Sage Streamlining Takes a Major Turn With the Sale of ACT! and SalesLogix

Posted on February 19, 2013 by lauriemccabe

sage imagesLast week, The Sage Group announced that it is selling its Sage Act! contact manager and SalesLogix CRM to Swiftpage. Swiftpage is a U.S. based digital marketing software vendor and has been a Sage partner supplying Sage E-Marketing as a connected service for three-plus years. The move is part of Sage’s strategy to streamline its business software portfolio and focus on its core application areas, accounting, ERP and payroll. Sage is also selling Sage Nonprofit Solutions to Accel-KKR, a private equity firm.

In addition, Sage is unloading four solutions sold in Europe. Combined, these sales amount to about $145 million, and result in a loss to Sage. Accel-KKR and Sage provided Swiftpage with significant capital to help finance Swiftpage’s SalesLogix and ACT! purchases. Sage will retain 16.1% ownership in this deal.

The sale affects about 1,000 of Sage’s 13,000 employees, with about 250 people from Sage ACT! and SalesLogix moving to Swiftpage. In my conversation with Himanshu Palsule, Sage’s North American support group is working with Swiftpage to put an escalation process in place for customers.

Sage isn’t exiting the CRM market, however. It is retaining Sage CRM (which it acquired as part of its purchase of ACCPAC several years ago) as its core CRM product.

Following Through On a Strategy to Streamline

Sage’s announcement doesn’t come as a big surprise. At Sage Summit 2012 last August, Sage North America management revealed its strategy to concentrate development on what Sage termed core solutions areas–namely financials, ERP, and payroll, as discussed in my post, Sage Turns a New Leaf: Top Takeaways from Sage Summit 2012.

At the event, Sage North America CEO Pascal Houillon set forth Sage’s strategy to move from a heavily decentralized product management and marketing approach to one that is more centralized and focused—and to put the company on a stronger growth trajectory. By streamlining its offerings, Sage intends to provide customers and partners with a more integrated experience and more flexibility to take advantage of new cloud-based connected services.

Shedding CRM Solutions That Weren’t Keeping Pace with Market Trends

Over the years, Sage has been very acquisitive. But many of its acquisitions haven’t really paid off. This has been particularly true for Sage ACT! and SalesLogix, both of which Sage acquired in 2001 when it bought Interact Commerce. Sage bought these products when desktop and client-server computing were at their peak–but about to wane. Since then, of course, the likes of Salesforce.com, Zoho CRM, Nimble and many other CRM cloud offerings have come to the forefront. Meanwhile, Sage has struggled to make the cloud transition with its CRM products. In addition, Sage hasn’t been able to keep pace with developing the new social capabilities that customers want in CRM solutions. These limitations have made it difficult to sell these products to new customers.

While Sage did develop integrations for ACT! and SalesLogix with its financials solutions, its attempts to cross-sell CRM to its installed base of financials and ERP customers met with limited success. The partner channel and end-user decision-makers for CRM and financials solutions are very different, and Sage was unable to develop an effective method to bridge the gap. As a result, there is very little customer overlap between the two.

With ACT! and SalesLogix off the plate, Sage intends to increase its focus on its core financials and ERP products, including Sage 50 (formerly Peachtree), Sage 1oo ERP (formerly Sage ERP MAS 90 & 200), Sage 300 ERP (formerly ACCPAC), and Sage ERP X3, and provide a richer set of connected services for these solutions.

Moving Forward

For a very long time, Sage has looked to acquisitions as a way to fuel growth, acquiring scores of business software products over the years. Sage has had a hard time rationalizing its strategy, sparking much criticism for having a cluttered portfolio, too many products and not enough focus.

Now, Sage is taking a 180-degree turn to sell off surplus solutions, freeing up development and marketing resources to create cleaner, more integrated solutions and messaging. While it’s too early to tell if this new strategy will result in the growth Sage is looking for, the move does give the company more bandwidth to concentrate on its core financial solutions, and give its remaining Sage CRM product the types of cloud, social  and mobile capabilities that it needs to be competitive. In addition, Sage no longer has to contend with the politics of competing product lines and partner channels.

While the move may be a bit emotionally jarring for current ACT!  and SalesLogix customers, they shouldn’t experience too much change in the short term. Over time, they may in fact see an upside, if Swiftpage, which has a strong focus in the digital marketing space,  can infuse the former Sage solutions with the updated cloud, social and mobile capabilities that they will need to attract new customers.

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SAP Shines the Spotlight on Small and Medium Businesses

Posted on January 15, 2013 by lauriemccabe

SAP SME SummitSAP’s stellar success in building its blue-chip large enterprise business has often overshadowed its considerable but quieter achievements in small and medium business (SMBs) markets. But SAP is not a household name in the SMB community. Even technology insiders are often surprised to learn that SMBs (or as SAP refers them, small and medium enterprises, or SMEs) account for the majority of SAP’s 197,000 customer base.

But at SAP’s first small and medium-sized enterprise (SME) summit, hosted at the company’s New York offices in late November, co-CEO Bill McDermott and other key SAP execs made it clear that SAP is intensifying its aspirations and endeavors with new programs and initiatives that reach well beyond its conventional solutions.

From SME Solutions to an SME Ecosystem

Over the last few years, SAP has steadily grown its SME business with its traditional solution offerings. For instance, year-over-year revenues have grown 20% for SAP Business One, SAP’s flagship ERP offering for small businesses. As discussed in The Progressive SMB: Customer Stories are Worth 1,000 Analyst Words, SAP has been particularly attractive to Progressive SMBs, who realize the increasingly direct connection between strategic IT investments and successful business outcomes.

The steady growth of SAP solutions has been admirable, but, as we learned at the SME Summit, SAP is casting a much wider net through a series of different initiatives that bring SAP’s big data, mobile and cloud capabilities to smaller organizations in a more accessible manner. Together, these are starting to take the shape of a growing SAP SME ecosystem. For instance, SAP is:

  • Growing and enabling the traditional partner channel. SAP channel partners currently account for one-third of SAP SME sales. SAP intends to raise this to 40% by 2015. To help accomplish this, SAP is enabling more of its traditional partners (VARs, SIs, MSPs, etc.) with Rapid Deployment Solutions (RDS).  Currently, SAP offers 150 RDS solutions, which provide businesses with fixed cost, fixed scope preconfigured software, best practices and implementation services that give customers everything they need to get up and running in just a few weeks. RDS has proven to be very instrumental in driving SAP’s growth in the SME sector. In the past year, RDS deployments in SME have outpaced the 500%+ overall RDS growth rate over the prior year. The importance of building and enabling the channel cannot be underestimated: according to SMB Group’s 2012 SMB Routes to Market Study, over half of SMBs purchase business applications through indirect channels.
  • Recruiting partners to build micro-vertical solutions on Business One. The small business market is actually very fragmented. While all small businesses share some common needs, each micro-vertical has unique requirements and needs specific capabilities when it comes to business software. SAP is building a development-focused partner channel to zero in on the needs of each micro-vertical. For instance, SAP partner Orchestra is building specialized solutions on Business One for small businesses in the fuel, beer and food industries. OrchestraBeer was showcased at the Summit. In this video interview, Ryan Hilliard, CEO of Hilliard’s Beer, a small startup with less than 10 employees, explains to me why he selected OrchestraBeer. Ryan plans to grow his business, and wanted a solution that would grow with him, and one over the lifetime of his business. But he also needed a turnkey solution geared to his business, and able to track specific metrics–such as batches and barrels of beer for visibility into his supply chain and production.
  • Empowering startups with SAP HANA. At the Summit, SAP announced that it has powered over 150 startups in Silicon Valley with SAP HANA. These startups are using HANA as a development platform to provide SMBs with a new, user-friendly generation of real-time analytics and advanced predictive solutions. For instance, Vish Canaran, CEO of Liquid Analytics, talked about his company’s cloud-based, mobile analytics applications for iPhone, iPad, Blackberry and Android users.  As Vish explained to me in this video discussion, Liquid Analytics starts with the user experience to help optimize productivity. Liquid Analytics apps use gamification and predictive analytics to help make it easier, quicker and more fun for wholesale industry sales reps to place orders and set and meet sales goals. As noted in SMB Group’s 2012 SMB Routes to Market Study, the data fire hose is running at full blast and shows little signs of abating. But, the big gap in big data is painfully evident for small businesses: Just 18% have purchased/upgraded a business intelligence solution in the past 24 months, and only 17% plan to do so in the next 12 months. Solutions such as Liquid Analytics show promise to offer small businesses an accessible, user-friendly ways to harness big data for business good.
  • Extending the Ariba network effect. As part of SAP’s recent Ariba acquisition, every SAP customer gets a free connection into the Ariba network (and any company, whether an SAP customer or not, can enroll as a Supplier on the Ariba Network). As revealed in our 2012 SMB Routes to Market Study, about one-quarter of SMBs sell goods and services to large enterprises. Since attracting new customers, growing revenues, and increasing profitability are perennial SMB challenges, we expect that SMB interest and involvement in big company supplier networks to heat up in 2013. As discussed in SMB Group’s Top 10 SMB Technology Predictions for 2013, access to the Ariba network is one opportunity that SMBs can leverage to compete for their share of the $300 billion dollars that large businesses spend annually on goods and services.

Looking Beyond Technology

SAP is also expanding its engagements with influencers, venture capitalists, governmental agencies and other vital SME catalysts. The Summit’s “Power of Small” panel featured speakers with wide-ranging perspectives and influence in the SME market, and underscored that SAP’s focus will go well beyond technology to include initiatives focused on policy, people, capital to help create an environment in which SMEs can thrive.

For example, Linda Rottenberg of Endeavor, who pioneered the examination of how high-growth business can transform economies, discussed the necessity of “mentor capital” for SME success. At the event, Bill McDermott announced that SAP has committed to help Endeavor select, mentor, and accelerate high-impact entrepreneurs on a global scale. Sunil Hirani of trueEX examined the effect of immigration policies on entrepreneurship in the U.S., and the importance of aligning governmental policies to help SMEs prosper.

Perspective

With these initiatives, SAP is tapping into a very important trend. As discussed in SMB Group’s Top 10 SMB Technology Predictions for 2013, Progressive SMBs, who invest more in technology and use technology for competitive advantage are also much more likely to anticipate revenue gains than peers whose tech investments are flat or declining. We also see this gap widening year over year, and expect that it will continue to do so.

Although not everyone at SAP may yet “get” small business, it was clear from the event that Co-CEO Bill McDermott does understand them, and also values the increasingly make or break role that technology plays for SMEs. SAP’s commitment to enabling partners to expose it technology in a relevant way, and its investment in the broader SME community were on display at this high-profile event, making it clear that McDermott wants to make SAP a household name among SMEs.  A lofty goal, to be sure, but one that SAP is very committed to aspiring to.

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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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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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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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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 »

Cisco OnPlus: IT Infrastructure Advisory and Management Services Solution For Small Businesses

Posted on January 10, 2012 by lauriemccabe

–by Sanjeev Aggarwal and Laurie McCabe, SMB Group

Last month, Cisco introduced a new IT Infrastructure advisory and management service solution designed for VARs to provide to small businesses with less than 100 employees. Delivered via Cisco’s value-added reseller (VAR) channel, Cisco OnPlus enables VARs to offload the mundane, time-consuming tasks of managing a network environment from small businesses, and provide them with higher value advisory services.  In addition to monitoring and managing network infrastructure devices, such as switches, wireless access points and routers, OnPlus also monitors devices that are connected to the network (including smartphones and tablets).  VARs can deploy a small OnPlus Network Agent appliance at the customer site, and remotely monitor and manage it through the cloud via a secure web portal or mobile application.

Perspective

 Cisco’s OnPlus IT infrastructure advisory and management service solution is designed to meet the needs of small businesses. SMB Group’s 2011 SMB Routes to Market study indicates that small businesses’ top technology related challenges include: Gaining ‘peace of mind’ that IT is under control (40%); containing IT costs (38%); finding/hiring qualified IT staff(35%); upgrading IT infrastructure(34%); protecting business from IT related failures(32%); and getting more done with fewer/flat IT resources (26%). As illustrated in Figure 1, Cisco’s OnPlus with Assess, Manage, Advise, Maintain features helps directly address several of these technology challenges.

