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.

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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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Tech Tidbits for SMBs: What’s Behind Xero’s Online Accounting Discount for Non-Profits

Posted on August 29, 2012 by lauriemccabe

Earlier this week, I had the opportunity to speak with Jamie Sutherland, U.S. President of Operations for Xero, which provides an online accounting solution for small businesses. Jamie discussed what makes non-profits tick, Xero’s latest announcement, which is a 25% discount for non-profits, and other Xero news.

Laurie: Jamie, can you start by giving us a little bit of background about what Xero is and what it does?

Jamie: Definitely! Xero is beautiful online accounting software designed specifically for small businesses. At the very outset, when we built the application, we went around to a number of small businesses around the world, and uncovered their workflows and the way they do business. We set out to solve key processes for them in an easy to use fashion. What was born was Xero as an application. Ever since we’ve been expanding rapidly with customers in over 100 countries now, and doubling our customer base and revenue every year. So it’s quite exciting.

Laurie: How do you define small businesses?

Jamie: Our definition is between 0 and 100 employee businesses, with a specific effort around the lower end of that spectrum. Now businesses take many shapes and sizes, and one distinction is around services-based businesses versus those that carry inventory or are involved with manufacturing or wholesale. So we’re more focused on the services-based businesses.

Laurie: So Xero announced this week that it is offering 25% off to all nonprofits?

Jamie: Yes. We know that non-profits are essentially small businesses, and are experiencing the same types of challenges other small businesses have. With the slow rebound of the economy, non-profits also have challenges around fund-raising and managing their finances. We did a panel and discussed this with a number of non-profits. We learned that managing their funds is one of their biggest challenges. So we want to make it easier for them to manage their finances.

But what we also know is that not every non-profit has an accountant or bookkeeper on staff—they typically use a volunteer to staff this position. The volunteer may not be as adept as an accredited accountant or bookkeeper. So we want to make it very, very easy for non-profits to do finances. Again, Xero is built in a very user-friendly fashion, which is helpful for the non-profit sector.

Laurie: So how does the 25% discount for non-profits work?

Jamie: Xero has 3 pricing plans. We have a $19/month, a $29/month, and a $39/month plan. All three plans include unlimited users. So no matter how many people are working in the business or non-profit, this one monthly fee covers everything, there are no additional charges. That’s unlike many of our competitors. That 25% discount is right off the monthly plan price.

Laurie: What are the differences between the three plans?

Jamie: The $19/month plan is our entry-level plan, which allows you to send up to 5 invoices a month and a certain number of bank reconciliations. For $29/month, you get the full feature set of Xero minus the multi-currency capability. The $39/month plan includes multi-currency. The majority of our customers are on the $29/month plan.

Laurie: When we do our SMB surveys, we always include non-profits, because we also see a lot of similarities with small businesses. So I’m just wondering, in what ways did you find that non-profit needs differ from those of commercial small businesses?

Jamie: We did research across the U.S., Australia and New Zealand. We found that non-profits’ needs don’t differ that much from small businesses. They focus on cash flow to make sure that cash coming in can cover expenses. Like small businesses, they have issues with employee turnover, complying with rules and regulations, etc.

But non-profits are unique in that they typically have a volunteer workforce. Whether small or large, this is very different from the typical small business.  The other big difference is that people running non-profits tend to understand finances less than the average small business owner. So something like Xero accounting, which makes it really easy to understand your finances, can help out.

Laurie: Are there some tips or best practices that came out of the panel that you can share?

Jamie: Budgeting is a big thing. There’s a budgeting tool in Xero to budget and forecast. It’s important to any business. You can import and export from Excel, and track what’s going on. So if you have a lot of volunteer turnover for accounting or bookkeeper roles, you can still have consistency around your financial and monthly reporting. With an online solution like Xero, you have real-time access to info anytime, anywhere in the world. This is helpful to anyone doing accounting or bookkeeping.

Laurie: Before we wrap up, I’d be remiss if I didn’t ask if there is anything else on tap for Xero that you can fill me in on?

