Dell’s Boston Think Tank: Big Ideas for Small Business

Posted on March 7, 2013 by lauriemccabe

Earlier this week I had the opportunity to participate in Dell’s Boston Think Tank for Entrepreneurs and Small Businesses (#smallbizboston) at the Cambridge Innovation Center. Dell billed the session as a chance for business owners, startups and others to come together to listen, learn, collaborate and share.

dpictInstead of talking heads, the day was interactive from start to finish, with speakers who realized that they have as much to learn from attendees as the other way around. And instead of PowerPoint slides, dpict.info’s scribe captured the story as it unfolded, building this great infographic to sum up the day’s key conversations and insights.

Dell_Boston_2013_printDell’s Entrepreneur in Residence, Ingrid Vanderveldt (who I spoke to in this video interview) kicked off the event some interesting stats about how Boston small businesses view the current business environment and their ability access to capital, talent and technology. Whitney Johnson (@johnsonwhitney), Author of Dare, Dream, Do and Harvard Business Review Blogger and event moderator, introduced the 4 different themes for the day, each facilitated by a local small business expert:

Dell sessionFrom my perspective, some of the most interesting takeaways from the day were that small business owners:

  • Struggle to find qualified people who are also a good fit for the company’s culture. Although small business owners believe that talent and expertise are the most important contributors to business growth, they find it difficult task to access the talent they need. The investment required to recruit, hire and train someone looms large for small business, and the risk of hiring someone who doesn’t work out is a big one. While people have had success outsourcing smaller jobs to contractors via sites such as Elance, TaskRabbit and Zirtual, “you reach a point where you need talent that you can trust, commit to and hire.” Practical advice included to “go where the talent is,” for example, check out http://www.meetup.com/ and go to meetups where you’re most likely to find the types of people you’re looking for, and learn some of the lingo they use so you can engage in a meaningful conversation. Other suggestions included writing down and codifying your corporate values so that you can clearly articulate them to the candidates you interview. Finally, look for people with complementary skills to yours, and those who can do the job as well or even better than you can.
  • See technology as both a blessing and a curse. One the one hand, the Internet and mobile solutions have made it much easier for people to collaborate and connect. On the other hand, small business owners are in information overload when it comes to sorting through all the thousands of available technology solutions and determine which can really help them achieve their business goals–growing revenue, being more productive, and operating more profitably. Dell’s survey indicates that 41% of Boston small businesses see technology needs as becoming increasingly complex, yet only 1 in 10 have full-time dedicated IT people. This mirrors SMB Group’s North America research findings. Most small businesses see the value of technology in making their businesses successful, but need a lot of help to identify which solutions will have the biggest impact on business results.
  • Believe telecommuting and working remotely enables productivity. Sorry, @Yahoo Melissa Mayer, but I think its fair to say that you are swimming against the tide. The general sentiment seemed to be that although live, face-to-face meetings are ideal for some things, the ability to work remotely has given small businesses more flexibility and access to talent. For instance, Sharon Kan, an entrepreneur with four successful start-up exits, kicked of the Access to Technology session by saying she runs her businesses with “a phone and a laptop.”
  • Typically pull their businesses up with their own bootstraps. Only 3% of Boston small businesses relied on venture capital and angel investors to get off the ground. Personal savings are the top source of funding at 44%, followed by banks and credit unions at 23%. Amy Millman of Springboard Investors, which has funded a raft of innovative start-ups, including Zipcar, iRobot and Constant Contact, gave business owners insights into what investors are looking for. First, you must be able to clearly articulate how your company is going to make money, and “learn the language of funders and investors”. More pointedly, when a prospect says “wow”, take it a step further. Find out the “why and how of the wow” and use that in your pitch to investors.
  • Need to get more strategic about using social media. According to Chris Brogan, who led the social media breakout, all businesses must think like “fledgling TV stations and create their own media” and “build trust at a distance.” The challenge is how to do this effectively. SMB Group’s 2012 Social Business survey indicates that of the 53% of small businesses using social media, less than half use it in a strategic way. According to Chris, small businesses need a home base, such as a web site or blog, and two “outposts.” One outpost should be the social media site that’s the best fit for your story and how you want to tell it (I would add that it also needs to be a place where your prospects hang out) and the other is email marketing: bad email marketing may be dead but good email marketing isn’t. Don’t try to spread yourself too thin–concentrate on using these three to help you “articulate, reach, trust, engage and echo” to meet your business goals.

dell session 5Overall, the interactive format, access to experts and eclectic mix of small business owners added up to an event that gave attendees information and inspiration, and new connections with people to get help from and vice versa.

Dell put a lot into the event. In addition to Ingrid and a number of Dell marketing and AR staff, Dell product strategy, management and technology teams were also well represented. With its listening ears on at events such as this, Dell is taking the right steps not only to help small businesses succeed, but to also ensure that it has the insights it needs to provide small businesses with the solutions they need to move ahead.

The Boston event was the last stop on Dell’s inaugural Think Tank tour of nine cities, but I’m told that Dell intends to follow-up with a new tour schedule soon.

