Putting Big Data To Work For SMBs

Posted on May 10, 2013 by lauriemccabe

info you need photoIn my previous post, Is Big Data Relevant for SMBs?, I looked at the underlying trends driving the buzz around big data, and why big data is relevant for SMBs. I also discussed why “big” is a relative term–relative to the amount of information that your organization needs to sift through to find the insights you need, when you need them, and the widening performance gap between businesses that can find the right needles in the data haystack, and those that can’t.

But, charting the course from information overload to actionable business insights isn’t easy, especially for resource-constrained SMBs. In this post, I’ll draw on my conversations with three IBM business partners to discuss what they are seeing, and how they are helping SMB analytics novices chart a course to a successful big data landing. They include:

  • FYI Solutions is an IT consultancy based in Parisppany, NJ. FYI specializes in business analytics solutions for financial services, insurance, life sciences, media & publishing, and automotive companies. In business for 29 years, FYI Solutions takes pride in creating lasting value through lasting relationships–the average FYI Solutions client relationship is 15 years.
  • LPA Systems, Inc. is a business analytics and business intelligence company with deep roots in the healthcare, hospitality, finance and insurance industries. Founded in 2001, LPA’s main office is in Rochester, New York, with additional offices in Houston, Dallas and Cleveland.
  • Waypoint Consulting is a business analytics and financial performance management consultancy based in Newton Square, PA and a 2012 Philly 100 company. Waypoint combines proprietary methodologies, partner products and certified consultants to help customers deliver analytic solutions. Waypoint’s Project Management process provides clients with full transparency into a project while ensuring solutions are delivered on time and under budget.

Houston (or Parsippany, Rochester, Newtown Square), We Have A Problem

SMBs rarely seek out “big data” solutions. Instead, they’re looking to solve a business problem. They may need guidance to understand what data they need to solve the problem, where the data is that they need to use, and how to capture and use the data to address challenges and meet business goals.

Trying to solve business problems is nothing new. What’s changed is that they are dealing with more data, located in more places, and created in different formats. The other big thing that’s changed is that they need to get information and insights faster.

As Joe Rodriguez, Software Practice Leader, FYI Solutions states, “They can be coming at it from different angles. They may have delivery people in the field telling them that it’s too slow to do queries to check on inventory–they are waiting too long and losing money. Or their information is stuck in different silos, and it’s a time-consuming, laborious process to try to pull it into an enterprise wide view.” Or as Brendan McGuire, Managing Partner, WayPoint Consulting puts it, “With more external and internal data available, companies can no longer effectively leverage and use the data with the tools they’ve been using.”

The Right Stuff for Successful Outcomes

Most SMBs that come to these solution providers are just getting started down the analytics path. They come in frustrated with ever-more complicated Excel spreadsheets and pivot tables that take too much energy to create and update, and that propagate too many errors to trust.

Some are also coming from industries, such as healthcare, that have undergone a rapid transition to digital records due to new regulatory requirements. All of a sudden, they are swamped with data.

Few have in-house experts that are well-versed in analytic best practices and approaches, and many don’t even have business analysts. As Joe Rodriguez puts it, “We often have a brand new customer who will come to us because they have a problem to tackle. They may have limited knowledge about analytics, and need us to help them understand it and how it can help them.”

?????????????????????????????????????????????????????????????????????????????????????????????So what does it take for these novices to successfully navigate up the curve? The solution providers I spoke with shared common views on the essentials for good outcomes.

