Report Card: 2012 Top 10 SMB Technology Market Predictions

Posted on November 28, 2012 by lauriemccabe

–by Laurie McCabe and Sanjeev Aggarwal, SMB Group

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

Prediction Score  Comments
1.     Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets 4 Year-over-year data from our annual SMB Routes to Market Studies indicated that more small and medium businesses (SMBs)* were forecasting flat or decreased IT spending heading into 2012 compared to 2011. Given SMB budget constraints and the plethora of solutions aimed at SMBs, vendors had to work harder to convince budget-constrained SMBs that their solutions would really help address top SMB business challenges to attract new customers, grow revenues and maintain profitability. More SMBs turned to lower-risk, pay-as-you-go cloud options, and several vendors (IBM, Dell and HP, to name a few) introduced new and/or enhanced financing options to help SMBs overcome financial hurdles.
2.     The SMB Progressive Class Gains Ground  5 We identified a distinct category of SMBs that we termed “Progressive SMBs,” who see technology as integral to achieving business goals and to gaining a competitive edge. Progressive SMBs invest more and purchase more sophisticated solutions than their counterparts. Trending analysis from our 2011 to 2012 Routes to Market Studies show that the percentage of SMBs in the Progressive category is growing. Furthermore, Progressive SMBs continue to gain ground over SMBs that skimp on technology in terms of expected business performance.
3.     The SMB Social Media Divide Grows  5 SMB adoption of social media did indeed jump, from 44% to 53% among small businesses (and from 52% to 63% among medium businesses from 2011 to 2012, based on trending analysis in our SMB Social Business Studies. The divide between social media haves and have-nots is also growing: our research reveals that 65% of SMBs that use social business tools anticipate revenue gains, while only 17% of “non-social” SMBs expect revenues to increase.
4.     Cloud Becomes the New Normal 4 SMBs haven’t swapped out all of their on-premises solutions in favor of the cloud–but the puck is clearly moving to the cloud in all application areas. The evolution is continuing at a steady pace, as evidenced by trending analysis in our annual SMB Routes to Market Studies. In some areas, cloud is poised to overtake on-premises solutions. For instance, over 30% of SMBs that purchased or upgraded collaboration, marketing automation, BI and data backup in the past 24 months chose cloud, and over 40% of SMBs planning to purchase solutions in those areas in the next month plan cloud deployments. 
5.     Mobile Application Use Extends Beyond Email to Business Applications 5 SMBs significantly ramped up mobile business application use and plans in 2012, as evidenced by trending analysis from our annual SMB Mobile Solutions Studies. More SMBs are providing mobile business apps to employees in categories ranging from CRM to time management to expense reporting.  In addition, adoption of external-facing (for customers, partners and suppliers) mobile apps and websites also rose considerably.  For instance, SMB use of a mobile-friendly website is up 10% among small businesses and 23% among medium businesses.
6.     Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate  3 The avalanche of data generated by cloud, social and mobile has certainly created the need for better analytics. However, year-over year trending data from our SMB Routes to Market Studies reveals a mixed bag in terms of adoption. Use of BI solutions among medium businesses spiked 24% in the past year, but adoption rose just 2% among small businesses. While vendors appear to be doing a good job of developing and marketing BI solutions tailored to the needs of medium businesses, they have not yet figured out the right formula for smaller ones.
7.     Managed Services Meet Mobile 5 We forecast that the explosion of mobile devices and apps, “bring your own device” (BYOD) phenomenon and the increasing concerns about security would spark increased demand for and more solutions to manage mobile on the back-end. Our annual SMB Mobile Solutions Studies show that SMB adoption of mobile management services—from simple device management to comprehensive mobile management platforms—has accelerated rapidly. For instance, 16% of SMBs have already deployed an outsourced mobile management platform, and 30% plan to do so within a year.
8.     The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions 5 Small businesses without a payroll make up more than 70% of America’s 27 million companies. We hypothesized that the 2008 recession and subsequent layoffs generated a new and often “accidental” breed of entrepreneurs that would spike demand for—and growth of—applications targeted to meet the needs of these businesses. And they have. New and improved cloud-based and mobile apps from traditional small business powerhouses (Sage, Intuit, Microsoft, Google, etc.), SOHO pioneers (Freshbooks, Nimble, Dropbox, Zoho, etc.), and freelance talent sourcing solutions from companies such as Elance and oDesk are making it easier than ever for SOHOs to get their work done.
9.     Increased Adoption of Collaboration and Communication Services in Integrated Suites 4 Trending from our Routes to Market Study Medium businesses shows that overall, use and plans to deploy collaboration solutions is up year-over-year. Low-cost, low-risk, cloud-based collaboration and communications services have made it easier for SMBs to use integrated collaboration tools, while eliminating the inconvenience of using multiple sign-ons and interfaces.The fact that vendors are integrating more into their offerings—such as  Google integrating Google+ hangouts, IBM SmartCloud Engage adding social communities and Citrix adding video capabilities to GoToMeeting—doesn’t hurt either.
10.   The IT Channel Continues to Shape-Shift. 5 Cloud, social and mobile trends continue to reshape how channel partners must deliver value across the board. SMBs are increasingly choosing to purchase directly from software and cloud vendors in most areas. And Managed Service Providers (MSPs) have gained ground as a purchase channel over VARs in several solution areas, including security, BI and collaboration. The need for more specialized business and/or technology expertise has also made some types of channel players more relevant in each specific solution category than others.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.

 

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Dell Cloud Client Manager–A Wyse Move For Mobile Management

Posted on November 20, 2012 by lauriemccabe

Earlier this year, Dell acquired Wyse, arguably the pioneer in thin-client computing. Together, Dell and Wyse have wasted little time in putting Wyse expertise to work to launch Dell Wyse Cloud Client Manager (CCM), which is designed to help companies address the increasingly vexing problem of managing mobile devices and applications.

Dell is delivering CCM as a cloud-based, self-service offering that gives businesses a centralized mobile management platform from which they can:

  • Manage thin client and mobile devices. Supported devices include Apple iOS, Android, and Dell Wyse thin clients, whether they’re using 3G, 4G or wi-fi networks.
  • Provide users with secure remote access to content on servers, laptops and desktops. Using Wyse Pocket Cloud technology, mobile users to remotely and securely access and manage content stored on home or office computers.
  • Set rules and policies to automate provisioning. CCM enables IT to create rules and permissions to streamline provisioning, and ensure that appropriate policies are applied to devices and users.
  • Real-time monitoring, analytics and reporting. The solution provides real-time feedback on users’ mobile activities, and the ability to send alerts in case of user non-compliance.

Since CCM is a cloud service, you don’t need to install any additional hardware or software, and can be up and running with CCM in less than an hour. As critical, CCM works regardless of your company’s mobile procurement and provisioning policy. Whether your business provides and manages all employee mobile devices, supports a BYOD program, has an employee self-service model, or some combination of these, CCM enables you to centrally manage how employees access corporate data and apps from their mobile devices, and create containers to separate corporate and personal apps.

The price is right for cash-strapped SMBs: Dell offers a free Starter Tier for smaller companies, which has all CCM capabilities except for group-based management. The Pro Tier comes with granular group management capabilities, and pricing starts at $5.50 per month for one user and up to three devices.

