Swimming With the Big Fish: Supplier Connection Warms Up the Water for Small Businesses

Most small businesses covet the opportunity to supply goods and services
to the lucrative large enterprise market. But as little fish in a very
big pond, many are overwhelmed by the commitment of time and resources
they need to devote to just getting on an approved vendor list with one
large company–let alone actually winning a contract.

The good news is Supplier Connection, which IBM launched in 2010 with 6
other large companies, is warming up these waters for small business.
Supplier Connection offers small businesses access to a free portal on
which they can register their companies to gain
increased visibility to the procurement communities of large corporation–
and into consideration for large enterprise contracts.

This week, IBM announced that momentum is growing: 15 major U.S. corporations are now on board, creating the potential for small businesses to get their share of the $300 billion dollars that these companies spend annually on goods and services.

Small Businesses as a Growth Engine

Most people realize that small businesses fuel economic growth and job
creation in the U.S. But most people also underestimate just how important
small business is to our economy. According to the U.S. Small Business
Administration, small businesses:

·    Represent 99.7 percent of all employer firms.
·    Employ about half of all private sector employees.
·    Pay 43 percent of total U.S. private payroll.
·    Have generated 65 percent of net new jobs over the past 17 years.
·    Create more than half of the nonfarm private GDP.
·    Hire 43 percent of high-tech workers (scientists, engi­neers, computer programmers, and others).
·    Are 52 percent home-based and 2 percent franchises.
·    Made up 97.5 percent of all identified exporters and pro­duced 31 percent of export value in FY 2008.
·    Produce 16.5 times more patents per employee than large patenting firms.

The Supplier Connection, which was created and funded by a grant of $10
million dollars from the IBM International Foundation, recognizes
these realities and the importance of maintaining a vibrant and growing
business climate for small businesses and entrepreneurs. As such, it’s
designed to take some of the friction out of the process that small
businesses go through to win contracts with large companies that can make
or break their businesses.

At the same time, Supplier Connection can help member large corporations
grow and diversity their supplier capacity. The intended result is to help
catalyze job growth in the United States.

What the Supplier Connection Is–and Isn’t

Stanley S. Litow, IBM Vice President of Corporate Citizenship and President
of its Foundation, likens Supplier Connection to the Universal College
Application (something I’m quite familiar with as the mom of a high school
senior!). In a nutshell, small businesses need to fill out one core
document on the Supplier Connection web portal. This provides member large
corporations with the common information they need to consider these  small
businesses for contracts.

In addition, small businesses can use Supplier Connection to identify other
small businesses that they could potentially partner with to be more
competitive and better able to respond to supplier opportunities.

What Supplier Connection is not is a commercial entity or marketplace. The
portal is designed to help large companies identify potential suppliers;
subsequently, all engagement activity is done independently (outside of the
portal) by the individual companies involved.

In addition, the data collected in Supplier Connection will be held private
and used only for procurement engagement activities. It will not be
aggregated, sold or used for other purposes.

How it Works for Small Businesses

The Supplier Connection portal is open and free to U.S. Small Businesses
with either:
·    Less than $50M in Revenue OR
·    Less than 500 employees

Today, businesses also need to fall into one of twenty areas that
current large enterprise members purchase from, but the category list is
dynamic and targeted to grow over time.

Small businesses visit the Supplier Connection Portal
to register. There are 9 different parts to the application,
but there is built-in help. For instance, if the small business
doesn’t have a DUNS number, the portal provides information about what it
is and how to obtain one. I’m told that most businesses can complete it in
about 45 to 90 minutes.
For small businesses that haven’t worked with large enterprises before,
just completing the registration process is an eye opener, as it gives them
new knowledge about what large enterprises require from suppliers.

Supplier Connection also offers educational services for SMBs to help them
in different areas, such as how to grow their businesses, how to diversity,
etc. Webinars on 9 on these topics are slated to kick off in April.

Currently, about 1,000 small businesses have signed up on Supplier
Connection.

How it Works for Large Companies

Supplier Connection is also free and open to large businesses that have a
commitment to buy from smaller companies. Each individual company has its
own unique commitments and metrics for engaging small businesses, but
members need to sign an agreement to honor this commitment.

Once on board, participating large companies identify a lead person to
engage in Supplier Connection on behalf of the company’s buyers. This
person (or a team of people) register into the site as approved registered
buyers. Once registered into the site, approved buyers can access and view
all of the small businesses that have registered. The fifteen large
corporations participating in the program to date have registered more than
250 buyers.

