Does Salesforce’s Refreshed SMB Strategy Add Up?

salesforce logoSalesforce hosted its second annual Analyst Summit last week. This year’s format was much more engaging and interactive format than last year, sparking lots of interesting questions and discussions among analysts and the Salesforce team.

At a high level, Salesforce’s executives laid out the company’s key themes for 2016, which included:

  • Continuing to invest in its core CRM space to maintain market dominance. To that end, Salesforce recently introduced its new Lightning user experience and development framework, along with Trailhead, its interactive learning platform to help users and developers transition more quickly and easily to Lightning.
  • Using IoT to strengthen customer engagement. Salesforce announced Thunder, its IoT Cloud, at Dreamforce 2015. Salesforce’s Adam Bosworth emphasized that while Thunder isn’t yet ready for prime time, it is in pilot with several customers. Salesforce is focusing on connecting IoT with business processes and customer experience to help its customers to help drive sales and revenues.
  • Reimaging Wave Analytics to provide better insights to users. Salesforce initially launched Wave Analytics as a platform in 2014, with plans to develop apps on top of the platform over time. After hearing from customers that it was too expensive and focused too much attention on the platform play and not enough on providing enough prebuilt apps for business users, Salesforce introduced its next iteration of Wave at Dreamforce 2015. In addition to a streamlined pricing model, the new version offers prebuilt sales templates and apps that make it easier for sales reps to get more value from their customer data.

Of most interest to me, however, was that Salesforce devoted more time to its strategy and solutions for SMBs than last year.

From SMB Startup To Enterprise Powerhouse

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

When Salesforce was founded in 1999, it was focused on the SMB market. As a cloud pioneer, Salesforce captured the market’s attention with its story of faster, easier, better and less expensive CRM. While SMBs were its target in the early going, the marketing genius of Benioff and a stellar sales team quickly moved Salesforce upstream, and capitalized on replacing enterprise dissatisfaction with Seibel to become the undisputed 800-pound CRM gorilla in the enterprise market.

To accommodate demands from large customers and a rapidly evolving market, Salesforce expanded its vision over the years to become what it now terms a “customer success platform.” Today, this platform encompasses many parts and solutions, including:

  • Multiple editions of its core CRM solution
  • A veritable storm of clouds (sales, marketing, service, community, etc.)
  • New Thunder and Lightning initiatives
  • More than 35 acquisitions, from ExactTarget to SteelBrick.

However, as I wrote in this post, Salesforce’s SMB Story: Great Vision, But a Complicated Plot Line, amid its enterprise success, the Salesforce story became harder for the average SMB to parse through. And, while the vendor offered relatively low entry-level pricing for it former Group Edition ($25/user/month), SMBs faced a steep jump to Professional ($65/user/month) if they needed more functionality that many wanted, such as pipeline forecasts, campaign management, contract storage and quote delivery, custom reporting and dashboards.

Either as a by-product or intentionally, Salesforce’s SMB story has evolved to focus on the “fast growth” SMBs and digital elite, where it has done an excellent job of capturing market share.

But when it comes the vast majority of SMBs the math is revealing. True, Salesforce is the #1 CRM vendor in SMB: SMB Group’s 2015 Routes to Market study shows that 25% of SMBs (1-999 employees) that currently use a CRM solution use Salesforce. However, 75% use other brands, from old-guard competitors such Microsoft and ACT!, to newer ones such as Insightly and Pipeliner. And then there are all of the SMBs still using Excel, email and/or basic contact management solutions.

Furthermore, according to Salesforce, about 150,000 businesses in total use its solutions, and about one-third of them (or 50,000) are SMBs. When you consider that there are roughly 6.5 million SMBs with employees (plus another 17 million or so solopreneurs) in the U.S. alone, Salesforce has barely scratched the surface in SMB market.

Salesforce’s New SMB Story

Recently, Salesforce has begun to refocus its SMB story, for a few reasons. In addition to the huge, untapped market potential, Salesforce sees SMBs as canaries in the coal mine in terms of requiring the simplicity and ease of use that all businesses—even large ones—increasingly demand from business application vendors. Salesforce also wants to tap into SMB diversity and innovation to help keep pits own focus fresh.

Screen Shot 2016-01-19 at 12.57.27 PMTo that end, Salesforce has recently taken a couple of big steps to refocus its SMB story, including:

  • Launching SalesforceIQ for Small Business at Dreamforce in September 2015. Positioned as “the smart, simple CRM to grow your business,” SalesforceIQ, at $25/user/month, replaces Group Edition as the vendor’s CRM entry point for SMBs. Based on the acquisition of RelateIQ, SalesforceIQ automatically captures, analyzes and surfaces customer information across email, calendars and other channels, using pattern recognition to provide users with sales insights and proactive recommendations.
  • Announcing a free integration between Desk.com, Salesforce’s small business customer service app and SalesforceIQ. The integration gives give SMBs a unified view of their customers, enabling them to provide the more connected, personalized experience that their customers will increasingly demand.

Screen Shot 2016-01-19 at 1.02.03 PMSalesforce also quietly rolled out Trailhead  in 2014, and then showcased it at Dreamforce 2015. Trailhead provides users, developers and administrators with a guided, learning path through the key features of Salesforce to help people get more value from Salesforce solutions more quickly. According to Salesforce, Trailhead earners have passed more than 1,000,000 challenges, earning more than 250,000 badges.

In addition, Salesforce’s AppExchange—one of the first and most successful app stores, which just celebrated its 10th birthday—offers more than 2800 applications that integrate with Salesforce). Many of these are SMB-oriented, and Salesforce continues to ramp up SMB partnerships and integrations, with vendors from MailChimp to Slack to Sage Live (link to blog) on board.