Mobile Management is a Top SMB Challenge

Unless you’ve been hiding under a rock, you know that the growth trajectory for mobile solutions is soaring. So it’s not surprising that SMBs are going mobile: SMB Group’s 2012 SMB Mobile Solution shows that 83% of small businesses (1-99 employees) and 76% of medium businesses (100-999 employees) already use mobile solutions in their businesses.

Much of this growth has been driven by consumer demand for new and better devices and apps. As we use mobile more in our personal lives, our expectations for applying mobile solutions in our business lives also rises. But this rapid escalation of mobile use combined with a dizzying proliferation of devices and apps has led to a management dilemma.

As they go mobile, SMBs are taking different approaches in terms of how they provide mobile devices to their employees (Figure 1).

Figure 1: How SMBs Provide Mobile Devices to Employees

Source: 2012 Small and Medium Business Mobile Solutions, SMB Group

The velocity of mobile adoption and the convergence of mobile device use for personal and business needs has led to a rash of security and management issues for IT, who must manage a mushrooming and increasingly hybrid mobile environment which extends beyond devices to apps and services (Figure 2).

Figure 2: Top SMB Security-Related Challenges In Using Mobile Solutions

Source: 2012 Small and Medium Business Mobile Solutions, SMB Group

The result is that many SMBs have yet to address the mobile management challenge (Figure 3).

Figure 3: SMB Use of/Plans for Mobile Management Solutions

Source: 2012 Small and Medium Business Mobile Solutions, SMB Group

Dell’s Answer to Managing the Bright and Shiny Mobile Challenge

The mobile management challenge will only intensify, especially given the industry’s proclivity to churn out bright and shiny new devices and apps–and users’ desire to get their hands on them. Dell CCM gives companies a secure, affordable and accessible way to manage through this inevitable churn, regardless of mobile policies, virtualization technologies or device choices.  CCM offers both device and app management, and supports Citrix, Microsoft, VMware and other virtualization environments.

CCM also offers management tools to automate and streamline management and offload routine chores. IT can create role-based rules and permissions for users or user groups, which allow or prohibit the use of specific apps. Once a user’s permissions are set up, the user can register devices on their won via the self-service portal. New devices automatically inherit the appropriate policies, configurations, and apps of the user. Employees also can use the portal to reset system passwords, and, if a device goes missing, lock or wipe corporate data. The platform delivers analytics and reporting, including audit trails to help IT monitor user compliance.

CCM provides added through virtual desktop capabilities in Wyse PocketCloud Remote Desktop (a new web-based version is in beta now), which lets users securely access and manage content stored on home or office computers from their mobile devices.

Perspective

CCM doesn’t have everything in it yet, and it competes with many other MDM and mobile management platforms, including other DIY services and fully managed services. But Dell’s approach is solid, and it has removed pricing as a barrier to entry for budget-conscious SMBs with its free version.

Over time, Dell intends to evolve CCM into a one-stop shop for device-agnostic, all-inclusive management of whatever combination of mobile and traditional devices companies choose to use. If it stays true to putting flexibility, ease of use and affordability at the top of the priority list, CCM will provide a very good answer for the mobile management challenges that SMBs face.

Furthermore, CCM represents another step forward for Dell’s vision to transform from a product-centric to a solutions centric company. Although achieving the vision is still a work in progress, Dell’s Wsye acquisition (as with Boomi) demonstrates Dell’s ability to assemble the right building blocks and expand its footprint in cloud computing and remote services.

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Got Apps? GetApp Introduces CloudWork to Integrate Them

Posted on November 12, 2012 by lauriemccabe

Last week, I spoke with Christophe Primault, CEO of GetApp, about GetApp’s new CloudWork platform, which provides a growing catalog of pre-built connectors to integrate cloud-based business and social media apps. Listen to the podcast or read the summary below.      

 

Laurie: Good morning, Christophe. Could you start by describing what GetApp is and what it does?

Christophe: Okay. GetApp helps small businesses be successful with cloud business applications. We started a couple of years ago by building a marketplace where small businesses can discover business applications that are suited for their needs.

Laurie:  Great. I know you got started around 2010, a couple of years ago. About how many apps are available in the app marketplace now?

Christophe: Today we have close to 5000 different applications available, and they are split in about 300 different business categories.

Laurie:  Now, I know that GetApp is a little different type of marketplace than say Google Apps marketplace or Salesforce AppExchange. Can you just describe a little bit about what makes it different?

Christophe: Sure. So what we are trying to do is be independent and inclusive and let small businesses see everything that is available in the market. We are not tied to any particular vendor or systems. We access apps that are integrated with Google Apps or Salesforce or any application, but by coming to GetApp you will be able to see all the applications in each category that can be of interest to you.

Laurie: Okay. So kind of like the Switzerland of small business app marketplaces?

Christophe: Yes. Exactly. It’s like a Swiss Army knife for small businesses looking for business applications.

Laurie: And about how many visitors do you have coming to GetApp these days?

Christophe: This has been ramping up month after month, and today we have close to 150,000 visitors coming to the marketplace every month. Overall 95% of these are small and medium businesses (SMBs).

Laurie: Great. And how do you define an SMB? What size company?

Christophe: We are mostly targeting the low-end of SMBs. It’s companies with between 0 to 100 employees, but we do have also larger companies that are coming to GetApp to find applications for their own departments.

Laurie: I understand that you have a new offering from GetApp called CloudWork. Can you tell us what it is?

Christophe: Absolutely. CloudWork is a new solution that we launched one month ago, and it is a continuation of GetApp. While GetApp is the first step for small businesses looking for business applications to discover what they need, CloudWork really comes in when you start using more than one application in your organization. Let’s say you are using four or five, and you have developed silos of data in each of your applications and you realize that these apps don’t talk to each other. You want to integrate these applications together to increase productivity, so this is what CloudWork is doing. It’s an easy to use platform and you don’t need any technical knowledge to get apps to talk to each other.

Laurie:  Okay. Yes, I think most of us that are small businesses, we can relate to that. We start by using one application to fit a certain need, and then as we need another we add another. Before you know it we have a few different cloud apps, but they don’t necessarily talk to each other. So we’re trying to manually coordinate what’s going on. What was the genesis for deciding that you needed to do this?

Christophe: Yes, that clearly came from our users. We found applications on GetApp or anywhere else, and now we run integral applications, but they don’t talk to each other so we developed processes attached that are repetitive, that are not bringing a lot of value to the organization that could be automated. So, we decided, maybe this is something interesting to do. And then we asked ourselves, as an SMB using over 20 different cloud apps, is it a problem we have?  How could we address this problem and how much value will it bring to us? We realized that we could save a lot of time and be much more productive in doing more value-added tasks in the organization if we had the ability to automate many of the internal processes and tasks. This is how we decided to build the CloudWork platform to do that.

Laurie: So, how would it work for me? Can you walk me through it? Once I go on the CloudWork site, what would I need to do? How much work would it take on my part?

Christophe: I am going to take a very precise use case to tell you how you can use CloudWork. For example, cloud-based CRM is one of the most common applications for an SMB. So, assuming you are using let’s say Zoho CRM, you will come to CloudWork, you will sign up for an account and you will authorize CloudWork to talk to Zoho. You will do that with just a couple of clicks, and then we will show you a list of applications that can integrate with Zoho with the objective of capturing your client’s profile in Zoho all the customers, all the interactions your company had with your customer.

