Sage Summit 2013: That Was Then, This Is Now

logoI’m a bit behind in getting my wrap up and thoughts on Sage Summit–Sage’s annual event for business partners and customers–together. But better late than never! As you can see in the related links at the end of this post, I’ve attended these events for many years. During this time, Sage North America has gone through many significant changes to bring sharper focus to its mission and more value to its customers. At this year’s event, I saw promising signs that these efforts are beginning to pay off.

That Was Then

Sage North America has been on a transformational journey since 2009, when Sue Swenson took over as CEO, made some tough choices, and began setting the wheels in motion to change the company’s downward trajectory. In the four years since, the company hired another new CEO, Pascal Houillon, in 2011. Under his leadership, Sage made some controversial (at the time) moves to unify the Sage brand and product names and divest Sage of seven non-core businesses, including ACT! and SalesLogix, which had large installed bases. To help streamline the company’s focus on its core business and on improving customers’ experience with Sage, Houillon also brought some fresh talent into the executive ranks.

This Is Now

The result of all this is a more focused, purposeful Sage. Gone are the days of trying (unsuccessfully) to rationalize an unfathomable number of overlapping products. On Houillon’s watch, it is unacceptable for Sage executives to position the Sage portfolio in different ways. At Sage Summit 2013, the executive team was singing from the same hymnal regarding Sage’s core positioning and messages:

  • Continue to focus on its core businesses (accounting, payroll, payment processing, ERP, etc) for very small businesses, SMBs and the midmarketSlide1. Key to executing on this is the company’s move to centralize R&D Centers of Excellence for cloud, mobility, customer experience. In the past, each individual product brand would undertake separate development efforts for new functionality. Now, Sage R&D develops new features, extensions and add-ons once (for mobility or analytics, for instance) that individual product groups can replicate across their solutions. Sage is also in the process (though not yet there) of standardizing service and support offerings. It launched Sage City, a new centralized online community for customers, business partners and employees, last month. And, Sage will make new acquisitions when needed to supplement its core solution focus.
  • Expand its connected services strategy and offerings. Sage is building more cloud services, such as SageExchange.com, Sage Mobile Sales, and Sage CRM, that connect to core financials and ERP solutions, as well as for partners to build and sell add-on connected services. The company’s big picture vision is to “liberate” data and services that had been locked into ERP so that customers can use them in the cloud, anywhere, anytime, and from any device. Sage is building a data cloud on Microsoft’s Azure platform with common connectors, bi-directional synch, multi-tenant storage and disaster recovery. This means that Sage connected services will work the same way regardless of the backend ERP/financials Sage customers use. This will all come together in the Sage Marketplace, slated to launch in FY14.
  • Going all-in on the subscription pricing and the cloud. Sage now offers subscription-based pricing for all of its solutions, and comps partners on a percentage of subscription sales over the life of a contract. It has also committed to developing cloud versions for its solutions, including a cloud version of Sage ERP X3, which will feature a user pure web experience when available in 2014.

Taking the Marketing Road Less Travelled

sage lisltensThe Sage commitment to putting customer experience first underpins these initiatives. Sage has several initiatives underway to up its listening game, such as the Sage Listens RV Relay, which is allowing Sage to also kick off a “Shop Local” campaign to encourage people to shop with local businesses.

In contrast to the “build it and they will come” tack that most tech companies take, Sage is taking its cue from the Proctors and Gambles of the world. It is getting customer input upfront before developing new products and functionality. Sage is hearing that customers want easy to use, flexible solutions, mobile capabilities and a low-cost of entry, and is concentrating resources on these areas. In fact, in one of the breakouts, when an analyst asked a Sage executive about social and big data plans, the exec said that customers are not calling these out as priorities. He added that while Sage isn’t ignoring these areas, it is prioritizing development and marketing based on customer input.

For instance, Sage recently launched Sage Healthcare Advisory Services , which includes a new “My Workforce Analyzer” tool to help SMBs understand plan for the Affordable Care Act. Analytics are under the covers, of course, to help SMBs develop what-if scenarios and optimize planning. But Sage isn’t calling it a big data solution.

Sage has often been knocked about for not keeping pace with the generational shift in the North American workforce. But it is now facing the facts–specifically that people born before 1968 will comprise less than 20% of the workforce by 2015. Sage is recalibrating its strategy to align more closely with different generational expectations. As Brad Smith, EVP of Customer Experience stated in his keynote, “We have to over-service the pre-PC guys but we also have to find ways to reach the ‘digital natives.’”

To that end, Sage demoed a voice-to-text initiative in which users can use voice-activated mobile technology to interface with ERP systems on mobile devices. It’s sort of like Siri, but within the context of the business and business workflows, so it appears to do a better job of handling user queries and requests. While the voice command initiative is in its infancy, it could be a key differentiator in the future.

Finally, Sage is putting its money where its mouth is, by tying Sage metrics and compensation for all Sage execs to Sage Net Promoter scores (NPS). The company’s previously shrinking North America business has grown 4% year-over-year.

Channeling The Channel

6a00d8345177fc69e20192ac233035970dSMB Group research shows that accountants/CPAs and technology business partners represent 2 of the top 3 influencer channels for SMBs selecting financials and related business solutions, with peers in other businesses rounding out the list. Sage has a large channel in both areas–with over 25,000 accountants in North America and more than 26,000 technology reseller partners worldwide. But over the past few years, cloud competitors have been trying to poach these very valuable resources.

Accordingly, Sage has several new initiatives underway to re-focus partners back on Sage. In addition to committing to provide cloud-based offerings across the portfolio to give partners a Sage cloud offering, Sage is:

  • Partnering with the Business Learning Institute to develop a curriculum for accountants to help them provide more competitive services to their SMB clients.
  • Planning to launch a new certification program for accountants focused on startup market, with a collaborative version of Sage One, Sage’s solution for very small businesses, to make it easier for them to automate tasks and take care of clients.
  • Introducing the Sage Advisor Partner Dashboard, which uses current customer data to help Sage reseller and accountant partners more readily identify new opportunities in the installed base, and provide a more personalized, consultative sales experience.

Sage is also recruiting new partners for midmarket Sage ERP X3, and new accountant partners to help it build traction among very small businesses for the Sage One solution.

Summary and Perspective

Minus ACT! and SalesLogix customers and partners, this year’s Sage Summit was smaller than in 2012. But, the energy level was much higher. Sage executives were more confident and relaxed, and the messages they delivered were consistent and crisp. Sage demos were more engaging, and even at times, entertaining.

Key metrics, including rising NPS scores, modest growth in its North America business, and a stock price that recently reached its highest point in 13 years are also good signs for Sage. As important, conversations with customers at the event led me to conclude that “Sage Listens” has moved beyond a slogan to put the programs in place to proactively engage customers.

However, there are a few areas in which I believe Sage needs to double down:

  • Sage One marketing. Worldwide, Sage has about 10,000 customers using this very small business management solution today. But most of the millions of very small businesses have never heard of it. Sage needs to significantly enhance awareness and demand gen campaigns to become more than a blip on the radar.
  • Third-party connected services . Sage has a big installed base, which should make it an attractive partner for third-party developers–especially now that developers can write just one connector and reuse it for all of Sage’s core products. But Sage has only about 20 endorsed connected partner services today. Again, many developers don’t know about this opportunity. Sage must raise its overall visibility in the developer community and launch a targeted recruitment program to get developers to build the apps that its customers need.
  • Clarity around CRM. After divesting ACT! and SalesLogix, the company’s sole solution here is Sage CRM. But other than discussing integration and a cloud version of Sage CRM that is in the works, CRM was very low profile at the event. Given Sage’s focus on core financials/ERP it leads me to wonder how committed is Sage to Sage CRM, and if will make the investments required to provide a truly first-rate CRM solution.
  • Innovation. Sage made a good case for its direction in the cloud, mobile and integration areas. However, analysts and press did and will continue to hound it on social and big data/analytics. While Sage customers may not have put these areas at the top of their priority lists yet, it’s only a matter of time before they do. Sage needs to get out in front in these areas.

