Software companies are addressing the buying power of small businesses by offering products more closely tailored to their needs (see story, p. 30). Microsoft products have long been a favorite of small business, but IBM recently launched lower-cost Express versions of key products, such as a $598 edition of its DB2 database, to compete for small-business dollars. Likewise, Microsoft Exchange and IBM's Lotus division compete in the collaborative-software arena. While the drop in desktop and server computer prices is frequently noted, communications and business software has been undergoing a similar decline, and small business is in a position to seize the advantage of these technologies.
Combine broadband with affordable collaboration software and the way small companies compete really changes.
McHenry Consulting is a 15-person risk-management consulting firm with 500 customers around the country. In a recent competition for a New York financial customer, McHenry was up against a larger consulting firm that sent two consultants to the prospect's site to make a presentation. McHenry used WebEx Communications Inc.'s online collaboration service to transmit audio and video and conduct an interactive presentation, using whiteboard diagrams, highlighted text, and real-time chat. McHenry had eight consultants located in several different cities available online to answer questions during the presentation.
A consultant wouldn't have dared such a move not so long ago. It would have suggested the company didn't care enough or didn't have the resources to take on a job. But part of the firm's pitch is that McHenry can accomplish more for less than competitors because it uses tools such as Web collaboration in lieu of travel. Ward Harris, a McHenry partner, says the $100 a month the company pays for the collaborative-meeting software is a big savings over what it used to spend sending consultants to prospects' sites.
Harris admits there's a trade-off with the Web-conference approach in the loss of personal contact. But it worked for this pitch: The firm is about to sign a $500,000-per-year deal, he says.
Jones (left) and Rogas ran E-mail-management company Load out of Rogas' attic until moving it to a commercial space.
The Web-site manager and two associates from the National Football League's San Diego Chargers were clearly puzzled when they attempted a surprise visit to Load, which had been managing the Chargers' fan-mail system. They found themselves in the doorway of a suburban Henderson, Nev., home, talking to Rogas' father. The manager figured he'd been sent to the wrong address. He had--the company had moved out of the attic to commercial space only days before.
Load is now a corporate E-mail-management firm, handling 10 million messages per hour over 60-Mbps OC-3 fiber-optic service, now available in Henderson seven miles from Load's original attic headquarters. Before, the three men had been managing the Chargers' 15,000 fan-mail accounts with little more than a PC, a cable modem, a router, and an Intel server they built themselves, plus cable-modem service to the Rogas home. With the average Chargers fan sending two messages per day, the 128-Mbps service was enough to handle 30,000 messages.
It's a testament to the tech tools available to small businesses today, though the guys weren't so sure the day the Chargers executive came through their office door asking if they'd previously been running part of his precious Web site out of an attic. "They were shocked," Jones says. "I thought maybe they'd freak out."
The executives didn't care too much, it turned out, because service had been good. As long as it stayed that way, they didn't care where Load was housed. Load found out what many small businesses are learning: The tools are there to give them the chance to win. "It's a very exciting time," Rogas says. "There's never been a time when small business could compete so effectively."
Illustration by Alison Seiffer