In addition to the founding large enterprise members of the group, which
include AT&T, Bank of America, Citigroup, IBM, Pfizer, and UPS, new members include AMD,
Caterpillar, Dell, Facebook, John Deere, JP Morgan/Chase, Kellogg Company,
Office Depot, and Wells Fargo.

Time to Dive In

SMB Group research shows that about 25% of businesses with 1 to 500
employees consider large enterprises to be their primary customers (Figure
1). Supplier Connection can help these businesses get considered by a wider
range of corporations and help other small businesses throw their hats in
the ring.

Figure 1: Who Do Small Businesses Sell To?

Source: SMB Group

From the large corporation perspective, Supplier Connection provides an
actionable venue to walk the talk of supporting the small business
innovation that large enterprises depend on to fuel economic growth. The
streamlined approach takes a lot of the time and pain out developing a more
diversified supplier base.

And if Supplier Connection proves mutually beneficial to the companies
involved, it should also help catalyze some of the job creation that we all
want.

Dell Extends its End-to-End Storage Story for SMBs

–by Sanjeev Aggarwal and Laurie McCabe, SMB Group

Storage is a key requirement for today’s small-to-medium business (SMB) and mid-market enterprises. As the amount of data multiplies, and the need to protect critical data grows, SMBs now require many of the same data storage capabilities as larger enterprises.

With these requirements in mind, Dell recently announced the acquisition of AppAssure–the company’s first acquisition since launching its new Software Group. AppAssure will be part of Dell’s enterprise storage and software line-up, and underscores Dell intent to extend its footprint in the storage solutions market. The acquisition helps Dell take another big step in its enterprise solutions strategy and deliver a Fluid Data architecture that automatically and intelligently optimizes and protects data everywhere.

AppAssure’s software solution, billed as next generation data protection, provides continuous backup protection across physical, virtual, and cloud-based storage environments and includes the following capabilities:

  • Snapshot and replication
  • Data de-duplication and compression
  • Backup and restore
  • Archiving

Market demand for this type of solution is reflected in AppAssure’s success to date. Since its launch in 2006, AppAssure has expanded to 230 employees and more than 6,000 customers worldwide, with 194% revenue growth year-over-year for 2011.

PERSPECTIVE

The top four technology challenges for the SMB and mid-market companies are (Figure 1):

  • Containing technology related costs
  • Implementing new solutions and upgrades
  • Keeping my systems up and running
  • Integrating different applications

Figure 1. SMB and Mid-market Top Technology Challenges

Source: SMB Group 2011 Small and Medium Business Routes to Market Study, November 2011

As the complexity of storage requirements rises, these challenges have become more pronounced in the storage space as SMBs have tried to piece together disparate solutions from multiple vendors to ensure data protection and business continuity/disaster recovery.

With AppAssure, Dell can provide SMBs with storage capabilities not only for their physical servers but across to virtual and cloud computing environments–which are increasingly the environment of choice for SMBs. Regardless of the data environment, AppAssure Backup and Replication provides backup/restore, archiving, and disaster recovery, simplifying administration with near instant, reliable data recovery. AppAssure also protects application software in both virtual and physical environments.

AppAssure is part of Dell’s broader “fluid data” architecture (Figure 2), which is designed to put the right data in the right place at the right time, at the right cost. It provides a unified storage architecture to manage data more cost-effectively and efficiently–thereby addressing the key technology challenges that SMBs face. At a high level, the Dell Fluid Data architecture can help SMBs manage the growing data avalanche in a more intelligent and streamlined way. In addition to the capabilities enabled by AppAssure, Dell’s storage architecture and solutions (Figure 2) address a broad range of storage management needs including:

  • Ability of handle file, block and object-level data to support a variety of applications, from Microsoft Exchange to virtualization solutions to databases to social media applications.
  • Automated support for multi-tier storage (primary, backup and archive data) to control rapidly escalating storage costs and compliance requirements.
  • Automated data protection and replication, eliminating the need for daily manual intervention.
  • Support for business continuity and disaster recovery.
Figure 2.  Dell Unifying Storage ArchitectureSource:Dell

Rapid data growth driven by new applications such as rich-media, social media, 64-bit architectures and compliance solutions requiring availability of data for very long time-periods is causing increases in storage system costs, storage infrastructure complexity, and power and cooling costs. Dell’s end-to-end storage management solutions help SMBs get some of these storage costs under control, for instance:

  • Data reduction technologies such as data de-duplication and compression allow SMBs to control data growth rates by eliminating redundant data. This enables more efficient use of existing storage assets and helps users defer capital expenditures for new storage systems as they reduce disk capacity requirements. They also help decrease bandwidth requirements for data transfer.
  • Tiered storage architectures allow users to control storage hardware costs based on business value and frequency of access. Higher performance, higher cost storage resources can be dedicated to mission critical initiatives, and lower performance and cost solutions can be allocated for back up and archiving.
  • Storage virtualization helps address storage costs by improving resource utilization, data mobility, information availability and related IT resources required to manage storage environments.
  • Business continuity and disaster recovery solutions reduce the impact of unexpected outages. By helping to keep the business up and running, they protect against potential revenue loss and brand damage due to outages.