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Dell World 2012: An Update on Dell’s Journey

Posted on January 2, 2013 by lauriemccabe

Just before the holidays, I had the opportunity to attend Dell’s second annual Dell World user conference. Here’s my take on  Dell’s progress towards becoming an end-to-end solutions company, and its directions in the small and medium business (SMB) market.

To put things in context, Dell has been on a journey for a couple of years to transform from a hardware company provide businesses with open, flexible and easier to use IT solutions that can scale up or down as needed. Dell is leveraging cloud computing, open standards, and a blend of hardware, service and software offerings to build more comprehensive solutions. And, Dell has pegged midmarket business requirements as its design focal point to ensure scalability for organizations of all sizes. As I discussed in The New Dell and What it Means for SMBs: Takeaways from Dell’s 2011 Solutions for a Virtual Era Event, Dell has also made many acquisitions to turn this vision into reality, including KACE, Boomi, Wyse, SonicWall, Quest and AppAssure and others.

On Track for Transformation

Dell has taken a lot of heat for not turning around fast enough to please some analyst and pundits. But, at the event, Dell provided a status report on its progress, and unveiled several new strategies, products and services that I believe will continue to propel it forward.

For example, Dell reported that cloud revenue has increased 30% year for Q3 FY 2013, and that its x86 server shipment growth outpaced the industry overall (and HP and IBM in particular) according to International Data Corporation’s (IDC) Q3 2012 Worldwide Quarterly Server Tracker. In addition, security revenue for Q3 FY 2013 rose 16% year over year. Dell now processes more than 30 billion events every day, and is growing its footprint in the security area. Perhaps most importantly, services and consulting now account for roughly one-third of Dell’s sales.

Among the many announcements that are part and parcel of any vendor user conference, several highlighted how Dell is turning its vision into reality, including that Dell has:

  • Chosen OpenStack as its open source cloud platform of choice for public and private cloud. This extends Dell’s commitment to open, standards-based solutions. While it will still provide customers with solutions on other cloud platforms, the vendor has endorsed OpenStack as the most open, flexible way to implement a hybrid environment and move workloads between private and public clouds.
  • Added new solutions to its Active Infrastructure converged infrastructure portfolio. Dell announced new blueprints for VDI and unified communications and collaboration applications and workloads. This builds on Dell’s goal of helping customers to streamline IT deployment and management with Active Infrastructure solutions. These combine servers, storage, networking and infrastructure systems management into integrated solutions that zero in on specific workload requirements to speed deployment, cut costs and energy consumption, and simplify operations.
  • Unveiled the CIO Powerboard. Using Boomi, Dell has knit together management tools from Quest, KACE, SonicWALL and AppAssure to provide IT with a unified view and metrics across their IT environment–another proof point of Dell’s ability to provide more integrated, end-to-end solutions.

We also got a glimpse into the strong potential that Dell’s Wyse acquisition has to propel Dell into the mobile management space from the very energetic Tarkan Maner, Dell Wyse President and CEO. Maner demoed the Pocket Cloud web service, which allows users to search all of their physical, virtual systems and clouds. As I discussed here, Dell recently launched Dell Wyse Cloud Client Manager (CCM), which incorporates Pocket Cloud technology, and provides businesses a centralized mobile management platform with an SMB-friendly price tag.

Stepping Up Support for SMBs

Beyond new solutions and technology directions, Dell took the wraps off of two new initiatives designed to help entrepreneurs start and grow their businesses.

For starters, Dell launched the Dell Center for Entrepreneurs, headed up by its Entrepreneur in Residence, Ingrid Vanderveldt. In this video interview,  Ingrid discusses how the community is built by and designed for entrepreneurs. One of the program’s key goals  is to help entrepreneurs secure capital to invest in the technology they need to grow. Dell Financial Services and the Dell Innovators Credit Fund supply credit and leasing options, and the site also offers webcasts, videos and case studies from Dell, industry experts, and a community of entrepreneurs sharing their experiences.

With former President Bill Clinton on hand as the event’s marquee keynote speaker, Dell also announced that it is sponsoring this year’s Clinton Global Initiative University and support the entrepreneurship theme at CGI U 2013, which will be held at Washington University in St. Louis in the spring. The track is designed to help students and young entrepreneurs get the grounding they need to launch, run and grow a business, and the increasingly vital role of technology in building a successful business.

Quick Take

Yes, Dell still has to figure out how (or maybe even whether) to really differentiate and innovate in the client and particularly the mobile device battle.

But Dell World served to highlight that Michael Dell has crafted a strong vision and is sticking to it, building it through a series of strong acquisitions (compare this to HP’s Palm and Autonomy debacles) and solid technology directions. Combined, Dell has assembled many of the building blocks it needs to achieve its vision. And, Dell will keep filling in missing puzzle pieces, as evidenced just a few days after Dell World, when Dell completed its acquisition of Credant Technologies to fortify its data protection capabilities.

Meanwhile, Dell’s continuing commitment to provide solutions that scale up and down from the midmarket bode well for growing its footprint in the SMB market. In addition, Dell’s new initiatives to support entrepreneurs are a natural, given Michael Dell’s credentials as a poster child for entrepreneurial success. Through these programs, Dell will not only help young companies benefit from technology, but forge engagements with entrepreneurs that will fuel future directions with fresh insights.

Overall, Dell World 2012 demonstrated while Dell still lacks a magic bullet for the client device side of its business, it is making steady progress in its goal to supply the end-to-end IT infrastructure solutions and services that businesses need to support them.

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Report Card: 2012 Top 10 SMB Technology Market Predictions

Posted on November 28, 2012 by lauriemccabe

–by Laurie McCabe and Sanjeev Aggarwal, SMB Group

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

Prediction Score  Comments
1.     Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets 4 Year-over-year data from our annual SMB Routes to Market Studies indicated that more small and medium businesses (SMBs)* were forecasting flat or decreased IT spending heading into 2012 compared to 2011. Given SMB budget constraints and the plethora of solutions aimed at SMBs, vendors had to work harder to convince budget-constrained SMBs that their solutions would really help address top SMB business challenges to attract new customers, grow revenues and maintain profitability. More SMBs turned to lower-risk, pay-as-you-go cloud options, and several vendors (IBM, Dell and HP, to name a few) introduced new and/or enhanced financing options to help SMBs overcome financial hurdles.
2.     The SMB Progressive Class Gains Ground  5 We identified a distinct category of SMBs that we termed “Progressive SMBs,” who see technology as integral to achieving business goals and to gaining a competitive edge. Progressive SMBs invest more and purchase more sophisticated solutions than their counterparts. Trending analysis from our 2011 to 2012 Routes to Market Studies show that the percentage of SMBs in the Progressive category is growing. Furthermore, Progressive SMBs continue to gain ground over SMBs that skimp on technology in terms of expected business performance.
3.     The SMB Social Media Divide Grows  5 SMB adoption of social media did indeed jump, from 44% to 53% among small businesses (and from 52% to 63% among medium businesses from 2011 to 2012, based on trending analysis in our SMB Social Business Studies. The divide between social media haves and have-nots is also growing: our research reveals that 65% of SMBs that use social business tools anticipate revenue gains, while only 17% of “non-social” SMBs expect revenues to increase.
4.     Cloud Becomes the New Normal 4 SMBs haven’t swapped out all of their on-premises solutions in favor of the cloud–but the puck is clearly moving to the cloud in all application areas. The evolution is continuing at a steady pace, as evidenced by trending analysis in our annual SMB Routes to Market Studies. In some areas, cloud is poised to overtake on-premises solutions. For instance, over 30% of SMBs that purchased or upgraded collaboration, marketing automation, BI and data backup in the past 24 months chose cloud, and over 40% of SMBs planning to purchase solutions in those areas in the next month plan cloud deployments. 
5.     Mobile Application Use Extends Beyond Email to Business Applications 5 SMBs significantly ramped up mobile business application use and plans in 2012, as evidenced by trending analysis from our annual SMB Mobile Solutions Studies. More SMBs are providing mobile business apps to employees in categories ranging from CRM to time management to expense reporting.  In addition, adoption of external-facing (for customers, partners and suppliers) mobile apps and websites also rose considerably.  For instance, SMB use of a mobile-friendly website is up 10% among small businesses and 23% among medium businesses.
6.     Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate  3 The avalanche of data generated by cloud, social and mobile has certainly created the need for better analytics. However, year-over year trending data from our SMB Routes to Market Studies reveals a mixed bag in terms of adoption. Use of BI solutions among medium businesses spiked 24% in the past year, but adoption rose just 2% among small businesses. While vendors appear to be doing a good job of developing and marketing BI solutions tailored to the needs of medium businesses, they have not yet figured out the right formula for smaller ones.
7.     Managed Services Meet Mobile 5 We forecast that the explosion of mobile devices and apps, “bring your own device” (BYOD) phenomenon and the increasing concerns about security would spark increased demand for and more solutions to manage mobile on the back-end. Our annual SMB Mobile Solutions Studies show that SMB adoption of mobile management services—from simple device management to comprehensive mobile management platforms—has accelerated rapidly. For instance, 16% of SMBs have already deployed an outsourced mobile management platform, and 30% plan to do so within a year.
8.     The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions 5 Small businesses without a payroll make up more than 70% of America’s 27 million companies. We hypothesized that the 2008 recession and subsequent layoffs generated a new and often “accidental” breed of entrepreneurs that would spike demand for—and growth of—applications targeted to meet the needs of these businesses. And they have. New and improved cloud-based and mobile apps from traditional small business powerhouses (Sage, Intuit, Microsoft, Google, etc.), SOHO pioneers (Freshbooks, Nimble, Dropbox, Zoho, etc.), and freelance talent sourcing solutions from companies such as Elance and oDesk are making it easier than ever for SOHOs to get their work done.
9.     Increased Adoption of Collaboration and Communication Services in Integrated Suites 4 Trending from our Routes to Market Study Medium businesses shows that overall, use and plans to deploy collaboration solutions is up year-over-year. Low-cost, low-risk, cloud-based collaboration and communications services have made it easier for SMBs to use integrated collaboration tools, while eliminating the inconvenience of using multiple sign-ons and interfaces.The fact that vendors are integrating more into their offerings—such as  Google integrating Google+ hangouts, IBM SmartCloud Engage adding social communities and Citrix adding video capabilities to GoToMeeting—doesn’t hurt either.
10.   The IT Channel Continues to Shape-Shift. 5 Cloud, social and mobile trends continue to reshape how channel partners must deliver value across the board. SMBs are increasingly choosing to purchase directly from software and cloud vendors in most areas. And Managed Service Providers (MSPs) have gained ground as a purchase channel over VARs in several solution areas, including security, BI and collaboration. The need for more specialized business and/or technology expertise has also made some types of channel players more relevant in each specific solution category than others.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.

