Small is beautiful: Tech’s focus on enterprise customers is hurting innovation

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Resource gaps

Within the past few years, artificial intelligence has emerged as an example of technology that is out of reach for most small businesses and increasingly the domain of the “tech elite.”

Wired magazine writes of search startups and health information technology companies that would benefit greatly from more advanced AI across their operations, but they find that their ability to train these models pales in comparison with giants such as Google LLC and Amazon.com Inc. Part of the problem? The cost of training these models can “cost more than $50,000, paid to cloud computing companies to rent their computers and programs.”

The exorbitantly high sticker price of adopting new technologies isn’t a new phenomenon, nor one specific to the cloud industry, but the cloud industry is guilty of making it harder for small businesses to manage these costs better. Cloud costs at some of the largest cloud providers in the industry can quickly balloon if users aren’t careful, and hyperscalers typically offer little to no support in helping users understand exactly what they are paying for.

In the past few years, serverless technology has stepped in to allow developers to pay for computing resources “on demand,” essentially paying only for what they use rather than pre-provisioning capacity in the cloud. However, this tech is still challenging to operationalize at smaller companies, and migrating existing workloads to a serverless model often requires rewriting applications from scratch, not to mention a level of support and guidance that enterprise-focused cloud providers don’t readily offer to smaller customers.

Without a helping hand from vendors, smaller businesses tend to opt out of the latest advancements in cloud. And when they do, it’s a loss for these businesses, and a loss for innovation overall.

Redefining success

The term “underserved market” means different things across different industries. In the tech industry, entrepreneurs and small to medium-sized businesses building digital products continue to be underserved, as tech companies increasingly define success through the lens of acquiring new enterprise customers.

Nowhere is this more true than in big tech, across companies such as Amazon, Google and Microsoft Corp., where the obsession with enterprise customers has reached a new peak. Small businesses are being neglected by big tech precisely when the technologies these companies excel in – cloud, AI and machine learning, IoT – are growing in importance and impact.

When enterprise revenue is the singular focus, there is no incentive to build products and features that are geared for a 25-person company. Small businesses might complain about bloated enterprise products, or the lack of SMB-friendly pricing, but it’s hard to complain when the sales team doesn’t prioritize answering your call.

These barriers don’t need to exist. In the past few years, tech leaders have been talking more and more about product-led growth, a go-to-market strategy where the “end-user product experience is the primary driver of growth.” In other words, rather than a tenacious salesperson driving growth, growth starts with a customer’s love for your product.

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