Modernize your Business with Predictive Insights: Paving the Way for Business Growth

Businesses have always needed the ability to track and measure critical success metrics in a quantifiable way. Yet this is often a tall order for midsize businesses (100 to 1,000 employees) to address. The problem is that when there’s too much information, people find it difficult to fully comprehend it and make informed decisions. In fact, in our 2017 SMB Routes to Market Study, midsize businesses indicated that “getting better insights from the data we already have” as one of their top technology challenges.

Figure 1: U.S. Midsize Business Top Technology Challenges

We live in an age where technology is transforming virtually every industry. As a result, midsize business decision-makers face added pressure to “read the tea leaves” to reduce uncertainty. In this shifting business environment, simply analyzing past performance is no longer enough. You also need predictive capabilities to anticipate trends so they can plan for what’s likely to happen in the future.

A new generation of powerful, yet cost-effective and easy-to-use cloud-based analytics solutions can help level the analytics playing field for midsize businesses. The solutions offer the insights you need to answer key business decisions, such as “Who are my best customers?” or “How can we better match market demand with product supply?” or “How can I recruit and retain employees with the skills the business needs?” Armed with the right insights, you can better assess how they are doing today, and plan for what they should be doing in the future to optimize business performance.

This means that now is a great time for you to rethink your approach to business intelligence and analytics. In this paper, we examine why businesses should start using modern, predictive analytics solutions, and how they can help your business stay on ahead of new trends, opportunities and market shifts.

Dealing With the Data Rush

“Big data” is a big buzzword in the IT industry—and for good reason. According to IDC, 1.7MB of new information is being created for every human on the planet, every second of every day, and 180 zettabytes of digital data will be generated worldwide by 2025.

While zettabyes may be hard to wrap your head around, just consider all of the different types of information that’s moved from physical to digital form over the last several years:

  • Doctors have moved from paper charts to electronic medical records.
  • Merchants have moved from paper credit card imprinters to POS terminals to virtual terminals to mobile payment devices.
  • Internet of Things (IoT) technology is equipping objects—from Fitbits to traffic sensors to seismographs—to record, report and receive data, and create entirely new digital data streams.
  • People are growing their digital footprints on a myriad of social networks, and via their interactions with the companies they do business with.

Figure 2: U.S. Medium Business Attitudes About Decision-Making and Use of Analytics Solutions

Although 62% say they currently use an analytics solution to support this data-driven approach, many midsize businesses rely primarily on spreadsheets or homegrown tools for data analysis: In SMB Group surveys, spreadsheets are the most frequently used analytics tool among midsize companies. Because they don’t often have data scientists on staff, many feel that moving from basic tools that analyze internal, transactional data to a more comprehensive analytics approach is out of reach.

Figure 3: U.S. Midsize Business Top Business Challenges

The Limitations of Spreadsheets

As Albert Einstein noted, “Information is not knowledge.” Midsize businesses may have plenty of data, but if they’re using spreadsheets, they will reach a tipping point where they lack the means to extract knowledge and insight from it. In fact, many midsize businesses struggle to get the information they need to meet the wide range of complex business challenges (Figure 3) on their plates.

This is because as powerful as spreadsheets are, they have limitations that can lead to inefficiencies and expose the business to potentially damaging risks, such as inaccurate calculations and security breaches. When spreadsheet analysis is the norm, it’s also likely that everyone is crunching their own data–which can results in conflicts about what’s the “right” version of the truth.

In addition, spreadsheets must accommodate the increasing volumes of digital information that are being created every day. But as spreadsheets grow, they also get slower. It takes more time to run queries, and links and formulas are more likely to break.

Finally, spreadsheet analysis is typically limited to providing information to tell you about what’s already happened–limiting most midsize businesses to using analytics for descriptive purposes only (Figure 4). This stops short of answering predictive questions that can you evaluate what could happen in the future, or providing insights about possible outcomes so you can determine the best course of action for a given situation.

Figure 4: Ways in Which U.S. Midsize Businesses Use Analytics

 Advancing Your Business with Predictive Insights

But new technology is advancing at warp speed in the analytics space. Vendors are building powerful, yet easy to use solutions that help midsize businesses gain the benefits of predictive insights so they can stay ahead of market and competitive trends.

These solutions use database technologies that can deal with both structured data, such as transactional data from orders or payments, as well as unstructured data, such as emails. They can pull in and analyze both internal data, as well as data from external sources, such as social media. They also use technologies to speed data processing, number crunching and analytics to deliver analysis more quickly to decision-makers.

Modern predictive analytics solutions are also easier to “layer” on top existing data than in the past. As important, they are often designed for business users, offering capabilities such as:

  • User-friendly interfaces, with guided discovery to make it easier to ask the questions that will lead to “aha” moments and insights.
  • Visualization tools that turn rows of data into visuals that represent what the data says in intuitive ways that makes it easier to communicate the story the data is telling.
  • Natural language capabilities so users can easily query the data.

Some vendors provide pre-packaged applications that integrate all of the components necessary for analytics solution, including connectors to business solutions; the data model; tools to extract, transform and load (ETL) data; a semantic layer; query and reporting capabilities; and predefined metrics, reports and dashboards. Many solutions offer free-trials, and are available as subscription-based services. This takes the friction out of the buying process, and makes using analytics solutions much more affordable.

For instance, IBM offers a free trial for SPSS Statistics and a Subscription payment model of $99/month, without any term commitments, from the IBM Marketplace.

The self-service offering is easy enough for business users to learn to use, while also providing advanced capabilities that data scientists expect. From one online interface, users can subscribe to and download SPSS Statistics Service, which will help you to:

  • Improve business decision-making processes and business outcomes by quickly gaining insights from data sets in any format, including spreadsheets.
  • Eliminate labor-intensive manual checks with advanced data preparation capabilities.
  • Monetize the data you own by analyzing trends, forecasting, and planning to validate assumptions and drive accurate conclusions.

Users can input and aggregate data from multiple sources–whether from spreadsheets, email, call center notes, transactional data, sensors, social media or other inputs. Once the data is aggregated, decision-makers can get a clearer view of the business and the market, and get everyone on the same page to enable more efficient and effective decision-making.

With these capabilities, you can start thinking about moving beyond descriptive analysis, which provides insight into the past to answer, “What has happened?” to predictive analytics, which use statistical models and forecasts techniques to understand the future and to answer, “What could happen?” For instance, you can use predictive analytics to anticipate customer behavior and purchasing patterns, predict sales profitability trends, or forecast inventory demand, such as:

  • Who are my best customers?
  • How can I reduce customer churn?
  • Where should I open a new store or facility?
  • How is a new competitor affecting my business?
  • How can I improve employee engagement and performance?

As a result, you’ll be able to more readily identify and act on opportunities for cost savings, efficiencies and new business opportunities. Because SPSS Statistics Service is subscription-based, businesses can adjust resources up or down as needed for peak decision-making times, such as during the holiday season for retailers.

Smoothing the Shift

Although analytics solutions have gotten easier to access, use and gain insights from, Inertia and the tendency to stick with “the devil you know” prevent many businesses from moving from spreadsheets to more capable analytics solutions. In most cases, key stakeholders must be on board to help spearhead this shift.

One of the best selling points for this transition is that many studies show that businesses that can effectively harness and use data can gain dramatic market advantages over those that don’t: SMB Group’s 2017 SMB Routes to Market Study shows that midsize businesses that use “purpose-built” analytics solutions are 80% more likely to expect revenues to rise than those that rely on spreadsheets for business analytics.

Often, a good way to get started down a successful path is to cherry pick your first use case. Determine the most obvious missing information links, and at those where having better insights would yield the most immediate value. You should also identify areas where spreadsheet use is heaviest, as this may indicate that people looking for better business decision support and may be more willing to try new tools. Choose a place where you can quickly demonstrate the value, and build from there.

The best place to start will differ for every firm, but here are some pain points questions to think about in different functional areas to get started:

  • Sales and marketing: Is the organization more reactive than pro-active in addressing critical situations such as declining pipeline, increase customer churn, lowering conversion rates. Do you lack visibility into sales and marketing activities and effectiveness? Does a lack of visibility into customers’ buying trends undermine your ability to up-sell and cross-sell?
  • Finance: Does it take too long to close the books? Is it difficult to measure actuals against targets? Is it challenging to analyze large volumes of data? Is the budgeting process complex, inefficient and lengthy? Do you spend too much time producing reports for others in the organization?
  • Operations, manufacturing and customer service: Does the team lack visibility into overall performance of the supply chain, preventing them from taking timely corrective action? Is it difficult and complex to adjust to shifting customer needs and demands? Is there information disconnect with other departments, such as sales and marketing?

Across business functions, predictive analytics provides insights to help you solve these problems by answering three critical questions:

  • How are we doing?
  • What is driving our current performance?
  • What should we do to improve results?

As a result, managers can make better, faster decisions to drive growth, reduce costs and create better business outcomes.

Summary and Perspective

While decision-makers must do their homework to determine which analytics solutions will be the best fit for their businesses, the advantages of fact-based decision-making cannot be underestimated.

At a time when the business environment is undergoing rapid transformation, and information is proliferating at an unprecedented rate, midsize businesses need an intelligence edge that spreadsheets can’t provide. Being able to easily access, understand, analyze, report and act on critical information will increasingly become a make or break factor for business success.

Predictive analytics solutions can provide midsize companies with insights needed to spot new opportunities, avoid mistakes and identify small problems before they mushroom into big ones–and stay ahead of market trends and the competition.