Figure 1: Cisco OnPlus – Comprehensive IT Infrastructure Management for Small Businesses

Source: SMB Group, January 2012

Several IT infrastructure monitoring and management solutions are available for small and medium businesses (SMBs) ,  but they are often cost-prohibitive for many small businesses. Cisco’s hybrid solution, consisting of an agent embedded in a small network appliance and a secure cloud service, is aimed squarely at VARs that provide managed services to small businesses. These companies often lack dedicated IT staff and tend to depend on part-time IT people or external contractors to manage IT. With scarce resources typically stretched thin, small businesses are often unable to keep up with the demands of routine technology management–let alone support growth goals with new technology solutions.

At the same time, many VARs are looking for ways to quickly and efficiently offer remote management services to their small business customers, and the ability to provide more proactive guidance and management advice.

 Cisco OnPlus gives VARs an efficient way to expand their managed service offerings through remote management and visibility into the customer  network and the devices attached to the network. VARs simply plug the OnPlus Network Agent appliance into a switch or router on the customer’s network, and the OnPlus Agent then transmits information about the customer’s network and all connected devices to a secure data center for access by the VAR (Figure 2). Native apps for Apple and Android mobile devices are available for free from those companies’ app stores. The VARs have the flexibility to define their own business model for using OnPlus.  Some  will add additional fees based on their coverage and response times. Others will use OnPlus to enhance their service capabilities without additional charges to their customers.  In addition, VARs can use OnPlus as a tool to accelerate pre-sale assessments with prospective customers.

Figure 2: Cisco OnPlus Solution Service Data and Communications Flow

Source: Cisco, 2011

Cisco OnPlus appliance discovers Cisco and third-party devices with an IP address connected to the network and displays them in topology and inventory views. Partners can access a real-time view of customer networks from anywhere, through a highly secure portal using a PC, tablet, or mobile device. VARs work with small businesses to define and customize alert thresholds. Through OnPlus, VARs can also provide small businesses with automated reports of all the activity and tasks performed on the network.

Pricing is $250 (approx.  $7 per month, after typical discounts), which includes a three-year OnPlus subscription and the network agent appliance that is installed at the customer site. The OnPlus service from Cisco is available now in U.S. and Canada, with a rollout in Europe and Asia planned for 2012.

Quick Take

Cisco OnPlus delivers cost-efficient scalable IT management and peace of mind that small businesses need without sacrificing the local VAR that many SMBs want to do business with. On the VAR side, it provides a fast, efficient way to onboard customers into a managed service practice, provide more proactive services, and provide more efficient service to more small businesses customers.  With the advantages, Cisco OnPlus should be very attractive to Cisco VARs and enable Cisco to make significant inroads in the small business segment.

That said, Cisco OnPlus can significantly strengthen its story by:

  • Offering additional functionality in the areas of IT asset utilization and management (both hardware and software) to support compliance
  • Providing additional performance management solutions
  • Making it an extensible solution so that VARs can easily add additional value-added solutions like remote backup, Infrastructure on-demand, and business continuity services
  • Help VARs position and demonstrate the value of OnPlus as a comprehensive IT infrastructure management solutions vs. a network management solution
  • Investing in demand generation marketing to educate small businesses about the benefits of managed services

However, Cisco continues to invest in and develop solutions for small business, and OnPlus provides strong evidence that Cisco understands both small business pain points and how to create solutions that provide clear benefits to its partners. Cisco’s OnPlus should be a big step forward in helping Cisco VARs to move beyond the role of network product suppliers to become more strategic managed service providers.

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

There’s an App Store for That!

Posted on June 14, 2010 by lauriemccabe

App stores focused on the needs of small and medium businesses (SMBs) seem to be proliferating quickly as cloud computing takes off. As discussed in “What is an App Store, and Why Should You Care,” a marquee SMB vendor, such as Google or Intuit typically builds the app store and serve as the anchor tenant for it. The vendors that run the app stores typically have a strong brand and a large customer base. They woo developers to build and integrate complementary applications around their core applications and/or platforms, and in return, take a commission on sales.

Some of the SMB-focused app stores that have already launched include:

  • Intuit’s Workplace App Center, which provides a central location where small businesses can locate and try business applications that work with QuickBooks and with each other.
  • Google Apps Marketplace, which offers Google users apps that integrate directly with Google Apps.
  • Zoho’s Marketplace, which provides applications that work with Zoho’s solutions.
  • Constant Contact Marketplace, which offers small businesses with applications that integrate with Constant Contact’s email and marketing tools.
  • NetSuite’s SuiteApp.com, which features third-party solutions that integrate with  NetSuite.

