OnForce: SMB IT market presents major revenue opportunity

Summary:OnForce execs and partners discuss how its working with Apple, how this trend is affecting the small business market, and what we can expect from large corporations in the future.

Large tech corporations are becoming more and more interested in handling the IT needs of small businesses, according to OnForce.

Reps for the IT consultant marketplace cite a statistic from the IDC global intelligence firm that U.S. businesses with fewer than 500 employees spent roughly $23.5 billion on IT services last year, and are projected to spend $27.2 billion on IT services by 2015.

Given how much demand (and potential) there is in the small business IT sector where companies might not able to afford to employ an IT manager full-time, Apple is just one of many enterprises trying to get in on the ground floor and tackle this market early.

OnForce's chief operating officer, Bill Lucchini, explained that this market is extremely fragmented, and "probably the number one player is the local IT company down the street from you."

"People see that as a real opportunity to create a national brand or presence around SMB IT services," added Lucchini, noting that SMB needs are more significant and the revenue opportunity is huge.

But the market is still fragmented, Lucchini argued, because "you have to be particularly serious and focused to get anywhere with small businesses."

As of June 2011, OnForce has partnerships with 246 Apple Stores nationwide.

The process for the customer is quite simple. The SMB customer heads to the Apple Store and buys up whatever computer equipment he or she requires. Apple associates help the customers with the products they're buying in the store. But for on-site setup and other IT needs, that's where Apple offers a referral to OnForce.

"From our network of technicians, we will match the right person, get the scheduling down, and take care of the customer," Lucchini said.

For the most part, OnForce's customer base is largely mom-and-pop shops and other small businesses with between 10 and 40 employees -- but under 20 employees is the average.

OnForce retains about 100,000 independent technicians nationwide, all of whom are freelance and many of them are just one-person businesses. Each contract rate is negotiated independently, although Lucchini asserted that it is always a fair market price.

Kevin Kay, the president and owner of The Willows of Easley, a residence home for seniors in South Carolina, described his experience with OnForce as a largely positive one.

Kay contacted OnForce about a month ago after a referral from Apple about setting up PC to Mac data transfers.

“I'm not a computer person and, quite honestly, I didn't want to be a computer person. I just wanted to work," said Kay.

He noted that the local OnForce technician "worked through lunch," and was "very dedicated to getting this work complete and making sure it was done the right way." Within a day, the business had its new IT setup finished.

Lucchini pointed out the catch here is that from a partnership perspective, OnForce doesn't serve SMBs directly -- it always works on behalf of someone else, whether it’s Apple or AT&T.

"We are helping them decide what is right for the particular service they want so they can carve out their pieces of the market," Lucchini remarked.

Positing that there is a sense of "urgency" surrounding this sector right now, Lucchini expects we'll see many more similar partnerships roll out this year.

"If you just watch or listen to the news about what’s going on with companies under pressure," Lucchini said, "I think what’s happening is companies are feeling that SMBs are the direction to shift towards for future growth."

Related:

Topics: Apple, AT&T

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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