QUICK TAKE

Dell’s acquisition of AppAssure and its continued focus on end-to-end storage management solutions provides several benefits to SMBs in addition to cost savings:

  • Ability to manage a mixed environment of physical, virtual, and cloud-based storage in a unified storage management solution.
  • Reduced IT resources needed for data storage management.
  • Ease of doing business with a single vendor for an integrated storage management solution.
  • Significant storage capacity savings afforded by storage consolidations and sophisticated deduplication/compression technologies.
  • Support for the most widely adopted virtual solutions – Microsoft Hyper-V, VMware, vSphere and Citrix XenServer.

And, with SMB market adoption of virtualization and cloud solutions rising, Dell’s timing couldn’t be better. The interest among SMBs to acquire/upgrade IT infrastructure management and virtualization solutions is very high (Figure 3), driven by the need to address IT environment complexity and increasing costs.

Figure 3. Solutions Purchased/Upgraded and Future Plans

Source: SMB Group 2011 Small and Medium Business Routes to Market Study, November 2011

That said, SMBs need better guidance in this area. Dell can significantly strengthen its story–and sales–by making it easier for the SMBs to easily understand the scope of it storage systems and end-to-end storage management offerings and pinpoint the “best-fit” solution(s) for their needs through the following:

  • Comparative information and visuals on Dell’s web site-replacing pages of detailed information and specs that illustrate Dell solutions and provide guidance on when and why different systems are relevant
  • Web-based tools for needs assessment and recommendations.
  • Proof points in the form of customer references, return-on-investement and total-cost-of-ownership calculations that illustrate the financial and efficiency benefits of Dell’s integrated approach.

By providing education to SMBs and clarifying its storage story, Dell can make the most out of its push to extend beyond the hardware business to provide business computing solutions that are innovative, yet practical–and geared to both SMBs as well as large enterprises.

Beyond the Hype—What You Need to Know About the Cloud: Recap from Small Business Summit 2012

Last week, I had the pleasure of participating in a panel at the always-enlightening Small Business Summit 2012. This was the seventh annual Summit, a terrific event coordinated by Ramon Ray and Marion Banker.  As always, the energy in the crowd of 500 or so attendees was high, and I think everyone attending gained valuable insights in the information exchange. I know I did!

I was part of the keynote panel, Beyond the Hype—What You Need to Know About the Cloud (stayed tuned for slides and video link!), which was sponsored by Dell, and moderated by Rhonda Abrams, small business author and columnist for USA Today. Fellow panelists included Bill Odell, Marketing and Product Management Executive, Dell Cloud Business Applications, and Kathy Fable, CEO and President, Quinn Fable Advertising. The goal of the panel was to cut through the hype surrounding the cloud buzz, discuss what’s driving cloud adoption, and provide guidance on how small businesses can best leverage cloud computing for their businesses. In this post, I’ll discuss the conversation around three key topics of the session.

The Cloud IS the New Normal

The theme of the panel was similar to one of our SMB Group 2012 Top Ten Technology Predictions for SMBs, Cloud Becomes the New Normal. As we shared with the audience, small businesses need now—more than ever–to harness new technology-based solutions (social, mobile, analytics, etc.) in order to maintain a business edge. As a result, demand for cloud-based solutions is accelerating in almost all solution areas (Figure 1).

Figure 1. Source: SMB Group 2011 SMB Routes to Market Study

Those areas showing the biggest potential for cloud gains are marketing automation, business intelligence/analytics, and desktop virtualization solutions and services. But even solution areas that have lagged in moving to the cloud are starting to see a good growth spurt. For instance, while in the past 24 months, only 7% of small businesses purchased or upgraded cloud accounting/ERP solutions, 13% plan to purchase cloud accounting/ERP solutions in the next 12 months.

Small Business Summit attendees affirmed these data points. Early in the session, Rhonda asked for a show of hands to see how many attendees are currently using cloud solutions in their businesses—and everybody except one person raised their hands!