 

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NYEXPO Panel: Using Technology to Drive Innovation & GROW Your Business

Posted on October 19, 2012 by lauriemccabe

Thanks to all of you who came to our panel yesterday at NYEXPO,  Using Technology to Drive Innovation & GROW Your Business, moderated by Ramon Ray, Regional Development Manager, NY/NJ Infusionsoft and Editor of Smallbiztechonlogy.com, with panelists Shashi Bellamkonda, Sr. Director, Social Media, Web.com and Adjunct Marketing Professor at Georgetown University, and yours truly.

What a great event–I hope you got as much out of it as I did. Several of you asked for copies of the presentation, so I’m posting it here. For anyone who didn’t attend, our panel discussed the ground-breaking technologies–cloud, mobile and social–that are changing how small businesses operate, market and sell. I shared some market research and perspectives, Shashi provided social media guidance, and Grant gave us a great demo of the latest tools and gadgets that you may want to check out.

Enjoy and please let me know if you have any questions!

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The Technology—Performance Connection for Midmarket Businesses

Posted on September 10, 2012 by lauriemccabe

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

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

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

Figure 1: Increased IT Investments Pay Off For Midmarket Businesses

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

Cloud Computing and Virtualization Become the New Normal

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

Figure 2: Applications Moving to the Cloud

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

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

Mobile Mania Accelerates

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

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

Figure 3: Top Drivers and Obstacles For Mobile Solutions

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

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

The Social Imperative Grows

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

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

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

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

For instance:

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

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

Turning the Information Explosion into A Fountain of Wisdom

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

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

Getting the Job Done

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

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

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

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Tech Tidbits for SMBs: Elance

Posted on July 10, 2012 by lauriemccabe

I’ve had several interesting briefings in the last couple of weeks to tell you about. Since I won’t have the time to sit down and write them all up at once, I thought I’d dash them off as individual snippets instead.

First up is this post about Elance. Do you have too much on your to do list? Elance can help you find a contractor to help you get the job done. Or maybe you’re on the flip side of the coin as a contractor looking for work. Either way, Elance can benefit you. Its mission is to provide companies with “instant access to talent” through an online network of contractors and tools that make it easy to find, hire, manage and pay them.

Since my last briefing with Elance, it has grown at an impressive pace. Today, Elance has 1.3 million tested and rated contractors in its fold, and garners about 2,500 new job posts per day. While its original focus was on IT professionals, Elance has diversified to add lawyers, accountants, designers, writers and accountants on its roster.

No doubt that Elance owes part of its growth to the trend we labeled as that of “The Accidental Entrepreneur” in our SMB Group 2012 Top Ten SMB Technology Predictions. We discussed the fact that as unemployment has increased, so have the number of freelancers, contractors, independent consultants and others choosing to go it alone. According to the Census Bureau, small business without payroll makes up more than 70 percent of America’s 27 million companies, with annual sales of $887 billion.

The good news for these solo entrepreneurs is that Elance recently surveyed 1500 small businesses and found that 73% plan to hire more contractors online in the next 12 months. Why? Because it provides them with the competitive advantage they need to get things done faster, better and at lower costs–and helps them to present a larger, more professional image to their customers.

While it’s always tough to take that first plunge to hire a contractor online, Elance provides a community rating system to help you vet potential candidates. Once you select someone to work with, the Elance platform provides tools, such as a workroom with Skype, to help you connect and work together more easily. Real-time time tracking and status updates are built into the system, as are invoicing and payments. Elance also has an escrow process that protects both parties by pre-funding work and releasing payments only when results are approved. And Elance takes care of basic paperwork (such as 1099 forms) to help ensure compliance.

Whether you’re a small business that needs an extra pair of hands, or a solo entrepreneur looking for a new project, Elance could be a great fit.

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What Can We Learn From This Year’s Holiday Season?

