SMB Adoption of Unified Communication and Collaboration (UCC) On the Rise

—by Sanjeev Aggarwal and Laurie McCabe

Today’s small businesses need the right mix of collaboration tools to create a productive work environment. SMBs looking for new collaboration solutions that will help them work smarter, and achieve top business goals of attracting new customers, growing revenue and improving customer experience. Flexible solutions that connect employees with each other and with customers and partners from any location, device or network will play a big part in achieving these goals.

But as SMBs increase their reliance on collaboration tools, managing and integrating multiple solutionsincluding email, instant messaging, voice, click-to-dial, presence, videoconferencing, and morecan become difficult. As a result, more SMBs are considering unified communications and collaboration (UCC) solutions to aggregate and integrate these functions and bring some order to collaboration chaos.

Mainstream VoIP Adoption Lays the Foundation for UCC

SMB adoption of voice over IP (VoIP) solutions is already well underway. According to SMB Group’s recently completed 2016 Small and Medium Business Communication, Collaboration and Mobility Study, 53% of small businesses (companies with less than 100 employees) and 68% of medium businesses (companies with 100 to 1,000 employees) are currently using VoIP. In addition, 16% and 10%, respectively, plan to implement VoIP within the  next 12 months.

Figure 1: SMB VoIP and UCC Adoption

b2-picture1-768x383Source: 2016 SMB Communication, Collaboration and Mobile Study

With a VoIP foundation in place, more SMBs are considering deploying UCC solutions. Currently, just 12% of small businesses (companies with less than 100 employees) and 28% of medium businesses (companies with 100 to 1,000 employees) use UCC solutions. But, over the next 12 months, 17% of small and 35% of medium businesses say they plan to deploy a UCC solution, potentially doubling year-over-year penetration.

SMBs Are Split on UCC Implementation Preferences

Our study shows differences in SMBs’ UCC implementation preferences. While small businesses tend to gravitate to cloud-based solutions, medium businesses are more likely to choose on-premises deployments. In addition, 14% of small and 20% of medium businesses favor a hybrid UCC approach.
Figure 2: SMB UCC Implementation Methods

b2-picture2-768x320Source: 2016 SMB Communication, Collaboration and Mobile Study

Drivers for UCC Adoption

As shown on Figure 3, SMBs are turning to UCC to:

  • Improve employee productivity from any location, device or network
  • Standardize communication and collaboration tools
  • Increase security
  • Easier to use, monitor and manage
  • Better integration between communication solutions and business applications
  • Lower telecommunication costs
  • Create a more professional image with customers, suppliers and partners

Figure 3: Top Reasons to use UCC

b2-picture3-768x340Source: 2016 SMB Communication, Collaboration and Mobile Study

UCC Solution Purchase Channels

32% of the small businesses and 23% of medium businesses have purchased or plan to buy their UCC solution from their traditional phone carrier (Figure 4). A greater percentage 28% of medium businesses have purchased these solutions from an Online UCC service provider vs. 24% of small businesses. Small businesses prefer to buy from channels they have an existing relationship with. Medium business that have some more IT resources prefer to buy from newer online channels or VARs (if their requirements are more complex).

Figure 4: UCC Solution Purchase Channels

b2-picture4-768x354Source: 2016 SMB Communication, Collaboration and Mobile Study

Most Important UCC Features

SMB survey respondents ranked the UCC features that are most important to them (Figure 5), with the following coming out on top:

  • Better security and compliance capabilities
  • Lower cost
  • Easier for end-users to use
  • Easier to integrate with other business applications
  • Easier and flexible to deploy, manage and extend
  • Better voice and video quality and reliability

Figure 5: SMB Rank Importance of UCC Features

b2-picture5-768x378Source: 2016 SMB Communication, Collaboration and Mobile Study

Summary and Perspective

The market opportunity for UCC in the U.S. SMB segment is around $4.5B. Adoption among both small business and medium business segments should be continue to rise, as more employees work away from their companies’ main offices. Traveling employees, telecommuters and employees in remote offices represent different types of mobile workers and cloud-based UCC solutions can help keep them connected—both among themselves and with their customers—in a more streamlined and manageable way.

Integrated UCC solutions that also connect easily with key business applications can further fuel adoption. And, UCC solutions can help SMBs gain more control, and as a result—security—when compared to a hodge-podge of disjointed point solutions.

Especially in the resource-constrained small business segment, cloud-based options, which offload deployment and management headaches, and offer more affordable subscription pricing, will continue to help facilitate UCC adoption among SMBs.

However, the concept of UCC as an integrated set of systems and applications is still confusing and complex for SMBs who have yet to adopt these solutions. UCC vendors and their channel partners need to help SMBs better understand benefits and evaluate the best-fit alternatives to best capitalize on the growing interest in UCC.

For a complete table of contents and ordering information for SMB Group’s 2016 Communication, Collaboration and Mobility Study, click here.