Perspective

There are many things I like about what Salesforce is doing in the SMB space. I think SalesforceIQ gives SMBs a much better bang for the buck than Salesforce Group Edition. Furthermore, the integration between Desk.com and SalesforceIQ gives SMBs a cost-effective way to improve their customers’ experience, and level the playing field against larger companies in today’s increasingly social, omnichannel world.

Salesforce’s ecosystem is also a huge plus for SMBs that are already Salesforce customers. The AppExchange makes it easier for SMBs to find apps that will work well with Salesforce, and reduce potential integration issues. Meanwhile, Trailhead is one of the most fun training programs I’ve seen in the business applications space.

But, Salesforce will need to do more if it really wants to become an SMB mainstay. First, of all, Salesforce needs to improve SMB segmentation and understanding. Sure, it gets those Silicon Valley startups, but it needs a deeper understanding of the broader SMB landscape and their diverse attitudes and requirements.

This leads to my next point, which is that the broader swath of SMBs still need a lot of business and conceptual education about how and why sales, marketing and customer service are changing, and what they need to do to succeed amidst these changes. Salesforce paved the way in educating SMBs about the big picture benefits of the cloud, it should have the same lofty goals in terms of educating them about the new customer journey.

In addition, Salesforce says that there is “a clear migration path” from SalesforceIQ to Sales Cloud. While it sounds like Salesforce can easily migrate data from SalesforceIQ to Sales Cloud, the applications are built on different code bases, and have different user interfaces. So its not intuitive as to how this works in real life in terms of user learning curves. As important, what is the strategy for all of the ISVs on the AppExchange that target SMBs? They’ve integrated with Sales Cloud offerings, not with SalesforceIQ. Since Salesforce is now pitching SalesforceIQ to SMBs, what do they need to do, and how will Salesforce help them? Another question is how does Lightning—and Thunder for that matter—fit into the SMB story?

That said, as evidenced at this event, Salesforce is listening, and is formulating plans to increase investments to educate and engage SMBs both locally and online. While engaging the broad SMB market is never easy, Salesforce has the right attitude, and the brand and budget to create a wider lens through which it can gain the pulse on SMBs it needs to capture SMB attention and market share.

My Top Posts From 2015

new-year-images- collectionSeems like we blinked and its already 2016! I hope your New Year is off to a great start. Here are my most popular blogs from 2015.

Thank you again for reading and commenting on them. And please let me know what SMB related tech topics are of most interest to you in 2016.

SMB Group’s 2016 Top 10 SMB Technology Trends

Making The Internet of Things Real For SMBs

Are You Keeping Pace With Your SMB Customers?

Taking the Plunge: Triggers for Small Businesses to Move to SAP Business One

Trends in Small Business Adoption of Mobile Solutions

Cloud Is The New Normal for SMBs—But Integration Isn’t

SMB Spotlight: Empowering A Billion Women by 2020 Teams Up With Xero

The Cloud: Mother of Re-invention for IBM

Charting a Course in the ERP Clouds

Mobile Solutions Play a Big Role in Small Businesses

SMB Group’s 2016 Top 10 SMB Technology Trends

Foggy Crystal Ball-128x128Here are SMB Group’s Top 10 SMB Technology Trends for 2016! A more detailed description of each follows below. (Note: SMB Group is the source for all research data quoted unless otherwise indicated.)

  1. SMBs That Make the Business-Technology Performance Connection Outpace Their Peers.
  2. The Battle for Self-Employed Workers Heats Up.
  3. SMBs Tune in to IoT Possibilities.
  4. Public Cloud Is a Done Deal, but Cloud Variants Remain Hazy for SMBs.
  5. Security Remains the Elephant in the SMB Room.
  6. Mobile Solutions Occupy a Bigger Part of SMB IT Real Estate.
  7. SMBs Rethink CRM.
  8. SMBs Move Up the Cloud Analytics Curve.
  9. SMBs Streamline Internal Processes to Focus on Business Growth.
  10. More Tech Vendors Use Big Data to Provide New Business Services to SMBs.

Detailed SMB Group Top 10 SMB Technology Trends for 2016:

  1. SMBs That Make the Business-Technology Performance Connection Outpace Their Peers. SMB success is increasingly tied to technology. SMBs that view technology as critical to improving business outcomes are outpacing their peers in terms of business growth. According to SMB Group’s 2015 SMB Routes to Market Study, 29% of SMBs view technology as helping them to significantly improve business outcomes. These “progressive” SMBs are 18% more likely to forecast revenue increases than their peers. Progressive SMBs spend 29% more on technology, are 55% more likely to have fully integrated primary business applications (financials, CRM, HR, etc.) and are 86% more likely to use analytics than their counterparts. By using technology to streamline workflows, slash time spent on repetitive data entry and inefficient processes, gain better insights into opportunities and threats, and create new business models, progressive SMBs are well positioned to tap into new customer requirements, improve customer engagement and experience, and enter new markets. As they move forward, they will continue to outpace their peers and reshape the SMB market.
  2. The Battle for Self-Employed Workers Heats Up. According to April 2015statistics from the U.S. Government Accountability Office (GAO), more than 40% of all U.S. workers are contingent, which includes the self-employed as well as temp workers, contractors, on-call workers and part-time employees. That number represents a 10% increase from the previous GAO survey in  The survey spans industries from construction to pet care, and from professional services to Uber and Lyft drivers. This trend shows no sign of abating, with the GAO predicting the percentage of self-employed workers to rise to 50% by 2020. Self-employed workers need tools to manage finances, build brands and grow their business—but they must do all this on a shoestring budget. SMB Group’s 2015 SMB Routes to Market Study shows that consequently, many of these workers rely on Excel spreadsheets: 40% of self-employed workers use Excel for accounting, and 85% use Excel or email (such as Outlook or Google) for sales and contact management. On average, median annual spending on technology for businesses with one employee is approximately $3,500, which includes client devices, productivity software, business software, Internet connectivity and mobile data service and device expenses. Vendors such as FreshBooks and Square have been pioneers in developing solutions specifically for self-employed workers. But more vendors, such as Intuit (with QuickBooks Self-Employed) and Sage (with Sage One), are following suit. Although the sheer market volume creates great potential, rapid scale will be required to attain and sustain profitability in this cash-constrained segment.
  3. SMBs Tune in to IoT Possibilities. The Internet has delivered its latest game changer: the Internet of things (IoT). As with the Internet innovations that preceded it, IoT presents tremendous potential for disruption—along with all of the opportunities and challenges that accompany this type of sea change. Yet IoT is still just a buzzword for most SMBs. When asked in SMB Group’s2015 SMB Routes to Market Study, “What are the top three technology areas that are most critical for your business to invest in over the next 12 months?,” IoT ranked at or near the bottom. Only 18% of small and 13% of medium business decision makers selected IoT as one of their top three priorities. But factors such as vendor education and early success stories will help SMBs better understand IoT use cases and opportunities, both to improve internal operational efficiencies and to create new product and services offerings. SMB Group research indicates that SMBs in retail, wholesale/distribution and discrete manufacturing (e.g., auto, electronic equipment) are likely to lead the SMB IoT charge. Regardless of industry, IoT solutions built to move critical, trigger-based data to the Internet (through smart gateway solutions and applications) and store less important data locally will be key to helping SMBs avoid information overload and achieve successful IoT outcomes.
  4. Public Cloud Is a Done Deal, but Cloud Variants Remain Hazy for SMBs. Cloud solutions are already part of the business fabric for most SMBs, with the adoption of cloud solutions surging across all solution areas, according to SMB Group’s 2015 SMB Routes to Market Study. In fact, the cloud is poised to overtake on-premises deployment in the next year in areas such as collaboration, file sharing and marketing automation. Cloud adoption is also growing in areas in which it has traditionally lagged: Almost one-third of SMBs planning to purchase accounting and ERP solutions say they plan to purchase a cloud offering. But for the most part, SMBs have been choosing public cloud options—despite several vendors’ vocal promotion of private and hybrid cloud alternatives. Although each variant has its pros and cons, most SMBs remain confused about what private and especially hybrid clouds are as well as when and why they should consider them. Most vendors define hybrid cloud as the integration of a public and private cloud; but because private clouds are still rarely utilized by SMBs, the hybrid cloud notion remains hazy for SMBs. Microsoft with Azure Stack for Windows Server, IBM with its Bluemix-powered “cloud everywhere” platform and Dell with Dell Cloud Manager are trying to make private and hybrid cloud options more accessible and manageable. But unless and until vendors offer more articulate, relevant and compelling alternatives, SMBs will continue to opt for the public cloud in the vast majority of cases.
  5. Security Remains the Elephant in the SMB Room. As SMBs rely more on technology to run their businesses, the requirements to secure and protect data and access become more critical and complex. SMB Group’s 2015 SMB Routes to Market Study shows that medium businesses rank security as their second most pressing technology challenge, while small businesses rank it as their number-one challenge. However, many SMBs feel overwhelmed, confused and completely inadequate to deal with the magnitude of the seemingly endless potential for digital security breaches that could wreck havoc on their businesses. All too often, they continue to take an outdated, ineffective, 1990s-era “whack-a-mole” approach to security, deploying point solutions to ward off the security threat du jour. However, vendors are delivering more holistic, end-to-end, risk- and rules-based solutions for SMBs. These solutions can enable them to close off the biggest vulnerabilities to their most critical corporate data, wherever it resides—whether endpoint devices, mobile apps, on-premises infrastructure and applications or the cloud. Although most SMBs will need help understanding this approach, once they do, they will be able to face and address the security elephant in a more effective way.
  6. Mobile Solutions Occupy a Bigger Part of SMB IT Real Estate. SMBs continue to turn to mobile solutions to help redefine business processes and pursue new opportunities. SMB Group’s2014 SMB Mobile Solutions Study indicates 59% of SMBs view mobile solutions and services as “critical” to their business. The effects of mobile adoption impact traditional IT in endless ways. For instance, 85% of SMBs see mobile apps as complementing traditional business apps; 70% believe that mobile apps will replace some of their current business applications; and 48% say their employees are doing significantly more work on mobile devices. As important, mobile solutions account for a growing share of SMB technology budgets, with median spending on mobile solutions as a percentage of total technology spending rising year-over-year. However, while they’ve been swept up in the mobile tsunami, many SMBs have yet to put mobile strategies and solutions in place to optimize their mobile investments. SMBs will need better guidance from vendors both to effectively manage and protect mobile assets and to better integrate them with traditional business applications and infrastructure.
  7. SMBs Rethink CRM. SMBs need an integrated, holistic view of their customers, but “enterprise” CRM has proved too complicated and costly for most. The good news is that vendors are crafting CRM solutions specifically designed and priced for SMBs. These solutions go beyond contact management to help SMBs improve the customer experience; compete in a social, omnichannel world; and access analytics to stay ahead of their customers’ expectations. Examples include Salesforce, which introduced Salesforce IQ as its new sales management entry point for SMBs and followed up with a free integration for SalesforceIQ withcom customer service. This combination provides sales and customer service reps with a complete view of customer interactions across sales and services. HubSpot launched Connect to integrate customer data from different applications, such as billing and payment data from FreshBooks and customer service records from Zendesk, into HubSpot, for a more complete customer view. Meanwhile, SAP rolled out SAP Anywhere & Everywhere to help SMB retailers and etailers manage sales, marketing, ecommerce and inventory activities in a more cohesive way. And Infusionsoft, which has focused on very small businesses from the start, is adding new capabilities to enable buyers to better personalize the Infusionsoft experience to their style and preferences. These vendors—and others—will help more SMBs realize that the time has come to modernize and integrate their CRM approach.
  8. SMBs Move Up the Cloud Analytics Curve. Vendors have been making big investments to build powerful yet cost-effective cloud-based analytics solutions. Designed for business users instead of data scientists, these solutions offer user-friendly interfaces, guided discovery, visualization tools and natural language capabilities to help users quickly get actionable insights from their data. For instance, IBM’s Watson Analytics minimizes the effort required to turn raw data into insight via visualizations. Users connect their data source to Watson and then query Watson about the data in plain English (or their native language). Watson then builds a dashboard or graphics so users can easily visualize the findings. It also offers a built-in predictive engine, which can, for instance, generate personalized offers based on customer preferences and purchasing histories. Another example is Tableau, which recently introduced Vizable, designed for a touch-based, mobile world. Vizable reads a spreadsheet or .csv file, determines the key categories and then displays an initial graphical view of the data that users can explore by pinching, swiping and dragging on the iPad. Vizable also offers a built-in animation engine to help users understand why results change as they manipulate the data. With clear benefits and easy access, SMBs are shifting from on-premises analytics to the cloud. This is particularly true in medium businesses, which cite analytics as the second most critical area to invest in over the next 12 months. Although most of these businesses currently use on-premises analytics solutions, among those planning to purchase or upgrade in this area, 48% plan to use cloud-based analytics solutions. This trend will strengthen in 2016, as more SMBs seek out analytics solutions that are easy to buy and use in order to stay ahead of the market and their competitors.
  9. SMBs Streamline Internal Processes to Focus on Business Growth. SMBs say that attracting new customers and growing the business are their top business goals, according to SMB Group’s 2015 SMB Routes to Market Study. Unfortunately, many SMBs waste so much time managing the daily internal grind of financial, human resources, procurement and other back-office processes that they don’t have time to focus on growth, opportunity and innovation. But SMBs in fast-growth industries such as software and biotech are role models for a more modern, automated and often cloud-based approach—one that enables them to spend less time on back-office processes and more time on decision making. In turn, early SMB adopters across the spectrum are taking note. They are replacing or foregoing outdated, disjointed back-office systems with next-generation solutions. These solutions enable them to automate drudgery and gain time-saving, visibility, collaboration and decision-making benefits that give them the flexibility to adapt to changing market requirements. As early adopters reap these advantages, pressure is mounting for SMBs that have resisted change. They will need to bite the bullet and update the way they run the business, or they will fall behind their more nimble peers.
  10. More Tech Vendors Use Big Data to Provide New Business Services to SMBs. Tech vendors are increasingly applying analytics to challenge traditional service providers in “non-IT” areas. For instance, Intuit recently launched a new financing alternative in partnership with OnDeck. The service uses small businesses’ QuickBooks accounting data to qualify applicants for lower-rate loans than those available from traditional lenders. Intuit also formed a partnership with Stride Health, which integrates Stride Health’s personalized health insurance, healthcare and compliance management within QuickBooks Self-Employed. Meanwhile, Intacct, which provides cloud ERP software, has partnered with Pacific Crest to provide SaaS businesses with real-time comparisons of their performance relative to their peers and pinpoint specific levers for improving their execution. And IBM continues to push Watson deeper into healthcare, with a planned $1 billionacquisition of medical imaging company Merge Healthcare. IBM’s intent is to apply image analytics to medical images taken by Merge, which are used in medical specialties such as radiology, cardiology and orthopedics. Big Blue also purchased the Weather Company’s digital assets (everything but the TV network). IBM will use the Weather Company’s forecasting data and technology to create services to help weather-reliant businesses to maximize profits. Because so many industries rely on weather data, the opportunities are endless. For instance, retailers need to know if they should stock up on groceries before a winter storm; farmers use weather data to maximize crop yields; and construction workers monitor the weather to determine the best times to pour concrete or operate a crane. As these types of services proliferate and become more powerful and convenient, they offer new ways for SMBs to grow and innovate.

If you are interested in learning more about licensing options for SMB Group’s 2016 Top 10 SMB Technology Trends, please contact Lisa Lincoln, Director of Client Services at lisa.lincoln70@smb-gr.com or 508-734-5658.

 

Intuit: Finding New Footing In the Small Business Cloud

For Intuit, small business is big business. The company has long dominated the very small business, or VSB (1-19 employees) accounting market in the U.S. (Figure 1), and in the last few years, has also been campaigning hard to win global business against incumbents in countries such as Canada, U.K., India and Australia.

Figure 1: U.S. VSB Accounting Solutions Purchased/Upgraded in Last 24 Months

Slide1

Yet Intuit has had a mixed track record in terms of evolving from a traditional package software model to a cloud-based services and platform company. Although Intuit initially launched QuickBooks online in 2004, the vendor seemed conflicted about how best to navigate its own transition to a cloud based business model for several years. However, it started getting serious about the cloud a few years ago, and today QuickBooks Online has grown to serve over 1,150,000 small businesses.

Meanwhile, the company has continued to wrestle with how to grow its business beyond its core QuickBooks franchise. This past summer, Intuit announced plans to divest several businesses, including its original Quicken consumer finance product; QuickBase, a collaborative workspace to build custom apps; and Demandforce, an automated marketing solution for small businesses. In addition, the vendor laid off about 5% of its workforce this past August.