That said, it’s challenging to do everything at once. The Sage leadership team has made the decision to move forward instead of standing still. All in all, I get the impression that Sage as a company has a better sense of who it is, where it’s going and how it will serve SMBs.

Related posts:

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

Sage Turns a New Leaf: Top Takeaways from Sage Summit 2012

Sage’s Rebranding: More than a Name Change

Sage Summit 2011: Tackling the Sage NA Branding Challenge

Impressions from Sage Insights 2009

Making Small Business a Bigger Business: Intuit’s Acquisition of Demandforce

Intuit announced last week that it was acquiring Demandforce, which provides an integrated suite of Web-based social media and marketing tools for small businesses, for $423.5 million in cash. Demandforce automates many of the internet and social media marketing tasks that small businesses increasingly need to do, giving Intuit a proven front office play: Demandforce already has about 15,000 customers, books about $50 million annually in revenue, and is growing at about 80% annually.

This is Intuit’s second biggest acquisition (Digital Insight, which Intuit acquired in 2006, was the largest). What makes Demandforce so attractive to Intuit? Let’s count the ways!

1. Broaden Intuit’s Front-Office Presence

Intuit has a very strong footprint in small business “back-office” applications, such as accounting, payroll and payments solutions. As important as these solutions are to running a businesses, they do little to address small companies’ top challenges–which according to SMB Group studies, are to  attract new customers and grow revenue.

Intuit has made some acquisitions over the past few years to provide customer-facing application to small businesses. The most notable is Homestead, which helps small businesses build web sites and create an online presence.

Demandforce builds on this acquisition, and can help Intuit capitalize on the broader shift to digital marketing that’s being fueled to a large degree by the adoption of social media and mobile solutions. Now, Intuit can provide it’s five million QuickBooks desktop users, and over 400,000 QuickBooks Online customers with Demandforce, which is designed to help services-based businesses grow revenue, retain clients and strengthen their online reputation. Demandforce has already done the integration with QuickBooks and now they can mine the Intuit installed base for service businesses that would benefit most from Demandforce.

And, at roughly $300 per company per month, Demandforce figures to be one of Intuit’s most profitable offerings over time.

2. Gain Industry Solutions and Go-to-Market Expertise

Demandforce’s customers span the true small business service universe–veterinary, pet services, dental care, automotive repair, medical spas, salons, chiropractors, and fitness centers, to name a few.  (The company recently added a solution tailored for accountants–which should turn into a doubly nice move as about 250,000 accountants use QuickBooks).

Demandforce gives these small businesses affordable, easy to use tools similar to those that large enterprises use–and tailored to their industry-specific needs. It’s model is to select an industry, study it, and identify the top industry solutions in that area, such as Henry Schein for dental. Then Demandforce engineering does the integration work, and looks for partners that sell into the relevant industry. The vendor markets through industry trade shows and conventions, and closes sales through telesales and partner feet on the street.

Many vendors say they’re going to target small business vertical markets. But I’m hard-pressed to think of another vendor that has done this type of holistic, industry-by-industry block and tackling. This has paid off for Demandforce, and should reap even bigger rewards with the added muscle and money of Intuit behind it.

3. Flying Higher Into the Cloud

Intuit has been steadily progressing from being a traditional desktop company to an online cloud services provider. This is also where small businesses are moving, as shown in Figure X. The Demandforce acquisition adds to Intuit’s cloud credentials in the very hot marketing automation area.

Figure 1: Small Business Purchase and Plans for Cloud-based Solutions

4. Serving Up SoLoMo to Main Street Businesses

Three big tech trends are reshaping businesses today: social, mobile and local. Demandforce hits all three of these bases for Intuit. On the social front, It brings together many of the social media tools into a unified service, making social media more manageable for small business to manage their interactions across social networks. In terms of mobile, Demandforce makes it easy for small businesses to engage with their customers using mobile devices. So for instance, your salon can send you a text message to remind you about your next appointment, Finally, there’s the local element. With Demandforce, small businesses can invite and collect user reviews and feedback, building up their local reputation. To date, Demandforce has helped its small business customers gather about 1.5 million reviews, which can also be syndicated out to Google, Yelp and other review sites.

Adding it Up

As I discussed in an earlier post, Intuit: From Products to Services, Applications to Platform, Intuit has already made great strides in transforming from a products to a services company. Demandforce gives Intuit the fuel it needs to more fully tap into small businesses’ hunger for solutions that can help them grow their businesses–and in doing so, accelerate its own transformation.

6 Tips to Maximize Twitter Event Hashtags

Originally published in Small Business Computing, 8-29-11.

Recently, a client asked me for some tips about how to get the maximum mileage out of Twitter event hashtags. Creating Twitter hashtags for your business events is a great way to multiply conversations about what you’re doing, and there are also lots of ways to maximize the impact of the hashtag. I put a few before, during and after the event tips here together for her, and thought I’d share them with you.

Twitter Hashtag Tips: Before the Event

1. Start publicizing your Twitter event hashtag a week or so in advance of the event. Of course Twitter, LinkedIn and Facebook groups are good ways to do this, as well as adding this information to any schedules, confirmations or even press releases you send out.  This lets people start tweeting in advance that they are going to attend the event — “@bugsbunny can’t wait to see you at #acmeroadrunner next week!” It also lets people who can’t attend know where they can get a real-time feed of what’s happening.

2. Create a list of ready-made tweets for your internal team to get the ball rolling. When you have specific announcements slated, send your internal team several ready-made tweets that are related to the announcement. Plan to do this a day or two before the event. For instance, “Acme Co.’s Roadrunner on stage with demo of the new Wylie Coyote killer app.” Ask your team to add their own comments to the tweets to personalize them and send them out in conjunction with the live announcement.

Twitter Hashtag Tips: During the Event

3. Publicize the event hashtag on signage and check-in materials at the event. Make certain you provide the event hashtag, so that people don’t need to hunt for it when they’re ready to tweet. At too many events, it’s too hard for people to find the hashtag when they need it. You want to make it easy for people to tweet about the event.

4. Monitor the Twitter hashtag, and then identify and promote the most active tweeters. At most events, there are at least a few people documenting and/or providing a running commentary on what’s going on. Promote these tweeters to others with tweets such as “Thanks @bugsbunny @elmerfudd @sylvestercat for chronicling and commentary about #acmeroadrunner!” — or something along those lines.

Twitter Hashtag Tips: After the Event

5. Create a Twitter transcript of all the tweets from the event each day and tweet out how people can access it. Twitter chats are great for real-time information and opinion sharing at events and getting the back-story.  But people can’t always participate real-time, so make it easy for them to catch up.

These transcripts are also a great resource for active press and analyst tweeters, who increasingly “take notes” in Twitter and use the tweet stream to refresh their memories to write blogs or reports later on. This article tells you how to make a Twitter chat transcript using TweetReports. There are other services out there, too; I’ve heard they all have pros and cons, so you may want to search around on Google and compare, and I’d be interested to find out what you come up with.

6. Figure out how you can analyze all the great information you’ve collected. This Social Media Today post provides information about a number of Twitter tools that can help you analyze hashtag streams. Some of the tools include MentionMap, The Archivist and Hash Tracking. A lot of these tools are free and/or available in a freemium model.

Well, for now, that’s all folks! But I’m sure that there are lots of other great tips, and I hope that you’ll send me your own to add to the list.

Dell KACE M300 Appliance Enables Small Businesses to Take a Proactive Approach to IT Asset Management

–by Sanjeev Aggarwal and Laurie McCabe

Dell KACE recently introduced a new series of System Management Appliances targeted at small businesses with 20-200 employees. The Dell KACE M300 Asset Management Appliance is designed to deliver an affordable, plug-and-play IT asset management solution that reduces the repetitive, time-consuming task of managing PC inventory and software licenses. The M300 qualifies as a robust yet easy-to-use asset management solution—saving these businesses time and money, while at the same time addressing their compliance and inventory management issues.

Perspective

Dell acquired KACE, which designs and builds systems management and deployment appliances, in February 2010. KACE solutions are available both as physical appliances (delivered as a pre-packaged hardware and software appliance) and as software-only virtual appliances, which customers can buy and load onto servers they already own. Dell’s KACE appliances are designed to perform processes ranging from initial computer deployment to ongoing management and retirement.

Higher-end Dell KACE products (K1000 and K2000) have been available for some time. Since Dell acquired the company, sales have spiked considerably year-over-year. However, the existing KACE offerings are designed for companies with 100 to 10,000 employees, and cost more than most small businesses are willing to spend in this area.

With the introduction of the M300, Dell is making a play in the true small business market, targeting customers that want a simple plug-and-play appliance to meet both hardware and software asset management needs. The M300 is designed for smaller businesses that often have a part-time IT manager, typically overloaded with installing software and keeping systems and client devices up and running, and frequently unable to keep up with the detail-oriented task of tracking hardware and software assets.

Many small business IT managers are still trying to manage assets and software licenses manually with spreadsheets. While manual tools provide a point in time snapshot of a network, the information rapidly becomes obsolete as computers are added or additional software is installed on existing systems. IT managers either end up spending too much time trying to keep this up-to-date, or end up with outdated asset inventories. Offloading the labor-intensive minutia involved in this job can free them up to focus on more important things.

Although there are some free and small business oriented solutions available, Dell’s strong market footprint and direct relationships with existing small business customers provide it with a significant go-to-market advantage, and the opportunity to educate small businesses about the benefits of investing in IT asset management (Figure 1).

Figure 1: Benefits of IT Asset Management

In line with small business requirements to keep it simple, the M300 features easy set up. The IT manager plugs the M300 into the network, and the device automatically scans and discovers all the attached devices, obtaining information like system names, IP addresses, vendor, models numbers, memory and disk space, etc. In addition to the hardware configuration, the M300 keeps track of all the software licenses, on what systems the software is installed, versions of the software and level of patch updates, etc.

The M300 continuously tracks computers and software, and can report accurate information in real-time and for compliance purposes at a specific point-in-time. The appliance’s web-based intuitive user interface shows real-time information on all of the monitored parameters. It can match the installed software with the number of software licenses purchased and authorized users. It provides online or sends out reports and/or alerts on any monitored parameters. For example, an alert will be issued if an unapproved application is downloaded and installed on a monitored PC or whenever a new PC is connected to the network.

Priced at $2,498, the M300 includes a one year warranty and supports a maximum of 200 nodes. Assuming the useful life of the M300 to be 3 years, we estimate the cost to monitor each node (desktops and servers) on the network at approximately $0.49 per month per node in a company with 200 nodes. Figure 2 shows the estimated cost per node in companies of various sizes (according to the number of nodes deployed). Given the cost of a employing an IT admin to manage systems full-time (approximately $75,000 per year), the M300 will pay for itself in about one month. In addition, the M300 can relieve the pressure and any additional costs related to non-compliance in terms of number of software licenses, etc.

Figure 2: Tracking Cost Per Node, Per Month with the M300
Source: SMB Group

The M300 is compact–measuring just 1.52 x 5.79 x 5.79 inches, connects to the network via a single gigabit Ethernet port, and is currently available in the U.S. only, both direct from Dell and via Dell partners.  KACE has added about 100 new certified partners since Dell acquired it and currently has 143 channel partners in North America.  KACE is aggressively recruiting new partners to help it expand its footprint and reach Dell’s large customer base in the small business segment.

Dell’s future plans for KACE small business solutions include additional appliances that can be stacked on top of the M300 and will address time consuming IT management functions like OS installs, remote management, mobile devices, service desk, etc. As the systems management needs of these small businesses expand, Dell intends to help them manage this growth without the need to rip and replace their current solutions and investments.

Quick Take

Cost-efficiency, productivity benefits, ease of installation and peace of mind benefits—aided by Dell’s strong clout in the market—should enable the company to make significant inroads with KACE in the lower end of the SMB space. And, the company’s plans to incrementally build on the current M300 offerings with additional appliances for other repetitive tasks make sense.  However, Dell can significantly strengthen its story–and sales–by:

  • Offering small businesses options to add at least some new functionality via M300 software upgrades. Although the small business KACE appliances have a small form factor, some companies will balk at buying additional boxes (not to mention that Dell wants to move away from its “box-provider” image!)
  • Incorporating capabilities to manage non Windows-based systems, clients and networked storage devices.
  • Enabling remote management features to allow channel partners to offer incremental value-added IT infrastructure management services. This would not only have appeal for customers, who like to have a one-stop shop, but for partners, that can build higher margin services on top of the M300.

Looking at the larger picture, the KACE M300 provides further evidence of Dell’s deepening commitment to small businesses. The company continues to invest in and build innovative yet practical solutions that address real small business pain points without breaking the bank. Small businesses increasingly rely on technology to run their businesses, and Dell’s focus on supplying them with easy-to-use solutions such as the KACE M300 to help manage this technology is on the mark.

What is Mobile Commerce, and Why Should You Care?

(Originally published September 13, 2010 in Small Business Computing)

What is Mobile Commerce?

Mobile commerce (also known as mobile ecommerce, m-commerce and other variations) consists of two primary components. The first is the ability to use a wireless phone or other mobile device to conduct financial transactions and exchange payments over the Internet. The second is the ability to deliver information that can facilitate a transaction — from making it easy for your business to be “found” via a mobile Web browser to creating mobile marketing campaigns such as text promotions and loyalty programs.

Why Should You Care?

Just as the Internet and ecommerce revolutionized the way we promote, market, shop for and buy goods and services, wireless devices and mobile commerce are poised to create another revolution in the world of commerce.

As the use of Internet-enabled wireless devices skyrockets, people want to use these devices to do more things. App stores and hundreds of thousands of applications have sprung up to accommodate demand for applications, games and other services. But just as we saw in the early days of ecommerce, privacy, security, usability and interoperability issues have slowed the pace of mobile commerce adoption in the early going — among both sellers and buyers.

However, with the Internet in our pocket or purse, it’s only a matter of time before mobile commerce really takes off. Mobile devices go where we go, and track where we are. The technology makes it easy to find a nearby pizza place and order a pizza, order theater tickets from your car, or check out price comparisons and reviews from a store.

