Top Trends Most Evident at the 2010 Small Business Technology Summit

Back in the beautiful Live Free or Die state after attending the 2010 Small Business Summit earlier this week. This is a fantastic event coordinated by Ramon Ray and Marian Banker, and held at the Digital Sandbox in the financial district in New York. Whether due to Ramon and team’s hard work and great marketing, or a glimmer of hope for an economic recovery, attendance was up over last year. More than 500 attendees turned out and  as usual, Ramon energized the crowd and a great networking experience was had by all.

As I’d done in 2009, I wanted to compare our Top 10 SMB Technology Market Predictions with what I was hearing at this event as a reality check on our musings. But as a duo, Sanjeev and I had 13 predictions for 2010—as compared to the measly five I’d put together on my own in 2009. So I’ve selected the 2010 predictions that we made that I saw most in evidence at the event.

Pent Up Demand Will Be There—But Won’t Be Easy to Capture. This was our #1 2010 prediction. Small business owners and employees at the Summit were most jazzed up about solutions with clearly demonstrable bottom and/or top line business benefits. In the words of one customer, “We have to spend money wisely to do more for our clients and make more money.” A few of the solutions that won the Hottest Technology awards that really seemed to hit the mark:

  • EzTexting, a solution that lets you easily send SMS text messages to customers to help capture their attention at the right place, and right time.
  • SugarSync, which helps you manage multiple devices, locations, versions, authors, editors, etc. by synching up everything on all your devices automatically.
  • Broadlook Technologies, Inc.’s Profiler, which helps you quickly find key contact details–names, titles, email addresses, phone numbers, bios, media mentions and more–for companies and  imports it into your CRM solution or sales database.

More vendors are also stepping up to the plate to make a long term commitment to tune in to true small business requirements and provide a more accessible, personal and positive lifecycle experience to win small business hearts and minds. For instance, the Dell panel, hosted by Dell Small Business VP Mel Parker, featured three small business customers (Vitals.com, TecAccess and Rightsleeve) to underscore Dell’s focus on two-way conversations and belief that the best way for it to shine is in the reflected glow of customers that are using Dell solutions to help grow their businesses.

SMBs Accelerate Their Shift to Digital Marketing Media. This was our #2 prediction for 2010. At last year’s event, attendees were asking about how to Tweet or blog. This year, most are now highly engaged in many social media venues. Summit attendees are a web savvy crowd–a show of hands indicated that most have a Web site ( more than 40% of small businesses in the U.S. don’t have a web site). But even this web-savvy group is struggling to figure out how to get the biggest bang for their social media buck. For many, the speed of innovation and the universe of social media solutions and options is overwhelming.

During the panel on “Strategies for Success”, moderated by Angus Thomson, leader of Intuit’s Grow Your Business Division, many of the questions that attendees asked centered on how they can more efficiently identify and use tools to help drive traffic to their web sites. Attendees also had plenty of questions for Melanie Attia of Campaigner about how to boost results from their email marketing campaigns. On top of that, they’re grappling with how to leverage social media into the digital marketing mix so that they can better integrate customer interactions across the seemingly endless expanse of digital venues. InfusionSoft had a steady stream of traffic from people interested in its email marketing plus social media integration story. In a nutshell, there’s a lot of confusion about how to best leverage all of these–and a big opportunity for vendors that can help small businesses sort this out.

The New Face of Small Business. In our #4 2010 prediction, we’d posited that vendors need to look at the small business market through a new segmentation lens. No doubt about it–the recession, generational changes, globalization, and the frenzied pace of technology innovation are the equivalent of an extreme makeover on the face of small business. Baby boomers aren’t retiring, they’re starting new businesses, and were well-represented at this event along with Gen X, Gen Y and Millenial entrepreneurs. But they are coming from different places in their experience and perceptions in areas such as digital marketing and social networking–and technology in general. They all want to figure out how to reach the same destination—business success—but are likely to take different paths in how they discover, evaluate, purchase and implement solutions. Vendors will need to tune marketing, training and services to meet these different requirements.

SMBs’ Appetite for Managed Services Grows. Jumping down to #8 on our 2010 list–we should have moved this one higher up! Many of the small business owners and IT people I spoke to at the event realize that they need technology to support their business goals, but have reached a point where they don’t have the time, expertise or resources to do it right on their own. As one business owner told me, “My business is only as strong as the IT foundation it sits on. We can’t afford for our systems to go down.” Dell’s booth did a brisk traffic with its Dell Managed Services offerings, as did CMIT Solutions, which also provides managed services. Small businesses are realizing they can’t do it all, and are looking for cost-effective, round the clock remote management services with onsite support. Vendors that can deliver affordable, put proactive, responsive and comprehensive  services—and do it scalably and profitably–will be in demand.