© SMB Group, 2017

SMB GROUP, INC.

SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is composed of many smaller, more discrete markets. Within the SMB market, SMB Group’s areas of focus include Emerging Technologies, Cloud Computing, Managed Services, Business and Marketing Applications, Collaboration and Social Media Solutions, IT Infrastructure Management and Services, IoT and Green IT. Read our 2017 Top 10 SMB Technology Trends for our views on game-changers in these and other areas of the SMB market.

Sponsored by IBM

Using Cloud Analytics to Make Big Data Actionable For SMBs

abstract data

“Big data” is a big buzzword in the IT industry—and for good reason. Basically, we’re doubling the amount of digital data that we create every two years, according to the EMC Digital Universe Study. Think about all of the different types of information that’s moved from physical to digital form just over the last several years.

Doctors have moved from paper charts to electronic medical records; merchants have moved from paper credit card imprinters to POS terminals to virtual terminals to mobile payment devices. Internet of Things (IoT) technology is equipping objects—from Fitbits to traffic sensors to seismographs—to record, report and receive data, and create entirely new digital data streams. And everyone is growing their digital footprint on myriad of social networks, and with the companies they do business with,

Organizations that can effectively harness and use this information can gain dramatic market advantages over those that don’t: SMB Group’s 2015 SMB Routes to Market Study shows that SMBs that have deployed analytics solutions are 14% more likely than peers to expect revenues to rise than peers that rely on spreadsheets for business analytics.

But let’s face it—most small and medium businesses (SMBs) don’t have dedicated data scientists on staff. Without this type of in-house expertise available, SMBs feel that moving from basic tools that analyze internal, transactional data to a more comprehensive analytics approach is out of reach.

However, a new generation of powerful, yet cost-effective cloud-based analytics solutions are emerging that can help level the analytics playing field for more SMBs.

Cloud Is the New Normal for SMBs

SMB adoption of cloud solutions has grown steadily over the last few years (Figure 1) to become part of the business fabric for most SMBs. In fact, SMB Group’s 2015 SMB Routes to Market Study reveals that SMB cloud deployments are poised to overtake on-premises deployments in the next year in areas such as collaboration, file sharing and marketing automation.

Figure 1: Trends In SMB Cloud AdoptionSlide1
SMBs are moving to the cloud include because they view it as a more cost-effective, flexible and faster way to deploy IT solutions (Figure 2). Cloud computing take care of IT infrastructure, applications, and ongoing management and support, offering SMBs economies of both scale and skill.

Figure 2: Top Reasons Driving SMB Cloud AdoptionSlide2

Analytics Meets the Cloud

In the analytics space, in which technology is advancing at warp speed, cloud analytics providers are building powerful, yet easy to use analytics solutions that few SMBs would have the resources or expertise to build on their own.

For instance, cloud analytics solutions often utilize database technologies that can deal with both structured and unstructured data, so that you can analyze different types data from both internal and external sources. They also use technologies to speed data processing, number crunching and analytics to deliver analysis more quickly to decision-makers.

Some vendors provide pre-packaged applications that integrate all of the components necessary for analytics solution, including connectors to business solutions; the data model; tools to extract, transform and load (ETL) data; a semantic layer; query and reporting capabilities; and predefined metrics, reports and dashboards.

In addition, cloud analytics providers build their infrastructures and services to support thousands of companies. This means they can offer customers on-demand scalability to adjust resources up or down as needed for peak decision-making times, such as during the holiday season for retailers.

Cloud analytics also gives everyone access to the same information in real-time. Instead of trying to reconcile data from different spreadsheets and applications, everyone is automatically on the same page in terms of data so they can reach consensus and make decisions more quickly.

As important, cloud analytics solutions are often designed for business users, offering capabilities such as:

  • User-friendly interfaces, with guided discovery to make it easier to ask the questions that will lead to “aha” moments and insights.
  • Visualization tools that turn rows of data into visuals that represent what the data says in intuitive ways.
  • Natural language capabilities so users can easily query the data.

With these capabilities baked in, SMBs can start thinking about moving beyond descriptive analysis, which provides insight into the past to answer, “What has happened?” to more sophisticated analysis, including:

  • Predictive analytics, which use statistical models and forecasts techniques to understand the future and to answer, “What could happen?” For instance, you could use predictive analytics to anticipate customer behavior and purchasing patterns, predict sales profitability trends, or forecast inventory demand.
  • Prescriptive analytics, which use optimization and simulation algorithms to provide advice on possible actions to answer, “What should we do?” For example, Google’s self-driving car uses prescriptive analytics to decide whether and when the car should change lanes on highway by anticipating what might be coming in terms of traffic and other drivers.