  1. Start with smarter decision-making, not tools. Start with a close examination of the business drivers for a more advanced analytics approach–not with the tools. As Brendan McGuire noted, “The first and most important part of the conversation is working with the client to understand what processes do they have and what decisions do they need to make, and how can better data insights support this? Or as Barbara Schiffman, Director of Technology Solutions, FYI Solutions says, “We don’t start out by talking about the tools. In fact, the tools are incidental. We start with what business problems are you experiencing? Where do you really want to be instead of where you are today?”
  2. Get on the right entrance ramp. As mentioned above, many SMBs are just getting started up the analytics curve. With so many bright and shiny objects under the big data umbrella, it can be tempting to bite off more than you can chew. Jesse McNulty, Account Manager, LPA Systems summed it up this way: “Most SMBs are just getting started and have enough to do with getting good basic functional reporting in place. They can get enormous benefits just from getting the foundation in place, then build on their analytics competency from there. But some are already farther along, and ready to move into location analytics, forecasting, predictive analytics or other more advanced things–like prescriptive analytics.” On the flip side, they may not have given much thought to mobile analytics right out the gate, but could benefit from it. According to Brendan McGuire, “Most SMBs don’t initially think about it. But once we end up talking about it, many of them realize that their executives and business users are using tablets and smartphones, and that mobile needs to be part of the plan upfront.”
  3. Create the right roadmap for your business. I know I just said to stay focused, but at the same time, you also need to create a roadmap that will serve your needs as things evolve in your business, the market and with the competition. As Barbara Schiffman advises, “You shouldn’t just put a tactical Band-Aid on the problem. You need enough detail to figure out the real problems, solve for those today, but also look ahead to the future, and the types of problems that could arise.” Keep in mind that this is your roadmap, for your business. Just as there are many different entry points, the roadmap for each business will be different. “At the end of the day, it’s all about what solution will deliver the best business ROI for your company,” notes Schiffman.
  4. Decode data requirements. Take time up front to think through what data your business needs to enable better decision-making. What data are you drawing on today for decision-making and business processes? Where is the data, and how can you make it more accurate and usable? What data are you missing that you need, and how can you get it? Once you have a clear picture of the key data sources you need to pull from, you can start to figure out which tools you’ll need for the job. If you’re like many SMBs, you probably have data in different “silos”, such as an internal financials application and a cloud-based HR or CRM solution. Integrating these data sources is likely an investment you’ll need to make. As Brendan McGuire advises, “Data silos are inconsistent, expensive to support, cause errors. When you have an integrated data store, and you use that for analytics, it doesn’t impact your transactional systems. You use that to do any level of reporting, build dashboards, create mobile interfaces.”
  5. Evaluate industry-specific solutions. While horizontal solutions may fit the bill in some cases, tailor-made, industry-specific solutions and a solution provider with expertise in your industry can often save time, money and a lot of aggravation. As Jesse McNulty explained, “There is tremendous change occurring in the healthcare industry as payment models shift from fee-for-service to pay-for-performance or full risk. There are many nuances, for instance, to areas such as managing chronic disease populations, and healthcare organizations have very specific metrics that they need to monitor to improve business performance against them.” Having a pre-configured solution that integrates the internal and external data, structured and unstructured, into one location, and addresses specific healthcare needs with healthcare terminology and business practices helps save clients time and money. According to McNulty, “This enables us to get a client’s electronic medical records (EMR) system connected to and running on our Chronic Disease Management analytics in as little as two weeks.”
  6. Find a partner that provides comprehensive services. Because most SMBs will take an incremental approach, it’s important to seek out comprehensive services in this rapidly evolving area. Look for solution providers that offer consulting, and implementation and support services, and demonstrate a deep commitment to establishing ongoing relationships with their customers. However, since no one provider is ever likely to be able to do it all, in this volatile space, selecting a vendor that’s part of a strong ecosystem is also important. Being part of a bigger ecosystem gives solution providers the knowledge and training they need to stay ahead of the big data learning curve, and improve the offerings and services they provide to you.

Perspective

As all investment literature warns, past performance in not a guarantee of future success. Just ask Blockbuster, which was blindsided by consumers’ shifting preferences for renting movies; RIM BlackBerry, which underestimated how much the bring your own device (BYOD) trend would impact its smartphone sales to businesses; or Energizer, which missed the boat on how fast the sales of single-use, disposable batteries was dropping.

For most SMBs, being able to mine untapped data for business benefits is still at the aspirational stage. But now is the time to seriously consider what impact big data and analytics will have for your business, your customers and your industry. Think about trends you see taking shape–and even about the ones that you can now only imagine. What information and insights would help you capitalize on these trends? Likewise, what information are you missing that puts the business at risk?

Clearly, the perfect storm is taking shape as data volume, variety and velocity continue to soar ahead, almost guaranteeing that the businesses that can harness it to their advantage will benefit, and those that don’t will be blindsided.

This is the second of a three-part blog series by SMB Group and sponsored by IBM that examines big data and its implications for SMBs. The first post, Is Big Data Relevant for SMBs?, parses through the underlying trends and hype surrounding big data, and what is important and relevant for SMBs. In my next and final post in this series, I’ll talk about ways that you can get the conversation going and the questions you need to ask to help your business move ahead.


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Is Big Data Relevant for SMBs?

Posted on April 30, 2013 by lauriemccabe

?????????????????????????????????????????????????????????????????????????There’s little doubt that “big data” is the latest “big thing” in the IT industry. But for many small and medium business (SMB) decision-makers, big data is a somewhat fuzzy term. Ask any number of them what big data means, and you’re likely to get different definitions. Making matters worse, the “big” in big data, along with endless discussions of petabytes and zettabytes, make many SMBs skeptical that big data is relevant for their businesses.