So let’s take an example. You start with Zoho CRM and then you decide that any e-mail that comes in via Gmail to your organization should be logged under your customer profile on Zoho CRM. So you integrate Zoho with Gmail. If you want to see which invoices and payment status of invoices, then you will integrate with Freshbooks. If you want to see when your client has received an e-mail campaign then you will integrate Zoho with MailChimp. If you want to have all your data in Zoho to be backed up on an online storage platform, then you will integrate with Dropbox, and so on.

So, in this specific case,  in just a few clicks you are adding different applications and building a unified view of all your company’s interactions, which of the apps you are using in your company under your customer profile in Zoho. It takes about 10 to 15 minutes to set up. No code is needed. You don’t need to have any particular knowledge, and with just a few clicks you can set up your account and then the tasks run in the background.

Laurie: So, at the end of the day you’re saving a lot of time because you don’t have to be manually trying to connect these things. And you’re gaining productivity and cutting down on manual kinds of errors so your information is more accurate.

Christophe: Yes, you’ve covered what are the main objectives of CloudWork. Increasing productivity of your sales people or your customer support people, avoiding making errors when you’re cutting, pasting, or exporting files from one application to another, making sure also that you always back up data outside each of the applications that you’re using. So productivity, saving time, more security are the main benefits of CloudWork.

Laurie: If someone wants to try CloudWork, how can they try it? Is there a free trial?

Christophe: Yes, absolutely. It’s very easy. You go wwwcloudwork.com. You get started. There is a free trial. In fact, the product is currently free for all to use. There will always be a free version of the product. Most companies they will be able to use CloudWork for free. For very heavy users that will be automating a lot of tasks during the month it will be a paid version, but today it is free. We integrate with 15 very popular applications, and we are adding new different applications every week.

Laurie:  So with GetApp, you addressed that discovery challenge, how do I find applications that I might need to run my business. I know people will also find there is a lot of guidance in terms of reviews, and evaluations, and discussions that small businesses can look at to get information about the apps as well as just getting the apps. So, you’ve addressed that discovery, with CloudWork you’re addressing a lot of the integration issues, what’s next? What’s the longer term vision for GetApp and CloudWork?

Christophe: You’re absolutely right. We are not going to stop there. Our plan is to be what we call a cloud operation center for small businesses. Really the idea is you start with GetApp where you discover applications. You also get a lot of education material on how to get started with cloud applications, what are the pros and cons, which ones you should keep for your business, and then as you start to be a heavier user of applications you will have integration needs. This is one of the first services we offer in CloudWork, but in the future you will be able to access different applications with a single password as an example, or you will be able to have a better view of who is using which kind of application in your organization. So, basically we are going to add additional services to CloudWork so it becomes a single place in your organization where you can manage all your cloud services.

Laurie: That sounds fantastic. For small businesses, if you have not been to the GetApp.com site, I would advise you to check it out because there are a lot of great applications and advice on there. Thank you so much for your time today, Christophe, and for talking to me and sharing this information with us.

Christophe: Thanks a lot Laurie. It’s been a pleasure talking to you and sharing with your listeners the benefits they can get out of GetApp and CloudWork. Thanks a lot.

Filed under: Small Business Software, SMB | Tagged: , , , , , , , , | 1 Comment »

Can HP Turn Infrastructure Solutions Into an SMB Mobility Play?

Posted on November 9, 2012 by lauriemccabe

The mobile explosion is causing a major disruption in businesses—and holds the promise of helping SMBs boost employee productivity and customer engagement. SMBs are rapidly picking up on that promise: SMB Group’s 2012 SMB Mobile Solutions Study shows that 80% of small and medium businesses (1 to 999 employees) already use mobile devices and services to support business operations.

Our study also reveals SMBs are rapidly moving beyond basic mobile collaboration solutions (such as email, contacts and calendars) to deploy more business applications. For instance, they’re equipping employees with mobile apps such as CRM, time management, expense management and analytics, and providing mobile purchasing, payments, and scheduling apps for their customers.

HP Infrastructure Solutions for a Mobile World

With adoption of new applications poised to double over the next year, SMBs will also be faced with new infrastructure and management challenges. Recently, HP announced new virtualization and infrastructure solutions that it is positioning as a solution to help SMBs prepare for and meet some the challenges that mobility brings to the forefront, including:

  • HP StoreEasy NAS Appliances. This is a file consolidation play designed to simplify data management, including the  chore of managing the additional data that new mobile applications will generate. HP is positioning StoreEasy as an alternative to continually adding and individually managing new file servers, and a way to improve security, availability, and responsiveness. StoreEasy can be deployed with Windows tools that many SMBs are familiar with, eliminating the need to learn a new storage system.  SMB 3.0 provides native file de-duplication conducted at the block level to save space; and secure data encryption to protect application data as it is moved across networks.  Pricing starts $5,192 for 8 terabytes.
  • HP StoreVirtual Storage, a virtualized storage environment designed to help larger medium businesses (99 – 1000 users) provision solutions that are re-engineered for mobile access in a virtualized environment. Companies can use StoreVirtual storage to test, deploy, upgrade, and add apps and storage without reconfiguring systems; and to migrate data between virtual and physical locations without taking systems down. Built with HP’s LeftHand operating system and HP ProLiant servers, StoreVirtual Storage supports heterogeneous client and server virtualization solutions. Pricing starts at $11,500.
  • Citrix VDI-in-a-Box with Personal vDisk and HP ProLiant Gen8 Servers is intended to give mobile VDI users more flexibility and efficiency.  HP claims the solution reduces image and storage requirements and adds 50% more users per server than prior HP VDI offerings.
  • HP M220 Access Points, to help deploy and manage a wireless network more easily and reliably. The solution enables SMBs to configure up to 10 access points via an Easy Setup Wizard (with a choice of 5 common configuration set-ups). The SMB or partner can manage all access points via a Web interface. Pricing starts at $389 per access point.

HP simultaneously announced some enhancements to its “Even Better Than Zero” financing program for SMBs, including a new 90-day payment deferral option.

Perspective

There’s no question that as mobile solutions become more critical to SMBs, they also fuel new infrastructure requirements for management, security, storage and performance on the back-end. As shown on Figure 1, in addition to cost concerns, SMBs see data, network, device and transaction security, and management as top barriers to moving ahead with mobile solutions.

Figure 1: Top SMB Challenges to Moving Ahead with Mobile Solutions

With the rise of bring your own device (BYOD) and consumerization, more types of devices to manage, more apps and more data, these issues will only become more taxing.

HP is addressing some of the requirements that mobile brings to the forefront with solutions to help SMBs streamline VDI deployment, more easily provision and manage wireless LAN bandwidth, and enhanced on-premises storage options.

But, this announcement does not provide a full picture of HP’s mobile management vision for SMBs–and leaves many questions about HP’s mobile management strategy for SMBs unanswered. For instance, many SMBs would like to offload data storage and management to a cloud provider. What does HP have in this department, and how does it complement these solutions?  The announcement also fails to shed light on how HP can help  SMBs tackle other key mobility related infrastructure issues, including mobile device and application management, and the need to compartmentalize personal and business apps and data.

While HP has put a relevant mobile veneer on its infrastructure story, it needs to paint more comprehensive picture of its full mobile management and infrastructure strategy and portfolio, from on-premises to cloud–along with the guidance SMBs need to figure out which solution(s) will best fit their needs.