SMB Preference for Cloud Analytics Is Growing

As in other solution areas, more SMBs are opting to analytics solutions in the cloud (Figure 3). SMB Group’s 2015 SMB Routes to Market Study shows among the SMBs that have purchased or upgraded an analytics solution in the past 24 months, 62% selected an on-premises solution, while 38% chose a cloud option. Looking ahead, however, just 40% of SMBs that are planning to purchase and/or upgrade analytics solutions are planning to buy an on-premises solution, while 42% are planning to use a cloud offering, and 18% have yet to decide.

Figure 3: SMBs’ Current and Planned Solution Deployment Methods for Business Intelligence/AnalyticsSlide3

Summary and Perspective

At a time when information is proliferating at an unprecedented rate, SMBs need to be able to easily access, understand, analyze, report and act on critical information. With the right tools, decision-makers can spot new opportunities, avoid mistakes and identify small problems before they mushroom into big ones.

Fortunately, more vendors are building powerful yet cost-effective cloud-based analytics solutions that are much easier to “layer” on top existing data than in the past. Designed for business users, these solutions offer user-friendly interfaces, guided discovery, visualization tools and natural language capabilities to help bring data to life.

While SMBs must still do their homework to determine which of the growing list of cloud analytics solutions will be the best fit for their businesses, the advantages of fact-based decision-making cannot be underestimated. The trend towards cloud analytics will likely strengthen in 2016, as more SMBs continue to opt for solutions that are easy to buy and use and can provide faster and better value to the business.

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.  

As The Cloud Turns: Dell’s 1-5-10 Cloud Roundtable

The roots of cloud computing date back to the late 1990s, but the “cloud” continues to evolve—as does the conversation about its impact on technology and business. So I welcomed the opportunity to moderate a discussion of cloud past, present and future at Dell’s recent 1-5-10 Cloud roundtable in Washington DC. Dell’s 1-5-10 series is designed to engage Dell customers, executives and influencers in discussions exploring the implications of major tech trends over the one, five and ten years

Top Takeaways

  • IMG_2915The cloud means different things to different people–but “game changer” is the common thread. We kicked off the roundtable by asking participants to describe cloud in three words or less. Customers chose descriptors such as cost-effective, flexible, reliable and mobile. For instance, Edima Elingewinga, Executive Director, Information Technology at the United Nations Foundation, used mobile as a key descriptor, noting that “Cloud facilitates communication all around the world. That is critical, and that is what drove us to the cloud.” Meanwhile, Dell execs used terms such as digital services enablement, future-ready, and scalable to describe the cloud. However the group was in consensus that the cloud is a game-changer for businesses, government and non-profits.
  • us government sealFederal government adoption of cloud has slowed since the Cloud First policy was established. Cloud First is an initiative launched in 2011 by then US CIO Vivek Kundra. The policy mandated that government agencies had to evaluate a cloud computing option first, and had to have a strong rationale on why they could not use cloud before they could purchase traditional on-premises solutions. As Dell Director of Product, Cloud Management Systems James Urquhart noted, “If you look at this from 2010-2013, you’d have to argue that the federal government as a whole was ahead of the enterprise” with a top-down approach and mandate. But, despite early advocacy and some marquee cloud deals, federal adoption has been more sluggish than many had anticipated, as noted in a 2014 report from the US Government Accountability Office (GAO), CLOUD COMPUTING : Additional Opportunities and Savings Need to Be Pursued. David Lancaster, Dell Federal marketing executive, believes that this is due in part to different agencies having different requirements for different types of clouds—which makes the sourcing process complex and time-consuming. “The federal government is more concerned about private cloud because of security,” added Dr. Lon D. Gowen, chief technologist and special advisor to the CIO at USAID. According the GAO report, legacy migration concerns, cultural barriers and skills deficits also put a drag on adoption.
  • The silver lining in Cloud First is that it sparked adoption in the private sector. Government endorsement of Cloud First paved the way for the private sector to become more bullish on cloud adoption. As Edina Elinewinga, commented, “If the government can trust the cloud, we can trust the cloud.” As a result, private sector adoption is now outpacing that of the federal government.
  • cloud question markCloud computing decisions are becoming more strategic and complex. Whether in business or government, cloud conversations are evolving into discussions of how cloud computing can provide strategic business benefits. As Executive Director and General Manager of Dell Cloud Services Jeremy Ford commented, “The cloud is an enabler, not the point of the discussion. The more organizations view it as an enabler, the more successful they’ll be.” Dell Vice President and General Manager for Engineered Solutions and Cloud Jim Ganthier observed that the conversation is shifting away from “either/or” private or public cloud to one of an “and” conversation in an increasingly hybrid cloud computing world. As Dr. Phil Yang, director of the NSF Spatiotemporal Innovation Center stated, “Choosing the right cloud is like match making, you need to think of it like uber legos.” Participants agreed that most organizations will choose to utilize both public and private clouds, depending on a requirements, constraints and other considerations.
  • Cloud is changing the role of IT. As the cloud conversation shifts to business enablement, IT is increasingly expected to serve as a strategic advisor to the business. Edina Elinewinga said that she has become more of a technology broker in her role now. In addition, IT must assume responsibility for developing a coherent strategy to guide organizations in how to use and integrate different types of cloud deployment models and providers.
  • Cloud will become the fabric of our lives. Big Data and the Internet of Things (IoT) will drive cloud growth over the next 10 years, affecting every aspect of cloud decision-making—from infrastructure and management to strategy requirements. “Big data and IoT are examples of usage models that wouldn’t have been practical or enabled without the cloud,” observed Jeremy Ford. “In about 10 years, everything will be part of the cloud, and we won’t use the word cloud to describe what we are using,” according to Dr. Phil Yang. And Jim Ganthier predicts that “We won’t be talking about “the cloud” in the future. It will be all about the data generated and how we use it.”
  • digital securityPrivacy and security concerns will continue to be top of mind cloud concerns–and power issues will enter the discussion. Privacy and security issues will intensify as more devices, more data comes into play. Edina Elinewinga noted that she is focused on how to keep the work environment and data secure as more and more UN Foundation employees bring different technologies and applications into work. As cloud computing becomes more ubiquitous, power issues will also arise. Dr. Lon D. Gowen predicted, that we’ll need “power over the airwaves to enable future generations of cloud computing.

