SMEs Drive Growth Of Networking Products And Services

New studies confirm the vibrancy of the small-and-medium-sized enterprise (SME) market for networking products and services in the U.S. and European regions.

IDC's survey of 550 businesses with between 20 and 1000 employees found that web hosting and networking and network security consulting services are being actively sought after by the SMEs. As a result of their increased spending, SMEs' share of the overall IT service market will rise from today's 22 percent to 28 percent over the next five years, according to IDC.

While network-related services were found to be in high demand today, services supporting IT infrastructure capabilities ranked high on the "wish list," with many firms hoping to step up budget allocations for these services.

Explaining SMEs' growing need for IT services, Ray Boggs, vice president for Small/Medium Business Research at IDC, said in a statement that businesses "with 100-999 employees are too big for the simple solutions that serve the smallest firms, but not yet ready for big ticket enterprise approaches. For these firms, access to flexible IT services can represent an affordable approach that meets their needs."

The same trend is playing out in Europe. According to new research from channel analyst Context, the second quarter of 2004 reseller sales of networking products -- including hubs, switches and routers -- were driven by the SME sector.While overall networking sales were up by as much as eight percent in the UK, France and Germany, the firms that fared best were those that had a channel marketing strategy that targeted the SMEs.

Their survey of value-added resellers showed that growth was strongest among SMEs; large corporate sales actually declined by 4.2 percent. According to Context: