Does Salesforce’s Refreshed SMB Strategy Add Up?

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

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

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

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

From SMB Startup To Enterprise Powerhouse

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

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

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

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

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

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

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

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

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

Salesforce’s New SMB Story

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

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

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

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

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

Perspective

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

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

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

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

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

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

My Top Posts From 2015

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

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

SMB Group’s 2016 Top 10 SMB Technology Trends

Making The Internet of Things Real For SMBs

Are You Keeping Pace With Your SMB Customers?

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

Trends in Small Business Adoption of Mobile Solutions

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

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

The Cloud: Mother of Re-invention for IBM

Charting a Course in the ERP Clouds

Mobile Solutions Play a Big Role in Small Businesses

The Top Five Warning Signs That You’ve Outgrown Your Accounting Solution

Does your business have the tools it needs to support business growth? Or are the systems you’re using holding your business back?

I recently participated in a webinar, Keeping Ahead of Change, with Sage’s VP of Product Marketing, Diane Haines. We discussed a common dilemma that many SMBs face. While today’s business environment offers SMBs plenty of opportunities to innovate and grow, many find themselves unprepared because they’re still relying on software solutions that worked when they were very small, but can no support business growth.

Accounting software is often the first business software small businesses buy. Many times, small business owners opt for the least expensive or easiest accounting solution they can find, and add new software to help with other functions as needed.

Tacking on point solutions, spreadsheets and manual workarounds can get the job done for a while. But, as businesses grow, they become more complicated (Figure 1). You hire more employees, and create more offerings. Different regulatory requirements start kicking in, and maybe you are in more markets. Business growth and profitability are still extremely important priorities, but other issues start coming to the forefront.

Figure 1: As Businesses Grow, Challenges Change

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At a certain point, solutions that used to work no longer fit your needs. Trying to manage a growing business with a jumble of different solutions, spreadsheets and pencil and paper creates a drag on the business, and you wind up spending too much time just keeping up with the day-to-day. As a result, it’s tough to be proactive, and to take advantage of new opportunities to grow in a scalable way.

The top five warning signs that the software you’re using today may be holding your business back include:

  1. Too Much Time, Too Many Errors. Accounting software is supposed to make running the business easier. But if you’ve outgrown the solution, you’re probably spending too much time creating “customized” reports outside the accounting software for things like billing, payments, and sales forecasts. Users may have to re-enter info into different programs and documents, and have to update and reconcile multiple spreadsheets–which is not only time-consuming, but greatly increases the risk of errors.
  1. Poor Visibility Into Data for Decision-Making. All businesses need to track and measure metrics and key performance indicators, but many struggle to do this efficiently. Many SMBs feel like they’re in information overload. You have plenty of data, but can’t find the right data when you need it, or it’s difficult to pull the data into a unified view to see how different aspects of the business work together. For instance, it may take days or weeks to generate reports required by different stakeholders, or take too long to close the books. Without a more comprehensive business management system that automates and integrates information across the business, it becomes more difficult to manage, measure and make the right decisions as a business grows.
  1. Everyone Has Their Own Version of the Truth. When people rely on different spreadsheets and reports, generated with different data from different systems, they can end up with very different views of what’s going on and what actions they need to take. When this happens, decision-makers can waste precious time reconciling these different views and finding common ground to base decisions on.
  1. Insufficient Time/Resources To Grow the Business. When you spend too much time on day-to-day business processes, its tough to carve out the time and resources to do things that will really move the business ahead, such like upgrading front end sales and marketing to attract new customers, or improving customer service so existing customers become repeat customers advocates for your business.
  1. Poorly Equipped for Business Expansion. If you are looking to expand your business to new countries, you need to be able to track exchange rates, convert currencies and consolidate financials across the business, and the entry-level accounting software you have can’t easily accommodate this. Similarly, if you want to add new product or services, or add a direct B2C channel to supplement your B2B business, things can get cumbersome and clunky if you have to use a lot of workarounds.

If any of these top five warning signs sound familiar, its time to think about how you can manage your business in a more automated, integrated and sustainable way. But change can be hard, even when the need to change is clear. Tune into the Keeping Ahead of Change webinar to learn more about these challenges, how a more complete business management solution can benefit your business, and advice for how to how to start managing your business in a more automated, integrated manner so you’ll be ready for opportunity when it knocks.

