Introduction
 
Small and medium-sized enterprises (SMEs) are one of the fastest growing ICT opportunities, but are notoriously hard to target. Evolving distribution and hosting models make SMEs more approachable than ever.
 

 
Scope
 
The report details the markets for hardware, telecoms, software and services in the SME space.
 
Market characteristics for Western Europe by country.
 
Market sizes and projections from 2003 to 2007.
 
Growth of the SME space by four different size-bands.
 
Highlights
 
The Internet has transformed the way all companies conduct business. However, it is the SMEs that are perhaps in the best position to leverage the power of a network-based business model. Unhindered by legacy systems or entrenched processes and cultures, SMEs can take advantage of the range of benefits associated with conducting business online.
 

 
There is a strong regional divide arising from the different rates of progress in eBusiness development within the EU, generally perceived as between the Nordic/Western and the Southern European member states. While some countries are fast adopters of eBusiness the situation is entirely different in regions with less well-developed economies.
 

 
Financial services, public sector and manufacturing represent the bulk of the SME opportunity.
 

 
Reasons to Purchase
 
Discover where to focus in the SME space to maximize returns.
 
Understand how the individual market characteristics of different sized SMEs affects their buying patterns.
 
Learn which vertical markets in the SME space will be most receptive to ICT and how to target them.

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Introduction 3
 
Market context 3
 
Market opportunities 4
 
Country comparisons 5
 
CHAPTER 2 INTRODUCTION 12
 
What is this report about? 12
 
Who is the target reader? 12
 
How to use this report 12
 
Forecasts and assumptions 12
 
Scope of the report 13
 
CHAPTER 3 MARKET CONTEXT 15
 
Introduction 15
 
Key findings 15
 
Segmenting the SMB sector 16
 
Number of employees per company sizeband 16
 
Where companies are on the ICT adoption curve 17
 
What is really driving the SME market? 19
 
Simplicity and ease of use allow SMEs to install more sophisticated solutions 19
 
Value for money and a fast and visible return on investment 20
 
Bundled solutions lead to a one-stop shop taking the complexity out of managing separate systems and providers 21
 
Reliability and flexibility are high on any SMB’s wish list 22
 
Broadband access technologies have opened up a plethora of enterprise-type communication solutions 22
 
Initiatives to increase ICT uptake among SMEs 24
 
SMEs are still reluctant to do business online 24
 
Investment concerns still hinder ICT uptake 25
 
Lack of IT staffing 25
 
Localization means cultural and language restrictions 26
 
SMEs are notoriously cautious when it comes to new ICT 26
 
Security is becoming a bigger issue for small firms 26
 
Sweating the assets 27
 
What SMEs want on the technology and services front 27
 
Networking technologies 29
 
Applications 31
 
IT services 32
 
Managed services prerequisites 33
 
Telecoms – voice and data 35
 
ROI, TCO and the implications of other TLAs for SMEs 38
 
CHAPTER 4 MARKET OPPORTUNITIES 41
 
Introduction 41
 
Key findings 41
 
Country comparisons 41
 
Variations exist 42
 
Benelux 43
 
Total market size by technology 43
 
Total market size by vertical market 44
 
France 45
 
Total market size by technology 45
 
Total market size by vertical market 46
 
Germany 47
 
Total market size by technology 47
 
Total market size by vertical market 48
 
Italy 49
 
Total market size by technology 49
 
Total market size by vertical market 50
 
Scandinavia 51
 
Total market size by technology 51
 
Total market size by vertical market 52
 
Spain 53
 
Total market size by technology 53
 
Total market size by vertical market 54
 
UK 55
 
Total market size by technology 55
 
Total market size by vertical market 56
 
CHAPTER 5 ACTION POINTS 57
 
Focus on financial services, public sector and manufacturing SMEs with more horizontal strategies elsewhere 57
 
Telecoms is the single biggest area of SME ICT spend followed by hardware 57
 
The UK, Germany and France are the biggest geographic targets and will require special attention 58
 
CHAPTER 6 APPENDIX 59
 
Definitions 59
 
Research methodology 60
 
Future readings 60
 
SPP writing team 60
 
How to contact experts in your industry 61
 

 

 
LIST OF TABLES
 
Table 1: Total SME IT spend in Benelux ($m), 2003-2007 44
 
Table 2: SME IT spend split by verticals in Belgium ($m), 2004 45
 
Table 3: Total SME IT spend in France ($m), 2003-2007 46
 
Table 4: SME IT spend split by verticals in France ($m), 2004 47
 
Table 5: Total SME IT spend in Germany ($m), 2003-2007 48
 
Table 6: SME IT spend split by verticals in Germany ($m), 2004 49
 
Table 7: Total SME IT spend in Italy ($m), 2003-2007 50
 
Table 8: SME IT spend split by verticals in Italy ($m), 2004 51
 
Table 9: Total SME IT spend in Scandinavia ($m), 2003-2007 52
 
Table 10: SME IT spend split by verticals in Scandinavia ($m), 2004 53
 
Table 11: Total SME IT spend in Spain ($m), 2003-2007 54
 
Table 12: SME IT spend split by verticals in Spain ($m), 2004 55
 
Table 13: Total SME IT spend in the UK ($m), 2003-2007 56
 
Table 14: SME IT spend split by verticals in the UK ($m), 2004 57
 

 

 
LIST OF FIGURES
 
Figure 1: Segmenting the SME sector 4
 
Figure 2: Segmenting the SME sector 18
 
Figure 3: What SMEs want 29
 
Figure 4: SME end-to-end solution 34
 
Figure 5: Telecoms and managed services overview 37
 
Figure 6: Total SME IT spend in Benelux ($m), 2003-2007 44
 
Figure 7: SME IT spend split by verticals in Benelux ($m), 2004 45
 
Figure 8: Total SME IT spend in France ($m), 2003-2007 46
 
Figure 9: SME IT spend split by verticals in France ($m), 2004 47
 
Figure 10: Total SME IT spend in Germany ($m), 2003-2007 48
 
Figure 11: SME IT spend split by verticals in Germany ($m), 2004 49
 
Figure 12: Total SME IT spend in Italy ($m), 2003-2007 50
 
Figure 13: SME IT spend split by verticals in Italy ($m), 2004 51
 
Figure 14: Total SME IT spend in Scandinavia ($m), 2003-2007 52
 
Figure 15: SME IT spend split by verticals in Scandinavia ($m), 2004 53
 
Figure 16: Total SME IT spend in Spain ($m), 2003-2007 54
 
Figure 17: SME IT spend split by verticals in Spain ($m), 2004 55
 
Figure 18: Total SME IT spend in the UK ($m), 2003-2007 56
 
Figure 19: SME IT spend split by verticals in the UK ($m), 2004 57