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VITTORIO - February 8, 2010 - President of Idealogical Systems, Andre Vittorio, poses with some of the technology he and his staff use in their Markham offices. Vittorio suggests to his clients that they keep a consistent technological plan and update their systems every five years.

Yvonne Berg/yvonne berg The Globe and Mail

When it comes to figuring out what his technology needs are, Andre Vittorio has it easier than most.

The president and owner of Idealogical Systems Inc., a Markham, Ont.-based reseller of technology to small businesses, has been working in the industry for almost 20 years and he replaces all of the equipment at his company every five years, a practice he recommends for his clients.

"You need to have a technology strategy and stick to it," Mr. Vittorio says. "And it should include replacing all of your technology every four or five years."

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Mr. Vittorio has a staff of 13 employees and Ideological's technology includes desktops, laptops, servers, VOIP, telephony, smart phones, firewalls and a printer. If a new staff member joins, he makes a purchase outside his five-year window. Otherwise, he sticks to his rule.

Among the qualities he's looking for are that all staff have the same hardware, that there's a consistent platform and that the technology is affordable.

Small business users, Mr. Vittorio says, have to remember that purchasing technology isn't like buying a refrigerator. "You can't just plug it in and let it run. You need to maintain, upgrade and manage it."

The biggest mistake small-business users make about technology, he adds, is getting advice from someone who only knows about big-business computer needs. Small business owners can learn from the way big businesses carefully analyze their technology requirements, but the actual needs are different.

The result is that the small-business technology market, which includes hardware, software and IT services, is booming to the annual tune of $3.5 billion in Canada, says Paul Edwards, director of IDC Canada, a provider of IT market intelligence and advisory services. Mr. Edwards, who is based in Toronto, expects the IT market for small business owners to reach $4 billion by 2012.

The market for hardware is expected to reach $2.2 billion this year, while IT services should total $750 million and software $554 million.

"Traditionally small businesses didn't view technology as something that could help the business," Mr. Edwards says. "But that attitude is changing."

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The shift can be seen in the way small businesses are spending their IT budgets. In the past, a greater percentage of small business IT budgets were spent on hardware, but there has been a shift to more IT services and software in recent years, Mr. Edwards says.

A recent survey by IDC found that business owners, small or large, are ranking IT purchases based on performance, price, alignment, reputation and brand. "This ranking speaks to the economy," says Mr. Edwards, since business owners want tangible returns for their investment.

Among the top IT purchases Canadian small business owners plan to make in 2010 are: IT security, desktop PCs and mobile computing devices.

The key question, though, is whether the products being targeted specifically to small business owners are actually unique. "There is marketing, no question," Mr. Edwards says, "because all vendors see small and medium sized businesses as an opportunity," but he also points out these users have unique needs.

About five years ago small businesses as a group were not being targeted, says Jay McBain, Lenovo Group's director of small and medium business for the Americas, who relocated to North Carolina from Toronto last year. At that time, small business owners were either buying consumer or professional service computers that were geared toward large companies.

Only in the past few years have unique products been offered to the small and medium sized businesses, he says, in Lenovo's case since its deal to buy IBM's PC division five years ago,.

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Lenovo introduced the ThinkPadEdge laptop in January for small and medium business owners. The company's research into customer needs found small business users demand higher quality multimedia functions, such as being able to plug their computers directly into a television for presentations. Laptops being marketed to small-business owners usually have higher definition audio and video than those targeted for consumers and big enterprise.

An HDMI, high-definition multi-media interface allows users to plug their laptops directly into a television.

Dell, which launched its Vostro product line in 2007, focuses on "security, productivity and durability" in its products for small and medium businesses. It is launching a new line of Vostro laptops next week, trumpeting security, storage and support.

Mr. McBain says that since small business users often require Skype, VOIP (voice over internet protocol) and instant messaging, they require a higher quality, light-adaptive camera and a better quality microphone built into their machines. Another demand item is high security, since small business owners are just as – or, arguably, more – susceptible to computer hacking than big business.

Small business owners, Mr. McBain says, prefer more durable laptops. That might include steel hinges instead of plastic ones, and notebooks reinforced with materials such as titanium or magnesium alloy, rather than purely from plastic.

As computer and technology prices have dropped, they have almost become commodities, says Derrick Neufeld, professor of information systems at the University of Western Ontario's Ivey School of Business. Computer makers and stores will vie for attention by offering the biggest screen, cool peripherals or various bundles to seduce shoppers.

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But small business owners can't forget what they're looking for, Prof. Neufeld says. "It's easy to get caught up with new gadgets and that can lead to a lot of unnecessary upgrading. Before small business owners hit the shop floor or a website, they need to know what they want to be able to do (with the technology) and why they stopped using their computer in the first place."

Prof. Neufeld admits to being cynical about the marketing of technology, but warns small business owners that they can't avoid re-assessing their technology needs. "Customers have increasingly required that businesses will be accessible all the time and technology enables that accessibility. But if you allow technology to get obsolete, that can lead to business losses."

Which could help explain why the fastest growing product being bought by small business owners is managed service, Mr. McBain says. It involves paying a monthly fee, usually about $100, to have someone remotely watch over your system, ensure it's running smoothly and be available to fix problems as they arise, either remotely or in-person. "You're buying a piece of an IT staff and you can write it off as an operating expense," says Mr. McBain, adding that about 11 per cent of small businesses have managed service.

Another trend is connectivity. Laptops need to be able to connect to the Internet five or six different ways, he says. This should include the ability to get online via WIFI, WIMAX and 3G networks, so small business users have access whenever they need it.

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