Filed under: mobile solutions, SMB, Uncategorized | Tagged: , , , , , , , | 1 Comment »

MSP Cloud Challenges in the Midmarket–and How IBM Helps Meet Them

Posted on November 1, 2012 by lauriemccabe

In my recent post, A View From the MSP Trenches: Cloud Opportunities in the Midmarket, I examined how MSPs see the midmarket opportunity shaping up, and why they are partnering with IBM to capitalize on these opportunities. I discussed how MSPs are taking advantage of cloud-based technology solutions and IBM’s offerings to help their midmarket companies offload infrastructure management, deploy the leading-edge solutions, and achieve the performance, availability and security required for mission-critical applications.

I also wanted to learn more about the challenges that MSPs face, and how they work with IBM to surmount these hurdles. This post focuses on that side of my conversation with the same three MSPs, who I’ll reintroduce here:

  • Oxford Networks characterizes itself as “a 112 year-old start-up,” which began as a phone company and has since reinvented itself a couple of times over to become a high-end carrier’s carrier transport network. Oxford recently acquired an MSP and a data center, and is building on this to offer a spectrum of IT and telecom services to SMBs.
  • Perimeter E-Security delivers highly secure infrastructure protection and compliance solutions via its security-as-a-software platform, including: firewall management and monitoring, vulnerability scanning, intrusion detection and prevention, hosted email, hosted collaboration, email security, message archiving and mobile device management. Perimeter offers its services in the cloud, and on customer premises.  About two-thirds of its customers are small and midsize businesses (SMBs).
  • Velocity Technology Solutions provides virtual private cloud managed application and hosting services for its customers’ ERP solutions. It also hosts and manages connected applications, such as analytics and workforce automation; and complementary technical solutions, such as imaging. Velocity offers remote managed services for customers’ on premises applications, including a full replication service for disaster recovery.  Velocity’s customers range from businesses with about $50M in annual revenues to the Fortune 500.

MSPs must keep pace with a rapidly changing technology landscape and provide consistent, high performance cloud services. After all, that’s precisely why their customers are outsourcing infrastructure and application management to them in the first place. In their view, IBM provides them with the proven solutions and expertise that they need to deliver superior quality of service. As Tom Bruno, President & CEO, Velocity Technology Solutions, noted, “IBM has the most stable infrastructure. We can tap into the strength and girth of IBM to get the peace of mind that we need to deliver high-availability service.”

Some of the specific areas in which MSPs find strong value in the IBM partnership include:

  • Resources to scale and grow. By standardizing on IBM hardware and middleware, they are able to efficiently create and manage a high-availability environment. For instance, Velocity Technology Solutions works closely with IBM to identify and standardize the server, storage, and middleware stack to support “just about any application the customer wants,” according to Bruno.  “One of the biggest challenges is that ERP is advancing so fast–with a rush of analytics, mobile apps, collaboration and process flow. Customers want to upgrade, and with IBM, we can get these upgrades down to a science, and offer customers freedom of choice.” Or, as Craig Gunderson, President & CEO of Oxford Networks told me, “When we acquired the data center, it wasn’t up to snuff. IBM technologists helped us to reconfigure it and build for the future.”
  • Speed and agility. The bar to stay ahead of the technology curve is rising quickly, and MSPs must move at warp speed to stay ahead of it. While MSPs are often small or midmarket companies themselves, their IBM partnerships help give them the agility they need to take advantage of leading-edge technologies. “The IBM SmartCloud, DataFlex, V Systems and other IBM solutions are core to our PaaS and IaaS offerings. This means we can make more capabilities available more quickly to customers,” notes Gunderson.  MSPs need a stable but flexible technology foundation, says Perimeter E-Security’s Andrew Jacquith. “We add a terabyte of data per day to our cloud email and archiving platforms. IBM helps provide a secure, scalable cloud fabric to support our growth.”
  • End-to-end services. MSPs don’t want to or can’t provide everything a customer may need across the entire technology spectrum. But they are taking advantage of IBM’s ecosystem to broaden their service portfolios and give their customers a one-stop shopping experience. At Oxford Networks, for example, “Customers are asking us to be more of a business solutions provider. This wasn’t our core competency, but we can provide end-to-end solutions via IBM SaaS partners’ says Gunderson. “Partnering with other partners in the IBM ecosystem gives us the ability to meet the converging needs of our customers.”

In late September, IBM launched new global initiatives for MSPs, which provide additional resources to help them meet core technology challenges, including:

  • Access to four new Global Centers of Excellence (in addition to 40 existing IBM Innovation Centers). These centers provide MSPs with hands-on technical skills in technologies such asIBM SmartCloud, PureSystems, storage, security and collaboration.
  • A new virtual briefing center for MSPs to share ideas and knowledge about industry trends, customer requirements and best practices with their peers and with IBM experts.
  • PureSystems, which provides a new, integrated, by-design platform to tune hardware and software resources for data intensive workloads, and gain more flexibility to configure applications for either an on-premise or hosted environment.
  • More options for IBM SmartCloud, giving MSPs the choice to either integrate SmartCloud as an IBM-backed solution, or provide SmartCloud under their own brand.

Profitable business growth is another key challenge for all companies, and MSPs are no exception. The MSPs I spoke with believe that IBM sets itself apart with the quality of business planning and marketing support that it provides. “IBM partners with us to help us plan and capture more midmarket business,” states E-Perimeter’s Jacquith.  “The level of partnering is very deep.”

In the case of Oxford Networks, IBM and its advertising firm, Ogilivy and Mather, helped Oxford to determine which markets to focus on and how to grow intelligently. IBM also brings in Avnet personnel to help Oxford educate customers and prospects.  “IBM is very hands-on. We have never seen another company provide this level of support,” says Gunderson.

IBM new global initiatives for MSPs also offer more marketing and operational support. These included dedicated marketing and sales support, and a new program to help MSPs build a complete marketing plan. Other assistance includes a four-part education seminar to help MSPs use social media to grow their businesses, and IBM analytic capabilities to identify new customers and drive more repeat business.

IBM Global Financing (IGF) is stepping in with flexible, affordable financing options to help MSPs acquire the solutions and services they need to grow. Plans include 12-month, 0% loans for IBM Systems, Storage and Software. MSPs that select PureSystems platforms can also defer their first payment for 90 days.

All told, IBM’s focus on MSPs adds up to a tremendous value not only for MSPs, but for their customers. Instead of just throwing resources at them, IBM has put together an integrated program to address their technology and business challenges. In addition, IBM’s dedicated marketing and sales support provides MSPs with real people who get to know them and understand their individual goals and challenges. With this coordinated and personalized approach, IBM can to get the right resources to MSPs when and how they need it. In turn, these MSPs will be able acquire the skills and resources they need to help their midmarket customers achieve their goals.

This is the fourth of a five-part blog series by SMB Group that examines the evolution of midmarket business technology solutions and IBM’s Managed Service Provider Channel programs. In the next post, I’ll discuss upcoming IBM’s MSP program announcements slated for November.

Filed under: cloud computing, SMB, Software as a Service, Uncategorized | Tagged: , , , , , , , , , , , , | 1 Comment »

NYEXPO Panel: Using Technology to Drive Innovation & GROW Your Business

Posted on October 19, 2012 by lauriemccabe

Thanks to all of you who came to our panel yesterday at NYEXPO,  Using Technology to Drive Innovation & GROW Your Business, moderated by Ramon Ray, Regional Development Manager, NY/NJ Infusionsoft and Editor of Smallbiztechonlogy.com, with panelists Shashi Bellamkonda, Sr. Director, Social Media, Web.com and Adjunct Marketing Professor at Georgetown University, and yours truly.

What a great event–I hope you got as much out of it as I did. Several of you asked for copies of the presentation, so I’m posting it here. For anyone who didn’t attend, our panel discussed the ground-breaking technologies–cloud, mobile and social–that are changing how small businesses operate, market and sell. I shared some market research and perspectives, Shashi provided social media guidance, and Grant gave us a great demo of the latest tools and gadgets that you may want to check out.

Enjoy and please let me know if you have any questions!

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A View From the MSP Trenches: Cloud Opportunities in the Midmarket

Posted on October 10, 2012 by lauriemccabe

As discussed in my blog, IBM’s Managed Service Provider Initiatives for Midmarket: An Interview with Mike McClurg, IBM views MSPs as an increasingly critical channel for delivering cloud-based technology solutions to midmarket companies. Just a few days after I posted this interview, IBM announced that it would further strengthen its initiatives to help MSPs meet the growing midmarket demand for cloud services.

Now, all research (including SMB Group studies) points to a rise in midmarket adoption of cloud solutions. But, what do MSPs see as the key midmarket hotspots, how are they turning these into opportunities for their businesses, and how is IBM helping them? To help answer these questions, I spoke with three very different IBM MSP partners to find out their views on the cloud opportunity:

  • Oxford Networks characterizes itself as “a 112 year-old start-up,” which began as a phone company and has since reinvented itself a couple of times over to become a high-end carrier’s carrier transport network. Oxford recently acquired an MSP and is building on this to offer a spectrum of IT and telecom services SMBs.
  • Perimeter E-Security delivers highly secure infrastructure protection and compliance solutions via its security-as-a-software platform, including: firewall management and monitoring, vulnerability scanning, intrusion detection and prevention, hosted email, hosted collaboration, email security, message archiving and mobile device management. Perimeter offers its on demand in the cloud, and on customer premises.  About two-thirds of its customers are small and midsize businesses (SMBs).
  • Velocity Technology Solutions provides virtual private cloud managed application and hosting services for its customers’ ERP solutions. It also hosts and manages connected applications, such as analytics and workforce automation; and complementary technical solutions, such as imaging. In addition, Velocity offers remote managed services for customers’ on premises applications, including a full replication service for disaster recovery.  Velocity’s customers range from businesses with about $50M in annual revenues to the Fortune 500.

Despite different technology and market footprints, these MSPs share a similar view of the compelling opportunities to provide cloud services in the midmarket. They are zeroing in to meet  customers’ requirements in several key areas:

1. Offloadinfrastructure management. More midmarket companies want to outsource management of the “IT plumbing” that their businesses require—from infrastructure and telecom to middleware and applications. Demand for IaaS services is spiking as customers seek to move resources from IT to other, more strategic areas of the business. Often, the need for application upgrades trigger a move to an MSP. “Businesses have been there, done that and have little appetite to go through the headaches again”, according to Tom Bruno, President & CEO, Velocity Technology Solutions, “Our opportunity is to take software and turn it into a utility or dial tone for our customers.”But, says Bruno, “the most important thing we can have is our customers’ trust—trust translates into availability. Partnering with IBM gives us the peace of mind that we can deliver.”

Many companies aren’t ready to put all of their applications into the cloud, but still want to offload management. Offering remote managed services for customers’ on-premises applications gives MSPs with another healthy revenue opportunity in the near term.  And, as Bruno puts it, remote managed services also provide these customers with “an on ramp to the cloud.” Bruno envisions that IBM PureSystems will give Velocity even more flexibility to tailor offerings for either an on-premise or private cloud environment.

2. Implement the leading edge technology solutions necessary to grow their businesses. Midmarket businesses increasingly recognize that they need leading edge IT solutions to be competitive. But in most cases, they lack the IT skills and expertise to keep up with these technology changes. According to Craig Gunderson, President & CEO of Oxford Networks, “Our customers know that technology is moving very fast and disrupting the status quo. Moving to the cloud and outsourcing is often the only way that they can maintain a competitive position.” By providing customers with a fully managed data center, PaaS and IaaS solutions, Oxford can “give them far more capabilities than they could have on their own, with fewer limits, and at a lower cost.”

Mobile is a prime example of an area in which SMBs need to innovate, but struggle to keep pace. Perimeter recently rolled out a new mobile security offering that provides best practice guidance and services to help SMBs comply with privacy statutes in world in which “bring your own device” is becoming the norm.

Oxford’s Gunderson and Andrew Jaquith, Chief Technology Officer, Perimeter E-Security, both view new access to IBM’s four new Global Centers of Excellence as key to helping them keep up swiftly evolving market demands. By leveraging IBM’s technical and best practice expertise, they can develop the scalable and reliable new solutions that their clients will require.

3. Provide stronger security, availability and performance levels. Companies know that an IT outage or security breach can seriously compromised or even destroy their businesses. Jaquith asserts that as industries become more regulated, they are increasingly held to higher security standards, similar to what banks have become accustomed to. As a result, “Demand is rising for end-to-end security solutions for messaging—including mailboxes, archiving, encryption, control and reporting, content filtering and more. But the technology needed for this is getting very complicated.”

Jaquith sees IBM as “a technology leader that gets the cloud, and a partner to help us achieve our goal to provide instant-on, scalable and elastic cloud services.” IBM storage and security solutions underpin Perimeter’s current offerings. With IBM’s new MSP initiatives, Jaquith sees opportunities to develop new services built on IBM SmartCloud, which provides enterprise-class cloud computing technologies and services for securely building and using private, public and hybrid clouds.

 The demand for higher availability solutions is also rising. Velocity’s Bruno notes that “Midmarket businesses may have 5 to 20 applications in the back office alone. They want providers to get the formula down for higher availability.” Velocity does this by providing standardized virtualization solutions and a single source of support across applications—from break/fix to functional, “how do I do this” support.

One of the common threads I heard was that midmarket companies are looking for comprehensive services. Although they may want to tap into discrete services in an incremental way, they want them to integrate with each other in a Lego-like fashion. Since few MSPs can provide everything, those I spoke with emphasized the importance of being part of a strong ecosystem. For example, at Oxford Networks, the focus is IaaS and PaaS services. But Gunderson and team work with IBM and its ecosystem partners to also provide SaaS solutions to customers when they are a good fit. Meanwhile, as Velocity’s Bruno explained, “Everything is advancing so fast in the ERP world. There’s a rush of analytics, industry apps, mobile apps, collaboration requirements and more. This creates more complexity in the infrastructure.  We can tap into IBM and its expertise to provide new services more efficiently.”

Clearly, the rapid rate and pace of change in technology—and what it means for business—creates an enormous opportunity. MSPs can leverage economies of scale and skill to provide better-performing and more cost-effective IT solutions than midmarket companies can attain relying only on internal IT resources.

But capitalizing on this opportunity also presents challenges for MSPs, who need to keep ahead of the technology learning curve, improve their marketing skills and programs, and identify and enter new markets. In my next post in this series, I’ll discuss these challenges, and how these three MSPs work with IBM’s MSP program to help address them.

This is the third of a five-part blog series by SMB Group that examines the evolution of midmarket business technology solutions and IBM’s Managed Service Provider Channel programs. In the next post, I’ll look at what MSPs see as their top challenges, and the role IBM plays in helping them to meet them.