And what about the rest of our predictions? While I did see and hear evidence for most of them, some, such as “Virtualization Boosts Cloud Computing” are probably more in tune with mid-market requirements than those of small businesses. Others, such as “2009 Acquisitions Drive New Value for SMB customers in 2010” and “Vendors Scramble for SMB Developer Loyalty—and New Integration Needs Arise” deal more with vendor trends, and rightfully were in background, rather than foreground at this very customer focused event.

At the big picture level, above and beyond individual predictions, what struck me most were that the two themes that really seemed to resonate with the audience were pragmatism and inspiration. Attendees ate up down to earth tips from Shashi Belamkonda of  Network Solutions, who offered a rapid fire list of ways to immediately boost return on your social media participation, and from Ellen DePasquale, aka the Software Revitalist, who provided practical information to help small buisnesses get better results from software solutions. (By the way, here’s a link to all the great pictures Shashi took at the Summit).

However, attendees were also riveted when Seth Godin, bestselling author and entrepreneur, urged them not to get out of the commodity business and trying to “fit in”—or price alone will dictate whether you are in or out. Seth’s call was to be an artist in business, aiming to change the status quo in your category, instead of following the conventional wisdom to do the same thing as the cheaper and better.

Of course, there were many other interesting discussions, people and solutions at the Summit, but I’m out of time. Check the tweet stream #smallbizsummit for lots of good info and insights from the many Tweeters at the event. I’m looking forward to the 2011 Summit already!

SAP Aims for SME

I dialed into SAP’s SME (small and medium enterprises) Global Business Update Call a couple of weeks ago. Jeff Stiles, SVP, SME, Volume & Ecosystem Marketing, provided analysts a recap of recent SAP SME highlights, and shared strategic directions for 2010. I’ve been following SAP in the SME market since it acquired TopManage (which later become SAP Business One) in 2002, so I’m always interested in checking their progress. Here’s what I heard and what I took away from the discussion—with the most interesting stuff saved for the end.

  • SME is critical to SAP’s future growth: As part of recent restructuring changes, the company named Peter Lorenz, Executive vice president of Small and Midsize Enterprises (SME), as a Corporate Officer, elevating SME attention at the corporate level. Though SAP has been investing in SME solutions, marketing and sales for several years, this appointment indicates that SAP is redoubling its efforts to crack the SME code. SAP also recently hired Kevin Gilroy—who spent 24 years at HP, most recently as senior VP of HP’s worldwide small and medium business segment—as vice president for channel and business development for SAP’s small and midsize business organization in North America. SAP is also making substantial product, channel and marketing investments in SAP Business One and SAP Business by Design—both of which are geared to smaller companies—as well as to SAP Business All-In-One, which is designed for the mid-market. As noted in the next bullet, however, SAP’s SME definition, solutions and pricing still skew towards larger SMEs, so the question remains, how low will SAP be able to go in the broader small business market?
  • SAP is growing its SME market footprint: Jeff shared a number of impressive stats, such as the fact that more than 77% of SAP’s 95,000 customers are SMEs, and that this percentage is growing. However, SAP defines the SME market as companies with $500 million in annual revenues or less, which gets into some pretty big businesses. For instance, the U.S. Small Business Administration (SBA), has established two widely used size standards—500 employees for most manufacturing and mining industries, and $7 million in average annual receipts for most non-manufacturing industries. Nevertheless, SAP has tripled its SME base (using its SME definition) in last 3 years (with about 30% coming from the Business Objects acquisition). The vendor indicates that it is garnering 35 new SME customers per working day, and that it is enjoying good growth among small businesses and in the lower end of the medium business market.
  • SAP is investing in channels to enable SME growth: The direct, feet-on-the street sales model that has served SAP so well in the large enterprise space doesn’t scale to the economies needed in SME. In addition to hiring Kevin Gilroy, SAP is recruiting and enabling more SME channel partners and developing and expanding direct inside sales to do the job. Channel partners now account for more than 50% of SAP’s SME revenues, inside sales accounts for 20% of the business, and 30% derive from SAP’s direct outside sales team. SAP has struggled with building effective SME channels for a long time. But, it looks like it is making some good gains here. It is investing in “virtual agency” marketing services to help its 6,000 partners create their own targeted campaigns, and in SAP Marketing University to teach partners about marketing. Inside sales will be increasingly critical for SAP in SME—especially as it prepares for the launch of Business by Design’s next version in mid-2010.
  • Business One gets a facelift and Business All-in-One gets a refresh: Release of Business One 8.8, slated for Q2 2010, features a new UI with Web 2.0 capabilities for a better user experience, and cloud integration for partner applications. Behind the scenes, SAP has consolidated three individual lines of Business One code into one—making the economics much more attractive. SAP has also created packaged integration scenarios for subsidiaries of big companies, making it easier for them to integrate with their corporate HQ SAP systems; remote monitoring; and embedded, packaged analytics. Meanwhile, Business All-in-One gets a refresh, with SAP extending the Fast Start (fixed scope, fixed fee) program with partner hosting offerings in 20 countries—another indicator that more companies just don’t want to or can’t run all of this themselves. SAP also said that its online solution configurator is helping to reduce the cost of sales, and that it will introduce a new supply chain relationship management module into the Business All-in-One offering.
  • Business Objects has been a boon: With 57% year-over-year growth, Business Objects has seen good traction with both SAP ERP customers (it tripled BI revenues with SAP ERP clients in Q1 through Q4 of this year) and non-SAP customers. SAP also intends to use Business Objects as a wedge opportunity, to get in the door and eventually replace older legacy systems with SAP ERP. The company recently announced a free personal use version of BI On Demand, which should boost interest among the vast majority of SMBs that don’t yet use any BI solution.