Small Business Considerations for Mobile Solutions

canstockphoto9457335 I was recently interviewed by GroupTexting about what small businesses need to keep in mind when planning a mobile strategy. A worthwhile topic, considering that SMB Group’s 2015 SMB Routes to Market Study reveals that almost half of SMBs agree that “mobile solutions are key to improving/transforming our business.”

Our conversation covered many angles, from how small businesses can use mobile technology in their businesses, to considerations they need to think about as they implement and expand use of mobile–both to improve employee productivity and to improve customer engagement, interaction and  service.  We also discussed some of common pitfalls in the mobile area, and what to keep top of mind as you make new mobile investments.

Click here to read the full article.

SMB Group’s 2016 Top 10 SMB Technology Trends

Foggy Crystal Ball-128x128Here are SMB Group’s Top 10 SMB Technology Trends for 2016! A more detailed description of each follows below. (Note: SMB Group is the source for all research data quoted unless otherwise indicated.)

  1. SMBs That Make the Business-Technology Performance Connection Outpace Their Peers.
  2. The Battle for Self-Employed Workers Heats Up.
  3. SMBs Tune in to IoT Possibilities.
  4. Public Cloud Is a Done Deal, but Cloud Variants Remain Hazy for SMBs.
  5. Security Remains the Elephant in the SMB Room.
  6. Mobile Solutions Occupy a Bigger Part of SMB IT Real Estate.
  7. SMBs Rethink CRM.
  8. SMBs Move Up the Cloud Analytics Curve.
  9. SMBs Streamline Internal Processes to Focus on Business Growth.
  10. More Tech Vendors Use Big Data to Provide New Business Services to SMBs.

Detailed SMB Group Top 10 SMB Technology Trends for 2016:

  1. SMBs That Make the Business-Technology Performance Connection Outpace Their Peers. SMB success is increasingly tied to technology. SMBs that view technology as critical to improving business outcomes are outpacing their peers in terms of business growth. According to SMB Group’s 2015 SMB Routes to Market Study, 29% of SMBs view technology as helping them to significantly improve business outcomes. These “progressive” SMBs are 18% more likely to forecast revenue increases than their peers. Progressive SMBs spend 29% more on technology, are 55% more likely to have fully integrated primary business applications (financials, CRM, HR, etc.) and are 86% more likely to use analytics than their counterparts. By using technology to streamline workflows, slash time spent on repetitive data entry and inefficient processes, gain better insights into opportunities and threats, and create new business models, progressive SMBs are well positioned to tap into new customer requirements, improve customer engagement and experience, and enter new markets. As they move forward, they will continue to outpace their peers and reshape the SMB market.
  2. The Battle for Self-Employed Workers Heats Up. According to April 2015statistics from the U.S. Government Accountability Office (GAO), more than 40% of all U.S. workers are contingent, which includes the self-employed as well as temp workers, contractors, on-call workers and part-time employees. That number represents a 10% increase from the previous GAO survey in  The survey spans industries from construction to pet care, and from professional services to Uber and Lyft drivers. This trend shows no sign of abating, with the GAO predicting the percentage of self-employed workers to rise to 50% by 2020. Self-employed workers need tools to manage finances, build brands and grow their business—but they must do all this on a shoestring budget. SMB Group’s 2015 SMB Routes to Market Study shows that consequently, many of these workers rely on Excel spreadsheets: 40% of self-employed workers use Excel for accounting, and 85% use Excel or email (such as Outlook or Google) for sales and contact management. On average, median annual spending on technology for businesses with one employee is approximately $3,500, which includes client devices, productivity software, business software, Internet connectivity and mobile data service and device expenses. Vendors such as FreshBooks and Square have been pioneers in developing solutions specifically for self-employed workers. But more vendors, such as Intuit (with QuickBooks Self-Employed) and Sage (with Sage One), are following suit. Although the sheer market volume creates great potential, rapid scale will be required to attain and sustain profitability in this cash-constrained segment.
  3. SMBs Tune in to IoT Possibilities. The Internet has delivered its latest game changer: the Internet of things (IoT). As with the Internet innovations that preceded it, IoT presents tremendous potential for disruption—along with all of the opportunities and challenges that accompany this type of sea change. Yet IoT is still just a buzzword for most SMBs. When asked in SMB Group’s2015 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. But factors such as vendor education and early success stories will help SMBs better understand IoT use cases and opportunities, both to improve internal operational efficiencies and to create new product and services offerings. SMB Group research indicates that SMBs in retail, wholesale/distribution and discrete manufacturing (e.g., auto, electronic equipment) are likely to lead the SMB IoT charge. Regardless of industry, IoT solutions built to move critical, trigger-based data to the Internet (through smart gateway solutions and applications) and store less important data locally will be key to helping SMBs avoid information overload and achieve successful IoT outcomes.
  4. Public Cloud Is a Done Deal, but Cloud Variants Remain Hazy for SMBs. Cloud solutions are already part of the business fabric for most SMBs, with the adoption of cloud solutions surging across all solution areas, according to SMB Group’s 2015 SMB Routes to Market Study. In fact, the cloud is poised to overtake on-premises deployment in the next year in areas such as collaboration, file sharing and marketing automation. Cloud adoption is also growing in areas in which it has traditionally lagged: Almost one-third of SMBs planning to purchase accounting and ERP solutions say they plan to purchase a cloud offering. But for the most part, SMBs have been choosing public cloud options—despite several vendors’ vocal promotion of private and hybrid cloud alternatives. Although each variant has its pros and cons, most SMBs remain confused about what private and especially hybrid clouds are as well as when and why they should consider them. Most vendors define hybrid cloud as the integration of a public and private cloud; but because private clouds are still rarely utilized by SMBs, the hybrid cloud notion remains hazy for SMBs. Microsoft with Azure Stack for Windows Server, IBM with its Bluemix-powered “cloud everywhere” platform and Dell with Dell Cloud Manager are trying to make private and hybrid cloud options more accessible and manageable. But unless and until vendors offer more articulate, relevant and compelling alternatives, SMBs will continue to opt for the public cloud in the vast majority of cases.
  5. Security Remains the Elephant in the SMB Room. As SMBs rely more on technology to run their businesses, the requirements to secure and protect data and access become more critical and complex. SMB Group’s 2015 SMB Routes to Market Study shows that medium businesses rank security as their second most pressing technology challenge, while small businesses rank it as their number-one challenge. However, many SMBs feel overwhelmed, confused and completely inadequate to deal with the magnitude of the seemingly endless potential for digital security breaches that could wreck havoc on their businesses. All too often, they continue to take an outdated, ineffective, 1990s-era “whack-a-mole” approach to security, deploying point solutions to ward off the security threat du jour. However, vendors are delivering more holistic, end-to-end, risk- and rules-based solutions for SMBs. These solutions can enable them to close off the biggest vulnerabilities to their most critical corporate data, wherever it resides—whether endpoint devices, mobile apps, on-premises infrastructure and applications or the cloud. Although most SMBs will need help understanding this approach, once they do, they will be able to face and address the security elephant in a more effective way.