 

BizSlate: Weaving QuickBooks Into ERP for Small Businesses

Laurie:  Hi, this is Laurie McCabe from SMB Group and today I’m talking to Marc Kalman, who is the CEO and founder of BizSlate, which provides inventory management solutions for small businesses. So, welcome Marc!

Marc:  Thank you. Glad to be here today.

Laurie:  Thanks for coming. We’re here at the QuickBooks Connect conference, a very appropriate place to be talking about small business solutions. I’m wondering, before we get into the specifics of what BizSlate does, can you tell us about your role how the company got started?

Marc:  Sure Laurie. I’ve been in the supply chain technology field my entire career. I started off as a software engineer right out of college, did that for about nine years and had the opportunity then to move into more of the practitioner side of things where I was an EDI (electronic data interchange) analyst for a while, I was a supply chain specialist at companies like Coach Leatherware, and then I had the opportunity to direct a team for a nine division accessories business in New York City. From there, I started my last company, which was, and still is a successful EDI provider, Easy Come Software.

What we found was, because of our unique way of addressing the market for small businesses, we were upwards of 90% more efficient than any of our competitors as far as a supply chain capabilities around EDI were concerned. That led to our customers calling up after a while saying, “Hey Marc, this is great what you’re doing for us in the world of EDI. While in our case it might be 70% or 80% of our business, it’s two customers and we have a thousand customers and we’re using QuickBooks and we want to see our inventory and we can’t keep track of things correctly. And people are traveling and need access to real-time information quickly to make important decisions and keep up with the market.”

So it caused me to look at what was going on in the supply chain space for small businesses and I saw that it was a big problem. I’m very passionate about the space, I’ve been involved with it for a very long time and decided, you know what? I’m going to go do something about it and so here we are.

Laurie:  So, what specifically does BizSlate do?

BizSlate_Logo2Marc:  So, we obviously we do integrate with QuickBooks, predominantly focusing on QuickBooks Online right now. That seems to be the direction that QuickBooks is pushing everybody towards anyway, and we want to be the forefront of that.

Laurie:  Right. And new companies are starting more with cloud-based offerings.

Marc: Exactly. We are web-based, and we focus on helping small businesses improve how they manage everything–customers, orders, vendors, inventory, logistics of the supply chain–and give them the tools that they need to succeed this very intense, omnichannel market.

Laurie:  Does it plug right into QuickBooks, Marc?

Marc: It does, seamlessly. We connect right to QuickBooks through APIs, so as you process documents in our system, let’s say like you post invoices or you receive inventory, if you go into QuickBooks you would instantly see those transactions.

Laurie:  It sounds like it kind of fleshes out QuickBooks beyond accounting and basic financials into what other companies would call ERP or Enterprise Resource Planning, with functionality that manufacturers or distributors might need.

Marc:  Correct. And you know, QuickBooks is great from an accounting system perspective. But certain businesses, particularly product-related businesses that have to track inventory, as they evolve, the operations aspect of QuickBooks doesn’t always keep up with the rate of growth. This causes companies to start looking outside of QuickBooks, at companies like MAS 90 or Dynamics. And until now, QuickBooks really hasn’t had a lot of defense against that. In fact we just did a demo for someone earlier and they said, “You know, QuickBooks plus BizSlate equals NetSuite.”

Laurie:  What are you finding in terms of the sweet spot of customers that are interested in BizSlate? I would expect you have a lot of QuickBooks users that say, “I like QuickBooks but I need more.” Any other kinds of people coming by that are interested?

Marc: There are two key areas that customers are attracted to us. One is what you just described, where someone is using QuickBooks, loves it, or their accountant wants them to stay on QuickBooks. They don’t want to have that disruption of having to change the whole system, they just want to expand functionality. We give them a nice path to be able to do that with a system that will help them not just today, but sustain them for the future. Also, the power that we offer is at a very affordable price. So we also find companies that use solutions like NetSuite that maybe aren’t capitalizing on all of the capabilities that NetSuite offers, or it’s too complex, it’s too big, it’s too expensive. This is an opportunity for them to get the same efficiency but easier, and more affordably.

Laurie: Is there a sweet spot in terms of company size for BizSlate?

Marc:  We are primarily focusing on businesses that are fifty million in revenue or less. Industry-wise, we have a lot of traction in apparel, footwear, also housewares, consumer goods, and electronics

Laurie:  A lot of companies are targeting small businesses who are outgrowing QuickBooks. So why BizSlate? What makes you different?