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IBM’s Managed Service Provider Initiatives for Midmarket: An Interview with Mike McClurg

Posted on September 20, 2012 by lauriemccabe

Here’s an edited transcript of my interview with Mike McClurg, VP of Global Midmarket Sales for IBM. [If you’d like to listen to the recorded podcast, click on the orange circle below].

Laurie: Mike, thanks so much for joining us today. Before we dive into our conversation about IBM’s strategy and programs for managed service providers (MSPs), can you give us a big picture view of IBM’s midmarket strategy?

Mike: Sure. In IBM, we typically classify midmarket accounts as firms with 1000 or fewer employees. Our midmarket initiative is global, and midmarket is one of our fastest growing segments, including growth markets, such as Brazil, Russia, India, China and Eastern Europe. We’re seeing real expansion of the midmarket and SMB client base in those geographies as they build out their infrastructure. We’re also seeing nice growth in traditional major markets.

Our products and services range from servers and storage that SMBs use to build their infrastructure, to business analytics tools such as IBM SPSS software and IBM Cognos software which are very popular to help create smarter approaches to manage data and knowledge. We also provide cloud capabilities and management and administrative services, to name a couple of the services we offer.

Trends show that midmarket customers are moving into some of IBM’s core strength areas—for instance, outsourcing through MSPs, business analytics and big data in the services area. So it’s an exciting time for us with the midmarket business.

Laurie: Can you tell us a bit about your background, Mike?

Mike: I have been with IBM for four years. I came from XIV, a storage company that IBM acquired in 2008. Prior to that, I ran channel and SMB businesses for EMC and Sun Microsystems. I’m fairly new in terms of my IBM tenure, but have long experience with the channel and SMBs.

Laurie: Thanks. So, turning to IBM’s MSP initiative, how do MSPs fit into the picture for IBM?

Mike: We look at it from a customer demand perspective. We see more interest from midmarket customers to leverage outsourced solutions. It is very appealing for them to roll out a new application and leverage standard solutions without expanding their IT organizations or building a lot of infrastructure. MSPs can help them do it quicker and with less upfront investment and risk. So outsourcing and MSPs are key trends.

Laurie: There are so many areas in which technology is evolving so quickly—cloud, and mobile, social, and analytics. Even if SMBs want to do some of this in-house, the pace of change is so rapid that they can’t get new solutions in place quickly enough with only in-house resources.

Mike: That is exactly right. Their IT organizations are working 9 to 6 five days a week, so it’s great to have a business partner that can provide a mission-critical applications such as email with a 24/7 service level. And they can leverage cloud capabilities for security monitoring.

Another benefit is that an MSP sees millions of intrusion detections a day, and can do statistical analysis to understand where the next one is likely to come from. That’s a level of sophistication that a midsized firm probably doesn’t have. But they can leverage that from an MSP partner.

Laurie: So MSPs can provide not only economies of scale, but economies of skill because of experience. But the MSP area can be very blurry, with a lot of definitions and overlap between MSPs and other partners like VARs or solution providers. How does IBM define MSP, and what type provides the best synergy with IBM?

Mike: We look at it from a few different perspectives. First, there is the traditional non-cloud MSP, which is what folks typically think of when they talk about an MSP: They provide network system management outsourced infrastructure management.

But we’re seeing real growth among cloud service providers, who fit into three categories: infrastructure as a service, platform as a service and software as a service. The best way to think of it is how much does that service provider provide as an outsource service to the end-user customer?

  • Infrastructure as a service (IaaS) providers are traditional MSPs that provide servers, storage and management capabilities such as security and backup.
  • Platform as a service (PaaS) providers provide infrastructure plus a development runtime environment.
  • Software as a service (SaaS) providers manage everything, including your application and data, for you.

IBM has programs for each type. IaaS MSPs are great partners for our Tivoli management tools, servers, storage and endpoint management tools for mobile applications. PaaS providers also use solutions such as Cognos, an analytics tool, SPSS and Rational development tools. SaaS providers may work with IBM partners who have built on IBM infrastructure or the IBM SmartCloud Enterprise.

Laurie: Several major IT vendors are courting MSPs. What differentiates IBM?

Mike: When we talk to MSPs, their needs focus on two areas. One is they’re looking for a full offering. Can I buy a platform, management tools, platform development tools and services? IBM has a really strong story to tell up and down the whole continuum of offerings—not only the products, but also the services.

We tune our offerings so that an MSP can plug-in anywhere. If they need a platform, we’ve got that. If they’re developing a vertical service that they’re rolling out and they would like to offer a managed backup or a managed security service as part of that, we have it and it’s available, priced and configured so that they can integrate it into their solution and sell it to their end-user customers. We’ve got a lot of flexible offerings and capabilities to address their needs.

Laurie: It sounds almost like they can get as many of the LEGO pieces as they want.

Mike: That’s the way we like to think of it. You define what your business is, and IBM will plug-in the areas that are not core to you or where you could use some help. If it’s another service that augments the business that you’re in, then that’s the way we’d like to work with you.

The other thing that’s really exciting is that IBM is very focused on how do we build a business relationship with an MSP? What do we do for joint marketing to drive demand for their services? We both have an interest in them being successful because the more they sell, the more they consume the technology we provide to them.

We focus on their people and capabilities, leveraging our background and business partner experience. We’ve done a lot in the last three years to assist with marketing support for our business partners to help them go to market as opposed to us just handing them a lead. We’re much more efficient if we put more money and investment and skills in their hands, supported with marketing investments and some other services that we can provide to them.

Sure, we’re a technology provider, we’ll hit all of your needs there, but we’re really focused on the business relationship and how we provide you the marketing support to drive demand, and how you can leverage the IBM brand and logo in the marketplace.

Laurie: What is the traction like with IBM for MSPs so far?

Mike: Explosive growth. We’ve gone from a couple hundred of MSPs to 1400 globally in just a few months since we’ve focused on bringing our message to them. We’ve kept it kind of a quiet secret; but since we’ve been starting to drive the discussion with partners, it’s starting to expand very rapidly.

Laurie: What are the best opportunities for MSPs in the midmarket to work with IBM on, if you had to pick a couple of sweet spots?

Mike: Most of our business today comes from the IaaS providers—the traditional hosters that are building out infrastructure. In major markets, they’re looking at systems like IBM PureSystems, which is an advanced fully functional platform. In growth markets, they’re saying come in and help us with our data center strategy and how we should build out these data centers.

But the other two areas, PaaS and SaaS, are ones that we’re really seeing explosive growth in. In PaaS, we’ve got partners developing environments based on IBM Rational software and IBM Cognos software, and some SaaS partners are using IBM SmartCloud Enterprise and Cognos tools. All three are great areas, and we’ve got a good story to tell for all of them.

Laurie: Can you give me an example of a specific MSP that’s really taken the bull by the horns and done a great job?

Mike: Yes. I’ll talk about one from Austria, a company called Pitagora. They developed a CFO dashboard around SmartCloud Enterprise in Cognos, which they host in our environment. They had been a traditional IBM Business Partner, so this was a great way for them to add significant value and launch a whole new services arm based on Cognos and their expertise in business analytics.

Laurie: What should an MSP know about the programmatic aspects of working with IBM?

Mike: Where to get information. Go to IBM PartnerWorld – Managed Service Providers, which is part of IBM’s global partner program. We’ve got information about the top offerings, depending on the type of business partner or service provider you are, and what would be the right way to engage with us from an offering perspective and from a business development perspective.

