Techaisle Blog

Increasing profitability, improving workforce productivity and reducing operational costs are among the top five business issues for SMBs in the Asia/Pacific region. Cost is sometimes a tricky item to nail down as too often SMBs focus on short term costs. In most cases this approach is absolutely valid but it can lead to situations that cost them more. The choice between maintaining older PCs and replacing them with newer PCs is one such area. Techaisle, conducted a Pan-Asia survey of 2156 SMBs in five countries to understand the comparative differences in costs of maintaining older & newer PCs and associated quantifiable productivity lost and the impact of newer PCs. Findings from the survey, commissioned by Microsoft & Intel, and driving Microsoft’s “Make the Shift Campaign” in the Pan-Asian region, uncovers that the cost of upkeeping a PC older than four years can be used to purchase at least two new Modern PCs.

The study reveals that the cost of owning a 4 year or older PC by an SMB is US$2,736 which is 2.7 times the cost for a PC that is less than 4 years old. The study also revealed that an average of 112 hours is lost due to downtime of an older PC, a number that is 3.1X of newer PCs. This is a “stealth” cost that drains cash flow and adds to the operating cost of an SMB which they can hardly afford. Cost implications vary for SMBs of different sizes.

IBM’s acquisition of Red Hat makes sense on several levels: it adds a high-growth software portfolio to boost software and recurring revenue, and provides IBM with a bit of a ‘halo’ in the tech community, as it now controls the industry’s leading Open Source supplier.

Moving down a level, though, why might this acquisition matter – and to whom? Techaisle’s take on the most important angles that shaped and will determine the success of the deal. (Download Techaisle Take report)

Who does this matter to?

Imagine you are an enterprise with a large legacy infrastructure, possibly in a regulated industry (like financial services or government). You see that IT service delivery is advancing faster outside your walls than within your firm, as other businesses aggressively adopt cloud, Agile, DevOps and containers.

You are motivated to try to integrate these advanced platforms/products/methodologies into your environment as well – to capitalize on the advantages that they can deliver, or because you’re afraid that if you don’t act you’ll be left behind, watching competitors introduce new IT-enabled capabilities faster and at lower cost than you can.

In an organization like this, IT executives are unlikely to want to dive headlong into a deep/committed relationship with a public cloud provider like AWS. They will understand the importance of building a multi-cloud, hybrid IT infrastructure, but will want to manage that environment internally, with a focus on existing capabilities (both installed products and skills). “Cloud first” won’t be a living mandate – it might describe an approach to new and non-critical applications, but won’t be a serious consideration for core systems of record.

Advantages (and some potential pitfalls) of a combined IBM/Red Hat

Change is a constant in IT – and SMBs are struggling to keep up. A recent Techaisle survey of more than 1,500 US SMBs (1-99 employees) found that in 83% of SMBs, technology is more important today than it was 3 years ago. More than half of SMBs find that their technology adoption related pain points have increased in the last year. Cloud is supposed to provide SMBs with worry-free access to cutting-edge technology – but 59% of SMBs find cloud technology difficult to understand. SMBs need defined paths that help them to build business agility on top of a complex infrastructure foundation.

One area where support and guidance are most needed is hybrid IT. As per Techaisle’s SMB & Midmarket Cloud adoption study just over 80 percent of SMBs are either currently connecting or planning to connect their on-premise environments (including private cloud) to external public clouds. These firms are responding to a need to enable digital transformation of their business operations: more than 40 percent of SMBs (as per Techaisle’s SMB & Midmarket Digital transformation trends study) are already embracing an advanced ‘holistic’ digital transformation strategy; almost all have some type of digitization, digitalization or digital transformation initiative underway.

Because SMBs can’t support multiple parallel environments, hybrid IT took root earlier in this segment than within enterprise accounts. SMB progress on hybrid has been halting, though: there has been a serious disconnect between what the channel partners offer in terms of hybrid IT solutions to the SMBs and what the SMBs really are asking for. Techaisle has seen evidence of greater vendor focus on supporting the SMB transition to hybrid infrastructure, however. As an example, HPE with its recent SMB-focused product announcements is addressing SMB concerns by simplifying its SMB hybrid technology, supporting easier adoption, enabling hybrid deployments and paving a path for digital transformation.

HPE has released five hybrid cloud solutions leveraging Microsoft Azure services, and purpose-built ProLiant Gen10 servers featuring HPE Silicon Root of Trust capabilities for enhanced security. For the very small businesses, HPE rolled out a small office deployment solution that provides wireless networking in-a-box and includes secure servers as well as Aruba Wi-Fi access points and switches.

Small and midsized businesses are challenged with defending their users, applications and data against external threats. Security issues cast a long shadow over SMB IT priorities, especially as firms embrace the benefits of hybrid IT, only to find that their environments become more complex, and more difficult to manage and protect. SMBs are responding by expanding security budgets – but they lack the staff and expertise to construct effective shields around their organizations. The channel has an essential role to play in defending their clients’ SMB businesses against security threats.

The origins of the saying “it’s about the journey, not the destination” may be unclear – it’s variably ascribed to Ralph Waldo Emerson, theologian Lynn H. Hough, Canadian rapper Drake, and others – but its applicability in an IT security context is clear: there is no end point at which security is ‘done’; security requires constant updating, to stay current with expanding threat vectors.

This requirement for continuously-improved IT security is both a challenge and an opportunity for channel members. There is a need to stay current with the tactics and technologies that protect SMBs from threats – and there is a steady and profitably business to be made in meeting this challenge.

What is the opportunity?

Techaisle has pegged US SMB security spending in 2018 at $9 billion: nearly $4 billion in spend by small (1-99 employees) businesses, and more than $5 billion in spending by midmarket (100-999) firms. And the market is expanding rapidly, especially at the high end of the small business segment and within the midmarket: a large-scale Techaisle survey found that in 2018, firms with 50-99, 100-499 and 500-999 employees increased IT security spending by 6%, 7% and 8%, respectively. Channel organizations that invest in building strong security practices are able to tap into strong and growing demand for IT security solutions, and the management expertise needed to effectively deploy security products in an SMB environment.