Jamie: Yes. It’s been a busy 6 weeks or so. We recently announced 100,000 paying customers across the globe. It took us 5 years to get to 50,000 and then we added the next 50,000 in 10 months. So we’re starting to see much more rapid growth and adoption.

We also announced  payroll integration with ADP, the world’s leading provider of HR and outsourced solutions. The payroll integration we developed with them lets you do your payroll online with ADP and seamlessly sync with Xero. This alleviates the need for duplicate entry between the two applications, which is also exciting.

We’ve also put together a partner advisory council in the U.S., the Xero Partner Advisory Council. The council will look at the things we’re doing in the market, the products and our strategy and help us really try to cater to the needs of small businesses and make everybody better off.

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Tech Tidbits for SMBs: Elance

Posted on July 10, 2012 by lauriemccabe

I’ve had several interesting briefings in the last couple of weeks to tell you about. Since I won’t have the time to sit down and write them all up at once, I thought I’d dash them off as individual snippets instead.

First up is this post about Elance. Do you have too much on your to do list? Elance can help you find a contractor to help you get the job done. Or maybe you’re on the flip side of the coin as a contractor looking for work. Either way, Elance can benefit you. Its mission is to provide companies with “instant access to talent” through an online network of contractors and tools that make it easy to find, hire, manage and pay them.

Since my last briefing with Elance, it has grown at an impressive pace. Today, Elance has 1.3 million tested and rated contractors in its fold, and garners about 2,500 new job posts per day. While its original focus was on IT professionals, Elance has diversified to add lawyers, accountants, designers, writers and accountants on its roster.

No doubt that Elance owes part of its growth to the trend we labeled as that of “The Accidental Entrepreneur” in our SMB Group 2012 Top Ten SMB Technology Predictions. We discussed the fact that as unemployment has increased, so have the number of freelancers, contractors, independent consultants and others choosing to go it alone. According to the Census Bureau, small business without payroll makes up more than 70 percent of America’s 27 million companies, with annual sales of $887 billion.

The good news for these solo entrepreneurs is that Elance recently surveyed 1500 small businesses and found that 73% plan to hire more contractors online in the next 12 months. Why? Because it provides them with the competitive advantage they need to get things done faster, better and at lower costs–and helps them to present a larger, more professional image to their customers.

While it’s always tough to take that first plunge to hire a contractor online, Elance provides a community rating system to help you vet potential candidates. Once you select someone to work with, the Elance platform provides tools, such as a workroom with Skype, to help you connect and work together more easily. Real-time time tracking and status updates are built into the system, as are invoicing and payments. Elance also has an escrow process that protects both parties by pre-funding work and releasing payments only when results are approved. And Elance takes care of basic paperwork (such as 1099 forms) to help ensure compliance.

Whether you’re a small business that needs an extra pair of hands, or a solo entrepreneur looking for a new project, Elance could be a great fit.

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

Posted on March 14, 2012 by lauriemccabe

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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More than a Name Change: IBM Rebrands LotusLive as IBM SmartCloud for Social Business

Posted on January 31, 2012 by lauriemccabe

Attending Lotusphere (or any other big vendor event) is kind of like getting soaked with a fire hose. So instead of providing overall highlights (here’s a 60-second video that does this quite well, FYI), I’m dialing the nozzle to focus on LotusLive news at Lotusphere 2012, and my perspective on it relative to the SMB market.

New Style

Perhaps the news that garnered the most attention is that IBM is renaming its cloud-based LotusLive collaboration suite to IBM SmartCloud for Social Business. The move is designed to give the offering, which provides business-grade file sharing, communities, Web meetings, instant messaging, mail and calendaring, some new cachet in the non-Lotus market. IBM is putting Smart Cloud for Social Business squarely under IBM’s SmartCloud umbrella. By making all of its cloud offerings available in one place, IBM intends to make it for clients and partners to find and use it’s open-standards based cloud services .

Fortunately, IBM SmartCloud for Social Business (which is 34 characters, or 25% of a tweet long!) is the category name for IBM’s cloud-based social solution family. IBM will offer more succinctly branded offerings, such as SmartCloud Engage, which replaces LotusLive Engage, and ala carte services such as SmartCloud Connections.