Given the opportunity to attend this year’s QuickBooks Connect conference, I was curious to learn more about Intuit’s transformation strategy, and how it will grow its small business footprint. At the event, Intuit emphasized plans to:

  • Double down on small business financial management-related services that leverage the QuickBooks Connect platform. With plans to take Quicken, QuickBase and Demandforce off its plate in the works, Intuit can free up resources to concentrate on innovation in small business financial management. The vendor announced new solutions to help retailers and e-tailers automatically connect QuickBooks to inventory and sales data across multiple channels. This includes integrating data from e-commerce providers like BigCommerce and Shopify, as well as integration for QuickBooks Point-of-Sale. Intuit also showcased a new QuickBooks financing option, offered in partnership with OnDeck. The QuickBooks FinancingLine of Credit uses small businesses’ QuickBooks accounting data to qualify applicants for lower-rate loans than those available from traditional lenders. Intuit also highlighted its partnership with Fundbox, which provides advanced payments for outstanding invoices in QuickBooks to help improve cash flow.
  • Bet the future on the cloud and big data. While Intuit will not abandon desktop users, it has shifted its resources (and partner ecosystem, see the next bullet) to the cloud. According to Intuit, QuickBooks Online accounted for 60% of new sales in FY15, and the company expects that to jump to 70% in FY16. As it transitions more customers to the cloud and the QuickBooks platform, Intuit gains access to more customer data that will enable it to create–and monetize–a broader array of financial services for small businesses.
  • Ramp up its ecosystem and platform play. Over the past year, Intuit has grown the number of third-party apps that integrate with the QuickBooks platform from just over 300 apps to more than 1,500. At the event, Intuit announced that it has set up a $4 million co-marketing fund to help developers promote apps developed on the QuickBooks platform. Through the program, the vendor will double developer partners’ marketing investments of $10,000 to $20,000. For example, if a partner spends $10,000, Intuit will double the match to $20,000.
  • Boost its focus on the self-employed sector. Last fall, Intuit announced QuickBooks Self-Employed, its somewhat late counter to rival Freshbooks, which launched in 2003, and now claims to have over 5 million users (though Freshbooks doesn’t disclose the number of paid subscribers). Designed to provide the rapidly growing self-employed segment with tools to organize and manage their finances, QuickBooks Self-Employed enables users to connect bank and credit card accounts to import transactions, and categorize them as either business or personal. The solution also automatically assigns them to the proper IRS Schedule C deduction category. According to Intuit, QuickBooks Self-Employed currently has about 25,000 paid subscribers. At QuickBooks Connect, Intuit highlighted a new partnership with Stride Health, which integrates Stride Health’s personalized approach to managing health insurance, healthcare and compliance within QuickBooks Self-Employed.
  • Strengthen its accountant solutions and network. Intuit introduced Trial Balance within QuickBooks Online Accountant at the event. The solution helps accounting professionals save time by pre-mapping most of the accounts from QuickBooks Online Accountant to an Intuit Tax Online form, reducing or eliminating manual data import, export and entry work. It also gives accountants one, centralized location to store the work they perform for clients. Intuit also launched a New ProAdvisor Fathom Partnership, designed for accounting professionals who want to deliver more frequent, engaging advisory and management reporting services. The new partnership provides ProAdvisors with exclusive benefits, including a free Fathom single company license for life, discounts of up to 50% off licenses for their clients and dedicated support for ProAdvisors and their clients. Intuit also hosted a special VIP event for key accountant partners. Intuit used the VIP event to provide partners with deeper insights into Intuit’s plans, and to tap into partner ideas and recommendations to strengthen QuickBooks small business and accountant solutions and programs.
  • Grow globally. Intuit currently provides localized versions of QuickBooks in the UK, India, Canada, Australia and Singapore, with plans to launch in France and Brazil later this year. Intuit’s commitment to global expansion was underscored by a large accountant and developer representation from these countries, especially the UK, Canada, India and Australia.

Perspective

Intuit has traveled a somewhat rocky road to the cloud, but now seems to be finding its footing. It has elevated QuickBooks Online to flagship status; significantly ramped up developer activity on the QuickBooks platform; is gaining awareness and customers in new geographies; and continues to have a large, loyal accountant network.

This doesn’t mean all will be easy climbing from here on in. Intuit needs to play an aggressive catch-up game in the race to win self-employed customers. Furthermore, while Intuit is focusing on helping small businesses better manage their financials, VSBs (businesses with 1-19 employees) seem more concerned with business growth. According to SMB Group’s 2015 SMB Routes to Market Study, VSBs rank growing revenue and attracting new customers as their top two business challenges–ahead of improving cash flow, maintaining profitability and obtaining financing (Figure 2).

Figure 2: Top U.S. VSB Business Challenges

Slide2

Meanwhile, competition for customers in new geographies will be fierce and nuanced with global complexities. And, in all cases, Intuit is competing for limited IT dollars: 62% of VSBs spend just $1,000-$9,999 on IT annually (SMB Group’s 2015 SMB Routes to Market Study).

Figure 3: U.S. VSB Annual Technology Spending

Slide3However, Intuit’s tack to build new, data-driven services for small businesses–such as its new lending service–provides the company with an exciting opportunities to disrupt the status quo and create new revenue streams, such as Intuit is doing with QuickBooks Financing. While other companies may launch similar services, Intuit’s dominant market share in the U.S. provides it with a unique advantage. While its too soon to know how this will actually play out, Intuit’s ability to capitalize on this potential will likely prove to be the biggest factor in spurring the company to the next level of growth.

Note: Intuit hosted me at QuickBooks Connect and paid for my travel expenses. 

Cloud Cover: Cloud Management and Security for SMBs

Cloud solutions already play a big role in most small and medium business (SMBs), with SMB adoption of cloud solutions gaining momentum across many solution areas (Figure 1). For many SMBs, the cloud offers a way to use new solutions to help grow the business despite limited IT resources and budgets.