Mobile applications and devices are getting more personal too: based on past history, they can anticipate our needs and promote goods and services to fulfill them. Still not convinced? Think about this: Amazon recently announced that “in the last twelve 12 months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device.”

Big retailers and companies are investing to make mobile commerce easier, more convenient and more secure. As they do, consumers will become more comfortable with making purchases over their BlackBerrys, iPhones, Androids, iPads and mobile devices we have yet to imagine.

If you sell your vegetables at farmer markets, or your home-made jewelry at craft fairs, or if you deliver pizzas to apartments or dorm rooms, its easy to see how being able to take credit card transactions on your mobile device could help you boost sales and repeat business. You don’t need to limit your sales to people who can pay by cash or check.

Customers that don’t have a checkbook can still buy from you, and they’re not limited by the amount of cash in their pockets. Furthermore, you can easily capture their contact information and follow up with other promotions. Meanwhile, if you run a hair salon, you could use mobile marketing to let customers know when you have openings or send them appointment reminders.

What to Consider

We are still early on in the mobile commerce era. But, as large retailers embrace mobile commerce, small retailers will need to gear up to provide convenient and secure mobile payment and commerce options. Now is a great time to develop a mobile commerce strategy to help differentiate your business. Some key areas to consider include

1. Do you need a mobile Web site? While it may be tempting to try to optimize your existing website for mobile devices, this often results in a clunky and hard-to-navigate site on a small screen. Consider building a separate, streamlined site geared to mobile users. Register it as a mobile site with search engines so it shows up in mobile searches, and provide a link to your mobile site from your main website. Check out services such as Mobify, which helps create mobile-friendly websites.

2. How can you best promote your business to mobile users? You can, for instance, send text messages to customers about specials and discounts. Or a group of retailers on Main Street could team up to offer joint loyalty programs — buy something at one store, get 20  percent off at the next — to help compete more effectively with one-stop big box stores.  SMS text messaging services such as Fanminder, Ez Texting and Ruxter, which helps businesses create a mobile website, and share messages with customers and members.

3. Don’t be a pest. You want to use mobile commerce for good, not evil, so make sure that customers can decide and opt-in if they want to get your promotions via their cell phones–or not.

4. Set up your business for mobile commerce payments. More vendors are starting to offer mobile commerce solutions geared to small and medium business requirements and budgets. These solutions let you take payments on your mobile device, and also send an email or text invoice to the customer. Wireless carriers, credit card companies and software companies are all introducing mobile commerce solutions; start by assessing solutions from vendors you already use and trust.

5. Think about integration. Integrating mobile commerce transactions with your accounting and contact management solutions can help save time and increase efficiency. Good news–If you are one of the millions of small businesses using Intuit or Sage accounting solutions — Intuit GoPayments and Sage Exchange provide integration with their respective accounting and financial solutions.

6. Be sure that it’s secure. Fraudulent activities can be an issue with mobile commerce, and compliance requirements and fines for fraudulent activities — never mind the damage to business credibility — are serious. Businesses considering mobile commerce need to verify that the mobile commerce payments vendor is PA-DSS compliant, which means that its solution has met global security standards created by the Payment Card Industry Security Standards Council to prevent payment applications from storing prohibited secure data, such as magnetic stripe, PIN or CVV2 numbers.

Remember, it took some time for businesses to develop ecommerce sites and for customers to feel comfortable using their credit cards on the Web. Today, mobile commerce is in its infancy, but given the explosion of Internet-enabled mobile devices coupled with consumers’ desire for speed and convenience, mobile commerce is destined to be the next big game-changer.

What is an Online Collaboration Suite, and Why Should You Care?

(Originally published on June 30, 2010 in Small Business Computing)

What is an Online Collaboration Suite?

An online collaboration suite provides businesses with an integrated set of tools that span a range of collaboration needs. While not every collaboration suite includes the same capabilities, they often feature tools such as business email, instant messaging, contact management, calendars, file sharing, document management, project management, portals, workspaces, web conferencing, and social media tools such as forums, and wikis.

Online collaboration suites are delivered as web-based, Internet delivered services, so you don’t need to buy, install or configure any hardware or software, or hire IT staff or consultants to get up and running. Users simply login via a Web browser to buy and use the service, which are typically sold through a monthly or annual per user subscription pricing model, with certain amount of email storage included as part of the standard subscription price. As with many online services, most online collaboration suite vendors offer free trials so you can try before you buy.

Why Should You Care?

Collaboration is probably the only activity that everyone in every company engages in everyday. Whether you’re the CEO or a new hire, an accountant or a construction worker, you need to share and manage information, ideas, resources and connections to get your job done. Effective collaboration tools help you to share knowledge, streamline processes, and keep everyone in the organization “on the same page”.

Until recently, most small businesses could get along just fine with a few tools, such as email, calendars, document sharing and the good old telephone. But in the last few years, the growth of digital information has been exponential. Newer collaboration tools, including portals, Web conferencing, instant messaging, social networks, wikis, bookmarks and tagging have become more prevalent as people seek out better ways to organize, share and access this information avalanche.  At the same time, the kinds of devices we use to collaborate–from desktops to notebooks to smart phones to iPads–has exploded.

New and better ways to collaborate can help make your business more efficient and productive. But, it can be very difficult to piece together different tools and services into an integrated whole. Online collaboration suites integrate many pieces of the collaboration puzzle into a unified solution that makes it easier to find, share, manage and use information, and to locate and connect with the people you need when you need them.

What to Consider

Is your business is suffering from collaboration chaos? Common warning signs include:

  • Too much telephone tag–wasted time on missed phone calls, searching for missing phone numbers and locating people with the know-how you need.
  • Bottlenecks in finding information or resources needed to get a job done.
  • Email overload and version control issues–such as trying to figure out which document is the most recent one.
  • Mistakes made because people are using incorrect or outdated information.
  • An overload of customer service calls.
  • Inability to easily track, monitor and engage in social media conversations relevant to your business.
  • It takes too long to make decisions because people can’t access and/or agree on what the “right” information is.

While many vendors offer online collaboration suites to help pull together people, tools, services and content to help bring order to the digital chaos, the devil is in the details. The SMB Group is currently conducting research and interviews to provide an in-depth comparison of eight vendors’ online collaboration suites (including Google Apps for Business, HyperOffice, IBM LotusLive Engage, Microsoft Business and Office Productivity Suite (BPOS), OnePlace, Salesforce.com, VMWare Zimbra and Zoho Business). Each vendor has bundled a different a different mix of capabilities into its suite.

For instance, several vendors include email, project management and/or web conferencing as part of the suite, but others don’t. Some focus heavily on social capabilities, while others have just started to add this type of functionality. Standard storage for email ranges from 5GB to 25GB, and each vendor offers different standard service and support capabilities and service level agreements. Some focus exclusively on the small and medium business (SMBs), while others target large enterprises as well as SMBs. Some offer freemium models, others don’t. Of course, pricing varies, as does the minimum contract length–from one month to one year. Some vendors offer pieces of their suite, such as instant messaging or Web conferencing, ala carte, and let you add new solutions as you need them in an integrated fashion. Some vendors sell direct, some through channel partners, and some do both.  And each offering has its own look and feel.

While each of these solutions has its pros and cons, some will be a better fit for your business than others, so it’s critical to take a step back and consider your business needs, priorities and goals before you start evaluating specific solutions. Your assessment doesn’t need to be complicated–it can be as simple as thinking about what’s working well for you now, and identifying collaboration roadblocks and gaps that hamper productivity and business results. Then look for an online collaboration suite that can help you to address these immediate needs quickly and easily, but also give you the option to use more of the suite’s functionality as your needs require and time permits.