IBM also plans to debut a dramatically simplified web site to make it easier for visitors to zero in on the most relevant solutions and information.

More Substance

IBM’s announcements in this area went beyond style to also include significant substance, for instance;

  • IBM Docs, formerly IBM LotusLive Symphony, will be included in IBM SmartCloud for Social Business. Currently in public beta with availability planned for later this year, IBM Docs is akin to Google Docs. The cloud-based service enables people inside and outside an organization’s firewall, to simultaneously collaborate on word processing, spreadsheet and presentation documents. Users can store, co-edit and share documents in IBM SmartCloud for Social Business.
  • Social Business Toolkit for LotusLive, available now, which enables customers and business partners to integrate custom applications with LotusLive–now SmartCloud for Social Business–services. Using OpenSocial APIs, developers can access profile contacts, meetings, files and communities data.  Companies can add unique custom actions to their SmartCloud for Social Business experience, and deliver everything via a unified user interface that leverages IBM standards-based extension points, authentication and encryption APIs. And, customers will only need to pay one bill for all of their Smart Cloud for Social Business services.
  • An updated Partner Online Guided Selling Tool, a dashboard to help resellers and distributors create and manage sales quotes and orders is slated for availability in the first quarter on 2012.  It will give resellers and distributors an automated collaborative tool to build quotes, place special bids, place orders, track service activation, manage customer billing, etc. to create customer-ready sales quotes for cloud services.  For instance, using the tool, partners will be able to calculate ROI, meter usage, create flexible term lengths, or ramp up customers to the full offering on a predetermined schedule.
  • New partner incentives. For instance, partners can get at 15% to 20% boost when they get authorized for and sell social business solutions, including IBM Smart Cloud for Social Business, under IBM’s Software Value Initiative (SVI) program. IBM is also giving partners that sell small deals and/or cloud –under $50,000 an additional incentive of up to 20%.
  • A new click to buy button so customers can buy IBM Smart Cloud for Social business direct on IBM’s web site.

Perspective

First, let’s look at the style front:

Lotus Notes, the on-premise ancestor of LotusLive, dominated the email and collaboration market back in the day. But competition from the likes of Microsoft to Google have chipped away at the original Lotus franchise over the years. Even when IBM Lotus out-innovated rivals in this space (for example, with IBM aka Lotus Connections), the perception of Lotus as being dated was hard to shake in the non-Lotus market.

This shift away from the Lotus brand also underscores a cultural shift that has been underway for at least a couple of years–and evidenced by the integration of Lotusphere and IBM Connect conferences. Lotus and collaboration are still a solid, underlying foundation, but social capabilities that help businesses extend beyond internal collaboration and into business workflow are the new mantra–and one more likely to appeal to a new generation of business decision makers.

Meanwhile, the IBM brand has continued to rank as one of the strongest brands in the world. Even as it enters its 101st year, Big Blue continues to buff and polish its brand with a seemingly endless appetite for innovation–as evidenced recently by Watson, atom size chips, not to mention selling 1,000+ patents to Google.

The net is that while the rebranding may cause some hiccups in the short-term as people acclimate to it, it makes sense over the long haul. And, who can argue with a simpler, easier to navigate web site?!

Moving on to substance:

Although IBM is very late to the game with click to buy capabilities, and isn’t the first to market with real-time document collaboration, the market is still young–with plenty of headroom. And, as privacy and security practices from other players come under increasing scrutiny, IBM’s measures to build corporate-strength security and privacy measures into SmartCloud for Social Business should give it an edge among organizations that place a premium on these areas.

However, my take is that IBM Docs needs to offer some compelling differentiation vs. the competition to make heads turn. In addition, IBM must go further than a 60-day trial and new click to buy capabilities to smooth the adoption and buying process. To its credit, IBM SmartCloud for Social Business does let companies provide free guest accounts to people outside their organizations. But I think it should take even more friction out of the process to boost viral adoption among SMBs–and compete more effectively with the likes of Google Apps. To that end, IBM should offer SmartCloud for Social Business free to a limited number of users in an organization.