  6. Mobile Solutions Occupy a Bigger Part of SMB IT Real Estate. SMBs continue to turn to mobile solutions to help redefine business processes and pursue new opportunities. SMB Group’s2014 SMB Mobile Solutions Study indicates 59% of SMBs view mobile solutions and services as “critical” to their business. The effects of mobile adoption impact traditional IT in endless ways. For instance, 85% of SMBs see mobile apps as complementing traditional business apps; 70% believe that mobile apps will replace some of their current business applications; and 48% say their employees are doing significantly more work on mobile devices. As important, mobile solutions account for a growing share of SMB technology budgets, with median spending on mobile solutions as a percentage of total technology spending rising year-over-year. However, while they’ve been swept up in the mobile tsunami, many SMBs have yet to put mobile strategies and solutions in place to optimize their mobile investments. SMBs will need better guidance from vendors both to effectively manage and protect mobile assets and to better integrate them with traditional business applications and infrastructure.
  7. SMBs Rethink CRM. SMBs need an integrated, holistic view of their customers, but “enterprise” CRM has proved too complicated and costly for most. The good news is that vendors are crafting CRM solutions specifically designed and priced for SMBs. These solutions go beyond contact management to help SMBs improve the customer experience; compete in a social, omnichannel world; and access analytics to stay ahead of their customers’ expectations. Examples include Salesforce, which introduced Salesforce IQ as its new sales management entry point for SMBs and followed up with a free integration for SalesforceIQ withcom customer service. This combination provides sales and customer service reps with a complete view of customer interactions across sales and services. HubSpot launched Connect to integrate customer data from different applications, such as billing and payment data from FreshBooks and customer service records from Zendesk, into HubSpot, for a more complete customer view. Meanwhile, SAP rolled out SAP Anywhere & Everywhere to help SMB retailers and etailers manage sales, marketing, ecommerce and inventory activities in a more cohesive way. And Infusionsoft, which has focused on very small businesses from the start, is adding new capabilities to enable buyers to better personalize the Infusionsoft experience to their style and preferences. These vendors—and others—will help more SMBs realize that the time has come to modernize and integrate their CRM approach.
  8. SMBs Move Up the Cloud Analytics Curve. Vendors have been making big investments to build powerful yet cost-effective cloud-based analytics solutions. Designed for business users instead of data scientists, these solutions offer user-friendly interfaces, guided discovery, visualization tools and natural language capabilities to help users quickly get actionable insights from their data. For instance, IBM’s Watson Analytics minimizes the effort required to turn raw data into insight via visualizations. Users connect their data source to Watson and then query Watson about the data in plain English (or their native language). Watson then builds a dashboard or graphics so users can easily visualize the findings. It also offers a built-in predictive engine, which can, for instance, generate personalized offers based on customer preferences and purchasing histories. Another example is Tableau, which recently introduced Vizable, designed for a touch-based, mobile world. Vizable reads a spreadsheet or .csv file, determines the key categories and then displays an initial graphical view of the data that users can explore by pinching, swiping and dragging on the iPad. Vizable also offers a built-in animation engine to help users understand why results change as they manipulate the data. With clear benefits and easy access, SMBs are shifting from on-premises analytics to the cloud. This is particularly true in medium businesses, which cite analytics as the second most critical area to invest in over the next 12 months. Although most of these businesses currently use on-premises analytics solutions, among those planning to purchase or upgrade in this area, 48% plan to use cloud-based analytics solutions. This trend will strengthen in 2016, as more SMBs seek out analytics solutions that are easy to buy and use in order to stay ahead of the market and their competitors.
  9. SMBs Streamline Internal Processes to Focus on Business Growth. SMBs say that attracting new customers and growing the business are their top business goals, according to SMB Group’s 2015 SMB Routes to Market Study. Unfortunately, many SMBs waste so much time managing the daily internal grind of financial, human resources, procurement and other back-office processes that they don’t have time to focus on growth, opportunity and innovation. But SMBs in fast-growth industries such as software and biotech are role models for a more modern, automated and often cloud-based approach—one that enables them to spend less time on back-office processes and more time on decision making. In turn, early SMB adopters across the spectrum are taking note. They are replacing or foregoing outdated, disjointed back-office systems with next-generation solutions. These solutions enable them to automate drudgery and gain time-saving, visibility, collaboration and decision-making benefits that give them the flexibility to adapt to changing market requirements. As early adopters reap these advantages, pressure is mounting for SMBs that have resisted change. They will need to bite the bullet and update the way they run the business, or they will fall behind their more nimble peers.
  10. More Tech Vendors Use Big Data to Provide New Business Services to SMBs. Tech vendors are increasingly applying analytics to challenge traditional service providers in “non-IT” areas. For instance, Intuit recently launched a new financing alternative in partnership with OnDeck. The service uses small businesses’ QuickBooks accounting data to qualify applicants for lower-rate loans than those available from traditional lenders. Intuit also formed a partnership with Stride Health, which integrates Stride Health’s personalized health insurance, healthcare and compliance management within QuickBooks Self-Employed. Meanwhile, Intacct, which provides cloud ERP software, has partnered with Pacific Crest to provide SaaS businesses with real-time comparisons of their performance relative to their peers and pinpoint specific levers for improving their execution. And IBM continues to push Watson deeper into healthcare, with a planned $1 billionacquisition of medical imaging company Merge Healthcare. IBM’s intent is to apply image analytics to medical images taken by Merge, which are used in medical specialties such as radiology, cardiology and orthopedics. Big Blue also purchased the Weather Company’s digital assets (everything but the TV network). IBM will use the Weather Company’s forecasting data and technology to create services to help weather-reliant businesses to maximize profits. Because so many industries rely on weather data, the opportunities are endless. For instance, retailers need to know if they should stock up on groceries before a winter storm; farmers use weather data to maximize crop yields; and construction workers monitor the weather to determine the best times to pour concrete or operate a crane. As these types of services proliferate and become more powerful and convenient, they offer new ways for SMBs to grow and innovate.