What Is an App Store, and Why Should You Care?

(Originally published on April 8, 2010, in Small Business Computing)

An app store can offer a lot more than just mobile apps. Essentially, it is a Web site that aggregates software solutions for business or personal use. App stores, also known as an applications marketplaces, are typically created and built by a “marquee” vendor, such as Adobe, Apple, Google, Intuit or Salesforce.com, that serves as the anchor tenant for the marketplace. App stores operate as a hub where you can discover, search for, purchase and deploy integrated third-party applications.

The marquee vendors that run the marketplaces typically have a strong brand and a large customer base — but no one vendor will ever have the time or expertise to build every possible application that a customer might want. However, marquee vendors can attract developers to build complementary applications to sell to their large customer bases.

The developer gets a new sales channel, and the marquee vendor can offer customers a bigger, more diverse array of applications than it could possibly provide on its own. In many cases, developers must also build their applications on the marquee vendor’s platform so that they will integrate with other applications in the marketplace.

Why Should You Care?
App stores can help streamline the application shopping and selection process, providing a one-stop shop for finding, trying and buying small business applications. Many of feature cloud-based solutions (see
What is Cloud Computing, and Why Should You Care?) that you can trial for free and purchase in a flexible, pay-as-you go model. App stores often offer free apps as well. And, they feature user-generated ratings and comments to help guide your decision-making process,

An app store can help you more easily locate new small business software that will work with apps you already use, adding them in an incremental, yet integrated manner. Instead of starting with a Google search, or contacting a VAR or consultant, and trying to figure out if there is an app that meets your needs and will work with solutions you already have, you can go to a marketplace and see if there’s an application that meets your requirements and work with the solutions you’re already running. An app store also provides single-sign on access to all of the apps that are in it. This means you don’t need to keep track of lots of passwords, and can navigate more easily between applications.

For instance, Intuit’s Workplace App Center provides a central location where small businesses can locate and try business applications that work with QuickBooks and with each other. You can, for example, sync your QuickBooks data to a CRM solution offered in the App Center, eliminating the need to enter the same data twice.

In addition to supplying ready-to-run applications, some app stores also help companies locate solution developers that can build custom applications that integrate with their anchor solutions. For example, Zoho’s Marketplace features an area that lets users submit requests for new apps and features, and developers can build new apps in response to these requests.

Of course, there are also stores for mobile apps that work with different smart phones, from Apple’s App Store to Google’s Android Marketplace. These marketplaces offer customers easy access to applications that are proven to work on and run safely on their mobile devices. In the case of mobile device marketplaces, however, the customer downloads the application to their device instead of running it in the cloud.

What to Consider
In the case of smart phones, customers select marketplaces solely based on the device they use. But when it comes to running apps on your Mac or PC over a Web browser, your choice of which app store to shop at isn’t device dependent — and may be a bit more complicated.

Chances are that you already use applications from several vendors that have a store — maybe you already use QuickBooks, Google Apps and Salesforce.com, for instance. But you probably don’t want to use three different marketplaces, because that will dilute the value of one-stop shopping, single sign-on, integration benefits and so on. So how do you decide which marketplace to use? Here are some key considerations to think about.

How many applications are in the marketplace, and how fast is it growing? While bigger isn’t necessarily better, a vibrant, growing app store means more choices for you.

How simple is it to sign up, sign in and test drive new applications? Try some free trials to see how it works for you.

How active is the user community in providing reviews, comments and ratings? A more engaged community gives you more feedback about specific apps.

What level of integration do you need between your existing application(s) and new applications? Some app stores (such as Salesforce.com’s AppExchange and the Intuit Partner Platform) require developers to use a common data model, which enables tighter integration. In contrast, in Google’s more open approach the Web is the platform. Both approaches promise integrated applications, but the degree of integration will vary. Think about what the types of data you need to integrate and the level of integration that you need.

What is Social Media Management, and Why Should You Care?

(Originally published on March 4, 2010, in Small Business Computing)

What is Social Media Management?

As described in the column “What is Social Networking, and Why Should You Care?” Internet-based social media make it easier for people to listen, interact, engage and collaborate with each other. But, as the volume of social media venues and conversations rises, it quickly becomes a time and labor intensive process to effectively track, converse, monitor and manage them.

Social media management solutions can help you manage outbound and incoming online interactions—along with other marketing activities–in a more efficient manner. They streamline and consolidate how you listen to and participate in relevant conversations in the different places they’re taking place—blogs, social networks like Twitter or Facebook, and other public and private web communities and sites. They help you to more easily monitor what people are saying about your business, and by automating the process of delivering your outgoing messages through multiple social media outlets simultaneously, help you to amplify your social media presence across several social media sites.

Social media management tools can also help you to integrate social media activities with other marketing programs. These can include both other online activities, such as web site, search engine marketing campaigns, contact management systems, and email marketing, as well as offline marketing, such as events or white papers.

Why Should You Care?

We all know how important word of mouth is, and social media is like word of mouth on steroids. As a business, it’s vital to tap into and join online conversations not only about your brand, but also those about your competitors, your industry and your areas of expertise.

Even if you haven’t launched an outbound social media strategy, you to keep a pulse on what people are saying—good or bad—about your company, competitors and major trends. And, by representing your company in a positive, authentic way, you can build credibility for your expertise and business, and link to customers and prospects quickly. You can also help mitigate damage should negative conversations about your company emerge by proactively responding to complaints. Social media can also steer people to your other marketing programs, where it’s easier to individually track and manage individual customer and prospect interactions.

Done right, social media can help you better understand prospect and customer needs, and increase visibility and generate leads. But it takes a lot of time and energy to stay on top of all of this in a manual, piecemeal fashion. Think about the time it takes to just to cover some of the basics, such as:

  • Creating content in multiple places, such as a blog, Twitter, a Facebook page, etc., and monitor and scan the views, decide what comments to approve, and respond to replies on these sites.
  • Scanning Twitter followers for conversations you may want to join, or checking your RSS reader subscriptions for relevant articles and new ideas.
  • Checking Google Alerts to see when and where your business is mentioned on the Web.
  • Creating and monitoring a community and topics on a site such as Facebook or LinkedIn.

Now think about the fact the social media to do list is only going to grow. And while you are building goodwill, relationships and awareness, it’s difficult to measure short-term payback on social media efforts. And you can’t abandon other marketing activities—web site, search engine marketing, email marketing, etc. and contact and sales management. Social media management tools give you a way to get your arms around the many-headed social media Hydra by streamlining and integrating customer interactions across multiple marketing venues.