So it’s not hard to make the case that “big data” is has become an over-hyped and poorly understood catch-all phrase. What does big data really mean, and what are the implications for SMBs? When we parse through the underlying trends and hype surrounding big data, what’s left that is actually important and relevant for SMBs?

The Realities Driving Big Data Buzz

The big part of big data is easy to understand. Basically, the volume and variety of digitized data is increasing exponentially. Think about how much and how many kinds of information have moved from physical to digital form just over the last several years. Doctors have moved from paper charts to electronic medical records; merchants have moved from paper credit card imprinters to POS terminals to virtual terminals to mobile payment devices. Movies have moved from Blockbuster to Netflix; and photos have move from Kodak to Facebook and Instagram. “Smart” machines–from traffic sensors to seismographs–are creating entirely new digital data streams as well.

As a result, researchers report that we have already created 2.5 quintillion bytes of data, and that 90% of it has been generated in the last two years alone. While quintillions are hard to wrap your head around, these facts make the concept more accessible:

  • 150,000 new URLs are created each day.
  • Twitter sees roughly 58 million tweets every day, and has more than 554 million accounts.
  • 160 million emails are sent every 60 seconds.
  • Over 20 billion credit card payments are processed annually in the U.S.
  • Power companies are moving from physical meter to digital “smart” meter readings, and going from monthly reading to gathering meter information every 15 minutes. This adds up to 96 million reads per day for every million meters–or a 3,000-fold increase in data.

The term “big data” refers to having the ability to dig in to this growing data avalanche more effectively and quickly with tools that make it easier to store, manage, analyze and act on information.

Big is Relative When It Comes to Big Data

According to findings from the IBM Institute for Business Value and Said Business School, University of Oxford, most large enterprises define the “big” in big data as databases with more than 100 terabytes, while most midmarket companies (less than 1,000 employees) consider anything more than 1 terabyte as “big”.

The fact of the matter is, “big” is a relative term–relative to the amount of information that your organization needs to sift through to find the insights you need to operate the business more proactively and profitably. Basically, if the data set is too big for your company to effectively manage and get insights from, then you’re facing a big data challenge.

This isn’t just a large enterprise problem. In SMB Group studies, SMB decision-makers repeatedly cite “getting better insights from the data we already have” as a top business challenge. SMBs may not be dealing with terabytes of data, but many are finding that tools that used to suffice–such as Excel spreadsheets–fall short even when it comes to analyzing internal transactional databases.

Welcome to the Insight Economy

info you need photoWith the amount and variety of digitized growing exponentially, these challenges and requirements will only increase.

Business that can find the right needles in the data haystack more quickly, easily and reliably than competitors can reap enormous market advantages. SMB Group’s 2012 Routes to Market Study shows that SMBs that have deployed business intelligence and analytics solutions are 51% more likely than peers to expect revenues to rise. Likewise, in the IBM-Oxford University study, three out of five midmarket respondents using business and analytics solutions reported that they are realizing significant advantages, most notably to “identify new opportunities in the marketplace” and to “understand and respond to customers better.”

Take the example of the Cincinnati Zoo & Botanical Garden. With one of the lowest public subsidies in the U.S., the zoo needed to increase attendance and boost food and retail sales to operate profitably. But the zoo was unable to easily access the data–which resided on different systems–so it could plan how to do this. The zoo implemented a business intelligence solution to get better insight into customer trends and its own operations, and answer questions such as, “How many people spend money outside of admissions costs?” and “What time of day do ice cream sales peak?” By answering these questions and others, the zoo was able to increase retail and food sales by 35%, save more than $140,000 per year in marketing dollars through more targeted, successful campaigns, and increase overall zoo attendance by 50,000 in one year.

Unfortunately, many SMBs are lagging large enterprises in this area. The IBM-Oxford Study revealed that the gap between large enterprises and the midmarket is increasing, and the SMB Group 2012 Routes to Market Study shows that the smaller the company, the less likely they are to use or plan to use BI solutions.

Perspective

Businesses have always needed the ability to measure critical success metrics and make sound business decisions. Big data solutions are designed to help businesses to do this in a world where the volume and variety of data is growing at breakneck speed.

When you look at the realities that are driving the big data bandwagon, its clear that long after the buzz fades, these realities will have a long-lasting impact on how businesses of all sizes operate. Over time, the performance gap will widen between businesses that can readily get the insights they need, when they need them, and those that can’t.