Summary and Perspective

The cloud conversation is increasingly centered on business problem solving, enablement and innovation. And, big data and IoT are likely to fuel exponential growth in cloud adoption and use cases beyond what most of us can even imagine today.

However, as cloud computing becomes a ubiquitous solution for more problems, cloud alternatives and issues are also becoming more numerous, nuanced. Cloud choices will also become more inter-dependent and related. As complexity and choice expands, brokerage services will become essential in helping most organizations navigate the cloud landscape.

As business reliance on the cloud grows, IT and business decision-makers must align to meet business requirements and optimize long-term security, agility and flexibility with cloud solutions. Both groups will also need guidance and education to build a common foundation from which they can engage to optimize their cloud investments.

The Cloud: Mother of Re-invention for IBM

ibm logoAs a 104-year old company, IBM has undergone many makeovers over the years to tack to the ever-changing winds of the technology industry and the market. 2015 ushered in what may prove to be one of it’s biggest transformations, when earlier this year, IBM CEO Ginni Rometty dramatically reorganized the company to better align with today’s cloud, mobile and analytics oriented technology landscape, and with the increasing consumerization of the business technology market.

This time, IBM’s restructuring puts software in the spotlight. IBM is replacing its former software, hardware and services silos with a more holistic approach designed to synchronize with customers’ growing preferences for cloud-based solutions. Research, Sales & Delivery, Systems, Global Technology Services, Cloud, Watson (IBM’s artificial intelligence and analytics), Security, Commerce and Analytics are now IBM’s main business units, with Mobility as an overlay to these groups. Meanwhile, IBM hardware and software channel teams will both report into IBM’s global Business Partner Group.

interconnect2015-800x160InterConnect 2015: Hybrid Cloud Takes Center Stage

In February, we had our first chance to see how these organizational shifts are coming to life. At IBM InterConnect, IBM rolled what had previously been three separate events for three different solutions groups (Pulse/Tivoli, Impact/WebSphere and Innovate/Rational) into one, reflecting the organizational changes. IBM took advantage of this opportunity begin to put its new story in perspective for an audience of over 21,000 customer, partner and influencer attendees.

IBM has cast it’s hybrid cloud strategy in the starring role of the next chapter of it’s story, with mobile, integration and business process, security, IoT and data, and the partner ecosystem in key supporting roles. Needless to say, IBM was trying to cover a lot of ground in a short amount of time, but here are the key themes that it emphasized:

  1. The hybrid cloud is key to digital transformation. IBM wants to provide customers with an open, flexible cloud experience across public and private clouds. IBM highlighted the importance of portability, announcing Enterprise Containers, based on a partnership between IBM and Docker. The partnership will result in IBM solutions integrated with Docker Hub Enterprise (DHE) to help companies to more efficiently run and build applications that will run anywhere, from a developer’s laptop to the IBM Cloud or on-premises. IBM also introduced Virtual Machines and Containers are now integrated as core infrastructure options in Bluemix, its cloud development platform, and virtual machined (VMs) powered by OpenStack to help IT deliver consistent, scalable business services and integrated monitoring.
  2. IBM MobileFirst, to help companies build and manage the mobile apps. According to IBM, 85% of enterprises have a mobile app backlog. IBM is positioning its MobileFirst Platform v7, announced at the event, to help companies to catch up with the backlog, and to get more value from their mobile app investments. Enhancements include capabilities to enable more efficient development, secure integration, continuous delivery, as well as an improved UI. IBM has also added a new component, the MobileFirst Platform Cloudant Data Layer Local Edition, for web and mobile access.
  1. Integration at the heart of hybrid. IBM had an Integration Booth at the event, and introduced 5 new services designed to connect clouds, refine and sync data across applications and clouds. These included API Harmony, API Harmony, which uses Watson to help developers find the right IBM or a third-party API for integration requirements; and Secure Gateway, to securely connect APIs, existing data, and systems to Bluemix through a Passport service.
  2. A new way to think about security. Most surveys show that security concerns are still the key inhibitor to cloud adoption. To help address this, IBM is encouraging customers to take a more proactive, analytics-based security approach. The vendor announced over 70 new security products and enhancements, and highlighted two 2014 security acquisitions, Lighthouse Computer Services and Crossideas as evidence of its focus on beefing up cloud and mobile security offerings to help businesses better protect, detect and respond to threats.
  3. IoT and data as agents of business transformation. The Internet of Things (IoT) and big data are two of the hottest IT trends. These two trends are also tightly connected, as the billions of IoT objects and devices coming online are generating massive quantities of data, which must be tracked, analyzed and put to practical use. As IoT exponentially accelerates data volume, velocity and variety, companies will need high-powered analytics solutions to harness and generate insights from it. This trend is behind IBM’s newly formed Internet of Things division, and initiatives that IBM is now exploring to leverage Watson analytical capabilities in an IoT world.
  4. The ecosystem is vital to IBM’s cloud success. In order to fulfill on its goal of creating the “most successful cloud ecosystem and developer experience in the industry,” IBM is ramping up programs for developers, ISVs, entrepreneurs and colleges and universities. In addition to more traditional programs, IBM is targeting top local communities and cities for as event hubs for meetups, classes, hackathons, learnathons and other programs designed to build a next-generation partner ecosystem in the cloud. 

White Clouds in Blue SkyPerspective

The changes that IBM is making to its organization and to its solution and partner focus are major ones. In the past, IBM operated in a more siloed manner, with each business unit owning its own P&L, budget, headcount and control. Back in the day, when companies often pursued different buying journeys and sought out different vendors for hardware and software, this made sense.

However, cloud computing has significantly blurred these lines. In the cloud model, buyers more often seek a solution, not piece parts. IBM’s new structure and vision are designed to meet these new expectations and demands. In an ideal world, these changes will enable IBM to more easily bring its technology innovations (such as Watson, Bluemix, and joint open source solutions) to market, and take center stage among in the cloud and adjacent markets.

But, the world is not ideal. Although IBM may have more IP, patents and research fellows than the next few tech vendors combined, it faces significant obstacles in terms of competing with more nimble competitors. To help address this, IBM recently hired Kevin Eagan, longtime Microsoft executive, as Vice President and General Manger for IBM’s Digital Channel. Eagan takes on the daunting task of making IBM easier to do business with, and as such, will play a pivotal role in IBM’s future cloud fortunes.

IBM also faces substantial pricing and margin hurdles. Will the board of directors and stockholders be willing to cannibalize traditional, higher margin business to build higher volume, but lower margin cloud business? Finally, can Big Blue get 400,000 IBMers energized and organized for the new mission?

At Interconnect, IBM demonstrated that it understands the magnitude of change that cloud, mobile, big data and IoT have wrought, and articulated its strategy to get ahead of the curve and the competition. Only time will tell if IBM can meet the necessary and perhaps more formidable challenges to change its systems, business model and culture to make this vision a reality.

Slide Show Version! SMB Group’s Top 10 SMB Tech Trends for 2015

(Originally published on the SMB Group website and available here in .pdf format).

Here are SMB Group’s Top 10 SMB Technology Trends for 2015 in slide show format!

SMB Group Top 10 SMB Technology Trends for 2015

crystal ball

(Originally published on the SMB Group website and available here in .pdf format).

Here are SMB Group’s Top 10 SMB Technology Trends for 2015! A more detailed description of each follows below.

(Note: SMB Group is the source for all research data quoted unless otherwise indicated.)

  1. Cloud is the new IT infrastructure for SMBs.
  2. SMB IT staff and channel partners evolve into cloud managers.
  3. SMBs recalibrate IT strategy and spending for a mobile world.
  4. The Internet of Things (IoT) comes into focus.
  5. SMBs reinvent marketing for the new buyer journey.
  6. KPIs trump ROI and TCO as the new “show me” metric.
  7. Analytics gets SMB-friendly with “bring your own data” and freemium offerings.
  8. It’s time to reimagine work.
  9. SMBs place a premium on protection.
  10. SMBs opt for an incremental, integrated solutions approach.

