SMB vendors: Here today, but tomorrow ... ?

HANOVER, GERMANY - The floor of the Cebit trade show is littered with small vendors offering software systems for small and mid-sized companies. They could be just the ticket for smaller customers looking for products that work "out of the box" -- assuming the vendor is still in business a year from now.

"Customers have to be concerned about the viability of some of these smaller vendors," said Stephen O'Grady, a software analyst with RedMonk LLC. "Take a look at their customer traction, what do they have in the way of references? If they have a happy and vibrant customer base it still doesn't guarantee anything, but at least it takes some of the uncertainty out of the equation."

Products for small and medium-sized businesses, or SMBs, are a special focus at this year's Cebit trade show in Hanover, Germany. A section of the show floor is devoted to them, where dozens of vendors are showing systems for content management, CRM (customer relationship management), ERP (enterprise resource planning), firewall security and other functions.

Most of the products promise "out of the box" functionality, meaning they include all of the key components needed and are easy to install and configure. They are aimed at businesses with anywhere from five to 5,000 employees and limited IT support. They also promise to let customers scale their systems as they add new employees.

"You can go from five to -- infinity!" said a sales manager at one ERP vendor here, with a grin that suggested he didn't even believe it himself.

While some offerings may deliver on more realistic promises, customers must be wary of picking small vendors that may soon go out of business, O'Grady said. A few of them put the source code to their software in escrow, he said, with a promise to make it available to customers if their company goes under.

"I think the opportunity for many of these small vendors is to target very specific customer needs. I don't care how big you are -- even companies the size of IBM (Corp.) are up-front that they can't address the needs of every SMB," O'Grady

The following is a sample of the smaller business products on show here:

-- Structur AG is here to show a new version of its content management system, icoya OpenContent 2.5, which starts at $370 for up to five users. Companies with a limited IT staff can use templates to design a simple Web site or intranet portal, providing access to HTML (Hypertext Markup Language) and content based on XML (Extensible Markup Language) content as well as other document types, said Structur representative Timm Dollinger.

The software runs on Windows, Linux and Solaris and includes a copy of the SAP DB open-source database; apart from an operating system, customer don't need any additional software to run the system, Dollinger said. Asked how far the product will scale, he said one of Structur's customers has 5,000 employees using the system in 20 countries, he said.

-- X-dot Gmbh was here to announce a new workflow management system for its groupware product, x-manage office, which includes calendaring, e-mail, fax, instant messaging, contact management software and other modules. The package runs on Linux or Sun Microsystems Inc.'s Solaris operating system and comes with the PostgreSQL open-source database, the Apache Web server and other infrastructure components.

The software is available in English, German and other languages.  The software can also be leased or hosted in a datacenter, prices for which are lower.

-- Pentaprise Gmbh unveiled a new workgroup module for its Web-based ERP system, aimed primarily at smaller businesses. The software runs on the main Linux distributions and works with transactional databases including those from Oracle Corp., IBM Corp.'s DB2 and Informix, My SQL AB's My SQL and others, said Hartmut Ahrens, a Pentaprise sales manager.