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Enterprise Business Intelligence and The SMB Market: Small Fish in a Big Pond

Posted by Datasource Consulting on Dec 20, 2016 10:14:54 AM

Enterprise Business Intelligence vendors tend to look over the SMB market.

By: Steve Dine

I recently led a Enterprise Business Intelligence tool selection project for one of our customers that is classified in the small and mid-sized business (SMB) market.  A business with 100 or fewer employees is generally considered small, while one with 100-999 employees is considered to be mid-sized (by this definition, our customer would be mid-sized).  Having recently heard a number of the enterprise business intelligence vendors state that they are now targeting this market, I figured that they would be prepared for the differences that these customers require with regard to the sales process.  Unfortunately, in most cases I didn't find this to be true.


The SMB customers tend to differ from larger, enterprise business intelligence customers in a number of ways. First, they generally have fewer IT employees to support the organization and if a BI competency center exists, it may only consist of one or two resources. Second, the user base is obviously smaller along with the budget for new software. Third, the projects tend to be shorter, including the tool selection process, so the sales cycle is generally faster. At least one of these areas seemed to cause problems for all the enterprise business intelligence vendors on our list. While a few of the vendors seemed unprepared for all these differences.

The selection team's first challenge was in getting some of the sales reps to participate.  While a few of the enterprise business intelligence vendors had specific sales reps assigned to the SMB market, my guess is that they primarily focus on the upper end of the market. A sales rep for one of the top enterprise business intelligence vendors, who I won't mention by name, declined to participate unless we agreed to purchase their ETL tool along with their front-end enterprise business intelligence tool set.  In one case, we discovered that the vendor doesn't sell into SMB customers but instead relies entirely on consulting partners for this area of the market.  This works well unless there is no opportunity for the partner to sell consulting.  Three of the sales reps wouldn't respond to the RFI before being promised multiple fact gathering meetings.  While most sales reps would argue that this is sales 101, unfortunately a faster sales cycle means fewer chances to meet prior to completion of the RFI.  Maybe that is taught in sales 102.

Another area the selection team found to be a challenge was with regard to pricing.  Most of the enterprise business intelligence vendors claim to have special pricing for SMB customers, but only with regard to the discount.  As far as the selection team could tell, the list prices were the same, it was only with regard to the discount amount that the sales rep could provide.  This made it difficult to determine whether a tool set was within the budget of the customer until well into the process.  The other challenge we found was with regard to the cost of non-production licenses (development & test environments).  In one case, the cost of the non-production licenses would be more expensive than the production licenses. This was due to the fact that the non-production licenses were priced based on assuming 100 users, with no ability to variate.

I realize that not all sales reps are created equally and in some cases, it's the actions of the rep that reflect poorly on the enterprise business intelligence vendor as a whole. However, for the enterprise business intelligence vendors to be successful in this market, they will need a different approach to selling and an updated compensation model for their sales force. It is not enough to simply focus on pricing, they must also focus on the sales process. Handing the opportunity off to an inside sales team or a consulting partner isn't sufficient. It only signals to SMB customers how they will likely be treated once they buy the product from a particular enterprise business intelligence vendor. Also, sending in a sales rep that has no training on selling into a smaller customer isn't sufficient either.  Chances are that they will overlook opportunities because they expect the process to be the same as selling into larger customers. The truth is that many of these companies will grow out of the SMB market and become bigger fish in the enterprise business intelligence pond.

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Topics: Tool Selection, Business Intelligence, Blog