That said, figuring out where and how to start isn’t easy, especially for SMBs who are often resource-constrained. The good news, however, is that this is definitely an area where you want to take small steps first. In the next blog of this series, we’ll draw on conversations with IBM business partners to learn how they are helping SMBs to chart the big data journey.

This is the first of a three-part blog series by SMB Group and sponsored by IBM that examines big data and its implications for SMBs. In the next post, I’ll discuss how IBM business partners are helping SMBs take practical steps to put big data to work for their businesses.

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CollaborHaitian: How CIC Uses Social Business to Crowd Source Medical Care in Haiti

Posted on April 26, 2013 by lauriemccabe

Logo-For-ThumbnailWhen small business owners and entrepreneurs think of IBM, they often mistakenly assume that IBM’s sophisticated solutions are only affordable by large corporations. And IBM sometimes lags the competition in garnering SMB mind share. But some of its offerings are actually a great fit for small and medium business (SMBs). A perfect case in point is IBM’s Smart Cloud for Social Business, which provides an online, integrated collaboration solution for file sharing, communities, web meetings, mail and calendars.

I recently had a detailed conversation with Marie Kenerson, Chief Collaboration and Learning Officer at Colleagues In Care (CIC) to learn how Smart Cloud for Social Business helps CIC achieve the effective collaboration that is vital to the organization’s mission.

Sometimes It Takes More than a Village

CIC is a nonprofit dedicated to building a medical knowledge database and volunteer network to help address the healthcare needs of Haiti. Even before the 2010 earthquake in Haiti, medical needs clearly outstripped available resources. Dr. Lisbet Hanson, a Virginia Beach OB/GYN, was in Haiti providing ultrasound training for OB/GYN practitioners when the quake struck. Just a few miles from the epicenter in Port-Au-Prince, the hospital she had taught at collapsed and all of the nurses there were killed.

People in Haiti needed help, and as we all recall, there was a worldwide outpouring of aid, including that from healthcare experts around the globe that wanted to volunteer. But, connecting the dots between far-flung doctors, nurse and other professionals to create and establish sustainable practices in Haiti posed a difficult collaboration challenge. Each expert has unique areas of knowledge to contribute in areas such as treatment options, clinical pathways, and best practices, but the real value comes from putting these puzzle pieces together in a way that can be shared and replicated.

Without a system to manage and collaborate on care, even the most knowledgeable people with the best intentions were unable to realize the outcomes that they had wanted to achieve. The experts would come in, and the destitute population became dependent on them. Then the experts would leave, and take their knowledge with them. A new group would come in, and the cycle would start again. There was no way to share or build upon best practices to improve care.

Crowd Sourcing Care

This was the impetus for CIC. Upon her return to Virginia following the earthquake, Dr. Hanson and her cardiologist husband, Dr. John Kenerson, decided that there had to be a better way. Hanson and Kenerson established CIC to create a more collaborative, replicable way to catalyze the global network of healthcare volunteers that wanted to assist Haitians. Their goal was and reamains to establish a navigable social network to bring expertise into Haiti–and provide the professional development that those staying in Haiti so desperately need. To help enable this, CIC applied for and received an IBM Trailblazer grant for IBM SmartCloud for Social Business (then called LotusLive) to help facilitate collaboratiotn.

CIC SchematicSizedforBlog2Using the SmartCloud solution since early 2011, CIC has built its “Social Collaboration Cloud Solution,” which is a collaborative learning system dedicated to transforming healthcare delivery in Haiti by fostering “CollaborHaitian.”  CIC is building a medical knowledge and volunteer service database and Best Possible Practice models (PPBMs) that practitioners in Haiti and other resource-constrained areas can use. CIC’s approach is fundamentally different from the traditional approaches to international development efforts because it relies on mutual collaborative learning in solidarity with Haitian colleagues.

Today, the program enables over 200 registered users to source, co-edit and share best practices information so that they don’t have to keep reinventing the wheel. CIC fosters collaboration between the different communities of providers integral to this type of environment, including:

  • ·Micro volunteers, who share specialized expertise to provide care such as screening for cervical cancer without equipment, or to build a clinic.
  • ·Peer networks of practitioners, who are focused on specific areas, such as pediatrics or hypertension. Some are physical volunteers, who train Haitian healthcare providers to embed evidence-based quality standards into the practices and curriculum in Haiti, and others contribute online.
  • ·Macro volunteers, who create and nurture mentoring relationships between practitioners on the ground in Haiti and vetted mentors.