Figure 1: SMB Current and Planned Solution Deployment Methods

Slide1
Benefits such as cost effectiveness, flexibility, and easier and faster deployment are driving SMB adoption of cloud applications and storage solutions (Figure 2). The cloud gives SMBs the opportunity to harness more of the solutions that they need to get ahead–solutions that many would never have been able to deploy and manage on their own.

Figure 2: SMB Drivers For Cloud Adoption

Slide2

But as cloud adoption grows, so does the complexity of managing and securing data in the cloud. As SMBs start to utilize a mix of public, private and hybrid clouds to meet different requirements, managing multiple solutions across multiple types of clouds can strain SMB resources. Many struggle to gain a holistic view of cloud performance. Compounding the situation, as SMBs spread data across multiple cloud environments, challenges to locate and safeguard data increase. In fact, SMB Group’s SMB Group 2015 Routes to Market Study shows that medium businesses rank security as their second most pressing technology challenge, and for small businesses, security is #1.

So how can SMBs continue to take advantage of new cloud solutions that help move the business forward, and at the same time, more easily manage and protect their data in this increasingly dispersed cloud environment?

Take Ownership of Your Cloud Strategy 

Because cloud solutions are typically easier to acquire and start using than traditional on-premises applications, many SMBs have taken a tactical approach to cloud adoption. It’s likely that corporate, line of business, small groups and individuals have all “turned on” cloud solutions for different purposes.

Think about it: the odds are good that you’re using public cloud services, such as Microsoft Office 365, Google Apps for Work, or Dropbox, and maybe using a platform-as-a-service like Salesforce.com, and an , or Infrastructure-as-a-service like Amazon Web Services to run a traditional financial application, or for testing and development.

There’s nothing wrong with using a mix of cloud services and deployment options. But an ad hoc, siloed cloud approach can quickly spiral out of control–leaving you with poor visibility, a lack of control and management, and potential security risks.

Take a step back and inventory who is using what and why. Then look ahead to develop a more proactive and strategic cloud strategy that aligns with business goals, applications and workloads, IT resources and budgets, as well as your requirements in areas such as compliance, security and performance.

Consider the differences (Figure 3) between public, private and hybrid clouds. Clouds come in different shapes and sizes. Understanding the differences can help you determine which type of cloud deployment is best suited to your business goals, workloads, resources and security requirements. There’s no one size fits all answer; even for the same application and workload, a private cloud may be the right option for one organization, while a public software-as-a-service (SaaS) might be best fit for another.

Figure 3: Different Types of Cloud Application Deployments

Slide3

Increasingly, SMBs are exploring a hybrid cloud model, in which some resources run in the public cloud, while others run in a private cloud. This approach is gaining momentum in situations where organizations want to use a public cloud/SaaS app, but security requirements dictate keeping some resources/data behind the corporate firewall; or companies need “burst” capacity for peak times, or have different needs for different data types/users.

Take Control of Cloud Security and Management

securityAs SMB reliance on cloud solutions rises, so does the need for better management and security. Solutions such as Dell Cloud Manager, featured at Dell World 2015, can help SMBs simplify and streamline cloud management of their cloud across multiple applications running in different private and public cloud platforms. Instead of having to juggle management dashboards from multiple cloud providers, Dell Cloud Manager gives IT a way to manage heterogeneous clouds from a single pane of glass. With this type of cloud management solution, SMBs can monitor, manage and govern existing cloud solutions, and bring new solutions into a centralized environment more easily.

Protecting your data–regardless of which cloud, on-premise system or network, or user device–also creates new security challenges. To address these concerns and protect data wherever it goes, Dell showcased new, more comprehensive security solutions. Some are designed specifically to address cloud challenges, such as:

  • Dell One Identity Cloud Access Manager 8.1, which enables secure access to all internal and cloud-based web applications, enforces security policies and controls. This new version also incorporates SaaS-based, multi-factor authentication.
  • Dell Data Protection, Cloud Edition 2.0, which allows businesses to encrypt their data and apply policy controls to data as it moves from endpoints to leading public cloud platforms, such as Google Drive, Microsoft OneDrive for Business, Box and Dropbox.
  • Dell SecureWorks, which now includes a new, on-demand Emergency Cyber Incident Response (ECIR) capability for clients using AWS. The solution helps organizations investigate cyber incidents affecting assets deployed on the AWS Cloud, and more easily and efficiently and contain, mitigate cyber incident response investigations.

Be Prepared for the Future

As SMBs rely more on cloud solutions to run their businesses, the requirements to manage, secure and protect data across different cloud environments will continue to rise. While an ad hoc approach to the cloud may provide a quick fix, it won’t provide the visibility and control needed for sustained, long-term success. By taking a proactive approach, SMBs can build a cloud strategy that not only provides a tactical fix to immediate challenges, but also helps ensure that you can securely scale and adapt it to meet future needs as well.

This post is sponsored by Dell.  

Making The Internet of Things Real For SMBs

canstockphoto24687951The World Wide Web became commercially viable 20 years ago, and it quickly became clear that the phrase “The Internet Changes Everything,” was spot on. The Internet has forever changed and continues to transform the ways we do things, both in the business world and in our personal lives. It has spawned and enabled an explosion of innovation, from cloud and mobile solutions to social networking to big data and analytics, destroyed old business models and created new ones.

IoT: The Internet’s Latest Game Changer

Most recently, the Internet has delivered its latest game changer: the Internet of things, or IoT. As with the Internet innovations that preceded it, IoT again presents tremendous potential for disruption–along with all of the opportunities and challenges that go along with this type of sea change. Gartner forecasts that by the end of 2015, there will be almost 5 billion ‘things’ connected to the Internet. By the end of 2020 that number will rise to 25 billion, or more than three things connected to the Internet for each person on the planet.

