Guest Column | March 27, 2009

SMB Resellers Reach Tipping Point, Embrace New Business Model


Written by: Stephen DiFranco is VP of Lenovo's commercial and consumer channels in the Americas

“The times they are a changing” for the SMB reseller and their suppliers. Vendors want their SMB channel partners to become a bigger part of their reseller mix. SMB resellers are moving beyond their traditional role of serving chiefly as hardware sellers, now becoming the trusted IT providers for their customers. As managed services and cloud computing become part of SMB resellers’ solutions, we will see SMB resellers evolve into full service providers often recommending, if not reselling, hardware.

The SMB market has always been difficult to define. Companies can range from as few as 10 or up to as many as 500 employees. While SMBs vary uniquely in their size and their technology requirements, they share a number of similarities. For instance, most do not have dedicated IT staffs, and owners are concentrating on running their business, not their IT. With growth in SMB now forecasted to outpace large corporate customers, manufacturers and managed service companies are rapidly shifting their attention to building SMB channels.

Traditionally, the business model for SMB resellers has focused on integrating hardware and software solutions into a customer’s operations. However, due to a decline in average selling prices and margins for hardware, SMB resellers are growing their consultative services and recommending managed services. At the same time, commercial resellers have opened their online websites to SMB companies to purchase technology. Small businesses are buying PCs at retailers and online stores. These websites are efficient, offer price comparisons, and fast delivery.

How will SMB resellers adjust? They will adjust as they always have — in the best interest of their customers. They will start to provide their customers with hardware recommendations, cutting through the clutter and validating which solutions are most beneficial. They will likely direct customers to the best websites or stores, reinforcing their position as a trusted advisor while maintaining the higher profit managed services, hardware installation, and repair business.

Similarly to the influence of online social media, SMBs will rely on the trusted advice of resellers. For example, as netbooks continue to interest SMBs as low-cost devices to be used for scenarios where users need Internet connectivity, resellers are in a good position to exert their strength in their new position as key influencer.

SMB resellers will continue to service SMB companies, and they will do it better than before. They are the trusted advisor and technology counselor to small business. In the future — the very near future — resellers will move away from hardware reselling and partner with online web sites to deliver products to their customers. The resellers will then service and support those products while integrating them into the managed services and cloud computing solutions they offer to customers.

Stephen DiFranco is VP of Lenovo’s commercial and consumer channels in the Americas. Prior to Lenovo, he served as VP of consumer sales and marketing at AMD and VP of corporate marketing for Maxtor Corp.