Detailed SMB Group Top 10 SMB Technology Trends for 2015

  1. Cloud is the new IT infrastructure for SMBs. SMBs increasingly view technology as a key business enabler. According to SMB Group research, 67% of small businesses (1–99 employees) and 81% of medium businesses (100–999 employees) say that technology solutions help them improve business outcomes or run the business better. However, most SMBs don’t have the resources necessary to keep pace with technology on their own. Just 19% of small businesses employ full-time dedicated IT staff. And while 86% of medium businesses have internal IT staff, they are typically IT generalists who lack expertise in newer technology areas such as mobile and analytics. As SMB requirements for fast, easy access to new social and mobile analytics solutions, more compute power and storage, and other services have been increasing, cloud adoption has boomed—with 92% of SMBs are now using at least one cloud business solution and 87% using at least one cloud infrastructure solution. In 2015, cloud solutions are poised for hockey stick growth as more SMB decision-makers turn to a cloud-first approach that not only supports existing business models, but also enables them to develop innovative new products, services and business models. Public cloud adoption will continue to significantly outpace that of private cloud, but more medium businesses in particular will consider a hybrid cloud approach, particularly in industries and applications where security and privacy are top concerns.
  2. SMB IT staff and channel partners evolve into cloud managers. As the cloud becomes mainstream, both internal SMB IT staff and external channel partner roles will evolve from implementation and break/fix support to become more proactive and strategic. SMBs will look for staff and channel partners that can work with line-of-business decision-makers to better align technology investments with business goals, select best-fit solutions and manage cloud service providers. Internal IT staff and channel partners will also need stronger integration expertise to help SMBs get more value from their technology investments. Channel partners will need to cultivate consultative selling and adjust staffing skill sets accordingly. SMB decision-makers will seek help to better understand and articulate new skill-set requirements, and to hire and/or contract for these needs. They will be hungry for thought leadership from SMB vendors, analysts and other influencers.
  3. SMBs recalibrate IT strategy and spending for a mobile world. A growing majority of SMBs now regard mobile solutions as essential business enablers, with 60% saying that mobile solutions are critical to their business. 86% of SMBs agree or strongly agree that mobile apps are a complement to traditional business applications, and 71% believe that mobile apps will replace some traditional solutions entirely. Mobile solutions also account for a growing share of SMBs’ technology budgets. SMB median spending on mobile technology and solutions as a percentage of total technology spending rose from roughly 12% in 2013 to 16% in 2014. Mobile service and device costs still account for the bulk of SMB mobile budgets, but SMB spending in other areas is rising as a percentage of mobile spend. On average, in 2014, SMBs spent 11% of their mobile dollars on apps, 9% on security, 11% on mobile management and 8% on consulting. Planned increased investment in mobile apps and more diverse mobile devices will necessitate a spike in mobile management adoption as well.
  4. The Internet of Things (IoT) comes into focus. IT vendors and prognosticators have been forecasting explosive growth for more intelligent and connected devices of all types. However, many IoT scenarios have been cast in a consumer light, such as smart watches and Tile (a locator for items such as keys and glasses), and the IoT vision has been fuzzy for many SMBs. In 2015, however, early but compelling use-case scenarios and solutions will emerge, leading more SMBs to the “aha” moments required to spark adoption. For instance, radio-frequency identification (RFID) has been used in logistics to track pallets and crates for some time, but mostly in closed-loop systems for high-value goods. IoT will help reduce RFID costs, making it more practical and appealing to retailers to use in order to help improve inventory accuracy, automate customer checkout and reduce theft. Beacons, which are indoor positioning systems that communicate directly with smart phones via Bluetooth, provide another compelling SMB use case. For example, a network of in-store beacons can identify the location of customers in a store and send them push notifications. Or, a trucking company could install beacons to monitor the state of its trucks, provide more timely maintenance, reduce vehicle downtime and decrease costs. Once SMBs understand use cases more clearly, IoT will hold great appeal because it is mostly invisible to end users, which negates adoption issues, and it provides real-time data for better decision-making and better business outcomes.
  5. SMBs reinvent marketing for the new buyer journey. The buyer journey is evolving rapidly and includes many more touch points than ever before. SMBs must transform their marketing approach to connect with more prospects and customers, and to provide them with the right information at the right time in the buying journey. Although many small and even medium businesses rely on point solutions, more will turn to an integrated marketing approach. In 2014, 20% of small businesses and 25% of medium businesses had purchased/upgraded to a marketing automation solution in the past 24 months. Meanwhile, 22% of small businesses and 26% of medium businesses plan to purchase/upgrade a marketing automation solution in the next 12 months. More SMBs will realize that choosing the right marketing automation solution is one of the most important technology decisions they will make, particularly as cloud, mobile, social, analytics and other technologies continue to transform the buying process.