If you are interested in learning more about licensing options for SMB Group’s 2016 Top 10 SMB Technology Trends, please contact Lisa Lincoln, Director of Client Services at lisa.lincoln70@smb-gr.com or 508-734-5658.

 

Sage’s Everest: Building Mind and Market Share With A New Generation of SMBs

everestAt last week’s Sage Summit, one of the featured speakers was renowned British explorer, entrepreneur and adventurer Justin Packshaw. Among other achievements, Packshaw spoke about the challenges he and his team of 10 climbers faced to successfully reach—and then descend—the peak of Mount Everest, the highest mountain on the planet.

Watching Sage’s new (as of November 2014) CEO Steven Kelly interview Packshaw, I couldn’t help but think about the uphill battle that Sage has faced in attracting net-new customers to its accounting and ERP software solutions over the past several years. While many rivals were quick to bring innovative cloud, mobile and social capabilities into their solutions, Sage has taken a slower, more conservative approach. As a result, although Sage has done a fairly good job of retaining existing customers, it has struggled to gain mind and market share with new generation of cloud and mobile savvy SMB customers that it needs to fuel substantive growth.

Making the Case for the New Sage

Steven KellyKicking off the event, CEO  Kelly made his case for a newly energized and more engaged Sage. At the 50,000 foot level, Kelly:

  • Pledged Sage’s commitment to “being the best technology company for small businesses,” by providing small businesses with help to run their businesses, give them more control, and help them make the right choices.
  • Positioned Sage at the forefront of the “golden triangle” of accounting, payroll and payments solutions to make small businesses “100% compliant, 100% of the time.”
  • Reiterated that Sage “loves on premises, hybrid and cloud solutions” and will support all of these models to give businesses choice.
  • Vowed that “end of life” is not part of the Sage vocabulary. Sage won’t force existing customers to go to the cloud before they are ready; instead, it will provide pathways and tools that enable customers to control the pace of their migration.
  • Asserted that the term ERP (enterprise resource planning) really means “expense, regret and pain,” and that Sage will also banish this term from its vocabulary (which by the way, got a pretty big round of applause).

All of the above should be welcome news for existing Sage customers, who have stayed the course through numerous changes in Sage strategy, management and products over the past few years. But, it doesn’t offer much in the way of helping Sage attract net-new customers So how will Sage ascent its Everest? 

Sage Live: Poster Child for the New Sage

sageliveKelly’s roadmap for new growth focuses on rapid, global new solution development for next-generation business decision-makers who are already sold on a cloud and mobile first world. Sage One, Sage’s offering for sole proprietors and very small businesses from pen and paper and spreadsheets, is part of this, but Sage Live  (formerly Sage Life) is really the poster child for Sage’s new approach tailored to the “office of the future.” Notably, Sage Live was designed and developed in six months from when Kelly gave the team its marching orders.

Built as a multi-tenant cloud-based accounting solution. Sage Live is aimed  squarely at growing small businesses who need more power than entry-level accounting solutions offer, and want cloud, mobile and collaborative capabilities out-of-the-box. Pricing starts at $30/user/month for full users (such as finance and accounting users) and $15 per user/month pricing for more casual business users. Slated for U.S. release now, and for UK availability at the end of the summer, Sage Live is designed to be a global solution.

The Salesforce1 Shortcut

Sage choose to build Sage Live on Salesforce1, the largest cloud development platform in the world, to gain development and go-to-market efficiencies, including:

  • A rapid development environment and tools to design, build and bring the solution to market.
  • The ability to embed Salesforce1 mobile and collaborative functionality, such as Chatter, directly into the Sage Live solution.
  • An enormous partner ecosystem to add features and functions for specific markets. For example, Kimble PSA announced its integration with Sage Live at the event. With a partner-centric approach from the get-go, Sage Live doesn’t need to become a clunky, monolithic solution.
  • The same look and feel as Salesforce, giving Sage a natural entrée into Salesforce’s 95,000 SMB installed base customers. 

Customer-Centric Design

Salesforce1’s platform also made it easy for Sage to pull in its best small business accounting experts from around the world to collaborate on Sage Live. Sage also involved customers in its early adopter program from the beginning, seeking out non-Sage customers–both owners and those in financial roles—for input.

What Sage heard is that they are spending too much time juggling too many spreadsheets. As their businesses grow, they need better tools to budget and forecast, the ability to look at their business through different lenses, and more collaborative capabilities. They want a “one-office approach” with easy cloud and mobile access to real-time information for all users.

In response, Sage Live’s multi-dimensional accounting engine allows users tag records with geographical, product or other information. Users can then easily pull up different views and reports based on the tags. The solution can also be configured for different role-based views or “scoreboards” giving users just the information most relevant to them.

iwatchEmbedded Salesforce1 real-time social and mobile capabilities make it easy for users to collaborate and share information, ala the “business in the moment” example of Sage Live notifications on Apple iWatch.

Perspective

New and fast-growth SMBs are increasingly gravitating to the cloud for accounting and ERP. SMB Group’s 2015 SMB Routes to Market Study reveals that 29% of SMBs planning to purchase new accounting/ERP solutions are leaning toward cloud deployments. Sage Live provides Sage with a much-needed solution to tap into this market, and meet it’s elusive (to date) challenge of attracting net-new business. 

While some have questioned the wisdom of building on Salesforce1, I believe that this was a good choice for Sage. Salesforce1 has enabled Sage to skip the plumbing work and to build Sage Live much more quickly than it could have from scratch. Furthermore, Sage gains exposure to Salesforce’s large SMB customer base, and an entrée to Salesforce’s extensive developer ecosystem.

In addition, while Salesforce customers have many choices when it comes to accounting solutions, Sage Live is the only small business accounting solution native to the Salesforce1 platform (FinancialForce is native as well, but aimed more at the midmarket).

Finally, armed with a true “net-native” cloud solution, Sage can apply its extensive expertise as a volume SMB marketer to the cloud and mobile first SMB segment. Sage is even opening a new Customer Business Center, exclusively dedicated to digital marketing and sales for the Sage Live solution.

