Q. What kind of initiatives has IBM taken to encourage IT adoption among SMEs in clusters? A. The small and medium businesses (SMBs), a key focus area for IBM India, have distinct needs that are often ignored by most service providers. IBM, however, offers SMBs the solutions and technologies that are critical for their survival in the challenging Indian market. IBM is one of the few players in the market that can offer end-to-end leading solutions for the SMBs. IBM’s technologies and solutions for Indian SMBs provide them a competitive edge in this era of globalisation. IBM will continue to bring in new and leading technologies for the mid-market segment. We have developed products and services under the brand name Express Advantage that are specifically-priced and designed for the SME market. IBM’s express portfolio, designed to meet specific needs of SMBs, comprises hardware, software, services, solutions and financing. Additionally, we have launched the Smart Business programme, a breakthrough and a radically simple way, for SMBs to acquire, use and manage technology. Recently, IBM conducted focus groups with hundreds of SMB executives from around the world and in these focus groups, the executives shared their IT experiences that helped us understand that the existing offerings for SMBs were costly, complex, limited in choice and were known to decrease SMBs’ business agility.

Thus IBM Smart Business was designed to address these concerns. We have also been expanding our geographic coverage beyond the tier I cities in India and enhancing our partner relationships to be able to address more of the mid-market opportunity. We have a dedicated team at IBM to serve SMEs and this team provides everything to SMEs from technical assistance, marketing, order handling to fulfilling their needs by providing customised solutions.

Q. Can you brief us about IBM Smart Business?

A. With Smart Business we are trying to make it incredibly easy for businesses operating in the mid-market space to get all business applications and capabilities they need. India is a price-conscious market and the companies that are focused on controlling costs always choose smart business solutions. In the recent focus group with SMB executives around the world, we understood that these SMBs deserved more than what they were getting today.

The severe backwardness in IT innovation among the SMBs surfaced predominantly in our focus group with the executives. However, we were convinced that only IBM, with its heritage of delivering ‘big’ ideas for small businesses, could provide these clients what they needed, that is, highly affordable, super-simple solutions that are completely integrated, open, and easy to deploy, secure and manage – in other words, invisible IT.

We devised IBM Smart Business to meet the SMBs’ needs. This system proved to be a breakthrough solution for SMBs as it enabled them to acquire, use and manage a radical simple IT environment. Moreover these solutions literally involve zero IT complexity because the applications and technology to support them are backed by IBM and our partners.

IBM Smart Business competes in a crowded marketplace and many players have picked up on our ’simplicity’ theme. Our offering distinguishes itself on three fronts:

1. IBM uses its wide-ranging technical expertise in hardware, Linux, middleware and services to deliver smarter solutions to mid-market customers. Other companies may look at the work purely from the perspective of a hardware manufacturer, a services provider, or a software company.
2. IBM developed Smart Business in close partnership and collaboration with independent software vendors (ISVs) who provide leading solutions for mid-market companies. The ISVs we work with customise their applications to our integration framework to deliver dramatic improvements in integration and simplicity, unlike others who bundle off-the-shelf components and sell them together. Moreover, we can draw on the unmatched portfolio of close ISV relationships since we do not compete in the application marketplace.
3. IBM has a strong sales channel that enables us to reach out to customers across India. This channel is excited about the marketing investment IBM is making and the ability to participate in a solution sale and not just a product transaction. Few other vendors in the Indian mid-market can match the quality and reach of our channel.
   We currently have over 40 ISVs who have built over 70 applications on IBM’s Smart Business platform.

Q. Do you also provide customised products to SMEs? Does your company adopt different approaches for dealing with larger organisations and SMEs?

A. IBM has a different way to address the unique requirements of SMEs and it does not offer the same standard product to every SME. We listen to the customer, understand his requirement, and put together a solution that fixes his need. IBM is the one of the few players in the market that can offer end-to-end leading solutions for the SMBs. IBM will continue to bring in new and leading technologies for the mid-market segment.

Q. In your experience are enterprise IT applications well adopted among SMEs in India?

A. SME’s are quite familiar with the benefits of adoption of enterprise IT applications but they look for a partner who can help them choose the right application for their enterprise and help them maintain their IT infrastructure. IBM helps SMEs in choosing the right application, in building proper infrastructure and if required, in providing maintenance services.

Q. In your experience what are the typical training / consulting requirements of IT applications among SMEs? What initiatives has IBM taken to fulfill these requirements?

A. IBM provides consultation services to SMEs if they want expert advice on right framework, approaches and best practices to be chosen. IBM also provides consulting in terms of how to convert best practices for an industry to IT solutions and then deploying them. In short, IBM offers end-to-end solutions as far as the SMEs are concerned. For example, a manufacturing SME in textile comes to us and seeks help to choose the right framework and practices. We provide him a framework that is the best practice in the textile industry and that suits him, and we then help him implement the IT solutions to make all these pieces work for him.

Q. What main hindrances do SMEs face while adopting IT in their business? What are the initiatives IBM has taken to help its customers overcome these hindrances?

A. Even though the SMEs know their business and what they need out of that business, they fail to convert their needs into IT infrastructure. The biggest hindrance is that most players do not know what application to choose, and need help in this area. SMEs tend to go and do everything in piecemeal to solve this problem; for instance, they get server, computers, application from different players and then face a problem in integrating everything. IBM is trying to overcome these problems by understanding their unique requirements and communicating to them that we have the expertise and solutions to help address those problems. We also explain the ROI implications of piecemeal vis-à-vis an end-to-end solution.

Q. What is the main area of focus for IBM in SMEs?

A. The main focus area in SMEs is to help them adopt the right framework that suits their industry, and to make IBM their trusted IT partner.

Q. What opportunities does IBM see in the SME segment?

A. SME segment is growing faster than any other segment today in the country. According to a recent IBM global study over 50% of Indian mid-market business decision-makers (including COOs, CFOs, and CIOs) expect their IT budget to increase in 2009 as compared with last year despite the tough economic conditions; thus there is vast opportunity. The Indian economy has been very bullish on this segment and so has been IBM.

Q. Does IBM provide financial assistance to their customers?

A. IBM Global Financing helps clients to acquire IT solutions to meet their business needs in the most cost-effective and strategic way. With an investment-grade credit rating, IBM Global Financing obtains funds at very competitive rates — savings that we share with our clients.

Our portfolio of offerings includes customised or standardised leases and loans, certified, used equipment and hassle-free asset recovery solutions. We can include hardware, software and services from IBM as well as other manufacturers and vendors, in a single financing facility.

Other IT vendors and consulting companies must partner with multiple sources to provide the deep global financial and comprehensive strength that IBM Global Financing can deliver. For instance, we provide payment and term flexibility to help our clients build the data centre or IT infrastructure that they need, rather than the data centre or IT infrastructure they can afford.

Q. What is the unique selling proposition (USP) followed by the company for selling products to the SME segment as against the competitors?

A. IBM is a provider of end-to-end IT services. IBM consults, designs, integrates systems and provides products according to the customer’s requirements. IBM also has its own applications. We have created a separate team to look after small customers to help us focus on their unique requirements. The company understands the needs of small customers and approaches them accordingly. So our USP is that we treat even a small customer as a big customer.

Q. What are the future plans of the company?

A. We want to enhance our focus on selling solutions that we provide to SMEs and we are concentrating on the following areas to achieve this: we are making it easy for SMEs to approach us, we are providing speedy information to SMEs and are helping them in designing solutions. We will also continue our geographic expansion plans to help us reach out to tier 2/3 cities better. We will also continue to enhance our Business Partner reach.