Posted on February 1, 2012 by lauriemccabe

—by Brent Leary, CRM Essentials

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

Christmas 2011 is a great example of Smarter Commerce in action.  It’s a lesson in why businesses need to transform the way they market and sell their products and services.  According to the National Retail Federation, retail industry sales for the 2011 holiday season increased 4.1 percent year-over-year to $471.5 billion, beating its expectation of 3.8 percent growth.  And while the overall numbers probably made for a pleasant holiday for the industry as a whole, what was happening online was astounding:

  • US online holiday shopping season reaches a record $37.2 billion, up 15 Percent vs. 2010 – a rate of increase almost 4X higher than the overall rate for retail.
  • A post-holiday 2011 retail study from Kabbage, Inc. focusing on small-to-medium online merchants found 69% of respondents reporting increased sales. On average, study participants experienced a 32% hike in sales compared to the 2010 season.
  • As late as one week before Christmas 2011, one-quarter of consumers hadn’t even started holiday shopping. (Consumer Reports)
  • 93% of retailers have offered free shipping at some point during the season vs. 85% last year. (USA Today)
  • The 2011 US Holiday Season edition of the ForeSee Results E-Retail Satisfaction Index of the top forty Internet retailers increased by a point from 78 to 79 (on a scale of 1-100)
  • Almost one in four retail searches online on Christmas Day were made using mobile phones or tablet devices, according to the British Retail Consortium (BRC).
  • The number of adults in the United States who own tablets and e-readers nearly doubled from mid-December to early January, according to a new Pew Research study. (New York Times)

Technology’s Impact on Behavior Is Accelerating

The world is changing.  While still a fraction of the overall sales figures, ecommerce is growing at a much faster rate than traditional retail.  And not just for the big retailers.  As the Kabbage study illustrates, small and midsize online retailers enjoyed tremendous growth as well.  This in part stems from the effect technology is having on the customer buying process, and the ability of companies to adapt their business processes to support online shopping.

When you think about twenty-five percent of shoppers not starting their Christmas shopping until after December 18th, it really hits home how the process of shopping has changed.  Five to ten years ago most people still were going to multiple stores in search of ideas for things to buy, to find recommendations, compare items, and to look for deals, so they had to start their shopping efforts earlier.  Now they can do most of that online – with a lot less time involved.  And from the online retailer’s perspective, they leverage the latest technology not only to provide this information to online shoppers, but also to deliver the goods on time as well.  Jewelry specialist Blue Nile offered free FedEx shipping guaranteed to arrive by Saturday, December 24, for all orders placed as late as 7 p.m. the day before (Friday, December 23). And other online retailers offered similar shipping capabilities.

This all adds up to shoppers more efficiently finding what they want, knowing the price they want to pay and having the confidence of getting it in time – with the added benefit of not having to wrestle with issues like parking, crowded malls, weather etc..  And as both companies and consumers accelerate their technology adoption, look for ecommerce to steadily increase its portion of the retail pie while customers leverage social and mobile to decrease the time and effort it takes to buy things.

Technology’s Impact on Behavior is Dramatically Affecting Expectations

One of the more interesting developments is how technology is impacting customer expectations as well as their behavior.  Now that companies like Amazon can get items to us in two days for free, we expect this kind of service all the time.  And while 93% of them did offer free shipping at some point during the holiday season, a study also showed 73% of consumers recently surveyed by MarketLive named “free returns” as a top promotion in determining their online purchasing behavior.

This is a great example of customers understanding what technology can do, and expecting vendors to find ways to leverage it to continuously improve their shopping experience.  And improving the experience is crucial to keeping customers satisfied.  According to the ForeSee study, satisfaction scores are important because a one-point change in website satisfaction can predict a 14% change in revenues generated on the web.  And when they were highly satisfied with a purchase:

-   64% of survey responders said they were more likely to buy from the same company the next time they needed a similar product;

-   67% were more inclined to recommend the company to others; and

-   65% felt a sense of ‘brand commitment’.

This illustrates that investing in improving customers’ web experience is a terrific way to build brand loyalty and capture the benefits of viral marketing (or something like this).

A Christmas Carol…

You really don’t have to look much further than Christmas Day 2011 to see how technology has changed customer behaviors and expectations.  Digital content & subscriptions (digital downloads of music, TV, movies, e-books and apps) accounted for more than 20 percent of sales on Christmas Day. On any other day of the holiday season, that number was only 2.8%.  And these numbers were driven by the rise of mobile devices, with the iPad leading the way on Christmas Day with a staggering 7% of all online sales coming through just that one device – accounting for 50% of sales that day, according to the IBM Coremetrics Benchmark.

While the numbers tell the story, it really hits home personally when I saw my parents (both octogenarians) sitting at the kitchen table Christmas Day  – my father with his iPad, and my mother with her Kindle Fire.  And my mother, having received the Fire as a gift, was reading an ebook she purchased Christmas morning… with an Amazon gift card.

This is a totally different story of Christmas than Charles Dickens told in the 19th century, but it’s a tale of what to expect in the 21st century when it comes to customer engagement.  Because of technology and its empowering effect on customers, they are developing “great expectations” their vendors must live up to.  Which means vendors must be smarter in their approach to smarter, more informed customers.

This is the fourth of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points to consider when planning a smarter commerce strategy. In our next post, we’ll look at IBM’s Smarter Commerce offerings to help illustrate how midsize companies can reshape the way they do business to meet the expectations and needs of smarter customers.