What to Consider

There are dozens, if not hundreds of solutions out there that let you manage/integrate different slices of the social media pie, but we are still searching for the Holy Grail in this relatively new area. However, I’ve spotted a few vendors that have put together some more comprehensive solutions designed and priced specifically for small business budgets, including:

  • BatchBlue’s BatchBook, a “social CRM” offering that integrates contact, sales and social media feeds, with mobile versions for iPhone and Blackberry. The social media integration is cool—after you enter social media feeds from Twitter, blogs, LinkedIn, etc. on a contact record, you automatically see a contact’s social networking profile, and the last three posts, tweets and/or other entries when you open the record so that you  can keep a pulse on  customers and prospects. With lists and reports, you can build lists, or create customized reports. BatchBook integrates with Mailchimp so you can send email newsletters to your lists. BatchBlue gives all new users a minimum of 2 hours of 1-1 consulting time to help them get productive as quickly as possible. Pricing ranges from $9.95 to $99.95 a month, based on the number of users, storage, and 1-1 consultation time you need. My take is that BatchBlue is a great solution for tech-savvy small businesses, especially services businesses where every relationship counts.
  • CloudProfile gives SMBs a unified content publishing and social media hub and web presence, which businesses can use standalone in place of web site, or with their existing web site. You create an online profile, which enables your business to get found in search engines like Google, business directories, and on social networks. It helps you find and connect with customers on Twitter and Facebook, and offers tools such as click-to-call, text messaging and e-mail marketing to help you stay connected with customers. CloudProfile provides built-In reports and connect to Google Analytics. The company plans to add PayPal and Amazon checkout and appointment scheduling soon. Pricing starts at $14.95 a month.  A very good choice for the approximately 40% of small businesses that don’t yet have a web site—gives you an online presence plus social capabilities.
  • HubSpot helps companies create, optimize and promote their content. HubSpot features a blogging platform and a content management system, and tools to help analyze your marketing reach via blogs, leads, Facebook and Twitter accounts. It provides links to conversations across the Internet related to your business’ keywords in one tidy dashboard. The Web Voter feature enables you to create a social news page on your site, where users can submit links and vote on them–creating an activity hub for discussion of hot issues. HubSpot also provides Keyword, Page and Link Graders, to help optimize search result rankings. Optional integration with Salesforce.com CRM is available. HubSpot charges an initial $500 start up fee, and ongoing pricing starts at $250 per month. It also offers a number of free tools, including Graders for web sites, press releases, blogs, etc. HubSpot, who we interviewed for a video a couple of weeks ago, provides a very comprehensive solution for both small and medium businesses.
  • ZooLoo provides a one-stop shop to get an online presence and manage social media interactions—including domain name registration, web site creation, a blogging platform, SEO tools, privacy controls, storage, and tools to connect across social networking sites–along with a personal dashboard to manage all of it. Some tools, such as the Graffiti blogging platform that lets you share posts across your social networks, are free. ZooLoo charges for other things, such as domain registration, web sites and privacy controls. ZooLoo’s fee-based services range in price from $1.99 to $9.99 per month. Although most of it’s current users are consumers, ZooLoo is a great fit for entrepreneurs—and the Facebook-like interface makes it easy for anyone to get the hang of.

As you can see, these companies come at the social media management conundrum from different angles. So as you evaluate these and other offerings, think about what is most critical to your business. What are your key objectives for your social media investments? Where do you spend the most time manually scanning, managing, updating and integrating across social media streams and more structured marketing activities? Where are the gaps? There is no one-size fits all, so start with your own requirements and objectives to help start taming the social media Hydra.

2010 Top 10 SMB Technology Market Predictions

Fellow SMB analyst Sanjeev Aggarwal and I have teamed up to bring you our top ten technology related predictions-plus three bonus predictions–for the SMB (companies with 1-1000 employees) market for 2010. Details for each prediction follow the list below.

Remember to vote for your top prediction here!

2010 Top 10 SMB Technology Market Predictions

1. Pent Up SMB Demand Will Be There—But Won’t Be Easy to Capture

2. SMBs Accelerate Their Shift to Digital Marketing Media

3. The Collaboration Battle Heats Up

4. The New Face of Small Business

5. Savvy SMB Vendors Get Strategic About Social Media Analysis

6. SMBs Drive the Mobile Internet Tsunami

7. Virtualization Boosts Cloud Computing Adoption

8. SMBs’ Appetite for Managed Services Grows

9. Beyond Excel—Targeted Workflow and Analytic Tools Takes Flight

10. 2009 Acquisitions Drive New Value for SMB customers in 2010

Bonus Predictions

1. Time to Get Paid for Selling a Free Lunch

2. Vendors Scramble for SMB Developer Loyalty—and New Integration Needs Arise

3. SaaS Computing Lifts Off in New Areas

Top Ten Predictions

1. Pent Up Demand Will Be There—But Won’t Be Easy to Capture. In 2010, as the economy comes out of recession, SMBs will be more willing to spend again, but only for solutions that will provide demonstrable bottom and/or top line business benefits. SMBs will spend only if they believe that the investment will help them operate more profitably, grow revenues, increase productivity, save money or gain time-to-market advantages. SMBs are also evaluating and making trade-offs in areas that offer strategic, long-term advantages vs. those that meet more urgent, short-term needs. In many cases, IT investments must also be weighed against requirements for other core goods and services essential to the business.

To have any chance at making the final cut, vendors will need to redouble efforts to illuminate their value proposition in a clear and compelling manner, and provide more quantifiable evidence that their solutions will help slash costs, increase productivity and provide payback value. Time-strapped SMBs will also increasingly demand that vendors be easy to do business with—heavily favoring vendors that offer an accessible, transparent and positive sales experience from discovery through purchase.

2. SMBs Accelerate Their Shift to Digital Marketing Media. In 2010, SMB adoption of digital marketing media will accelerate, as more SMBs turn away from traditional media (yellow pages, print, direct mail, etc.) and towards social networking (e.g. Facebook and Twitter), email marketing, search engine marketing, blogs, forums, etc. As SMBs become more familiar with the basics, they will seek out solutions that help them streamline and integrate customer interactions across multiple digital venues. Prime opportunities include more specific, tailored search optimization and management services.

Examples include Lotusjump, designed to help retailers and etailers optimize organic search for hundreds or thousands of products; Yodle, aimed at helping services businesses create an integrated Web site and SEO campaign to drive foot traffic and make the phone ring; and WebVisible, which helps local businesses create more effective online marketing and advertising campaigns. Another sweet spot will be services that help SMBs manage and integrate inbound and outbound social media streams, along with more structured digital marketing tools, such as SEO, SEM and email marketing. Vendors such as Cloudprofile and Hubspot offer such capabilities now, with Salesforce.com’s Chatter slated for the second half of 2010. With the market getting more crowded and noisy by the minute, however, vendors will need to avoid overloading SMBs with techno-babble, and focus instead on providing SMBs with an exceptional user experience and measurable business benefits.

3. The Collaboration Battle Heats Up. In an age of information overload, SMBs need better collaboration tools, integrated with daily workflow, to bring order to the chaos. SMB decision-makers and employees are reaping the benefits of social networking and collaboration tools like Facebook and Evite in their personal lives—and asking how they can derive the same kinds of benefits in their businesses. They want to make information easier to find, share and use; extend and enhance the body of shared knowledge; and connect with people they need when they need them. In 2010, the collaboration battle will swing into full gear, as vendors introduce more integrated solutions that pull together people, tools, services and content. After all, collaboration is the only business activity that every employee engages in every day—offering vendors an irresistible opportunity to expand their market footprints and installed base presence.

For instance, IBM LotusLive and Lotus Foundations make powerful Lotus collaboration capabilities affordable and digestible for SMBs; Microsoft continues to extend SharePoint and hosted messaging capabilities; and smaller players, such as HyperOffice and Zoho, feature services built for small business from the ground up. At the same time, business solutions vendors from SAP to Salesforce.com are embedding richer collaboration capabilities into their offerings. Even networking vendors, such as Cisco are getting into the game under the unified communications umbrella.