Plus, there are a few more SMB-centric app stores that I’ve been tipped off on that are in the works, but not yet announced. Of course, there are many app stores that aren’t exclusively focused on SMBs, but feature plenty of apps relevant to SMB requirements, such Salesforce.com’s AppExchange and Sugar CRM’s SugarExchange. There’s an even app store for Twitter. Not to mention all the marketplaces for mobile apps that work with different smart phones, from Apple’s App Store to Google’s Android Marketplace.

All of which leads me to wonder how this growing bubble of small business application marketplaces will sort out. Theoretically, app stores or marketplaces can help make it easier for users to find, try, evaluate and purchase applications. But things can get complicated if you use applications from several vendors that have a marketplace–for instance QuickBooks, Google Apps and Constant Contact.

Enter GetApp.com, which launched earlier this year. Unlike most app marketplaces, GetApp isn’t organized around a core application or platform. Instead, GetApp positions itself as a neutral, “meta-marketplace” that is application and platform agnostic. Any app can be listed on GetApp (the vendor has about 600 listings to date). In fact, many applications that are listed on GetApp are also on different proprietary marketplaces.

To help address integration requirements, participating vendors provide GetApp with landing pages and documentation to verify integrations between their apps and other apps and marketplaces. User ratings, feedback and commentaries offer validation–or not–about how well these integrations actually work.

GetApp’s model for developers is also different. Basic listings are free, but developers can sign up for a premium, or more complete listing, with a pay-per-click model; the vendor doesn’t take commissions based on application sales.

GetApp is a David among Goliaths, but will be interesting to watch. Potentially, GetApp can provide SMBs with more choice, transparency and neutrality than vendor-specific marketplaces–and give developers a new channel without requiring them to re-write their apps for another platform.

While it’s too early to predict how GetApp–or SMB app stores in general–will fare, the SMB Group will be tracking the marketplace area closely. In fact, we are asking respondents about their awareness, use and plans for marketplaces (among many other things!) in our 2010 SMB Routes to Market survey, which is fielding now.

It should be quite interesting to see if marketplaces can live up to their promise of becoming a new, powerful land very disruptive SMB solution channel.  If you know of other SMB app stores that we should be taking a look at, please let me know!

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What Does Cloud Computing Mean for the Channel? Presentation at Sage Insights 2010

Posted on May 26, 2010 by lauriemccabe

What Does Cloud Computing Mean for the Channel?

Last week I attended  2010 Sage Insights, Sage Software’s annual partner conference, and had the opportunity to present Perspectives on the Business Model of the Future: What Does Cloud Computing Mean for the Channel? twice at the event.

This was a timely topic for Sage partners, particularly in light of Sage’s recently announced Connected Services strategy, and several newly introduced offerings, including Sage Exchange, a cloud-based payments platform, ePhilanthropy service for non-profits, and the SalesLogix Cloud CRM deployment offering built upon Amazon EC2.

From my perspective, evangelism and a direct sales model fueled cloud computing and software-as-a-service (SaaS) growth early on. But most cloud and SaaS vendors that sell business solutions such as financials, ERP, CRM and HR will need to leverage channel/trusted advisor relationships to drive future growth and scale to the broader, mainstream small and medium (SMB) market.

However, cloud computing and SaaS models doesn’t align with the traditional IT channel provider role and the standard division of labor between software vendors and traditional value-added resellers. In the cloud model, the vendor delivers many of the things that IT channel has traditionally provided–software and hardware sourcing, installation and management–blurring the lines between software vendor and channel roles–and potential revenue opportunities for partners.

In my presentation, I discussed what I think cloud computing means for the channel, how vendor channel models are evolving, and my thoughts on how partners can create value in the cloud. The presentation sparked some interesting questions and dialogue among the partners attending–and several requests to share the presentation more broadly, so I’ve posted it here on Slideshare. Please take a look and send me your feedback and any questions you have as I would like to continue this dialogue!

Filed under: cloud computing | Tagged: , , , , , , , , | 2 Comments »

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