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Closing the Business Intelligence Gap for Small Businesses

Posted on January 27, 2012 by lauriemccabe

Most small and medium businesses (SMBs) can relate to Albert Einstein’s famous quote that  “Information is not knowledge.”  Many SMBs have plenty of data, but find it challenging to get the insights from it that they need to run their businesses more effectively and efficiently.

Businesses have always needed the ability to track and measure critical success metrics in a quantifiable way. The problem is that when there’s too much information, people find it difficult to fully comprehend it and make decisions. In fact, more than one-quarter of SMBs in our 2011 SMB Routes to Market Study indicated that “getting better insights from the data we already have” as a top technology challenge.

And the problem is growing: Scientists report that more than1.2 zettabytes of digital information were created in 2010. What’s a zettabyte, you may wonder? (I know I did.) A zettabyte is 1,000,000,000,000,000,000,000 bytes–yes, that’s 21 zeroes! Online video, social networking sites, digital photography, and smart phone data are all contributing to the data pile-up. If that’s not enough to make your head spin, researchers also predict that the annual rate at which we collectively produce data will soar 44 times over the next decade.

The Gap Between BI Haves and Have-nots

Business intelligence and analytics solutions are designed to help make sense of all of this information. However, many SMBs often view these solutions as too complex and/or expensive. And companies without an accurate, consistent and accessible data source face the additional challenge of aggregating and rationalizing data from different sources.

SMB Group surveys reveal that the smaller the company, the less likely they are to use or plan to use BI solutions (Figure 1).  Our 2011 SMB Routes to Market Study showed that while 33% of midsize businesses currently use and 28% plan to use BI solutions, among small businesses, just 16% currently use and 16 % plan to use BI solutions.

Figure 1: SMB Use and Plans for Business Intelligence Solutions

Source: SMB Group 2011 SMB Routes to Market Study

The danger is that relying on hunches and intuition alone can put you at risk of missing trends and market opportunities or spotting potential problems–all of which can hurt business performance.

Some of the warning signs that your company’s growth may be hampered due to an inadequate ability to analyze data are shown in Figure 2.

Figure 2: Warning Signs That Your Company Has a Data Analysis Problem

Source: SMB Group

Closing the Gap

Adding a BI solution on top of disparate, inconsistent and unreliable data is like putting lipstick on a pig.  So you need to start by establishing a core foundation of common, trustworthy and accessible data that’s shared across core business applications and processes. If you already run your business with an integrated business solution that pulls everything together into “one version of the truth”, you’ve already fulfilled this requirement. If not, you’ll want to integrate or upgrade the core solutions that your business relies on to ensure that you have a consistent and unified data source.

With this foundation in place, BI tools, dashboards and reports can help you to zero in on the insights you need to move your business ahead. The good news for SMBs is that several vendors now provide BI solutions tailored to meet SMB requirements and budget constraints. The bad news is that it can be difficult to figure out which one will be the best fit for your business.

While there is no “one-size fits all” solution that will be right for all companies, you can start by determining the core metrics that your business needs to measure. Many of these are likely to be areas that you need to measure and track long-term. Depending on the type of business you’re in, these could include things such as:

  • The percentage of income you derive from repeat customers vs. new customers
  • Times for order to ship, ship to invoice and receivables overdue
  • Time to respond to and close customer service calls
  • Procurement and spending analysis
  • Employee turnover rate

Given the pace of change in your industry, your business goals and the overall economy, you’ll probably want to make additions and adjustments over time as well, so look for a BI solution that can adapt to your needs as they change.

Figure 3 provides a checklist of additional questions to ask as a starting point to evaluate different BI solutions.

Figure 3: Key Considerations When Evaluating BI Solutions

Source: SMB Group

Getting the insights you need from a rising avalanche of information isn’t easy–but it is a critical business success factor. With the right BI tools in place, you can harness the data you have to get the wisdom you need to grow your business and stay ahead of the competition.

 

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Slideshow: Top 10 SMB Technology Predictions for 2012

Posted on January 4, 2012 by lauriemccabe

Each year, the SMB Group offers its Top 10 SMB Technology Predictions. In 2011, we created a slideshow version. Due to popular demand, we’ve created a slideshow version of our 2012 predictions, which are summarized below.

  1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
  2. The SMB Progressive Class Gains Ground
  3. The SMB Social Media Divide Grows
  4. Cloud Becomes the New Normal
  5. Mobile Application Use Extends Beyond Email to Business Applications
  6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
  7. Managed Services Meet Mobile
  8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
  9. Increased Adoption of Collaboration and Communication Services in Integrated Suites
  10. The IT Channel Continues to Shape-Shift

For the more detailed text version, see our 2012 Top 10 SMB Technology Market Predictions.

For a look back on 2011 trends, see Report Card: 2011 Top 10 SMB Technology Market Predictions.

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Top 10 SMB Technology Predictions for 2012 from the SMB Group

Posted on December 12, 2011 by lauriemccabe

Last week  we published a report card on our last year’s top 10 market predictions for 2011.

Here are the SMB Group’s Top 10 SMB Technology Predictions for 2012! A more detailed description of each follows below.