With SmartCloud file sharing, a peer network of Haitian and international physicians can co-create training for how to take blood pressure without cuffs, a micro volunteer can translate it into Creole and French, and then share it with the peer network–all via SmartCloud. CIC is committed to making all programs openly accessible though the governmental ministers of health to anyone interested in customizing or replicating these BPP’s anywhere, thus reducing waste, redundancy of efforts, etc.

CIC also uses the meetings capability to conduct meetings between practitioners in Haiti and remote volunteers, and activities management to ensure ideas are documented, negotiated commitments to future tasks are managed and completed. Example templates for scheduling and managing travel and training program logistics make project management visible to all. Recently, CIC has also begun using IBM Docs to create and collaborate on documents.

As important, SmartCloud has been easy enough for SmartCloud users, predominantly a culturally diverse group of very busy volunteers who donate time and expertise in incremental chunks, to learn and use on a sporadic basis.

Perspective

SMB Group research studies indicate that teamwork and collaboration–or lack of it–effect an organizations’ financial performance as well as employee (or in this, case, volunteer) satisfaction. Organizations that are more collaborative have a decided edge over less teamwork-oriented counterparts.

This is not surprising. Whether you’re the CEO or a doctor, an accountant or a volunteer, you need to share and manage information, ideas, resources and connections to get the job done. Cloud-based, integrated collaboration tools such as SmartCloud for Social Business help organizations share knowledge, streamline processes, and keep everyone in the loop to gain that edge. This is more important than ever, as digital information continues to grow at an exponential rate.

CIC may face more urgent challenges than most private-sector small and medium businesses (SMBs) or even other non-profits when it comes to harnessing, applying and replicating knowledge-based practices and communities. But SMBs, as well as other non-profits, have just as much to gain by adopting a more integrated, collaborative approach to meet their challenges and gain their own unique edge.

This blog was sponsored by IBM to help educate small and medium businesses (SMBs) about how collaboration tools and social technologies can help their businesses.

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IBM Global Financing Antes Up Another $4 Billion to Fuel SMB and Business Partner Growth

Posted on December 7, 2012 by lauriemccabe

IBM Global Financing (IGF) recently announced that it would make an additional $4 billion available to help SMBs finance technology purchases through IBM’s partner channel. While this sounds like a very large amount of money (and it is), consider that in less than one year, 7,000 SMBs took advantage of the $1 billion in financing that IGF offered up in late 2011 . In fact, IBM had underestimated pent-up demand—IBM had expected the $1 billion to last 18 months.

IGF is quadrupling its initial commitment to help SMBs finance new cloud, analytics, mobile and infrastructure technologies to help grow their businesses. The program also makes it easier for IBM business partners—including managed service providers (MSPs), who are often SMBs themselves–finance the infrastructure investment they need to build the hosting environments they need to serve customers.

Some of the details include:

  • Deal minimums start at $5,000 U.S., and the maximum tops out at $500,000, with a 0% payment plan for 12 months, making the program relevant for both small and medium businesses.
  • Typical financing contracts last 3 years, but no specific time frame is mandated.
  • IBM business partners sell the financing. These business partners can size the solution and financing required to individual customer requirements, and execute the contract via IBM’s Rapid Online Financing widget, which is designed for non-financing experts.
  • Credit-qualified SMBs can get an approval in just a few minutes.
  • Financing options range from simple loans to tailored leases to total solutions including hardware, software and services (both IBM and non-IBM) in one contract with one predictable monthly payment.
  • IBM is rolling out the program on a worldwide basis.

In addition, IBM has created a new mobile app to further streamline the process. Business partners can quickly provide their clients with price proposals and generate credit approvals using an iPad, iPhone or Android mobile device.

Access to Capital–the Fuel for Progressive SMBs

As discussed in The Technology—Performance Connection for Midmarket Businesses, technology has become a critical lynchpin for business success. Businesses of all sizes increasingly view technology as an essential to improving customer engagement, raising employee productivity, and creating innovation and differentiation—all necessary to building economic value.

SMB Group research reveals a distinct correlation between SMB investments in technology and their business performance. “Progressive SMBs,” who invest more in technology much more likely to anticipate revenue gains than peers whose tech investments are flat or declining. For instance, our recently completed 2012 SMB Routes to Market Study shows that while 85% of SMBs that plan to invest more in technology anticipate revenue increases in 2013, only 42% of those planning to decrease IT spending expect revenues to rise, and 38% that planning for flat IT investments are anticipating growth.