And now to what I found most interesting—Business by Design, Chapter 2. What a long strange trip this has been. After launching ByDesign to much fanfare in 2007, things quickly fizzled. Going against conventional wisdom (and economics) SAP built its debut SaaS offering on a single tenant model instead of a multi-tenant architecture. We all know what that means—lots of red ink because single tenancy doesn’t afford the economies of scale and skill that multi-tenancy provides. Anyway, since then SAP has limited ByDesign to about 100 charter clients, who are getting a lot of tender loving care. Feature Pack (FP) 2.5, slated for H2 2010 will sport multi-tenancy, making it economically feasible for SAP to sell, provision, maintain and support it in a broader market. SAP will continue to offer a single tenancy option alongside the multi-tenant offering (both on the same code base).

Since this is ByDesign’s first multi-tenant varietal, SAP isn’t quite sure what the sweet spot will be but will stick with a 25-user minimum. From my perspective, this still seems a bit high for getting at much of the SMB market. By SAP’s own calculations, about 10% of client companies’ workers currently use ERP. Although this percentage may grow, right now this puts ByDesign at 250 employees and up (whereas the vast majority of SMBs have fewer than 100 employees). Another challenge SAP faces is around routes to market. Few SaaS vendors have established successful channel programs with traditional IT VARs, many of whom have been skittish about the model. As I mentioned above, SAP will need to fire up the inside sales model for ByDesign, and create a lot of pull with marketing campaigns (enter the 100 ByDesign reference customers).

Another interesting note: SAP is incorporating Microsoft Silverlight to make it easier to make changes to the ByDesign UI, create mashups and integrate with Microsoft Office applications and features. SAP will also release an SDK for developers based on Microsoft Visual Studio.NET, hoping that all those developers will be enticed to build add-ons and industry-specific extensions for ByDesign. And yes, there will be a store for that—SAP intends to build an app store down the road.

I don’t know if I’m reading too much into the tea leaves, but I’m a bit intrigued by SAP’s growing relationship with Microsoft for ByDesign. Since Microsoft Dynamics has yet to offer a true SaaS ERP solution, it just makes me wonder if there’s something up with that. Related to this, Microsoft recently forfeited it’s small business accounting play to Intuit, and soon after, inked a deal with Intuit to integrate its cloud-based Partner Platform with Microsoft Windows Azure—which looks to be a mutually beneficial relationship. Could SAP and Microsoft be hatching some similar type of joint effort in this space, aimed at the mid-market?

As ByDesign FP 2.5 comes fully online, SAP will probably spend more time than it would like in positioning ByDesign against both Business One and Business All-in-One.  Though the on-site vs. cloud angle is clear, there is lots of market overlap. SAP will need to proactively guide both customers and partners to the right solution in terms of total cost, ease of use, functionality, ROI timeframes, etc. so it doesn’t waste time and energy competing against itself—or having its partners compete against themselves or its inside sales team. It will also be interesting to see if ByDesign can replicate the experience of its 100 charter customers to a broader base, as it will be difficult to broadly supply the same level of attention that these early customers enjoyed.