  1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
  2. The SMB Progressive Class Gains Ground
  3. The SMB Social Media Divide Grows
  4. Cloud Becomes the New Normal
  5. Mobile Application Use Extends Beyond Email to Business Applications
  6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
  7. Managed Services Meet Mobile
  8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
  9. Increased Adoption of Collaboration and Communication Services in Integrated Suites
  10. The IT Channel Continues to Shape-Shift

2012 Top 10 SMB Technology Market Predictions in Detail

  1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets. After the Great Recession officially ended in 2009, the U.S. economy resumed moderate economic growth in 2010—and the SMB outlook for 2011 became fairly bullish. But new economic worries and uncertainties are dampening some SMB outlook. Our 2011 SMB Routes to Market Studyindicated that SMBs are less confident about their revenue prospects for 2012: 56% of small and 63% of medium businesses are forecasting revenue growth for 2012, compared to the 77% of both small and medium businesses that forecasted growth for 2011. And many SMBs are tightening their tech wallets: More are forecasting flat or decreased IT spending for 2012 compared to 2011. To loosen the purse strings, tech vendors must deliver a rock-solid case for how their solutions help address top SMB challenges—which are to attract new customers, grow revenues and maintain profitability. In addition to broadening subscription-based cloud solution options (which offload big upfront investments), more vendors will offer flexible, alternative financing to help ease the financial burden—and gain a leg up on competitors.
  2. The SMB Progressive Class Gains Ground.That said, we also see a distinct category of SMBs that we are terming “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT spending. These SMBs see technology as a vital tool for business transformation, a mechanism to create market advantage and a way to level the playing field against bigger companies. Although price is still a key factor for Progressive SMBs, they are more likely to rate other factors—such as easier to customize for my business, strong reputation and brand, and ability to provide local service and support—higher than other SMBs when making technology decisions, according to our 2011 SMB Routes to Market Study. Progressive SMBs invest more in technology and see the results in terms of higher revenue expectations. For instance, 73% of medium businesses that are investing more in technology anticipate revenue increases in 2012, compared to just 17% among those decreasing IT spending. Technology vendors need to develop different marketing campaigns and more sophisticated solutions for Progressive SMBs than for their counterparts to win in this very important segment.
  3. The SMB Social Media Divide Grows. SMB use of social media is rising. According to our 2011 Impact of Social Business in Small and Medium Business Study, about 50% of SMBs already use social media, and another 25% plan to do so within the next 12 months. The study revealed that about half of SMBs take a strategic and structured approach with social media. These “strategically social” companies use social media for more activities, use more channels and are more satisfied with the business results than the other half of SMBs that are still throwing spaghetti on the Facebook wall. These more informal, ad hoc users say that they don’t have enough time to use social media effectively; they can’t decide what social media strategies and tools will work best; it’s too difficult to integrate social media with sales, marketing, service and other business processes; and they are unable to measure value from social media. As new social media tools—from crowd-sourced pricing to video commerce—take shape, SMB social media “haves” will gain business ground on the “have-nots” in an exponential manner. As the have-nots lose ground, they will clamor for better social media guidance and easier-to-use, better integrated and more affordable social media management solutions.
  4. Cloud Becomes the New Normal. Is the cloud perfect? No. Is it right for every solution and every business? No. But that said, the rate and pace of technological change are in overdrive, and the need for businesses to harness new technology-based solutions—social, mobile, analytics, etc.—to maintain a business edge is rising. Our 2011 SMB Routes to Market Studyresults reveal that demand for cloud-based solutions is accelerating in almost all solution areas. For instance, in the past 24 months, only 7% of small businesses purchased or upgraded cloud accounting/ERP solutions, compared with 13% that plan to purchase them in the next 12 months. Areas that show the biggest potential for cloud gains in 2012 are marketing automation, business intelligence/analytics, and desktop virtualization solutions and services. Most SMBs simply don’t have the staff, expertise or capital budgets needed for do-it-yourself IT—and they can’t afford the time it takes to get business payback from a solution that they need to vet, buy, install and deploy in-house. This makes the arguments for cloud computing—reduced capital costs, speed to deploy, and real-time collaboration and visibility—compelling. Demand for anytime, anywhere, any-device mobile access to applications will also accelerate cloud adoption, as many SMBs will want to offload management of mobile applications to a cloud solutions provider too. Enterprise players such as Oracle (with RightNow) and SAP (with SuccessFactors) have already begun their cloud shopping sprees. Look for traditional SMB vendors (Intuit, Microsoft, Sage, etc.) to join in the fun.
  5. Mobile Application Use Extends Beyond Email to Business Applications. In a custom study we completed this summer, SMBs indicated that they plan to significantly increase spending on mobile devices and services in the next 12 months, with the highest jump in the 5-to-49–employee size band. The study revealed that with mobile use of collaboration apps (email, calendar, etc.) now mainstream, SMBs are mobilizing business applications. Some of the strongest categories for SMB current and planned mobile app use are mobile payments (52%), time management (59%), field service (59%), and customer information management (69%). This rapid uptake will also include more vertical apps that are a perfect fit for industry-specific needs, especially given the choice of both smart phone and tablet (read: iPad) form factors. Unfortunately, our crystal ball is cloudy when it comes to predicting if another vendor will be able to give Apple a run for its money in the business-use tablet market.
