Techaisle Blog

On 2^nd of March, Cisco made three new product and service announcements for the small and mid-market business segments. With these announcements, Cisco is continuing to show its commitment and focus for empowering the SMB segment and enabling its partner community to efficiently and effectively serve such market.

These three new announcements are a new platform for SMB collaboration (UC300 & BE 3000); a program to empower partners with the resale of WebEX solutions; and improved sales support to the SMB partner community with the Partner Advisor. These offerings are immediately available in the US and UK, and will gradually roll out in other European countries as Cisco completes the localization activities.

SMB-tailored products

The Cisco UC300 series is a very important step towards empowering small businesses to have a voice of their own, literally. Priced at US$165 per user, UC300 series can support up to 24 users and provides one single platform for voicemail, wireless, auto attendant, remote access, and mobile links. We feel this is an important and affordable platform for many of the small businesses who are still sitting on the fence as far as having a well connected communication and collaboration system among its employees. It is also extremely suitable for those small businesses which have grown organically and have multiple communication devices and have either fully or partially deployed VoIP systems.

For higher end small business users and the lower end of the mid-market businesses, Cisco announced its Business Edition 3000 which can support up to 300 users and is priced at US$100 per user. The platform not only provides capabilities for a single number, soft phones, auto attendant, click to call, mobility link, but also is able to connect up to 10 different sites.

Technologies such as collaboration and web conferencing are increasingly becoming important to SMBs to satisfy their priority to make employees more productive. As SMBs tighten budgets for items such as travel, such collaboration and conferencing solutions take center stage. While some solutions have been around for a long time, we believe that broad adoption among SMBs is upon us as evidenced by the priority assigned to such technologies vs. the current level of penetration. And with the announcements of UC300 and BE 3000, Cisco is playing right within the sweet spot of empowering the SMBs.

Similarly, mobile devices and enabling technologies are perhaps the most exciting space today remaining somewhat resilient even in a severe downturn. SMBs have always had a strong desire for mobile products and things became more interesting since Apple released its iPhone. As smart phones expand their empowering abilities, SMBs have strongly taken to accessing email, conferencing, collaborating and using social networking when mobile. A unified, affordable and simple to deploy platform suddenly helps the small businesses.

Small businesses have actively begun to use social media to create awareness about their business. According to Techaisle’s most recent survey, 70% plan to use social media in the next 12 months which is a positive sign, however 45% are not sure how it could help their business. Nevertheless, it is comforting to know that platforms from Cisco can provide that consolidated enablement across all different devices and solutions that are being used by SMBs. Another recent survey on Cloud Computing shows that besides industry specific applications, communications/collaboration and general business productivity applications including CRM are fastest growing. The inflection point for cloud based services is evident when business hit 20 or more employees. This again points to the fact that Cisco seems to have done its homework and instead of following a technology paradigm, has introduced a real business solution paradigm.

More focus on supporting Partners with dedicated personnel

Cisco announced also the introduction of Partner Advisor. With this enabling element of its partner programs, Cisco is catching up with the more traditional instrument of back-office support that is customary for the small/mid-sized reseller. Cisco Partner Advisor, which is to be deployed globally during this year, includes a one stop source for sales support and information such as product selection, promotion, pricing, financing and ordering.

The Cisco Partner Advisor is to be delivered both through the use of a dedicated myCisco online portal and, more importantly, with dedicated live agents’ organization – recognizing that distribution is a people business and resellers requires personal touch. The physical locations of the agents’ organization and their ability to solve issues for resellers will be the test ground for success of this investment Cisco is making. Dedicated to support the smaller resellers, not all Cisco’s partners will be allowed access to the Partner Advisor services.

Andrew Sage, Vice-President of Worldwide Small Business Sales, Cisco said at the announcement, “Our partners are the center of our business at Cisco, and we will do whatever we can to help them succeed. Our new Cisco Partner Advisor initiative uses both people and technology to help our small and mid-market business partners to begin or continue working with Cisco to get the immediate sales and programs help they need.”

Partner-Led WebEx: Cisco shows how the channel can drive Cloud Services

Cisco is bullish here, and rightly so. A chance to talk to customers, different ways to sell collaboration features, application sharing and complementing the new product launch, Cisco announced that Partners will be able to bundle or resell in their offerings Cisco WebEx Online Services.

Whilst this will be offered to users at published prices, this enabling & recurring revenue stream has all the writings of a strong lock leverage which competitors will find difficult to neutralize in the quest for new partners. Additionally, this appears to be a great integration example for Cloud based services offered by the reselling channel for others to follow.

Ian Pennell, Senior Vice-President, Small Business Technology Group and Co-Chair, Small Business Council, Cisco also showed his commitment for small businesses and the partner community that serves that segment by saying, “Cisco continues to be 100 percent committed to giving our partners and the customers they serve the easy-to-use technology innovation they need to succeed. Our partners and customers have told us they want simple unified communications solutions to help them stay ahead of their competition. Cisco is ready to meet that need.”