But clearly, the vendor must make ByDesign work to capture the SME market’s increasing appetite for SaaS and cloud alternatives—yes, even in the ERP space, as evidenced by NetSuite and Intacct. SAP’s recent investments, Peter Lorenz’ new chair at SAP’s corporate table, and Kevin Gilroy’s appointment to steer North American channel and business development indicate that this time, the vendor intends to go much further to make sure that it’s cloud and SME formulas work.

What is Social Media Management, and Why Should You Care?

(Originally published on March 4, 2010, in Small Business Computing)

What is Social Media Management?

As described in the column “What is Social Networking, and Why Should You Care?” Internet-based social media make it easier for people to listen, interact, engage and collaborate with each other. But, as the volume of social media venues and conversations rises, it quickly becomes a time and labor intensive process to effectively track, converse, monitor and manage them.

Social media management solutions can help you manage outbound and incoming online interactions—along with other marketing activities–in a more efficient manner. They streamline and consolidate how you listen to and participate in relevant conversations in the different places they’re taking place—blogs, social networks like Twitter or Facebook, and other public and private web communities and sites. They help you to more easily monitor what people are saying about your business, and by automating the process of delivering your outgoing messages through multiple social media outlets simultaneously, help you to amplify your social media presence across several social media sites.

Social media management tools can also help you to integrate social media activities with other marketing programs. These can include both other online activities, such as web site, search engine marketing campaigns, contact management systems, and email marketing, as well as offline marketing, such as events or white papers.

Why Should You Care?

We all know how important word of mouth is, and social media is like word of mouth on steroids. As a business, it’s vital to tap into and join online conversations not only about your brand, but also those about your competitors, your industry and your areas of expertise.

Even if you haven’t launched an outbound social media strategy, you to keep a pulse on what people are saying—good or bad—about your company, competitors and major trends. And, by representing your company in a positive, authentic way, you can build credibility for your expertise and business, and link to customers and prospects quickly. You can also help mitigate damage should negative conversations about your company emerge by proactively responding to complaints. Social media can also steer people to your other marketing programs, where it’s easier to individually track and manage individual customer and prospect interactions.

Done right, social media can help you better understand prospect and customer needs, and increase visibility and generate leads. But it takes a lot of time and energy to stay on top of all of this in a manual, piecemeal fashion. Think about the time it takes to just to cover some of the basics, such as:

  • Creating content in multiple places, such as a blog, Twitter, a Facebook page, etc., and monitor and scan the views, decide what comments to approve, and respond to replies on these sites.
  • Scanning Twitter followers for conversations you may want to join, or checking your RSS reader subscriptions for relevant articles and new ideas.
  • Checking Google Alerts to see when and where your business is mentioned on the Web.
  • Creating and monitoring a community and topics on a site such as Facebook or LinkedIn.

Now think about the fact the social media to do list is only going to grow. And while you are building goodwill, relationships and awareness, it’s difficult to measure short-term payback on social media efforts. And you can’t abandon other marketing activities—web site, search engine marketing, email marketing, etc. and contact and sales management. Social media management tools give you a way to get your arms around the many-headed social media Hydra by streamlining and integrating customer interactions across multiple marketing venues.

What to Consider

There are dozens, if not hundreds of solutions out there that let you manage/integrate different slices of the social media pie, but we are still searching for the Holy Grail in this relatively new area. However, I’ve spotted a few vendors that have put together some more comprehensive solutions designed and priced specifically for small business budgets, including:

  • BatchBlue’s BatchBook, a “social CRM” offering that integrates contact, sales and social media feeds, with mobile versions for iPhone and Blackberry. The social media integration is cool—after you enter social media feeds from Twitter, blogs, LinkedIn, etc. on a contact record, you automatically see a contact’s social networking profile, and the last three posts, tweets and/or other entries when you open the record so that you  can keep a pulse on  customers and prospects. With lists and reports, you can build lists, or create customized reports. BatchBook integrates with Mailchimp so you can send email newsletters to your lists. BatchBlue gives all new users a minimum of 2 hours of 1-1 consulting time to help them get productive as quickly as possible. Pricing ranges from $9.95 to $99.95 a month, based on the number of users, storage, and 1-1 consultation time you need. My take is that BatchBlue is a great solution for tech-savvy small businesses, especially services businesses where every relationship counts.
  • CloudProfile gives SMBs a unified content publishing and social media hub and web presence, which businesses can use standalone in place of web site, or with their existing web site. You create an online profile, which enables your business to get found in search engines like Google, business directories, and on social networks. It helps you find and connect with customers on Twitter and Facebook, and offers tools such as click-to-call, text messaging and e-mail marketing to help you stay connected with customers. CloudProfile provides built-In reports and connect to Google Analytics. The company plans to add PayPal and Amazon checkout and appointment scheduling soon. Pricing starts at $14.95 a month.  A very good choice for the approximately 40% of small businesses that don’t yet have a web site—gives you an online presence plus social capabilities.
  • HubSpot helps companies create, optimize and promote their content. HubSpot features a blogging platform and a content management system, and tools to help analyze your marketing reach via blogs, leads, Facebook and Twitter accounts. It provides links to conversations across the Internet related to your business’ keywords in one tidy dashboard. The Web Voter feature enables you to create a social news page on your site, where users can submit links and vote on them–creating an activity hub for discussion of hot issues. HubSpot also provides Keyword, Page and Link Graders, to help optimize search result rankings. Optional integration with Salesforce.com CRM is available. HubSpot charges an initial $500 start up fee, and ongoing pricing starts at $250 per month. It also offers a number of free tools, including Graders for web sites, press releases, blogs, etc. HubSpot, who we interviewed for a video a couple of weeks ago, provides a very comprehensive solution for both small and medium businesses.
  • ZooLoo provides a one-stop shop to get an online presence and manage social media interactions—including domain name registration, web site creation, a blogging platform, SEO tools, privacy controls, storage, and tools to connect across social networking sites–along with a personal dashboard to manage all of it. Some tools, such as the Graffiti blogging platform that lets you share posts across your social networks, are free. ZooLoo charges for other things, such as domain registration, web sites and privacy controls. ZooLoo’s fee-based services range in price from $1.99 to $9.99 per month. Although most of it’s current users are consumers, ZooLoo is a great fit for entrepreneurs—and the Facebook-like interface makes it easy for anyone to get the hang of.

As you can see, these companies come at the social media management conundrum from different angles. So as you evaluate these and other offerings, think about what is most critical to your business. What are your key objectives for your social media investments? Where do you spend the most time manually scanning, managing, updating and integrating across social media streams and more structured marketing activities? Where are the gaps? There is no one-size fits all, so start with your own requirements and objectives to help start taming the social media Hydra.

NetSuite’s SP 100 Program: An Offer VARs Can’t Refuse?

In a bold move to get traditional value-added resellers(VARs) off the SaaS fence, NetSuite announced its new Solution Provider (SP) 100 Program, which gives business application VARs 100% margin on the first year of license subscriptions they sell. The program requires a 2-year minimum license commitment from the customer, and after the first year, NetSuite pays VARs 10% margin on recurring annual license fees. Prior to this program, NetSuite had offered VARs 30% of annual license sales.

NetSuite’s SP 100 Program targets established mid-market and enterprise ERP and CRM VAR’s and consultants, including VARs selling Microsoft Dynamics, SAP, Sage, Epicor, Deltek, and others. The program is not exclusive—VARs can continue to sell their packaged business software offerings as well. NetSuite is also extending the program to it’s current solution provider partners, and it includes all other SP program perks, including sales and technical training, sales cycle assistance, and marketing support.

Background:

Since the model got off the ground over 10 years ago, SaaS vendors have argued that SaaS can open the door for VARs to create a recurring revenue stream, and free them up from low margin IT service chores to focus on generating higher value business.

But the case has evidently not been strong enough to entice the masses, for a few key reasons. First, the recurring revenue model is radically different to the conventional business applications model, where VARs earn a large upfront commission for selling a business solution, hardware and infrastructure software. Second, VARs have balked at not being able to generate income from services necessary to deploy and maintain business applications on customer premises. Third, whether real or perceived, many VARs don’t trust SaaS vendors. Deep down, they think that after they make the sale, SaaS vendors will take control of the account and soon disintermediate them entirely.

Quick Take:

NetSuite’s SP 100 Program supplies VARs with the big upfront payment that they are accustomed to. NetSuite’s own side-by-side VAR revenue comparison to Microsoft Dynamics favors NetSuite of course, but VARs can try it and do their own math to see how it proves out without having to give up selling competitive packaged software. It’s an opportunity to get up to speed on SaaS, the cloud and recurring revenue models and develop their business consulting skills.

As important, it comes at a time when the SaaS model has proved its maturity and staying power, many VARs have lost deals to a SaaS vendor, and many customers are trying to avoid big upfront capital outlays. While some VARs will remain skittish, distrustful, or even just lethargic about adding a SaaS solution to their business management portfolio, I think NetSuite’s SP 100 will be big wake-up call for many VARs.

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