There’s a form you can fill out there, and we’ve got a business development team to understand your business and help you map IBM’s resources to your business. We’ve got folks that are really smart about this business. All they do is work with service providers to understand their needs and how to bring the full force of IBM to help them.

Laurie: How is the business model structured?

Mike: We’ve made it a lot easier to register, and the business development executive we assign will stay on and work with the MSP partner. Our business motto is that the partner will have an assigned person not just for the sign-up phase, but also once we’ve both decided this is the right partnership, getting those first few customers and starting to scale the business.

Laurie: Mike, I just have one more question to ask. What would be the most important takeaway you would want an MSP to have in terms of how they view IBM?

Mike: You know, it’s funny. I think when we have that conversation with MSPs, generally we’re not the first name that they think of in this space. But our team is focused on being an active participant in this marketplace. We’ve been listening, and what we’re hearing is that MSPs need a full set of offerings and somebody that really views this as a partnership and is willing to invest upfront in developing the business jointly.

Our key message to MSPs is that we are very interested in this business and in working with you. We’ve got a lot of very exciting things to offer, and there is a lot of leverage and benefit from being affiliated with IBM—so we would absolutely love to talk to them. The next step would be to take a look at IBM PartnerWorld – Managed Service Providers and get the ball rolling, and we’ll follow back up with them. We’re very committed to this business, and we would love to talk to them.

This is the second of a five-part blog series by SMB Group that examines the evolution of midmarket business technology solutions and IBM’s Managed Service Provider Channel programs. In the next post, we’ll look at the opportunities and challenges from an MSP perspective.

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The Technology—Performance Connection for Midmarket Businesses

Posted on September 10, 2012 by lauriemccabe

In today’s always-on, hyper-connected world, technology has become a critical lynchpin for business success. Increasingly, businesses of all sizes view technology as an essential to improving customer engagement, raising employee productivity, and creating innovation and differentiation—all vital ingredients for building economic value.

You don’t need to take my word for it. For the first time since IBM began conducting its Global CEO Study eight years ago, study respondents identified technology as “the most important external force impacting their organization” in the most recent 2012 IBM study.

It looks like these respondents are right. In the SMB Group’s 2011 SMB Routes to Market Study, we identified a distinct category of midmarket companies that we’ve termed “Progressive SMBs.” Despite or perhaps because of economic uncertainties, Progressive SMBs invest more in technology and have higher revenue expectations than peers whose tech investments are flat or declining.  For instance, 73% of midmarket companies (medium businesses with 100 – 999 employees) that plan to invest more in technology anticipate revenue increases in 2012, compared to just 17% among those planning to decrease IT spending. Progressive SMBs view technology as a vital tool for business transformation, a mechanism to create market advantage, and a way to level the playing field against bigger companies.

Figure 1: Increased IT Investments Pay Off For Midmarket Businesses

As a result, Progressive midmarket companies can leverage key technology trends to fuel better business returns. As they do, they make the case for the value of these technologies, and in turn, will spark broader adoption across the midmarket spectrum.

Cloud Computing and Virtualization Become the New Normal

The pace of technological change is in overdrive, and the requirement to harness technology-based solutions to gain market advantage is rising. As a result, demand for cloud-based solutions is accelerating (Figure 2).  The business application areas that show the strongest near-term potential for midmarket cloud growth are marketing automation, business intelligence/analytics, and collaboration.

Figure 2: Applications Moving to the Cloud

The promises of cloud computing—reduced capital costs, speed to deploy, real-time collaboration and data visibility—tap into key midmarket business needs and constraints. By offloading deployment, management and support to a cloud service provider, midmarket businesses can free up internal resources to focus on core business requirements. Users can reap the benefits of anytime, anywhere, any device access to applications. And, companies can achieve solution benefits more quickly than if they had to vet, buy, install and deploy a new solution in-house.

But that doesn’t mean everything will go to the public cloud; it will continue to be a hybrid world for a very long time. Many midmarket businesses will continue to choose on-premises apps as security, regulatory, customization or other needs dictate, but will turn to desktop and server virtualization solutions to gain benefits similar to the public cloud. With IT staffs stretched thin, midmarket businesses will turn to managed service providers (MSPs) to offload IT infrastructure planning, implementation and management more frequently.

Mobile Mania Accelerates

The growth of smart mobile devices and applications has been nothing short of spectacular. The SMB Group’s 2012 SMB Mobile Solutions Study shows that 81% of midmarket businesses already equip their employees with mobile devices and solutions–and the other 19% plan to do so within the next 12 months.

Midmarket businesses want to give employees more and better mobile solutions to boost productivity, streamline information access and improve customer service (Figure 3). With use of mobile collaboration apps (email, calendar, etc.) is already mainstream, these companies are now deploying customer relationship management, social media marketing, time management, and field service apps.

Figure 3: Top Drivers and Obstacles For Mobile Solutions

They are also ramping up external mobile application development to interact with customers, partners and suppliers. External-facing mobile apps in areas such as mobile marketing, payments, scheduling and customer service apps help businesses improve customer responsiveness, grow revenue and streamline service.

However, mobile apps also creates several challenges. With limited IT resources and mobile expertise, many midmarket businesses need outside help to ensure security, manage mobile applications and devices, and integrate new mobile apps with their existing business solutions.

The Social Imperative Grows

Social network-based technology has grown from curiosity to niche to new paradigm in a very short time, and is becoming indispensable to many midmarket businesses. According to our 2012 SMB Social Business Study, social media use among midmarket businesses increased to 63% in 2012–up from 52% in our 2011 study.

Use of social tools is already exceeding that of purpose-built software for functions such as to “connect with people who aren’t customers” “generate more web site traffic” “generate more/better interaction with customers/prospects” and “new employee recruitment,” as shown in Figure 4.

Figure 4: Social Media Use Gaining Ground for Accomplishing Many Business Functions

But, while social media use is up, the percentage of midmarket businesses taking a planned, strategic approach has pretty much remain stuck. 51% of midmarket social media users still pretty much throwing the proverbial spaghetti on the Facebook wall—or into the Twitter stream. This is a critical distinction because strategic users are significantly more satisfied with the outcomes they get from their social efforts than counterparts with an ad hoc approach.

For instance:

  • 62% of strategic users, compared to 42% of informal users are very satisfied with social to “improve market awareness/reputation.”
  • 55% of strategic users, compared to 45% of informal users are very satisfied with social to help them “connect with people who aren’t customers.
  • 58% of strategic users, compared to 28% of informal users are very satisfied with social to help “generate more leads.”

As midmarket businesses invest more time and money into social efforts, the need to incorporate social into corporate planning in a more strategic way will increase. Midmarket businesses will need guidance to select the best tools for their requirements, train employees, integrate social with business solutions, monitoring social interaction, and measuring return on social initiatives.

Turning the Information Explosion into A Fountain of Wisdom

Many SMBs have plenty of data, but find it challenging to get the insights they need from it. The social-mobile-cloud triumvirate adds more fuel to the data explosion. In our 2011 SMB Routes to Market Study, respondents cited “getting better insights from the data we already have” as a top technology challenge.

To plow through the growing data avalanche, businesses are beefing up their intelligence investments. 29% of midmarket businesses purchased/upgraded a BI solution within the past 24 months, and 28% plan to do so in the next 12 months. The need will only grow as midmarket companies integrate new customer and prospect data from social media into the information flow of existing business solutions to bring market and individual customer trends, requirements and behavioral patterns into sharper focus.

