Tuesday, 2 August 2005

Easy pickings in small organizations for Linux-based Email, but beware sales overheads

For vendors of Linux-based email servers, the low hanging fruit are in the low end: organizations with fewer than 250 seats. However, many of those organizations have little Linux expertise, so the key is for email vendors to work with VARs who can make these engagements a success. There's an opportunity here for VARs to provide a "fit and forget" solution. Contrast this with a solution that the customer must tweak and fiddle with.

However, sales to smaller organizations have potentially higher sales overhead costs per mailbox. The key for vendors is to partner with VARs who will allow a business model to generate sufficient profit. I've seen the VAR model work at first hand, particularly in Europe. The challenge wasn't the volume of prospects, but of keeping the sales overhead low enough.

The potential for selling to medium-to-large-sized organizations also exists, but with much longer sales cycles. This can present a different challenge to under-funded vendors, but an opportunity for well-funded people such as Scalix.

[Edit: Aug 18 - f(R) pointed out that used "cost of sales" incorrectly]

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