IBM’s new partner programs and incentives are spot on, underscoring its commitment its partners, and respect for the role its partners play, particularly in the SMB market.  Just as important, the roster of SmartCloud for Social Business partners has been growing steadily, with a focus on developer partners that add significant value by integrating with the solution I spoke with representatives from both Silanis and SugarCRM, who indicated strong customer growth for their integrated offerings. With the Social Business Toolkit, IBM makes it easier for developers to integrate with SmartCloud for Social Business and provide their joint customers with a unified, collaborative business process experience.

Many SMBs take a fairly ad hoc approach to collaboration and social business. But SMB Group’s 2011 SMB Collaboration and Communications Study and 2011 SMB Social Business Study show that SMBs that take a more strategic approach in these areas not only tend to invest more in relevant solutions, but are also more likely to anticipate revenue growth. To attract more of the types of partners that it needs to more deeply penetrate the SMB market, IBM needs to both educate SMBs about the business benefits a strategic social business approach. It also must help partners identify the more strategic sector of the SMB market that is likely to have more interest in IBM.

Overall, I believe that IBM is moving in the right direction, both in terms of style and substance. If it can create some strong brand awareness, take a bit more of the friction of the user consideration and adoption process, and fuel SMBs’ understanding of how collaboration and social business impact business results, it should make good headway in this market.

Filed under: cloud computing, collaboration, SMB, Social Business, Software as a Service, Uncategorized | Tagged: , , , , , , , , , , , | 4 Comments »

The Small Business Forecast for Cloud Computing

Posted on October 10, 2011 by lauriemccabe

(Originally published October 5, 2011 in Small Business Computing)

What’s changed about cloud computing since 2009, when I wrote What is Cloud Computing, and Why Should You Care? In terms of the basic definition and benefits of cloud computing, not much. But in terms of market trends and adoption, the landscape has changed considerably.

Status Quo: Cloud Computing Basics

Here’s the definition that I provided in 2009: Cloud computing is a computing model in which you access software, server, storage, development and other computing resources over the Internet, in a self-service manner, as illustrated in Figure 1.

What is cloud computing graphic display
Figure 1: An illustrated depiction of cloud computing.
(Click for larger image).

The benefits that drive cloud computing adoption remain the same as well; instead of having to buy, install, maintain and manage these resources on your own servers, you access and use them through a Web browser.

Since many small and medium businesses (SMBs) lack the time, money and/or resources required to buy, deploy and manage the increasingly complex array of applications and infrastructure they need to run their businesses, this is a huge plus.

Cloud computing lets you access these resources as a service, without having to worry about the care and feeding of them. You can expand or shrink services as your needs change, and do it all on a pay-as-you-go subscription basis instead of forking over capital to buy hardware and software.

The concerns that people raise about cloud computing haven’t changed much either. They continue to revolve around reliability, security and support questions, such as how do providers protect your data? What happens if a service goes down, and you can’t access the application or your data?

Even highly reputable cloud providers — including Amazon, Google, Intuit and Microsoft — have experienced outages. Customers still need to do their homework and get details from providers on uptime guarantees, data protection, service levels and other policies and practices.

Cloud Computing Adoption Becoming Mainstream

Cloud computing has been around since 1997– albeit under different labels. But cloud adoption was more evolutionary than revolutionary for a long time. In the early going, many of the technologies required to effectively take advantage of cloud computing — such as ubiquitous high-speed Internet access — weren’t ready.

Equally important, people tend to be creatures of habit, and they felt no need to rush away from packaged software to the cloud. Finally, many IT people were reluctant to go to the cloud for fear it might put them out of a job.

But in the last 2 or 3 years, studies from both researchers and vendors indicate that cloud computing is becoming a more mainstream choice, especially in categories such as online marketing, collaboration and contact and customer management, as shown in Figure 2.

What’s Driving the Change?

Several factors that have coalesced to create the right conditions for cloud computing’s increased popularity. To begin with, cloud computing providers have grown up. NetSuite was founded in 1998, and Salesforce.com was founded in 1999.

Small business cloud-computing adoption rates, by application category
Figure 2: Small business adoption of cloud-based software-as-a-service solutions in selected application categories. Source: SMB Group 2010 SMB Routes to Market Study.
(Click for larger image).