Figure 1: IT Spending Current and Planned

SMB Progressive growth

Source: 2012 and 2011 Small and Medium Business Routes to Market Study, SMB Group

Meanwhile, as more SMBs come to view technology as key enabler to create market advantage, level the playing field against bigger companies, and adapt to new business and market requirements, the percentage of SMBs that are planning to increase IT spending is growing, as shown in trending analysis of 2011 and 2012 SMB Routes to Market Studies (Figure 1).

However, access to capital remains tight, and many SMBs find it challenging to get the capital required for the technology investments they need to grow their businesses.A July 2012 survey by the National Small Business Association (NSBA) found that 43 percent that needed funds for their businesses over the past four years were unable to find a lender. As important, 53 percent said they’d been unable to grow their business or expand operations due to a lack of capital—and almost one-third had to lay off workers.

A Virtuous Cycle for IBM, SMBs and MSPs

IBM isn’t a charity or governmental agency. As a for-profit organization, one of IBM’s key goals for the program is to fuel sales of IBM products, including PureSystems, which offers a new, integrated 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 environments, and a multitude of infrastructure, cloud, mobile and business intelligence solutions. If past success is an indicator of future performance, IBM will certainly achieve this goal with its new round of financing.

Furthermore, this fresh pool of financing should helps MSPs to build scalable infrastructure and hosting environments, and provide more innovative and differentiated offerings to SMB customers. As I discussed in MSP Cloud Challenges in the Midmarket–and How IBM Helps Meet Them, top MSP challenges are to: procure and deploy the resources they need to scale and grow; stay ahead of the technology curve, and to provide the end-to-end services their customers want.  Since IBM financing will cover both IBM and non-IBM content in one contract, it will make it easier for MSPs to build out a more comprehensive, end-to-end infrastructure.

The result? IBM can attract new MSP and other partners, and get them outfitted with the solutions they need more quickly. The net-net is that MSPs and other IBM business partners will be able to speed up and scale their ability provide new solutions that SMBs need for business growth and agility, and help SMBs finance this investment.

Finally, IBM isn’t just throwing money (albeit a large amount) at the situation. The new round of financing is additive to several new global initiatives for MSPs, which IBM launched in September. IBM has put together an integrated program that provides the money, expertise and solutions that both MSPs and their Progressive SMB customers require.

This is the fifth and final post in 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.

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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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Drinking From the Dreamforce Fire Hose: Part 1, The Big Picture

Posted on September 25, 2012 by lauriemccabe

Dreamforce, like Salesforce.com’s ambitions, just keeps getting bigger. This year’s event in San Francisco claimed 90,000 registered attendees and 250 media, analysts and bloggers. The pageantry surrounding the event—from MC Hammer to the Red Hot Chili Peppers, and from Tony Robbins to Colin Powell—is also on the rise, seemingly in direct proportion to Salesforce’s enterprise ambitions. Anyway, with so much erupting from Mt. Salesforce, I need to write a two-part blog post. This first post covers the Salesforce.com’s vision and announcements, and my perspective on them. The second post, which will be up in a few days, will cover how Salesforce’s ever-expanding ambitions translate and apply to small and medium businesses (SMBs).

The Big Picture

CEO Marc Benioff’s keynote featured the success stories from marquee customers, including Activision, Burberry, Coca Cola, Commonwealth Bank, GE, Virgin Atlantic and Rossignol. Through these customer vignettes, announcements, demos and, interestingly, IBM’s 2012 CMO Study, Salesforce made its case for enterprises to buy into its version of the social enterprise. While Salesforce isn’t the first vendor to come up with any of the ideas put forward, Benioff and team continue to aggressively extend the Salesforce footprint along cloud, social, and platform themes, and its push beyond CRM into other functional areas. A drink from the fire hose includes a slew of new directions and offerings. A few are available now, but most are slated for general availability later in 2012 or in 2013. They include:

  • Added social selling capabilities. Salesforce Touch and Data.com Social Keyadd new social and mobile oomph for sales people. Salesforce Touch puts Salesforce on any mobile device, giving reps anytime, anywhere mobile capabilities. Salesforce Data.com Social Key integrates data from social networks with company data to provide companies with a more comprehensive view of their customers.
  • Social marketing. Salesforce Marketing Cloud brings social listening, content, engagement, advertising, workflow, automation and measurement into one place through the combined technologies of (recent acquisitions) Buddy Media and Radian6.
  • Platform Push. Salesforce announced Salesforce Identity, touting it as the “Facebook for the Enterprise.” It will provide a single, social, trusted identity service to manage multiple apps and includes single sign-on across apps; social identity to enable Chatter to push information from multiple apps to a user in one feed; and centralized identity and access management to make it easier for administrators to provision and manage users across applications.
  • Work.com: Rypple is now Work.com, and Salesforce is positioning it as a social performance platform to manage performance reviews and provide recognition, rewards and feedback to employees.