Marc:  That’s one of my favorite questions. Because we get it. We understand small businesses. Small businesses today are understaffed and overworked. People are doing fifteen different jobs at the same time and that’s on a good day. They don’t have time to sit in front of a computer processing documents. Every single person at that company needs to focus on the growth and profitability of that organization. It’s actually detrimental to the business in a very aggressive market to have people who are wasting time on a lot of data entry.

When some vendors target small businesses, they just don’t understand what these small businesses need. They say that they do, but they don’t. These providers, what they say is, “Well, for a small business it has to be affordable,” right? It does. Has to be easy, and it has to be easy, right? But to get there, the typical provider does that by removing value. But this removes ROI. So where BizSlate is different is we bring enterprise value, the kind of tools, the intelligence that small businesses really need to be able to capitalize on the market. But we do it in a way that is affordable and easy and gives them tools that to really rev the business up and focus on things that are more important to the company.

Laurie:  I think you hit the nail on the head. Time is usually the most precious resource for many small businesses. So how long on average does it takes somebody to get up and running on BizSlate, and how do you help them get productive more quickly?

Marc:  Every customer’s a little different. There are different levels of complexity. We start our promise to our customers with ease of use by making sure that the software itself can be learned and trained and used without anybody ever having to teach somebody something. Now that said, that doesn’t mean we don’t support our customers. In fact, I believe we’re one of the few, if not only, providers of this type that offer free unlimited phone support.

Laurie:  That’s a big deal.

Marc: Because we want to make sure our clients succeed, it’s not just about selling software here.

Laurie:  Yes, in a subscription model you really want to keep them once you get them.

Marc:  Exactly. And we’re passionate about small business, I come from the space. Half the employees at BizSlate come from the space. We are really here to make a difference and we want our clients to be successful. As great as our software is, we want to be known for the service that we offer and really make a difference.

Laurie:  Last but not least, is there anything here at QuickBooks Connect that you’re highlighting that you’d like to just give a shout out for?

Marc:  We have two very exciting themes here at the show. Number one, we just found out that we were selected as one of the top twenty cloud providers of 2015 by CIO Review magazine.

Laurie:  Congratulations.

Marc:  Thank you, we’re very excited. Also we’re just finishing up QuickBooks partner certification. In about a week or two, we should be listed on apps.com so everybody will be able to find us.

Laurie:  That’s great. It looks like you’re having a good time at the show too.

Marc:  I’m having a great time. I’m meeting lots of great people, having great conversations, and excited to see that there’s a lot of interest for what we’re doing.

Laurie:  Well Marc, thank you so much for talking to me today and sharing this information so people can learn more about BizSlate and connect with you.

Marc:  Thank you.

Cloud Cover: Cloud Management and Security for SMBs

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

Figure 1: SMB Current and Planned Solution Deployment Methods

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

Figure 2: SMB Drivers For Cloud Adoption

Slide2

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

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

Take Ownership of Your Cloud Strategy 

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

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

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

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

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

Figure 3: Different Types of Cloud Application Deployments

Slide3

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

Take Control of Cloud Security and Management

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

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

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

Be Prepared for the Future

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

This post is sponsored by Dell.  

Making The Internet of Things Real For SMBs

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

IoT: The Internet’s Latest Game Changer

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

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

Figure 1: SMB Rank Their Top Three Technology Investment Areas

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

What Is The Internet of Things (IoT)?

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

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

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

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

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

Unpacking IoT at DellWorld

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

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

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

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

The Time Has Come To Explore IoT

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

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

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

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

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

This post is sponsored by Dell.  

New Rules for Tech Vendors: How the SMB Buying Journey Is Changing

So many vendors are interested in selling to SMBs, or selling more to them—for obvious reasons! It’s an enormous market and many areas of the market are ripe for new technologies and solutions.

But over the years we’ve seen so many vendors flail—and even fail—when it comes to successfully reaching, selling and serving SMBs. And its arguably getting even more difficult to be successful as as the SMB landscape changes and more vendors compete for SMB customers.

So we put this webinar together as a  primer to on some of the key dynamics we see in the SMB market, so you can use it as a starting point to fine tune your SMB marketing strategy and tactics. During the webinar, I discuss:

  • Key SMB technology market trends
  • Insights into how the SMB customer technology journey is changing across the exploration, evaluation, selection and service phases, and their new expectations of technology vendors
  • Eight new rules for technology vendors in the SMB market

Please let me know what you think, and any additional observations that you’ve made related to this area!

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