4. The New Face of Small Business. In 2010, vendors need re-examine the evolving small business market with a new segmentation lens to better identify the composition of the small business market, and how they can create the most compelling offerings as the sands shift. Triggered by the recession, generational changes, and globalization, a tectonic shift is changing the face of small businesses. The generational shift has been underway for a while, of course: the U.S. Bureau of Labor Statistics forecasts that the number of workers between ages 33 and 44 will decline rapidly through 2020, and that more people in the labor pool are likely to be either under 30 years old or over 50. Meanwhile, more people are opting to start their own businesses: the U.S. Department of Labor notes that 650,000 new businesses started up in 2006, compared to roughly 570,000 in 2002.

Different types of entrepreneurs, small business owners and their employees have diverse requirements and expectations for technology solutions. While older workers may tend to stick with the familiar, younger new business owners and workers are unlikely to have much allegiance to existing market leaders. As baby boomers in the U.S. retire, younger Gen X and Gen Y workers—and soon Millenials—will replace them. But, many retiring or laid off older workers will move on to start new businesses, out of economic necessity and/or for lifestyle preferences. In addition, persistently high unemployment will accelerate the entrepreneurial trend across all age groups. Meanwhile, globalization is fueling the need for small businesses to expand interactions beyond their traditional geographies.

5. Savvy SMB Vendors Get Strategic About Social Media Analysis. Social media is becoming a mainstream way for vendors and service providers to engage with small and medium businesses. Most vendors already have a social media presence and publish content regularly through social media channels, while many have integrated social media into their customer service approaches and/or using tools to measure brand performance. However, only a handful have developed an effective approach to extract meaningful strategic insights from social media conversations, engagements and information.

In 2010, vendors will augment tactical use of social media with a more sophisticated, strategic plan to monitor and analyze broader SMB trends and directions. By listening, synthesizing and analyzing conversations at a higher level, vendors can strengthen market insights for use in marketing, product planning, channel development and merger and acquisition strategies. Coupled with more traditional research, domain expertise and analysis, this strategic perspective on social media conversations will provide actionable insights and a competitive edge.

6. SMBs Drive the Mobile Internet Tsunami. In 2010, SMB adoption of smart mobile devices and services will increase at an even faster pace, as the number of mobile applications and services grows exponentially. SMBs with services businesses are already serving up local ads in local searches delivered on iPhones and Blackberries—as evidenced by the fact that vendors providing local search solutions saw their revenues jump by 50% to 100% in 2009. Things will continue to heat up as new Google Android-based smart phones continue to swarm the market, Dell’s new division focused on mobile devices debuts, Apple’s iPhone AppStore expands, and vendors such as RIM and Nokia extend their own application stores in response to Apple’s success. Vendors that can go beyond devices and applications to help SMBs create more engaging content, and develop more effective e-commerce and permission-based strategies to reach their target customers on these devices can gain a significant advantage going forward.

7. Virtualization Boosts Cloud Computing Adoption. For the foreseeable future, SMBs’ will continue to take a hybrid approach to technology, combining on-premise and public cloud-based solutions to satisfy business requirements. In 2010, vendors will offer a greater range of targeted solutions for hybrid environment requirements to spur SMB interest and traction. Virtual desktops, business continuity/disaster recovery, on-demand computing and storage will feature prominently in vendors’ lineups.

As SMBs contemplate Windows 7 migration strategies, they will more closely evaluate the total cost of ownership (TCO) of cloud delivered virtual desktop solutions vs. deploying new Windows 7 desktops/laptops—as well as the added benefits around security, backups, updates, etc. that virtual desktops provide. Growing adoption of virtualization will also open the door for SMBs to consider high availability and disaster recovery solutions, which until now, have been highly desirable, but largely unfeasible for smaller companies. Look for VMware to lead the way, with others, such as Citrix and Microsoft playing catch up.

8. SMBs’ Appetite for Managed Services Grows. SMB business requirements continue to become more complex, and their reliance on technology is increasing. But most lack the resources to keep IT infrastructure up and running at peak performance. Increasing business reliance on IT infrastructure will fuel rising demand for managed services providers (MSPs) to increase performance, reliability, availability and service levels—but at reduced or at least neutral costs.

Although demand for point services (for things like backup and recovery, security and virus protection) will remain healthy, more SMBs will seek out comprehensive managed services offerings in order to free up resources to focus on core business requirements and get the benefits of “one throat to choke.” By coupling cost-effective, round the clock remote management services with onsite support, vendors will make managed services more affordable and accessible for SMBs. Examples include Dell’s ProManage Managed Services, which combines the advantages of remote management services with a scalable network operating center along with a team of local Dell and partner support professionals around the globe that provide onsite support; Mindshift, which offers horizontal managed services, as well as vertical managed services solutions for industries such as legal, healthcare and professional services; and HP, which is approaching the SMB managed services segment through its HP Smart Management Services for SMBs and Total Care Business Solutions.

9. Beyond Excel—Targeted Workflow and Analytic Tools Takes Flight. SMBs often rely on disjointed, ad hoc methods to manage many tasks and workflows, such as spend management, expense management, sales compensation and corporate performance management—to name a few. For the most part, they tackle these and other jobs with Excel spreadsheets and a messy mix of emails, paper documents and manual processing. Besides being a headache for everyone involved, this cumbersome approach has many other drawbacks, such as limited reporting abilities, high error rates, a lack of real-time visibility and collaboration capabilities, and limited flexibility.Until recently, most solutions to help manage these processes were too expensive and cumbersome for the typical SMB customer.

However, the rise of cloud computing has given wings to many software-as-a-service (SaaS) solutions that give SMBs purpose-built tools that help streamline workflow and provide critical intelligence to help improve top and bottom line performance. In 2010, vendors’ mid-market offerings in areas such as corporate performance management (CPM), with vendors such Adaptive Planning and Clarity Systems; sales compensation management, with players such as Xactly; and spend management, with entrants such as Rosslyn Analytics, which recently launched RA.Pid, a free self-service solution for SMBs. Meanwhile, traditional enterprise BI players, such as IBM Cognos and SAP Business Objects will continue to carve out more digestible BI offerings for the mid-market, offering up solutions and/or end-to-end on demand business process services to customers.

10. 2009 Acquisitions Drive New Value for SMB customers in 2010. In 2009, many deals were struck that portend great impact on the SMB market, channel and competitive landscape. Among the most notable were HP’s acquisition of 3Com, which gives HP the ability to provide a full complement of networking and connectivity solutions for SMB customers. In a market long dominated by Cisco, the HP-3Com combination gives SMBs a strong alternative, with attractively priced, competitive networking products and services with a compelling value proposition. Intuit’s acquisitions of PayCycle, Mint.com and BooRah continue to build and refresh the vendor’s portfolio of services for it’s core small business and consumer segments—which often overlap in the “prosumer” category. Intuit will likely continue on an aggressive acquisition trajectory in 2010. Avaya’s acquisition of Nortel Enterprise Solutions makes Avaya the runaway market share leader in voice and unified communications in the SMB market, with roughly twice the market share of Cisco. But at the same time, Cisco’s pending acquisition of Tandberg will enable it to bring cost effective, standards based video conferencing solutions to SMBs, creating new awareness and interest in the SMB video conferencing market. We also expect 2010 to spawn a new round of acquisition activity as vendors converge collaboration, social media and business solutions.