As important, in just a few years, Salesforce AppExchange has grown to become a mature ecosystem for developers. Over 350 partners attended Dreamforce 2012, and Force.com development partners such as FinancialForce, BMC Remedyforce and Xactly Express are enjoying a great growth ramp on Salesforce’s coattails. In the analyst Q&A, Benioff explained that Salesforce is trying hard to move from geek speak to talk and walk like the new breed of IT customer, the CMO. In both the keynote and the Q&A, he reiterated that IT spending will increasingly shift from IT to CMOs. He also underscored that Facebook has become the most popular app on the planet because it is so intuitive, and his belief that all business apps will eventually need a Facebook-like activity stream because that is the interface users know and will demand.

Perspective

Really, what could play better into Salesforce’s hands as it tries to expand its enterprise footprint against stalwart ERP vendors? Larger enterprises have pretty much taken care of business in the back office. And smaller companies top priorities most often center on revenue growth and customer acquisition. With a CMO-centric view of the world, Benioff & co. can position Salesforce as chief mentor and leader in the next wave of IT innovation—in the front office, collaboration and user interface arenas. For example, I think that Benioff is spot on with his statement that all business apps will need a Facebook-style feed interface to take the friction out of using them and facilitate user adoption. Meanwhile, compelling customer success stories and strong partner growth underscore that Salesforce is ready to take its game to the next level. Unlike some of its competitors, Salesforce also has social in its DNA from the top down, which should prove to be an enormous advantage. However, rivals are not going to yield turf easily. In fact, it’s ironic that, in addition to helping to fuel Benioff’s agenda with its CMO research, IBM already walking much of the Salesforce talk. IBM coined the “social business” term before Benioff coined “social enterprise,” and many of the solutions that are in the works at Salesforce bear a close resemblance to IBM solutions such as IBM Connections, Smarter Commerce and SmartCloud—all of which are available now. Meanwhile, many of Salesforce’s newly announced offerings won’t be ready for several months or more–and are somewhat lightweight compared to comparable offerings from the competition. But sometimes, lightweight is better. Some apps are so clogged with feature bloat that they actually hinder getting work done instead of enabling it. And, I’ve said many times, Benioff is a marketing genius. He has an uncanny knack for winning by articulating a new value proposition better than anyone else in the industry. While he may need to play catch up in terms of getting his solutions to market, it’s likely that his messages will be the first to come through loud and clear in many corporate boardrooms.

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

Posted on September 20, 2012 by lauriemccabe

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Laurie: How is the business model structured?

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

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

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

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

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

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The Technology—Performance Connection for Midmarket Businesses

Posted on September 10, 2012 by lauriemccabe

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

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

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

Figure 1: Increased IT Investments Pay Off For Midmarket Businesses

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

Cloud Computing and Virtualization Become the New Normal

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

Figure 2: Applications Moving to the Cloud

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

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

Mobile Mania Accelerates

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

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

Figure 3: Top Drivers and Obstacles For Mobile Solutions

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

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

The Social Imperative Grows

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

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

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

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

For instance:

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

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

Turning the Information Explosion into A Fountain of Wisdom

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

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

Getting the Job Done

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

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

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

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IBM Smarter Commerce for Midsize Businesses – Future Trends

Posted on April 2, 2012 by lauriemccabe

To help companies understand IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the final post in the series.

Empowered customers are reshaping business today. They want a consistent experience between all channels. They compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. In response to these trends, IBM Smarter Commerce helps companies manage and adapt their commerce processes, putting the customer at the center of their operations.

For this post, we had the opportunity to talk to Alisa Maclin, Vice President, IBM Smarter Commerce Marketing. We asked her about IBM’s views on some of the more nascent trends in this area that may not yet be on the radar for most midsize businesses–but have the potential to create significant shifts in how companies conduct commerce.

Q. While it may have been difficult to predict how radically social media or the rise of smartphones and tablets would affect commerce a few years ago, what are some of the technology trends likely to have a dramatic impact on commerce in the next 5 years or so?

