sized business? John H. Terpstra, co-founder, Samba

What are your impressions of LinuxWorld so far?

John H. Terpstra: The LinuxWorld shows over the last five years have been increasingly sedate. There's been a transition from focusing on the geek and developer community to being more focused around business and business opportunity. What seems to be lacking is a clear focus on where the major market opportunity is. Most companies are focused on the top end of the market, on [companies with] 500-plus employees. Out of the 27.6 million businesses in North America, there are 16,500 businesses that employ over 500. The rest are in the SMB [small and midsized business] space and employ between 10 and 50 employees. What's missing is value-added to that marketplace.

Some major IT companies, such as Novell, have been dragged into that space by their resellers. Yet there is no clear focus at LinuxWorld that screams out to that SM enterprise customer saying, 'Here is a real value solution that will solve your business problem.'

Today, we did talk to quite a few startup or small vendors that said their primary customers were in the SMB space, but some of them went on to say that they were aiming higher at the Fortune 500. Are you saying that they're moving in the wrong direction?

Terpstra: The problem is that everyone wants to be a star operating in the big-time star space. Smart businesses don't start off attempting to be stars, but have a clear vision that they have to appeal to the volume market with a pain point and dollars to spend relieving that pain. The SMB market today is screaming for an alternative to Microsoft, but as I speak to those companies, I keep getting the same complaint: 'We don't know how to solve our problems with Linux. It's too difficult to use. I can't get support. I don't know how to do it.' That is the big opportunity that Linux and open source providers are missing.

Microsoft is the obvious example of success built on the SMB market.

Terpstra: The value-added reseller and service provider was the key to Microsoft's success. The same part of the industry gave Novell its first success. The lesson is: 'Don't forget the little guy.'

The tragedy is that large IT vendors have failed because they spread themselves too thin and lost sight of and touch with the business customers who paved their roads to success.

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I've seen some vendors here at LinuxWorld that do have a clear focus on their market. Which companies have impressed you?

Terpstra: I, too, have seen some companies that have done their homework, see what the competition offers, and are very clear about their target market. They've created clearly differentiated, value-added products. Most are seeing the value of the SMB customer.

On the application development side, SlickEdit, for instance, is crystal clear about what their unique offering is, who their customer is and what the needs of that customer is. Trolltech's QT is another one.

In business applications, Scalix stands out with its clear market focus and an SMB focus, too. They've obviously studied the market and know where they're going. They're customer-oriented and in touch with their market. SteelEye, in clustering, knows where it's going, too.

These companies aren't going after the top-end customer, the top tier of the IT customer market. They're content to gain a foothold within the medium-sized businesses that want an alternative to Microsoft and delighted to pick up the big business customer, too.

We need to see more of that clearly focused business in the Linux community.

It seems obvious that chief information officers and IT managers would benefit from choosing vendors that are very clearly focused on their type of business.

Terpstra: Technology is only the beginning of the buyer's selection criteria. The vendor's customer road map should also be considered. Are they moving too quickly into a new marketplace, one that doesn't fit with your category?

Seeing vendors that have a clear commitment to the importance of customer need satisfaction is a new and exciting thing at LinuxWorld. It's just that type of understanding of the true value of IT that customers should look for.

There's room for improvement, of course, but what I see in these small vendors here is heartening.

Wouldn't it be wonderful if the next LinuxWorld was entirely focused around meeting the needs of the small to medium-sized business? What if the Linux community focused on giving the SMB market an alternative they just can't say no to? That would show that Linux has arrived.

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