  6. KPIs trump ROI and TCO as the new “show me” metric. Historically, vendors have tended to focus on proving solution value through return on investment (ROI) and total cost of ownership (TCO) analysis and metrics. But these assessments and metrics, while often beneficial, are frequently too vague and/or too dependent on nuanced measurements to be compelling for SMBs. In comparison, key performance indicators (KPIs) can provide SMBs with specific, actionable insights on business performance and what areas need improvement. With so many vendors fighting for SMB dollars, SMBs will increasingly seek out those that help them understand what KPIs are most relevant for their business and industry, and those that provide credible, specific metrics about how their solutions affect these KPIs.
  7. Analytics gets SMB-friendly with “bring your own data” and freemium offerings. Most SMBs don’t have data analysts on staff. These businesses often are intimidated by analytics solutions, which have traditionally been expensive, complex and difficult to use. But cloud computing, better user interfaces, visualization tools, improved algorithms and natural language capabilities as well as a growing number of freemium offerings designed for business decision-makers—not data scientists—are poised to change this. For instance, IBM’s Watson freemium offering allows users to bring in data from many sources, and it has capabilities that reduce data preparation and loading time, including a “fix it” button to repair data quality issues. Once data is plugged into Watson, users can query in natural language to analyze information. As more solutions designed for people with little or no data preparation and analytics skills emerge, analytics will become more consumable for SMBs.
  8. It’s time to reimagine work. Whether you prefer the hashtag #futureofwork, #newwaytowork, #reimaginework or something else, it’s clear that change is on the horizon. Processes, tools, attitudes and behaviors are shifting as mobile, social, cloud, analytics, IoT and other technology advances take hold in SMBs. Likewise, demographic shifts are reshaping the makeup of SMB workers as well as their expectations of what technology should do and how it should do it. For instance, millennials and digital natives are rising through the workforce ranks, while baby boomers are starting to retire or move to part-time work. Meanwhile, the ranks of temporary and contract workers continue to grow. The National Employment Law Project found that temporary help agencies, staffing agencies, professional employer organizations and employment placement agencies fill 2.5% of all jobs, up from 1.4% in 1990. In addition, easy-to-use consumer apps and devices have raised the bar for user experience in the business-to-business (B2B) world. This changing mix of resources, behavior, attitudes and requirements will lead more SMBs to seek better, easier and more affordable ways to access, evaluate, buy and get productive with technology solutions. Vendors that understand and plan for this evolution, provide clear solution value and make SMB customers feel that they are part of a strong ecosystem will have a decisive edge as this trend unfolds. Providing easy access and free trials, clear messaging, a delightful user experience, superior support and vibrant user communities will be key to tapping into this trend.
  9. SMBs place a premium on protection. SMBs are already using basic security and backup tools. However, our research shows that most use point solutions that only tackle part of the problem. The use of more comprehensive solutions to protect and manage data is still far from the norm. But greater reliance on technology, an increasing number of “moving parts” (traditional apps and infrastructure, cloud, social, mobile, etc.) and the need to manage data no matter where it resides necessitate better security, control and management capabilities. SMBs need only turn on the news to understand the financial, brand and legal ramifications of data breaches at large companies such as Sony Pictures, Home Depot and eBay. As awareness rises, SMBs will place a premium on more comprehensive solutions from vendors that offer proactive guidance, deeper expertise, stronger service-level agreements (SLAs) and 24/7 support for an always-on world.
  10. SMBs opt for an incremental, integrated solutions approach. New cloud, mobile and social solutions have made it easier for SMBs to access and use new applications, but they have offered little help with integration. Although 63% of SMBs have partially integrated some applications, 79% still rely on manual Excel file uploads or custom code for integration, which underscores the severity of the problem. SMBs typically lack the expertise and resources to manage the entire integration process, and they need solutions that both encompass and better integrate cloud, mobile, social, analytics, security and other technologies. However, SMBs don’t want—and can’t digest—monolithic solutions. Vendors need to accommodate SMB integration requirements with a LEGO-like approach that enables SMBs to acquire only what they need at a given point in time, and then to add on new capabilities (their own or those of partners) with as little friction as possible when new needs arise. Although integration remains one of the toughest technology nuts to crack, we see new hope. Open ecosystems, embedded integration capabilities and stronger APIs should help pave the way, as should toolsets designed to help non-technical users to configure integrations without coding if they understand business integration workflows and requirements. Built-in collaboration and social communities to help users crowdsource information, find experts and share and/or sell integrations will also be key to making SMB integration a reality.

About SMB Group

SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is composed of many smaller, more discrete markets. Within the SMB market, SMB Group’s areas of focus include: Emerging Technologies, Cloud Computing, Managed Services, Business and Marketing Applications, Collaboration and Social Media Solutions, IT Infrastructure Management and Services, and Green IT.