A: We believe that the speed of technological innovation and consumer adoption will continue to accelerate for the next five years and beyond. This acceleration is driving entirely new business models that are changing the landscape between buyers and sellers. The traditional models of B2B and B2C will need to leverage technology to continue to improve efficiencies, while adapting to new models such as Social and Facebook Commerce. The empowered and connected consumer is driving the “consumerization” of business and the empowered citizen is increasingly digitally engaged and networked. For small and medium-sized businesses, the opportunity to embrace technology and the connected consumer is now.

Q: Is there a difference in what B2B and B2C businesses need to think about and do?

A: Yes and no, the lines separating B2B and B2C models are blurring. The empowered consumer looks for the same benefits of mobile and social technologies whether they are at work or at home or on the go. The result is a connected ‘consumer’ that has access to information looking to engage in new ways and do business both locally and globally to meet their needs.

B2B companies need to optimize their digital operations and transform how products and services are created, marketed, sold, delivered and serviced. For example, the influence of ‘self-service’ is universal in both B2C and B2B, with 56% of customers demanding increased self service when they do business with a company, according to Forrester Research in 2011. And, B2C companies need to really look at mobile and social as a ‘must have’ to compete and win their customers and keep them coming back.

Q: In addition to the impact of emerging technology, what other trends–economic, social, regulatory, etc.– do you see happening in the future that will impact how companies buy, market, sell and service?

A: Economic realities affect how companies operate, especially across the value chain. As the number of supply chain partners increases, the need for accurate, time-sensitive information becomes more acute. Many companies will turn to business intelligence and analytics on key control point indicators, such as orders versus forecasts and inventory in transit versus in stock, to move from “sense-and-respond” to “predict-and-act” organizations.

From a regulatory perspective, product lifecycle traceability in consumer products and other industries is a growing requirement. As product lifecycle traceability in many industries is becoming a major concern, the use of smart devices is likely to become more prevalent for tagging products wherever they are, as well as the containers and modes that are transporting them.

Q: How do you envision these changes affecting midsize businesses? What should they do to prepare and take advantage of them?

A: These changes will impact businesses of all sizes. No business is immune, and those that think they are will find themselves at a disadvantage. Midsize businesses can start to put the customer – the empowered customer – at the center of their commerce processes by taking these steps toward Smarter Commerce:

  • Listen to their clients to better understand and anticipate customer behavior and turn insight into action.
  • Adapt their sourcing of goods and services with a focus on customer demand, and orchestrate seamlessly among their trading partners and suppliers to serve that demand.
  • Personalize marketing and selling to your customers as much as possible and keep them coming back for more.
  • Evaluate service processes and learn from customers’ behavior to predict and take action.

Q. Do you think Smarter Commerce provides midsize companies a way to level the playing field–by helping them to establish a “virtual presence” in other countries without the physical infrastructure or physical presence?

A: Yes, in a flat world and global access at our fingertips – companies of any size can compete to win. But, just putting a virtual presence out there will not be enough. The key is customer satisfaction, which is tied directly to profitability. Data shows that for every customer who complains of poor service a company loses 10. And, it costs 6 to 7 times more to gain a new customer than to keep an existing one.

The way to stand out will be to incorporate customer-centricity into all your commerce processes. This is not a new concept… but in today’s marketplace it is the difference between thriving and going out of business.

Q: What are some of the things IBM is doing to help midsize companies stay ahead of the curve?

A: You’ll find that much of what we’re doing with our Smarter Commerce initiative is designed to help companies of all sizes to address these market changes. It focuses on three areas organizations need to address – customer insight, strategy and engagement. Companies need deep insight into customer behavior and needs – and the ability to anticipate and predict behavior to take immediate action. This insight, in turn, should drive the development and refinement of their customer value strategy – how to enhance, extend – and redefine value as viewed by the customer – and, the key here, is to do it profitably. And, finally, using that strategy to build customer engagement.

IBM works closely with its Business Partner network to drive this kind of change in the midmarket. For example, working with IBM Business Partner ExactTarget, Skymall was able to deliver more targeted e-mails using analytics-driven behavioral insights. This resulted in recapturing 3-5% of potentially lost revenue from abandoned carts, and helped Skymall to grow email-generated sales by 34%. Another example is RiverPoint, a systems integration consulting firm and IBM Business Partner. They helped The Society of Critical Care run more effective marketing campaigns. Combining IBM’s enterprise marketing management (EMM) software platform with RiverPoint’s best practices EMM consulting has enabled the client to experience a 2.4% positive change in membership attrition in the first year.

This is the final post in a series examining the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. For more information about how IBM Smarter Commerce is transforming midsize companies’ approach to commerce, visit IBM Smarter Commerce for the Midmarket.

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