Meanwhile, “old guard” players including IBM, Microsoft and SAP have also created rich portfolios of cloud solutions. Cloud vendors continue to address reliability, security and performance concerns with more redundant services and controls.

Many are also providing more visibility into performance. For instance, Trust.salesforce.com is Salesforce.com’s site for real-time information on system performance and security. Zoho Service Health Status provides a similar service.

Customers have also learned that they like many things about the cloud model. They like the responsibility being on a vendor 24/7 — and that it’s easier to switch to another provider if their expectations aren’t met. They like what I call the “virtuous feedback loop,” which means that when a cloud provider fixes a problem for one customer, it gets fixed for everyone.

Meanwhile, a funny thing happened on the way to the cloud — an explosion of mobile and social technologies. In both cases, the adoption curve has been truly revolutionary.  In contrast to cloud computing, these revolutions didn’t require IT managers or business decision-makers to take off.

Individuals could drive adoption, which in turn required businesses to interact more effectively with these newly empowered customers, employees, constituents, etc. — when, where and how they wanted.

This has had a profound effect on cloud computing. Although it has been on a slower trajectory than social and mobile technologies, cloud is increasingly the critical enabler for both mobile and social solutions. It provides the:

  • Economies of scale and skill that developers need to create, reiterate and reinvent.
  • Continuous customer-feedback loop and data aggregation required to spot trends, identify opportunities and get a leg-up on the competition.
  • Real-time collaborative environment that’s necessary to accelerate new ideas, launch new solutions and solve problems.

Finally, the curve to take advantage of new technologies and new ways of using technology is getting steeper. Most individual companies can’t tap into these opportunities on their own, however. They need IT solutions that will empower the business without draining it — and they are more likely to get this with cloud computing than with traditional on-premises software.

The net-net is that we’ve reached a tipping point. Increasingly, small businesses that want to use technology to move their businesses ahead will need to move to the cloud — or risk falling behind the competition.

Filed under: cloud computing, SMB, Software as a Service | Tagged: , , , , , , , , , , | 7 Comments »

Is Salesforce.com Outgrowing SMBs?

Posted on September 7, 2011 by lauriemccabe

Salesforce.com’s Marc Benioff is a great visionary with a big appetite for change. From packaged software to the cloud, from CRM to platform-as-a-service, he’s painted a color by number picture for businesses to emulate. But does his latest work, “the social enterprise” come with an easy enough guide for small businesses to paint it?

The Paint-by-Numbers Social Enterprise

Benioff laid out his newest work, the “social enterprise” last week in his keynote  at Dreamforce 2011. He made a convincing and compelling case that companies need to proactively listen to and engage with customers that are vocal and socially connected on a mobile, digital web–or they’ll be brought down in a “corporate spring” the way Egypt and other Arab countries have toppled in the “Arab spring.”

To that end, Salesforce has been acquiring and building the components that companies will need to become social enterprises (also known as social businesses, a term IBM coined a year or so ago). Although Salesforce.com’s Winter 2012 release contains over 150 new features, Benioff provided paint-by-number instructions for companies to become social enterprises in a few broad brush strokes:

  1. Establish a database that maintains and updates social profiles for customers and prospects, in real-time. Paint this part of the picture with Database.com, which Benioff introduced as a social, mobile and open cloud based database, and Data.com, which builds Salesforce.com’s 2009 acquisition of Jigsaw, which uses crowd-sourcing to gather customer info, by integrating Dun & Bradstreet lists and data services. Together, this provides data storage, external data sources, data cleansing. On top of that, Salesforce plans to introduce a new Chatter service next year that will bring external conversations into the database as well.
  2. Create a social network integrated with your business processes. Chatter is the color to use to integrate collaboration services with Salesforce.com and partner apps. Salesforce initially introduced Chatter in 2010 as an internal, employee social network, but is expanding it so that you can open it up to customers and partners and share files in Chatter streams. Chatter is also slated to get instant messaging, presence-awareness and screen sharing capabilities (by way of its Dimdim acquisition) so you do things such as have a video conference on the fly within Chatter.
  3. Analyzing and acting on all the customer comments and data you now have. Once your listening ears are on, you need to do something with all that information. Radian6, which Salesforce acquired earlier this year, fills this piece in nicely, enabling you to view, slice and dice unstructured data and take action based on that data.
  4. Get everything to work for any customer, on any device. To make sure that you can engage with your customers on any device they choose to use, Salesforce is launching Touch.salesforce.com. Based on HTML5, Touch.salesforce.com automatically renders the apps, data and customizations in Salesforce.com and partner apps built on Force.com on any mobile touch devices.

