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Midmarket Leading Us Out Of The Great Recession
Dell's VP and GM of small and medium business, ErikDithmer, discusses SMB trends in hardware refresh cycles, cloud computing, and how medium businesses are leading us out of the economic doldrums.
Erik Dithmer is Vice President and General Manager, Small and Medium Business, for Dell Americas. Prior to joining Dell in !997, he founded and operated midsized business of his a own, a VAR specializing in printing and color separation. In this interview with InformationWeek SMB, Dithmer discusses the emphasis that SMBs now place on IT infrastructure investments and how midsize businesses, rather than small businesses, are leading us out of the great recession.
InformationWeek SMB: There's lots older hardware out there that has reached the end of its useful life cycle, but many SMBs have been holding off on hardware investments because they're so cash strapped right now. Are we approaching the point where the flood gates open and we significant spending?
Erik Dithmer: Well, you're seeing that today actually. I don't know that you're going to get a tsunami of refresh. Once you've gone through a recession like we've gone through, I think people are going to be pretty prudent on those investments. I think every SMB is pretty conservative right now and waiting to ensure that this is a true economic turnaround. And the longer that we keep seeing that steady improvement, the better off we are going to be. What we have seen at the infrastructure level, which is really sort of the backbone of the information highway for these SMBs, is that they are making those investments. On the client side, they are trying to get out of it as much as they can, but now that they've seen that Windows 7 is pretty stable and there is a reason to move, we are seeing that move as well. Credit is an issue. And managing cash flow after what they've gone through over the last 18 months is still very, very important to them.
If you think about it, very few of these SMBs have ever gone through a recession like we've gone through, but now, they've gained some experience, which is why there are using financing options a lot more prudently then they did before. 22% of our customers use our financing options today, compared to about 17% about 2 years ago.
InformationWeek SMB: How much of a factor are financing terms for SMBs and do the options you offer give you a competitive advantage in the SMB market?
Dithmer: I think our strategic advantage, whether we go through a channel or we go direct, is really understanding what the customer's investing around and really understanding what their pain points are. Then we can give them best advice on how they manage it. Yeah, there's always risk when you go into financing, but we are very prudent about it. We are very thoughtful about it and it is a really in-depth conversation of understanding where they are at and understanding why they are doing this so that we both understand the ROI for this technology. Our job is not being bankers. We have a financing arm. We have some financing expertise. But what we really have are solid relationships and stable relationships with those customers that allow us to be prudent.
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