  6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate.According to our 2011 SMB Routes to Market Study, 16% of small and 29% of medium businesses purchased/upgraded a BI solution within the past 24 months, and 16% and 28%, respectively, plan to do so in the next 12 months. The social-mobile-cloud triumvirate will fuel new and increased SMB investments in this area as businesses try to plow through the growing data avalanche to get to the insights they need to grow their businesses. As SMBs try to get a better handle on customers’ and prospects’ opinions and influence networks, interest in sentiment analysis and social graphing solutions will grow. New mobile access capabilities and applications from BI vendors designed to provide SMBs with just the information they need, when and where they need it, will spur interest as well. Finally, our study indicated that roughly a third of SMBs use or plan to use cloud-based BI and analytics solutions. An expanding array of cloud options in this area will make it easier and more affordable for more SMBs to deploy these solutions.
  7. Managed Services Meet Mobile.Despite momentum toward the cloud, it will continue to be a hybrid world for a very long time. Many SMBs will continue to use existing on-premises apps and choose on-premises deployment as security, regulatory or other needs dictate. So most SMBs will continue to grapple with IT infrastructure management—even as new mobile device management and governance challenges grow. SMB adoption of mobile phones and tablets is now on par with that of traditional landline phones, according to our 2011 SMB Collaboration and Communication Study. With employees more likely to lose a smart phone than a laptop, security issues abound and will only increase. The “bring your own device” (BYOD) phenomenon creates additional concerns, not least of which is to create a firewall between personal and business data. These SMB challenges provide ample opportunity for wireless carriers, networking vendors, MSPs and others that can provide integrated and automated managed services. These are likely to include services that encompass management of cloud-based infrastructure and all end-point devices, from desktop PCs, tablets and smart phones to purpose-built mobile devices; network services to reduce downtime and help optimize the network that mobile access relies on; and support for cloud-based dual-persona solutions on personal mobile devices.
  8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions.As unemployment has increased, so has the number of freelancers, contractors, independent consultants and others choosing to go it alone. According to the U.S. Census Bureau, small businesses without a payroll make up more than 70% of America’s 27 million companies, with annual sales of $887 billion. Many entrepreneurs never intended to take this path, but stay solo because they prefer it to going back to the corporate payroll. Others stick it out due to limited employment options. Either way, more accidental entrepreneurs view what they’re doing as a long-term business venture instead of a short-term stopgap. As a result, they see themselves more as business owners than as freelancers or contractors. But many have no intention or desire to hire employees. This will spike demand for—and growth of—applications and services that help them to achieve their business goals without adding employees. Traditional small business powerhouses (Intuit, Sage, etc.), pioneers in the SOHO space (FreshBooks, Shoebox, Zoho, etc.), new start-ups and others will increasingly cater to their needs with solutions that make it easier for them to fly solo—whether from a home office or on the go.
  9. Increased Adoption of Collaboration and Communication Services in Integrated Suites. As evidenced in our 2011 SMB Collaboration and Communication Study, the SMB pendulum is swinging from point solutions for voice, communications, social media and collaboration solutions to integrated suites. Medium businesses are leading the charge, with 28% currently using an integrated collaboration suite, and 35% planning to do so in the next 12 months. Small businesses are slower to make this leap, but a transition is under way here too. By moving from disparate point solutions to an integrated offering, SMBs can avoid the hassles of learning to use multiple user interfaces, going to different sites to login and remembering different passwords—in short, things that waste time and frustrate users. They also can lower costs and improve their ability to collaborate effectively. A growing roster of low-cost (or free), easy-to-use integrated collaboration suites (Google Apps, Microsoft Office 365, IBM LotusLive and HyperOffice, to name a few) are adding fuel to the convergence fire—although vendors will still need to address the obstacle of user resistance to learning something new.
  10. The IT Channel Continues to Shape-Shift. The trend triumvirate—cloud, social and mobile—is also reshaping the IT channel. These trends are moving the goal posts and changing the ways in which channel partners add value. Cloud computing reduces the need for hardware, software and infrastructure deployment skills, and ups the ante for educational guidance, business process transformation and integration skills. Re-imagined channel partner programs from vendors such as Intacct and IBM’s Software Group have blossomed as they shift partner rewards to focus more on value-add and renewals. Meanwhile, non-traditional IT partners, such as creative and marketing agencies, have stepped in to fill a gap by providing social media and digital marketing services for solutions such as Radian6 and HubSpot. In the mobile domain, partners will need to bring more value to help SMBs develop and implement mobile strategies, and offer solutions to manage mobile devices and applications and provide better network performance, reliability and redundancy. As with any significant inflection point, the cloud-social-mobile trend necessitates that older partner models continue to move aside as new, more relevant ones take shape.

For more information, please visit the SMB Groupweb site at http://www.smb-gr.com, contact us at (508)410-3562 or send an e-mail to information@smb-gr.com

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