Bonus Predictions:

1. Time to Get Paid for Selling a Free Lunch. There may be no such thing as a free lunch in the physical world, but there is an abundance of free and very low-cost software-as-a-service (SaaS) tools for everything from personal productivity and collaboration applications (such as Google Apps, Zoho and Dimdim) to financial management (including Freshbooks, Sage BillingBoss and Workingpoint) for small businesses. With more people starting their own businesses—often on a very tight budget—use of these services will continue to rise. But in 2010, vendors with this model will start feeling the pressure to scale.

The business models for these services are predicated on the assumption that a small percentage (usually in the range of 5% to 10%) of customers will convert to a premium paid offering. Many vendors also get advertising revenues, and some see data aggregation services as another way to generate income. To profitably scale their businesses, these vendors need to stimulate rapid viral adoption (which enables both advertising and data aggregation sales) and achieve their conversion rate goals for premium services. But the combination of rapid, high volume viral growth and paid conversions is a to tough code to crack. While Google may not need to worry about cracking the code anytime soon, smaller, venture-backed vendors have a much shorter time horizon to make it work. Many will not be able to, and will need to either get acquired or shut their doors. However, some will get the formula right—with good odds on FreshBooks and Zoho.

2. Vendors Scramble for SMB Developer Loyalty—and New Integration Needs Arise. Cloud infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) are giving SMB application developers lower cost, lower risk options to develop and bring new solutions to market. In 2010, both traditional platform vendors, such as Microsoft and IBM, along with newer PaaS and IaaS types such as Salesforce, Intuit and Amazon, will need to fight tooth and nail to get both commercial SMB developers and end-user customers to create applications for their environments. Meanwhile, since its highly unlikely that most customers will only want solutions from one of these ecosystems, vendors that provide integration solutions, such as Pervasive, Boomi, and Cast Iron, have a whole new market opportunity ahead of them—integration between these different platforms and ecosystems.

3. SaaS Computing Lifts Off in New Areas. Cloud poster child Salesforce.com celebrated its 10th birthday and hit the $1 billion in annual revenues mark in 2009—and software-as-a-service (SaaS) CRM is now a mainstream—even preferred–choice for SMBs. SaaS is also gaining a solid foothold in HR, marketing and content management are other areas in which SaaS is gaining a solid foothold. In 2010, the rate and pace of cloud computing adoption among SMBs will continue its upswing.

Key areas to watch include the historically elusive SaaS financials market. Smaller companies are showing a good appetite for self-service online accounting solutions such as Intuit QuickBooks Online Edition and Workingpoint, and point solutions for things such as invoicing, from vendors such as Freshbooks and Sage Billingboss, and others. Moving upmarket, firms such as NetSuite, Intacct, FinancialForce—and after a hiatus, SAP Business By Design–should enjoy good growth spurts in midsize companies, especially in those that are faced with a costly upgrade of a legacy packaged financials solution. Both internal IT and business decision-makers move to cut upgrade, maintenance and application management costs, while also speeding time to solution value. This momentum will be further fueled as SaaS vendors make progress in bringing integrators, VARs and CPAs on board to amplify marketing and sales capabilities.

What is SEM, and Why Should You Care?

(Originally published in Small Business Computing, November 30, 2009)

Technology insiders tend to throw around technical terms and business jargon, assuming people outside the industry understand what it all means. By its nature, technology vocabulary is often confusing and complicated, and insiders often add to the confusion by over-complicating things. To help add a sense of clarity to the confusion, each month, Laurie McCabe, a partner at Hurwitz & Associates (a business consulting firm), will pick a technology term, explain what it means in plain English, and then discuss why it may be important to you. This month, Laurie takes a look at search engine marketing.

What is Search Engine Marketing?

Search Engine Marketing (SEM)is an umbrella term that describes the different methods you can use to make your Web site more visible on search engines so that you can drive more traffic to your site. SEM blends organic search engine optimization (SEO) with paid search or pay-per-click (PPC) advertising to increase exposure for your Web site.

SEO focuses on designing and optimizing your Web site so that your site will rank higher within the organic search results pages—the list of Web sites that pop up when you conduct a search. Basically, search engines such as Google or Bing look at a page and try to decipher the most important or relevant information on the page. SEO revolves around figuring out what keywords people will use when they are looking for the types of services and/or products you provide, and using these in your Web pages and content so that search engines accurately index your site and people can easily find it. When you use SEO techniques, you are not paying search engines to appear or move up on their site, you are simply optimizing your content so that it will naturally place higher in search results.

In contrast, paid search or PPC advertising involves paying search engines so that your site appears as a sponsored link in the small text adds that appear on the top and right hand side of a search results page—think Google AdWords. While it is free to display your ad on Google or another search engine, you pay the search engine vendor every time someone clicks on your link. The search engine vendor positions your site on the results page based on a combination of how much you are willing to pay-per-click, and a subjective quality assessment of how important your ad is in relation to others on the page. This quality measurement includes things such as the percentage of clicks on your ad and how many times the search term appears in your ad.

Why Should You Care?

What good is your Web site if you’re not driving traffic to it? You invest in a Web site to help educate and promote your products and services to prospects and customers. But, if people can’t find it, you will not get the kind of results you want form your Web site.

Both organic and paid search techniques can help you drive traffic, but each method has different plusses and minuses. For instance, cost per click is less for organic SEO than with a PPC approach. While you invest time (and maybe money, in the form of an SEO marketer or a service) to optimize natural search results, you’re not paying the search engine vendor for every click-through. In addition, people click on organic search engine results much more frequently than they click on PPC ads, because of where they appear on the page.

On the other hand, a PPC campaign can typically ramp up traffic to your site much more quickly than organic SEO. So, if time is of the essence—say you need to drive holiday sales—PPC is likely to help you get better results.

Many businesses find it most effective to combine both SEO and PPC approaches. For example,PPC enables to you to quickly test keywords to see which search terms work, and which don’t. As you discover which terms work best in a PPC campaign, you can also incorporate them into your organic SEO approach.

What to Consider

Web searches are becoming the top way for both consumers and businesses to research and shop for products and services. Consequently, small businesses are rapidly shifting their marketing initiatives from traditional media to digital marketing media tools, including SEO and SEM.

These marketing tools are often less expensive to use than traditional marketing options such as print advertising and direct mail. A small investment can help companies significantly boost marketing reach and return. SEO and SEM give small businesses more visibility into whether they’re reaching their target audiences, easier ways to track and measure payback on their efforts, and the ability to rapidly adjust and refine campaigns and outreach as needed.

However, search engine marketing techniques involve both art and a science, and are evolving at a rapid pace. What works today won’t necessarily work tomorrow. To stay ahead of the competition, consider services that are tailored to your specific market and needs. For instance,

Lotusjump provides a service to help small businesses optimize organic search results for hundreds or thousands of keywords to generate more qualified leads. The automated service automates the process of building more qualified leads based on more specific “longtail” search terms. So if have a retail business, you can create keywords specific to the hundreds or thousands of products that you sell.

Own a bakery or tree service business? If you do, everything is local, and services that help to reach the local market are what you care about. WebVisible, for instance, buys advertising space from multiple media providers and ad networks, and provides many types of online marketing solutions, including fully managed search advertising, banner/display advertising, call tracking solutions, custom landing pages, promotional URLs and more. Using the WebVisible platform, small businesses can target local advertising more effectively. Yodle, meanwhile, focuses on local services businesses, helping them to create a Web site, develop an effective SEO campaign across the Web, and help make the phone ring when the business is found through a Web search.

The Web is becoming our virtual shopping mall. Small businesses that make an investment into understanding different types of organic and paid search approaches and using those most relevant to their business will have a big advantage in bringing in traffic.

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