However, this is not enough to ensure success. I see a few areas in which Sage will need to double down, including:

  • Creating a clear, constant drumbeat to articulate why Sage Live is different from other Sage and its competitors’ offerings. Getting on SMB radar is hard in a market where so many vendors are vying for customers that have outgrown QuickBooks and other entry-level accounting solutions. And, since SMBs rank “Figuring out how different technology solutions can help my business” as one of their top three technology challenges in SMB Group’s SMB Routes to Market surveys. Sage will also need to provide in-depth education to make it to SMB short lists.
  • Persuade Salesforce to more actively promote Sage Live. From what I gathered at Sage Summit, Salesforce sales reps will refer customers to Sage Live if they want to integrate accounting and CRM. This is a start, but fairly passive. Sage Live needs Salesforce to play a more active role to kick-start consideration and adoption. Sage will be a Platinum sponsor at Dreamforce, and it will be interesting to see how Salesforce reciprocates.
  • Prove that it can expand traction with developer partners. To further validate its cloud direction and ambitions, and to fill in key gaps for critical customer segments, Sage must quickly recruit high-profile Salesforce developers to the Sage Live fold.

Prior to Kelly’s appointment, Sage had been investing in new technologies to modernize its existing accounting payroll and payments solutions for quite some time. But progress seemed to be slow, and it was clear that simply moving existing solutions would not be enough to fuel significant  growth. With Sage Live, Steven Kelly is already operating at a bolder, faster and more aggressive pace than his predecessors to pursue this growth. Now, having proved it can get on the fast track with product development, Sage’s next—and bigger challenge—is to get on the fast track with marketing and sales.

Mobile Solutions Play a Big Role in Small Businesses

Small businesses are rapidly moving to mobile solutions to gain anytime, anywhere access to people, information and applications. As mobile becomes a mainstream solution technology, small businesses must also factor mobile into their broader technology strategies and plans. Our 2014 SMB Mobile Solutions Study highlights the powerful impact of mobile in very small (1-19 employees) and small (20-99 employees) businesses to date, and implications for the future.

Changes in Attitudes

Mobile applications are quickly becoming indispensable for many small businesses. As shown on Figure 1, a half of very small and two-thirds of small businesses regard mobile solutions as critical for their businesses. Slightly more than half of these organizations also view mobile apps as helping to drive business growth. Consequently, it’s not surprising that mobile apps are playing a bigger role in small business operations. A substantial majority see mobile apps as complementing traditional business apps, and 67% of very small and 73% of small businesses believe that mobile apps will even replace some of their current business applications.

Figure 1: Small Businesses are Bullish on Mobile SolutionsSlide1

For small businesses, cash is king. Attracting new customers, growing revenues, and maintaining/improving profitability as top business goals (Figure 2). Small businesses see mobile solutions as very instrumental in helping them to address these and other important customer engagement, workforce and financial goals.

Figure 2: Top Small Business GoalsSlide2

For instance, 70% of very small and 87% of small businesses agree that mobile solutions play a significant role in improving customer experience and retention (Figure 3). Almost two-thirds see mobile as playing a significant role in helping them to attract new customers.

Figure 3: Significance of Mobile Solutions In Addressing Customer ChallengesSlide3

Survey respondents are also convinced that mobile solutions help them create a more effective, productive workforce environment, with 74% of very small and a close to unanimous 91% of small businesses seeing mobile as boosting employee productivity. Furthermore, almost two-thirds see mobile solutions as helping them to attract and retain quality employees, reflecting the reality that people increasingly want to gain the same level of mobile access, convenience and information in their business lives as they are getting as consumers. Mobile solutions are likely to become even more important to recruiting new employees as small businesses seeking to hire more younger workers and millenials.

Figure 4: Significance of Mobile Solutions In Addressing Workforce ChallengesSlide4

Perhaps most telling, small businesses see mobile solutions as playing a significant role in helping them meet critical top and bottom line business challenges, such as reacting quickly to changing market conditions, reducing operating costs, improving cash flow, and growing revenue.

Figure 5: Significance of Mobile Solutions In Addressing Financial ChallengesSlide5

More Work Is Getting Done On Mobile Devices

Businesses are taking advantage of providing employees with the ability to work anytime, anywhere via mobile devices (Figure 6). Small business use of basic collaboration and productivity tools such as email, calendar and contacts is already mainstream, with upwards of 80% of very small and small businesses already using these apps on mobile devices. However, some mobile collaboration and productivity apps are poised for strong gains next year, with 20%-plus of small business respondents planning to deploy mobile conferencing, document management, find-me-follow-me presence, personal assistant and/or document editing and creation apps within the next 12 months.