Can SMBs Afford the All You Can Eat Buffet Social Enterprise Buffet?

This vision is compelling for businesses of all sizes. But it sounds like a lot of stuff for a small or medium business to piece together and pay for. As I discussed in Prescription for Subscription Fatigue, there are only so many subscriptions you can tack on before people will start to complain about getting nickeled and dimed. So to make things more palatable, Salesforce is introducing a new Social Enterprise License Agreement, which provides full access to everything Salesforce sells for one all you can eat price.

The only problem is, Salesforce hasn’t told us how much it will cost for companies to become a social enterprise. When queried in media and analyst sessions about how pricing would work, Salesforce execs said that’s where the direct sales force comes in, and that basically, pricing would be determined on a case-by-case basis, in relation to the value that the total solution provides the customer.

This makes sense for Salesforce–it elevates them beyond CRM and into a more strategic platform discussion. And it makes sense for large companies that actually have dedicated Salesforce.com account reps, and enough seats and volume in the account to make the cost of one-off pricing work. But how will it work for SMBs that want to become social enterprises?

A Tough Fit for SMBs

When I followed up with a one-on-one question to Salesforce.com’s Clarence So and Alex Dayon, they assured me that SMBs are near and dear to Salesforce.com’s heart–and that they’ll figure out how to make this all you can eat feast feasible for SMBs. After all, as they said, democratization and leveling the playing field for smaller companies has been a core component of Salesforce.com’s strategy. But, they didn’t offer any specifics, and I suspect that Salesforce.com will need to figure this out as it goes along.

Clearly, Salesforce.com will continue to be pestered for answers in this area. Customers–especially SMBs–want transparency in pricing, and to date, Salesforce.com and most cloud vendors have provided them with that transparency. They’ve gravitated to the cloud model in part for the predictable pricing it affords, and are wary of vague or open-ended commitments that might be budget busters.

As important, its hard to see how Salesforce.com or even most of its partners could transact these one-off deals profitably with most SMBs. The time needed to account for the number of users, the technologies used, the value derived from those technologies, etc. might be quickly recouped in a large enterprise deal, but would be a very steep sales cost to absorb in SMB deals.

SMBs not only need affordable, predictable pricing, but many require a lot of hand holding and guidance to help them through the cultural and business process changes required to transform into social enterprises. How will Salesforce.com and its partners help them with this transformation? As of now, there are no clear answers.

Can SMBs Keep Up with Salesforce.com as it Grows Up?  

At Dreamforce 2011, Benioff underscored his vision for the Social Enterprise with great testimonials from big companies such as Coca Cola, NBC Universal and Disney, which are using Salesforce.com solutions to recreate their businesses as social enterprises. But these big companies are used to one-off enterprise-wide license negotiations, have the undivided attention of Salesforce.com sales reps, and can afford to bring in Accenture or Deloitte to help them as needed.

Clearly, Salesforce.com has grown up and evolved into a multi-faceted company with a rich portfolio of technologies and solutions that extend well beyond its CRM roots. But with this kind of growth comes complexity. In Salesforce.com’s case, it looks like they are doing a great job of shielding customers from a lot of the technical complexity that underpins these quantum leaps. But can it figure out how to take the business complexity out of the equation for SMBs? And will it want to devote the time to do this as demands from its large customers rise?

More often than not, other vendors, faced with a similar dilemma, have been unable to find a formula that allows them to live comfortably in both worlds. But Benioff and team seem to relish Rubik cube-like challenges–and it will be interesting to watch them try.