Getting the Job Done

The ability to strategically apply cloud, mobile, social and business intelligence solutions to their businesses will increasingly distinguish high-performance midmarket businesses from lesser perfuming counterparts. But with an average full-time IT staff of eight, most midmarket businesses simply don’t have the staff, expertise or budget for do-it-yourself IT in these areas. These IT shops have their hands full simply grappling with the day-to-day problems of their current IT environment.

However, these midmarket challenges offer managed service providers (MSPs) and other solution providers with ample opportunity to provide these businesses with a broader portfolio of automated, integrated managed services for both infrastructure and business application requirements, along with professional services guidance and training. In our next post, I’ll explore some of these opportunities in more detail.

This is the first of a five-part blog series by SMB Group that examines the evolution of midmarket business technology trends and IBM’s Managed Service Provider channel programs. In the next post, we’ll look at the opportunities and challenges these trends create for MSPs to serve midmarket businesses as they navigate to these solution areas.

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The Progressive SMB: Customer Stories are Worth 1,000 Analyst Words

Posted on July 18, 2012 by lauriemccabe

I attended SAP’s SAPPHIRE NOW 2012 several weeks ago and am finally getting a chance to share my thoughts on the customer meetings I had with Big Byte Corporation and KEEN Footwear at the event. These two customers are very “real” SMBs. BigByte has 52 employees; KEEN has 130. Neither is a Silicon Valley venture capital startup, which let’s face it, is a very different breed. Why did they choose SAP, which, after all, is best known for its footprint in large companies? Their perspectives about this are quite interesting because they personify what we at the SMB Group call “Progressive SMBs.”

The Progressive SMB Class–What is it, and Why is it Important?

Our 2011 SMB Routes to Market Study indicated that many SMBs are tightening their tech wallets for 2012 as compared to 2011 (Figure 1). But the study also showed a distinct segment of SMBs that we call “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT investments. They see IT as a tool for business transformation, and a way to create market advantage and level the playing field against bigger companies. Although while price is a factor, they rate other criteria–such as the ability to customize solutions, strong vendor reputation, and local support and service–higher than other SMBs when making technology purchase decisions. Figure 1: SMB IT Spending Plans and Revenue Expectations More important, Progressive SMBs have higher revenues expectations than their peers. For instance, 75% of the Progressive medium businesses (who are increasing technology spending) anticipate revenue gains in 2012, compared to just 17% of medium businesses that plan to decrease IT spending. BigByte and KEEN Footwear have both adopted a Progressive strategy. They illuminate how Progressive SMBs think about IT, and how their businesses have benefitted by making a bigger investment in IT than most of their SMB peers.

BigByte’s SAP Story

Founded twenty years ago, BigByte provides annual global warranty services, after-sales tech support, product repair and refurbishment and reverse logistics services to large companies such as Apple, Cisco and Panasonic. BigByte had used a combination of entry-level financials, homegrown apps, spreadsheets and manual processes for a long time. But keeping track of the significant inventory on consignment from its customers became more challenging over time. And, since every manufacturer has its own, unique set of processes to handle warranty service, BigByte was struggling to accommodate each company’s individual workflow. By 2009, BigByte’s resources were stretched thin. It didn’t have the inventory controls it needed, and was spending too much time pulling data together for reports. At the same time, the company’s owner wanted to prepare the business for growth and/or acquisition. He realized that to accomplish this, the business had to become more efficient. Michael Franklin, who I spoke with at SAPPHIRE NOW, was hired as COO to fix the problem. Initially, Mike hadn’t considered SAP; he had a couple of other ERP solutions he was vetting for the job. But the company’s owner spotted an SAP ad in Golf Magazine, and thought, why not get information? Mike went to SAP’s web site and was connected to Softengine, an SAP Business One partner. Why did BigByte decide to buy SAP Business One? The other solutions Mike was looking at promised many of the same things, such as a unified management for core business functions and embedded analytics. What sold the company on SAP Business One echoes what we heard in our survey about what Progressive SMBs are looking for:

  • Good value and no pricing surprises. Soft Engine offered a fixed price for implementation, and fixed monthly price per user, per month pricing for everything else (hosting management, 24×7 support, upgrades, etc.).
  • Fast time to value. As part of the fixed scope implementation BigByte got the software and 21 users up and running in less than 6 months via Softengine’s hosting program for Business One.
  • The ability to customize. BigByte needed to tailor return authorization functionality tailored for each of its customers–and be able to customize for future ones too.
  • Trust in and credibility. Softengine had a strong mix of SAP credentials and competencies, along with managed services and cloud infrastructure design and deployment.

Interestingly, although debating what isn’t and isn’t really a “true” cloud solution has become the most popular past time for many of us in the industry, this was not an issue for BigByte. Mike wanted the best ERP solution for BigByte, but didn’t want to manage the IT infrastructure needed to support it. Two years later, Mike says that Business One has given the company what it needs: automated processes and efficiencies; reliable, unified and real-time data; dashboards, tools and reporting for better decision-making. BigByte also uses Business One mobile apps for things such as approving purchase orders. Net-net, Mike estimates the company cut labor costs by about 15%, and cut IT costs by about 80%, because it now outsources hardware maintenance. IT now helps power the business, instead of just supporting it. BigByte can adjust to different customers’ processes and requirements, giving the company the agility to replace shrinking customer demand in the optical disk drive sector with the new customers in the growing LCD market. And, with its business processes in order, BigByte is also much more credible to potential buyers.

KEEN Footwear

If you’re an outdoor enthusiast, you know (and probably love) KEEN Footwear, a Portland, Oregon-based footwear designer and distributor. KEEN’s founders went into business to invent sandals that protect the toes with a signature protective “toe bumper.” Today the company offers shoes, bags and socks for many outdoor activities and for casual wear. I had the opportunity to talk to David Boeschenstein, KEEN’s COO about their SAP story. When Dave came to KEEN from Adidas in 2008, the company had outgrown its ERP system. Dave’s charge was to select a scalable solution that could adapt as the company continues to grow. He looked at a few options–including SAP Business All-in-One (BAiO) for apparel and footwear, which is used by several others in the outdoor and specialty footwear sectors. After extensive evaluation involving multiple users from each department, KEEN decided SAP BAiO–along with SAP Business Objects and Business Warehouse–would be the best fit for the company. Now remember, KEEN has only just over 130 employees! But they are another prime example of a Progressive SMB. KEEN views IT as an essential enabler to drive business growth, and wanted solutions that will scale to support the initiatives they have planned for the next 5 years and beyond. According to Dave, Keen’s motivation for installing SAP solutions was “to ensure we provide our customers with excellent service. Our business operations mandate is to make it easy for customers to do business with KEEN wherever in the world they interact with our products and our fans.”. SAP partner Gravity Pro helped KEEN deploy BAiO (using Rapid Deployment Solutions, or RDS), Business Objects and Business Warehouse in July 2011. KEEN is now live in the U.S., Canada, and The Netherlands.

Customer Stories are Worth 1,000 Analyst Words (or more!)

Much has already been written about the details of the new products, strategies and solutions that SAP announced at Sapphire, and this is, of course, very valuable to understand. But sometimes not enough is discussed from the customer’s point of view–and some of the most important things–namely the business outcomes from technology–can get lost in translation. The BigByte and KEEN experiences help put the SAP into perspective for SMBs, and illustrate how Progressive SMBs are making their decisions about business solutions. They also highlight why it is so important to be–or become–a Progressive SMB.

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