Yet IoT is barely on the radar of most small and medium business (SMB) decision-makers. When asked in SMB Group’s 2015 SMB Routes to Market Study, “What are the top three technology areas that are most critical for your business to invest in over the next 12 months?” IoT ranked at or near the bottom. Only 18% of small and 13% of medium business decision-makers selected IOT as one of their top three priorities.

Figure 1: SMB Rank Their Top Three Technology Investment Areas

Slide1Clearly, SMBs need help to better understand this trend, and the opportunities and challenges it presents.

What Is The Internet of Things (IoT)?

As with most tech terms, there is an over-abundance of definitions for IoT. Perhaps the most “official” is from the National Institute of Standards and Technology (NIST), the U.S. technology agency chartered to develop and apply technology, measurements and standards. According to NIST, IoT is part of what it terms cyber-physical systems (CPS):

Cyber-Physical Systems or “smart” systems are co-engineered interacting networks of physical and computational components. These systems will provide the foundation of our critical infrastructure, form the basis of emerging and future smart services, and improve our quality of life in many areas.  Cyber-physical systems will bring advances in personalized health care, emergency response, traffic flow management, and electric power generation and delivery, as well as in many other areas now just being envisioned.

In laymen’s terms, IoT is when “things”–objects, people, animals, etc.–are equipped with sensors and assigned an IP address. These sensors are programmed to send data over a network automatically, so you can access and use the data to make better decisions. Using IoT, people can monitor, measure, access and manage the physical environment more efficiently. For instance:

  • Planes with internet-connected parts can send data to predict maintenance requirements and improve flight and fuel efficiency.
  • Tennis players can track and analyze ball speed, spin, and impact location to improve their game via sensors in their racquets.
  • Smart buildings can monitor energy use in real-time, so they can use heating and cooling resources more effectively, and run elevators based on actual occupancy.
  • Manufacturers can operate more efficiently by enabling equipment to proactively call for maintenance before a failure occurs.

While wearable, consumer IoT devices have garnered much of the early buzz, most experts agree that business and public sector opportunities will dwarf those on the consumer side. But, commercial IoT systems have the capacity to ingest vast quantitative of data from different sources. All of this data must be normalized and secured, and then analyzed to make sense of it. These are the hard bits, and most SMBs need help to understand these variables to effectively harness the power of IoT.

Unpacking IoT at DellWorld

Dell World 2015  provided a glimpse into its approach to create an IoT solution that does much of the heavy lifting with the Dell Edge Gateway 5000 Series. Dell’s Gateway collects, manages, and secures sensor data, using Edge analytics for analysis and to mitigate potential data overload issues. The solution determines what data is important, and transmits that to the cloud for analysis and action, leaving unnecessary data on the local device.

rcr logoSeveral Dell customers demonstrated how they use the solution. For example, RCR Racing uses Dell’s Gateway solution in its “Smart Pitstop.” Racing at speeds of 190 mph or more, successful pit stops are essential for RCR car performance. In fact, auto races can be won and lost because of the many actions–from wheel changing to refueling–that the pit crew performs in a matter of seconds. In addition to monitoring performance indicators in its Smart Pitstop dashboard, RCR assesses pit crew performance. By monitoring key variables, such as how the heart rate of a tire changer affects how well they secure the tire, RCR improves performance and increase confidence. Looking ahead, RCR plans to add more sensor information, such as weather and track data into the dashboard to further improve outcomes.

eiganDell is also working with third-party software vendors and system integrators for domain expertise. At DellWorld, Eigen Innovations demonstrated how it uses Dell’s Gateway in its Intellexon Gateway in factory floor environments to collect boiler room data with thermal imaging cameras. The cameras monitor the melting process, and proactively alert for certain conditions so that very expensive equipment can be fixed before it goes down. Eigen builds human expertise into the system, training it to crunch relevant data in the cloud and analyze it for continuous monitoring.

In addition to providing data filtering, Dell’s Gateway normalizes data from different sensors–even data from older, non-Internet compliant sensors–into a unified state for analysis. Combined with included security and manageability capabilities, Dell’s Gateway offers a holistic IoT approach.

The Time Has Come To Explore IoT

canstockphoto28600859With limitless potential use cases, and early adopters already experiencing great outcomes, IoT could be the biggest Internet-fueled game-changer yet. But along with boundless opportunity come questions and challenges, especially for SMBs, who typically lack IT resources and expertise. Where do I start? What projects are realistic for my business? How do I store, secure and analyze it? These are just some of the questions to consider.

To avoid getting overwhelmed, break things down and take a practical approach:

  • Pick a small, realistic test project, using devices you already have for sensors. Some companies have even used old smartphones to get started.
  • Address a clearly defined business problem or opportunity with an affordable solution.
  • Identify goals and metrics–such as lower fuel consumption, proactive alerts, or more efficient operations–so you can measure effectiveness.
  • Look for pre-configured solutions specific to your use case/industry so that you don’t have to figure out how to pull all the pieces–security, analytics, storage and management–together.
  • Seek help from vendors and partners that can help reduce IoT complexity and risk and help you gain benefits more quickly.

Finally, keep in mind that most big businesses have big plans to instrument their operations for IoT to reap the intelligence and performance gains that IoT offers. SMBs need to get on the IoT learning curve to gain these same advantages and compete on a level playing field.

P.S. Dell is sponsoring an Internet of Things Contest! Design your IoT solution with real business impact for a chance to win one of 16 prizes worth up to $150,000 in value.

This post is sponsored by Dell.  

Automation and Insight: Intacct’s Focus for Dreamforce 2015

This video interview was recorded on September 16, 2015, and originally posted on SMB Group Spotlight.

