Not much SMB dollars today for open-source vendors, the 451 Group finds
December 10, 2007 Leave a comment
Matt points to a report by The 451 Group indicating that Open Source has not had much penetration in the SMB market.
It’s not surprising to see The 451 Group’s findings that the small-to-medium-sized business market doesn’t promise untold riches to open-source vendors. The SMB market is difficult to crack regardless of one’s licensing and marketing approach. Several of open source’s primary benefits – and particularly the ability to modify code to suit one’s requirements – fit large companies well and SMBs almost not at all.
Some key findings from the report, which surveyed 50+ open-source vendors:
* 73.8% of open-source vendors surveyed believe that SMB revenue will account for <50% of total revenue, with wide disparity in how much the surveyed vendors feel will come from the SMB market;
* Open-source vendors are split on whether SMB will account for a significant increase in business in the future, 47.5% saying that it will and 34.4% saying it won't.
* The overwhelming majority of open-source vendors (72.1%) are taking a direct approach to selling into the SMB market, despite citing "Lack of expertise" (36.1%) and "Lack of awareness of open source options" (24.6%) as the key inhibitors to SMB adoption.
The brand recognition and integrated solutions offered by Microsoft are very entrenched in the SMB market. The smaller a company, the less likely they are to have a dedicated IT staff that is able to understand Open Source. That means either the person who “knows the most about computers” or a 3rd party handles most IT related issues. In most cases, that’s going to lead to a Microsoft install. Add to this the fact that many of the current commercial Open Source companies are selling products that are squarely aimed at the Enterprise market, and the report really is no surprise. There is good news here though. The SMB market is clearly a great place for potential future growth, in time.