Nov 2007
The SMB market opportunity

Open source software is being widely adopted by large enterprises, but what about the much larger market of small and medium-sized businesses? Many vendors talk about SMBs as the ‘hot market,’ but how do open source vendors, open-source-enabled systems integrators (SIs), other resellers and consultants actually break into this difficult market, which is heavily dominated by Microsoft and other proprietary vendors? Among SMBs, the prospect of converting free downloaders and open source users into paying customers is in many cases more daunting than with enterprises. Margins are limited, and reaching customers through sales and marketing or channels is an expensive proposition. Yet open source software has some of the key characteristics – free or lower cost, easy accessibility, and freedom from vendor lock-in and license nightmares – to draw significant SMB business.

This report explores the challenges and conditions that must be met in order for open source software and its vendors to succeed in the SMB market. In addition to providing guidance for SMBs contemplating open source, it also examines the future trends and opportunities taking shape for open source in this very different market.

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