Paolo Puppoli
Tavishi Agrawal
Techaisle

Intel today announced, Thunderbolt, a technology that allows a user to connect multiple devices with only one cable with a bi-directional transfer rate of 10 Gbps. Now, that is a massive speed and certainly takes the pain and guessing game away from finding the right cables to fit into their relevant slots acoss devices. Imagine a case where a PC is connected to a TV to a printer to a storage device to a phone - all with the same cable and with almost instantaneous data transfer.

It is certainly a very excitement development. However, I feel it is several years out in its full adoption, implementation and pervasiveness. In a world that is increasingly becoming wireless do we still need cables? Why would I want to stream my music or video to my TV through a cable? But no, no. I feel that wireless is becoming important but not all devices are suitable for wireless connections. Wireless transfer rates of 10 Gbps at consumer level are still far out. But would it not be nice. At my home, or even in the office, behind the TV stand or the desk are hiding plethoras of cables gathering dust. Such tangled cables are also known to be bad feng-shui.

If we understand correctly, using Thunderbolt, all the cables can be replaced in one uniform daisy chain. Would that not be nice? It would be.  But only now we are all learning the use of HDMI and probably USB 3.0 and not all devices have them. What about legacy systems that are still in use? And there are many and will remain so for many years. Especially, in the case of SMBs where devices and form factors get amassed organically with no one clear overhaul.

Nevertheless, I am rooting for the technology. However, Intel will have to move very fast to get device-makers on board. Granted it may be expensive to begin with but such pricing becomes secondary when wide adoption begins.

WiGig is also coming into play with data transfer rates of 7 Gbps and Intel is among its board members. To those who say that WiGig will win, I say, wait and watch, both Thunderbolt and WiGig will co-exist. With Apple taking the lead in the introduction of Thunderbolt it is definitely a defining moment which many will take note of, especially the eco-system that thrives around Apple.

Anurag Agrawal
Techaisle

Techaisle believes that in about 5 year’s time, SMB Cloud Computing will begin its steady route of complexity of client-server technology. Client-server technology (alternatively server-based computing) became increasingly complex to implement and maintain because of the following reasons:

• Lack of control


• Complexity in development and usage


• Muddled TCO


• Intricacies in Data Integration


• Expensive implementation


• Dependency on Consultants


• Too many Vendors providing niche solutions

Historically, these are the very reasons that  gave rise to thin-client computing which quickly transformed its nomenclature to Desktop Virtualization. Again the promise of lower TCO, “access anytime, anywhere”, centralized computing with de-centralized user capabilities, disaster recovery and standardization is still struggling to make a definitive statement for SMBs.

Similar signs are already becoming visible in the Cloud Computing arena. The beneficiaries of this complexity will be three different types of entities:

1. Those that provide consulting to SMBs prior to Cloud Computing Implementation


2. Those that provide consulting and data integration across clouds post cloud implementation for SMBs


3. Those that have a stack of offerings providing not only cloud solutions but also seamless data exchange capabilities for SMBs

Anurag Agrawal
Techaisle

It should come as no surprise that marketing to SMBs is hard – harder in many ways than marketing to enterprises. The diversity and vast size of the SMB market is the primary reason for why getting and supporting SMB customers is such a hard task. Most Cloud vendors design their products with larger enterprises in mind with SMBs being an afterthought. Even if there are any SMB specific requirements that become part of the solution they are typically overshadowed by other enterprise requirements. This is a particular problem with Cloud based services which are designed to scale and so selling those to SMBs becomes a matter of configuring a price that SMBs can digest.

Little if any thought is given to whether a Cloud service has direct business relevance to SMBs. But as the Techaisle SMB computing survey data shows, vendors must demonstrate direct business relevance if they are to succeed in gaining SMB customers. Despite all the marketing around productivity and line of business Cloud services, SMB Cloud adoption is led by industry specific services. This aspect provides valuable insight into SMB decision making where Cloud services are concerned. When evaluating packaged software SMBs are more concerned with issues surrounding application compatibility, maintenance, cost, integration, training and support. It would appear, however, that this criteria changes when applications are evaluated as Cloud services. The key question appears to be how quickly can a Cloud service impact their business. This makes justifying purchase of industry specific services rather an easy one.

It is clearly not the only criteria though. The same survey shows high levels of adoption of hosted email, Cloud storage and security services. While all these have indirect business relevance in that they are foundational IT services, they are essentially a cost line item in an SMB income statement. SMBs are migrating these services to the Cloud because it is also an easy decision. SMBs are familiar with using email in the Cloud for personal reasons (Gmail, Hotmail etc.) and are therefore comfortable migrating the business email and storage to the Cloud as well. Similarly, migrating to Cloud based storage and security also are easy decisions for the same reasons.

Other services however, have not enjoyed the same success (yet). One can argue that this is simply a matter of giving SMBs time to get comfy with Cloud services. The problem as we see it is that most of the other services are marketed using a “reduce cost” value proposition. We believe a different sales and marketing approach is warranted. If reducing cost continues to be the centerpiece then for vendors this becomes a race to the bottom – which is not good for the industry as a whole.

Abhijeet Rane
Techaisle