Figure 6: Small Business Employees are Doing More Work On Mobile DevicesSlide6

Mobile business apps have made strong gains over the past three years, particularly among businesses with 20-99 employees, where the number of mobile business apps used regularly jumped 27% over the past year. We expect this trend to continue, as respondent’s plans to add new mobile business apps in the next 12 months were strong across the board. Mobile apps for time management and capture lead the way, with 25% of both very small and small businesses planning to add this capability; followed by mobile marketing and advertising (24%); business analytics (23%); and financial management/payment processing (23%).

Small Businesses Are Deploying Mobile Web Sites and Apps for Customers

Since attracting new customers and growing revenues are top goals for small businesses, it’s not surprising that they are investing in mobile web sites and apps for customers, partners and suppliers. 48% of small businesses now have a mobile-friendly website, and 30% offer at least one mobile app for customers. Growth across all functional areas is up dramatically year-over-year (Figure 7), and plans to add more external-facing apps are healthy.

Figure 7: Small Businesses are Rapidly Adopting Customer-Facing Mobile AppsSlide7

Small business attitudes about mobile solutions are remarkably positive, and small business ascent up the mobile adoption curve has been nothing short of revolutionary when compared to other technology areas.

As a result, mobile is already having a significant impact on decision-making in other IT areas (Figure 8).

Figure 8: Mobile Impact on IT DecisionsSlide8

Perspective

As the mobile-first mentality becomes more pervasive, small businesses will need more guidance to ensure that their strategies for cloud, networking, infrastructure, legacy applications and devices support, enhance and integrate with the mobile solutions they deploy. By developing a holistic strategy, rather than taking a reactive approach, small businesses can both maximize value from their mobile investments, and reduce management headaches down the road.

This is the second post in a two-part series sponsored by Dell that discusses how small businesses are using mobile technologies in their businesses.

Trends in Small Business Adoption of Mobile Solutions

Mobile technology is revolutionizing how small businesses get things done. Over the last few years, SMB Group has conducted detailed surveys to quantify the impact of mobile in the small business market. Having recently published our 2014 SMB Mobile Solutions Study, we thought the timing was right to look at some key benchmarks to illuminate just how quickly very small (1-19 employees) and small (20-99 employees) businesses are evolving in the mobile solutions area.

Mobile Making Steady Gains as a Percentage of Overall Small Business Technology Spending

Mobile solutions also account for a growing share of very small and small business technology budgets (Figure 1). Year-over-year, median spending on mobile solutions as a percentage of total technology spending has risen 10% year among very small businesses, and 7% among small businesses.

Figure 1: Mobile Accounts for an Increasing Share of Small Business Technology Budgets

Slide1

 In addition, both very small and small businesses continue to be bullish on mobile spending plans (Figure 2). In 2014, 48% of very small businesses and 70% of small businesses forecast that they would increase mobile spending in the coming year.

 Figure 2: Small Businesses Mobile Spending Plans Continue to Rise

Slide2

Mobile Applications Play an Increasingly Bigger Role in Small Business

Trending analysis shows that mobile applications are becoming more critical for small businesses. Both very small and very small businesses continue to incorporate a growing number of mobile apps into their day-to-day business operations (Figure 3).

Figure 3: Increasing Use of Mobile AppsSlide3

Since upwards of 80% of very small and small businesses already use basic collaboration and productivity tools such as email, calendar and contacts, growth is tapering somewhat in this area. However, some mobile collaboration and productivity apps are poised for strong gains next year, with 20%-plus of small business respondents planning to deploy mobile conferencing, document management, find-me-follow-me presence, personal assistant and/or document editing and creation apps within the next 12 months.

Mobile business apps have made bigger gains over the past three years, particularly among businesses with 20-99 employees, where the number of mobile business apps used regularly jumped 27% over the past year. We expect this trend to continue, as respondent’s plans to add new mobile business apps in the next 12 months were strong across the board. Mobile apps for time management and capture lead the way, with 25% of both very small and small businesses planning to add this capability; followed by mobile marketing and advertising (24%); business analytics (23%); and financial management/payment processing (23%).

Furthermore, 67% of very small and 73% of small businesses believe that mobile apps will replace some of their current business applications, further underscoring that mobile apps are becoming core to the business (Figure 4).

Figure 4: Mobile Apps Increasingly Likely to Complement/Displace Traditional Business AppsSlide4

BYOD Support Still Gaining

Employees increasingly want to use their own devices to access corporate data. This is part of a growing trend dubbed Bring Your Own Device (BYOD). In the BYOD model, employees can use the device of their choice for work. BYOD has both pros and cons. Most people think it helps improve employee productivity, and some think it can lower costs. However, most also agree that BYOD devices are more difficult to manage and secure than company owned devices.

Despite these tradeoffs, small business support for bring-your-own-device (BYOD) programs for employees also continues to enjoy strong growth (Figure 5). Top drivers for the 60% of small businesses that currently support BYOD support include employee familiarity/preference for their own device (71%); saving money (63%); and meeting employee expectations/demands (42%). Roughly one-quarter of these businesses pay for all smartphone device and service expenses. In contrast, 20% cover smartphone service plan costs only; 18% cover business use expenses only, and 20% provide employees with fixed monthly stipends. Interestingly, 18% expect employees to use their own mobile device for work but do not cover any BYOD expenses.