Filed under: cloud computing, Small Business Software, SMB, Social Business, Software as a Service, Uncategorized | Tagged: , , , , , , , , , , , , , , , , , , | 2 Comments »

Reflections on Dreamforce 2011: Now the Cloud Can Ride the Waves

Posted on September 6, 2011 by lauriemccabe

This year, Salesforce.com’s Dreamforce event–with a record-setting 45,000 attendees–got me thinking about the early days before the cloud was the cloud, how far its come, and how perfectly poised it is to ride the waves now driving technology adoption–mobile and social solutions.

Traveling in the Way Back Machine

In a galaxy long ago and far away, I was an analyst at the former Summit Strategies when the first cloud seeds were being planted in 1997. NetLedger (now NetSuite) and Employease (now part of ADP) were among the first to visit and brief us in Boston, followed soon after, of course, by Marc Benioff and Salesforce.com.

These vendors were among the early pioneers of what was first called the internet business service provider (IBSP) model. They built their solutions as multi-tenant software-as-a-service solutions, designing them  business from the ground up to be delivered as a single instance, to thousands of customers, in a subscription-based pricing model.

In the early going, these pioneers survived the confusion wreaked by the traditional software vendors, who put their traditional packaged apps–never designed for a services model–up on servers in the application service provider (ASP) hosting model. Then, they persevered through the onslaught of the software establishment at the time–from Siebel to Microsoft to SAP–who insisted SaaS was just a passing fad. They forged on even as multitudes of IBSP wannabes–from Agillion to Red Gorilla to vJungle–crashed and burned when the Internet bubble burst. They even survived the problems they created for themselves as they kept renaming themselves, from IBSP, online services vendor, software-as-a-service (SaaS) and then to the “cloud” label that would finally stick.

Evolutionary Vs. Revolutionary

From the start, analysts such as myself and counterparts, such as the luminary Phil Wainwright, thought that IBSP/SaaS/cloud was a great alternative to the packaged software model–and that it would catch on much more quickly than it has. But, though cloud computing has grown over the last 13 years or so, it’s growth has been more evolutionary than revolutionary. In the beginning, many of the technologies necessary to enable widespread cloud adoption, such as ubiquitous high-speed Internet access, just weren’t there. As important, IT people were often reluctant to go to the model because they were afraid it might put them out of a job, and decision-makers in some companies didn’t feel a compelling need to change the status quo.

In contrast, adoption of mobile and social technologies has been truly revolutionary. Not only were the right technologies were in the right place, at the right time, but individuals–not IT people or business decision-makers–called the shots. Employees are also consumers, and are spending their own money to BYOD (bring your own device) instead of using a company-issued brick. They started questioning why it was easier to keep track of friends on Facebook than keep track of contacts in CRM.  Armed with iPhones, iPads, Facebook and Twitter, as Benioff so rightly pointed out, individuals are now empowered not only bring about the “Arab spring” that has toppled dictators, but also stir up a “corporate spring” for companies that don’t listen to customers and employees.

Now the Cloud Can Ride the Waves

As a result, the pecking order of the IT universe is being radically altered. Apple is worth more than HP, Google is more powerful than Microsoft, and Facebook has changed the world–and what we expect from software–forever.

Though cloud computing has been on a slower trajectory than social and mobile technologies, cloud is increasingly the critical enabler for both mobile and social solutions. It provides the economies of scale and skill that developers and companies need to create, reiterate, and reinvent. It provides the customer feedback loop and data aggregation necessary to see where the puck is going and get there first. It provides the collaborative environment required to accelerate new ideas and new ways of solving problems. But it is very complicated for individual companies to piece together all the components that they need on their own.

As this perfect storm of social and mobile rapidly forms, how much time do the software vendors such as Microsoft, Oracle, Sage and SAP, have to straddle the fence and ride out the storm? You can bet that I and a lot of other storm chasers will be watching closely as the waves build.

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

We Liked it So Much, We Made it Into a Slideshow: 2011 Top SMB Tech Trends

Posted on February 23, 2011 by lauriemccabe

Presented by Laurie McCabe on January 18, 2011 WITI (Women in Information Technology) webinar.

Filed under: cloud computing, collaboration, mobile solutions, Small Business Software, SMB, Software as a Service | Tagged: , , , , , , , , , | Leave a Comment »

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