Laurie: Today I have the opportunity to talk to Rob Reid who is CEO of Intacct, which is a cloud-based financial management solutions company. We’re here at Dreamforce 2015 for this SMB Spotlight. Rob, I’m delighted to be speaking with you.

Rob: It’s a real pleasure. It’s always good to see you.

Laurie: Thanks and likewise! Before we kind of get into some of the specifics of what Intacct is focusing on at Dreamforce, can you provide a quick review about Intacct–who you are and what you do?

Rob:  Sure. At Intacct we deliver ERP solutions for midmarket firms. We focus on being best in class and complementing other best in class applications like Salesforce. So connecting the front office and back office seamlessly is one of the things that we really focus on at Intacct . We’re doing that for midmarket firms that are typically going through a lot of growth that want to automate their processes so they can invest in their mission. You know, so maybe they can hire more engineers, or if they’re a not for profit going on out and really helping the world. We help them eliminate some of the costs of running the business so that they can go and attempt the big things.

Laurie: Yes, helping midmarket companies to automate a lot of backend processes. So how did you arrive at this focus?

Rob: So you know the industry has pretty much segmented for while when we got into the market several years ago. There were solutions initially for enterprise corporations, such as Oracle and SAP. And because there are millions of very small businesses in the United States and across the world, businesses like Intuit went after that arena. And requirements are significantly different between what a large enterprise needs and what an owner/operator needs. But in the middle market, in the past, it was pretty much Microsoft and Sage with offerings there to help those organizations grow and to try to become larger companies. And unfortunately, Microsoft and Sage didn’t migrate to the cloud too quickly. The cloud changes the economic model, it’s a more cost-effective, easy to use type of environment, and enables much better reporting than ever before. So organizations like Intacct went on in to that sector to take advantage of cloud, and it’s been working great for us. We’ve been achieving 40% growth for the last four to five years. We now have 9,000 customers in locations all over the world in every continent other than the Arctic, and it’s just working for these organizations.

Laurie: Here at Dreamforce, you have some announcements or focal points that you’re highlighting here at Dreamforce. Could you talk about that?

Rob: I’d be glad to. At Dreamforce we’re showing Intacct Subscription Billing capability, which allows you to automate the subscription billing practices that you have. So many different industries are moving to subscription billing, they need an adaptive way to do the monthly billing and then connect that from a revenue recognition perspective. So we offer Intacct Subscription Billing, on top of the Salesforce1 platform. It’s totally integrated in with Salesforce, so there’s a seamless flow from the front office into the back office, so you’re accurately billing your customers. In turn, customers are happier, and will pay the bill faster. We’ve tied the revenue recognition requirements in and automated the whole overall process.

Laurie:  You’re absolutely right, even products now are on subscriptions, like on Amazon I have certain things set up for subscription, like vitamins, because I know that I’m going to need them every so often. I think that subscription capability is going to be key for a lot of companies.

Rob:  I’m glad you brought that up about getting your vitamins and other consumer things, but I want to clarify that our subscription billing solution is really focused on B2B type organizations. There are solutions from our partners that do a great job for the B2C area.

Laurie: So you integrate with partner solutions to handle the subscription billing in a B2C environment. Ok, what else is Intacct focusing on here?

Rob: In addition to automation to help organizations take out costs, they need to know exactly what’s going on with regard to revenue and their overall performance. They need to get information to the management team and all the employees about what’s going on in real time. They need empirical data to make both strategic and tactical decisions. If they can see what’s happening, they can spot opportunities and go after them. Or if all of a sudden there’s a new issue starting to bubble, you’ll see it and you can hone in on it. So we have delivered the Intacct Visual Board Book to give organizations the ability to see not just gap performance measures, but the operational measures that go on all the time. In today’s world, many times the operational measures are more important than the gap measures.

Laurie: If you can see where you’ve got either an opportunity or an issue and fix that or address it right away it’s gonna make a big difference.

Rob: Yes, and since we’re here at Dreamforce, there are a lot software companies here, and the change in monthly recurring revenue is actually the most comprehensive way to look at a software company’s health. Looking at revenue from the past, you’re always looking at things in the rearview mirror. When you’re seeing changes in real-time, you know exactly what’s happening. For instance, one of the challenges for most subscription-based software companies is the cost of customer acquisition. Well at Intacct, we’re providing you that information in real-time. Our Visual Board Book it’s keeping track of cash, it’s keeping track of what your customer lifetime value is, all that’s automated and provided visually. Everything is data-driven so that you make the right decisions. So as important as it is to have a financial management system to automate your processes, I think it’s even more important to be able to have the empirical data to make the right decisions.

Laurie: Right, have the insights and get everybody on the same page instead of everybody having a different opinion about what to do.

Rob: You know, you and I have known each other for a long period of time. I’ve been in Fortune 500 companies and I’ve never had more information to make the right decisions than I have right now at Intacct. We use Salesforce, we use Intacct, we use Marketo, we have about 30 different cloud solutions that we’ve integrated in together. We’ve got dashboards on everything and know what’s going on in the real-time.

Laurie: So these capabilities help you grow a business and sustain a business.

Rob: Yes, and that draws us back to that midmarket. According to The Economist, 89% of all the jobs created in our economy since the Great Recession are in the midmarket. The midmarket is driving our economy today. In fact, enterprise level new jobs have gone down 10% since the Great Recession. So we’re helping growth-oriented midmarket organizations take it to the next level. It’s just really an exciting time.

Laurie: We have known each other a long time Rob, and I know you have a lot of experience in business, and you were also honored with the Glassdoor CEO of the Year award last year. I’m looking forward to Part 2 of this interview, where we’ll talk about your management tips for midmarket businesses over and above automation and analytics.

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