Figure 5: Growth In Small Business BYOD SupportSlide5

But BYOD challenges hinder wider adoption. 40% of small businesses don’t support BYOD due to security concerns (56%); difficult to manage (54%); and because reimbursing employees for BYOD is too time consuming/complex (38%). These businesses are not likely to add BYOD support until it is easier to partition, secure, bill and manage work-related versus personal mobile use and expenses.

Small Businesses Slower to Add Mobile Management Capabilities

In fact, small business adoption of bright and shiny mobile devices and apps has quickly outpaced their embrace of mobile management solutions in general. As shown on Figure 6, only 43% of businesses with 20-99 employees are using a mobile device management solution, while just 33% use a solution to manage and secure mobile apps.

Figure 6: Small Business (20-99 employees) Adoption of Mobile Management SolutionsSlide6

In addition, while small business spending on mobile devices, service plans and apps as a percentage of total mobile spending has risen from 2013 to 2014, spending on mobile management, consulting and security has declined somewhat from 2013.

But it does not appear that cost is what’s holding small businesses back. Just 16% of respondents said that they didn’t’ use a mobile management solution because they are too expensive. Instead, the biggest obstacles are they don’t think they need it (51%); they don’t know which solution is right for their company (22%) and they don’t have the resources to deploy it (22%).

Perspective

Small businesses are clearly swept up in the mobile tsunami, and mobile solutions are becoming essential to small business success. However, small business adoption of mobile devices, apps and services is rapidly outpacing their ability to secure and manage mobile assets.

Without appropriate mobile device, application and data management policies and solutions in place, small businesses risk putting their corporate financial and brand security at ever-higher risk. In addition, as reliance on mobile solutions rises without adequate attention to management, many small businesses will find manual attempts to track and manage mobile use increasingly time-consuming and frustrating.

Study findings strongly suggest that while small businesses have quickly grasped how mobile can help their businesses, they are still struggling to understand the why, what, and how of mobile management. Vendors will need to dramatically ramp up education, guidance and consulting initiative and services to help more small businesses understand and take action in this area.

This is the first post in a two-part series sponsored by Dell that discusses how small businesses are using mobile technologies in their businesses.

The State of SMB Adoption of Mobile Apps and Management Solutions

Slide1We recently published two new Perspectives reports that provide in-depth data and insights about the state of SMB mobile solution adoption. These reports tell an interesting story: While 55% of small and 65% of medium businesses view mobile solutions as critical to their businesses, and as mobile budgets continue to rise, SMBs are challenged by high data service costs, uncertainty about which solutions are the right fit for their businesses, security and management concerns, and integration.

The first, SMB Adoption Trends and Requirements: Mobile Applications, examines SMB drivers, challenges, requirements and future implications for SMB adoption and of mobile applications. Some of what we learned includes:

  • 84% of small and 87% of medium businesses view mobile apps as complementary to traditional business applications, and a majority envision that mobile apps will replace some traditional applications.
  • Employee use of mobile collaboration apps is ubiquitous, and adoption of mobile business apps jumped 9% in small and 5% in medium business from 2013 to 2014.
  • SMBs are rapidly adopting customer-facing mobile websites and apps to help attract new customers, respond faster to external constituents and keep up with the competition.
  • Security concerns, development and deployment costs, and lack of a strong business case are preventing SMBs from implementing more mobile apps.

The second report, SMB Adoption Trends and Requirements: Mobile Management, explores how SMBs are handling mobile management today, their future plans, and what they need vendors to do to better serve their needs. For instance, we found that:

  • From 2013 to 2014, spending for mobile consulting, management, apps and security services rose in terms of actual dollar expenditures. However, dollars allocated for these areas decreased as a percentage of the total SMB mobile spend, while the percentage allocated for mobile devices and services continues to grow.From 2013 to 2014, small business support for BYOD jumped 33%, while medium business support grew 10%. However, BYOD adopters are struggling to determine the best policies to administer and reimburse for BYOD device and service plans.
  • Less than half of SMBs have implemented mobile device management solutions, while about one-third use a mobile application management solution.
  • 29% of small and 28% of medium businesses are seeking services to help them craft mobile strategy, security, use and management policies.

These reports underscore that although many SMBs want to continue to expand their use mobile technologies to transform their businesses, they need vendors to provide them with easier access to better solutions to manage and scale their mobile capabilities.

For More Information
Report highlights, detailed table of contents and pricing are available for each report by clicking on the report links above. 
Please contact Lisa Lincoln, lisa.lincoln70@smb-gr.com or 508.734.5658, for additional information or to order.