Our panelist Kathy Fable discussed how Quinn Fable Advertising uses cloud computing to run virtually every aspect of its business, including support for many client campaigns. For example, Quinn Fable is running a campaign for Girl Scouts USA to help troop leaders connect with girls across the United States. Like most of Quinn Fable’s clients, the Girl Scouts don’t have the hardware and software to turn something like this on quickly. In this case, print pieces and email marketing will all drive to an online toolkit, which will also serve to capture emails, build databases, and generate engagement via a cloud-based solution—which allows Quinn Fable to quickly and flexibly turn these campaigns on and off to meet client requirements.

This spike in adoption of and enthusiasm for cloud computing doesn’t surprise me. Although cloud computing solutions (aka software-as-a-service, or SaaS) have been around since the late 1990s (when companies such as NetSuite and Salesforce.com were first launched), much has happened in the last few years that has spurred the momentum that is resulting in a hockey stick effect:

  • High-speed broadband has become pervasive.
  • The advent of the “great recession”—and continued economic uncertainty-the no upfront capital, has made the subscription-based cloud computing model almost irresistibly attractive from a financial perspective.
  • Early cloud applications have matured and at the same time, a new generation of cloud applications has launched that incorporate social and mobile technologies from the get-go—which enables these solutions to provide small businesses with even more access and value.

As Kathy discussed, Quinn and Fable use their cloud-based collaboration solutions to make sure that they’re all on the same page, even if they’re not talking to each other or in same time zone, whether on a laptop or a smartphone.

Bill also shared research that Dell just completed which echoed the growing momentum for cloud computing. Study data revealed that among small and medium businesses with 50 to 500 employees that use cloud applications, the average number used has doubled since 2010. This year, Dell expects these SMBs to be using an average of 7 cloud applications.

Small Businesses Need “No IT Staff Required” Solutions

Marc Benioff created and made the “no software” symbol famous. I think “No IT Staff Required ” is probably an even more compelling mantra for small businesses. As evidenced in Figure 2—as well as another show of hands at the Summit—most small businesses simply don’t have any IT staff, let alone the IT expertise or capital budgets needed for do-it-yourself IT. As important, they can’t afford the time it takes to get business payback from a solution that they need to vet, buy, install and deploy in-house. They need to focus their attention on other things, such as making sure the salon’s customers leave looking their best, or that the legal firm is winning cases for its clients.

This reality makes cloud computing even more appealing for small businesses than for larger companies that have the luxury of IT staff.

Figure 2. Source: SMB Group 2012 SMB Mobile Solutions Study

Integration—the Link and the  Missing Link

Cloud computing makes it easier for SMBs to deploy new applications—and more applications—to help their businesses grow. The panel discussed that as SMB adoption rises, integration requirements rise too. Ideally, different apps should be able to share data or “talk to” each other.  For example, if you’re running Intuit QuickBooks, a CRM solution and an email or social media marketing application, the best scenario is to have data flow from one application to the next. This not only increases data accuracy, but gives a company a much more complete picture of things such as conversion rates, order to cash, business performance and other key metrics.

But integrating business solutions with each other and with other applications shouldn’t cost more than the business solutions themselves. Cloud computing takes a lot of cost and complexity out of the application deployment equation, but integrating cloud apps with both existing on-premise software and other cloud applications can still be difficult, expensive and “one-off.”  Lacking IT staff, expertise and budget, SMBs often go without integration and the benefits it provides, both in streamlining business processes and providing the foundation to easily pull in data from across different business applications.

Bill discussed how Dell’s Cloud Business Applications address this issue by providing SMBs with cloud applications, along with turnkey integration services and built-in, cross-application analytics and support. Today, Dell’s analytics dashboard incorporates data from both Salesforce CRM and several SMB accounting solutions (with additional applications on the way).

Dell is one of several vendors (others include IBM Cast Iron, Informatica, Pervasive and Scribe) making big investments in the integration space—for good reason. Cloud-based “integration-as-a-service” solutions can help make integration more affordable and accessible for SMBs. And some, including Dell’s solution, are geared specifically for SMB requirements and budgets.

The Net-net

Small business adoption of cloud computing is on the upswing–and for good reason. But, integration is the missing link that can help small businesses get the most value from these solutions. Targeted integration can help companies operate more efficiently, reduce errors, get a better view of the business and make better decisions. While Integration may not be as exciting to talk about as the latest social media app, in the greater scheme of things, it may be much more important to the overall health of your business.

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