Techaisle Blog

Techaisle’s latest US, Asia/Pacific, Europe and Latin America SMB and Midmarket cloud adoption trends survey research shows that the external spend on cloud will likely reach US$115B in 2019. The survey data also reveals that the total spend will be higher within small businesses (1-99 employees) than midmarket firms (100-999 employees) but average spend on cloud by midmarket firms will be approximately 30X – 35X of small businesses. Although cloud adoption is accelerating within SMBs and midmarket firms, the cloud spend is still only a fraction of the global SMB and midmarket IT spend (excluding telecom services) of US$662B in 2019.

Techaisle had forecast in 2016 that that the near-term trends will include ‘multiple clouds’ with more sophisticated automation. The 2016 data showed that over 70% of small business users and just over half of midmarket firms were working with a single type of cloud platform (public, private or hybrid). Techaisle believed that over time, most midmarket firms and a more substantial proportion of the small business community would opt to use multiple different cloud platforms, deploying workloads on the infrastructure that is best suited or most cost effective for the application’s needs. This would in turn require users to connect clouds – to each other, and to on-premise equipment – to ensure that management requirements associated with these diffused IT delivery platforms did not overwhelm the IT staff. Techaisle expected to see increased use of orchestration and advanced security technologies and other sophisticated tools to help the IT generalists who are common within SMB IT units to keep pace with increases in IT management complexity.

The forecast on the use of multiple clouds and use of orchestration and automation technologies is coming true. For example, in 2019, in the US, 52% of midmarket firms are currently using multiple clouds and 38% are using multiple public cloud providers. Even the percent of midmarket firms using hybrid clouds has increased to 45% with 18% of cloud workloads on hybrid platforms. Survey data shows that other regions, especially, Europe and Asia/Pacific, although behind the US are catching up.

Techaisle has released its annual research infographics on top 10 IT priorities, business issues and IT challenges of SMBs (1-999 employees), midmarket firms (100-999 employees) and small businesses (1-99 employees) for 2019. In its detailed SMB survey Techaisle investigated 21 different technology areas and several technology sub-categories, 23 different IT challenges and 21 different business issues. This is the 9th year of Techaisle’s annual survey research initiative that probes for top business issues, IT priorities and IT challenges. Tracking history provides a fascinating evolution in which new business goals drive new IT priorities and uncover challenges that must be addressed to enable progress on business objectives.

Primary research was conducted among senior IT and business decision makers from Techaisle network of 1.2M B2B IT professionals spread across 30+ countries.

There are some interesting differences in IT priorities as compared to 2018. IoT and VR/AR fell below top 10 (but still within top 15) and replaced by Voice/Digital assistants as well as Open source solutions. Across all regions (US, Europe, Asia/Pacific, Latin America) digital unified workspace and software-defined are becoming a priority for both SMBs and midmarket firms. Security many places within the top 10 IT challenges in different forms – cloud security, mobile device security, data protection/recovery/business continuity – with Cloud security as the top IT challenge.

Global SMB & Midmarket IT spend (excluding telecom services) in 2019 is projected to be US$665B and corresponding cloud spend is expected to be US$115B. Research also found that IT budget growths in 2019 will be the highest in Asia/Pacific (6.2%) and lowest in Latin America (1.8%). While IT budget constraint is not the top challenge within SMBs in the US and Asia/Pacific, it is the top concern in Latin America.

Managing data growth is continuing to pose challenge for SMBs and when probed further Techaisle research found that only 11% of SMBs and 29% of midmarket firms have evidence-driven culture with data-driven decision-making business processes in which data defines requirements or opportunities and management then determines the best option for moving forward. In the US, 17% of small business and 34% of midmarket firms consider themselves to be innovative.

2019 Top 10 SMB business issues, IT priorities, IT challenges

A Techaisle survey of nearly 900 midmarket firms on Digital Transformation trends in the US found that more than one-third of midmarket businesses – 34% - view digital transformation as a means of driving product innovation. Regardless of whether the ‘product’ that an organization produces is a physical good or a service, there is likely a link between DX and breakthrough design and delivery.

In both products and services, the key links between DX and product innovation are insight and agility. As the graphic below shows, these themes permeate the key business issues, innovation objectives and digital transformation drivers that shape the strategy of ‘holistic’ organizations – the most advanced DX users in the midmarket. These firms are using DX to respond to a set of imperatives that set them apart from their competitors.

Senior executives in midmarket organizations care about digital transformation – and as a result, channel members can leverage their understanding of key Digital Transformation objectives and roadmaps into long-term, sustainable relationships with senior decision makers.

A Techaisle survey of nearly 900 midmarket firms in the US found that 41% of midmarket firms believe digital technologies impact every aspect of the business and are a core part of organizational strategy and more than one-third of midmarket businesses – 34% - believe that digital transformation is a key to customer intimacy. Executives are surrounded by examples of organizations that are using data – drawn from integrated internal systems, or from social media, or from far-flung sensors, or from third party services, or from a mix of all of these sources – to improve the key operating parameters of their businesses. Midmarket firms anticipate 21% improvement in upsell/cross-sell, 20% improvement in brand image and 19% improvement in customer satisfaction as outcomes of a successful DX strategy.

DX-enabled organizations generate more revenue from cross-sell/upsell; they have greater customer loyalty; they are able to open new markets and introduce new products and services faster and with better payback periods. And they do this through customer intimacy – by better understanding what their clients want and need, and by being agile in responding to these wants and needs. Techaisle research finds, in fact, that performance metrics that are tied to customer intimacy – improved upsell/cross-sell of products, improved brand image, and better customer satisfaction and retention – are the areas expected to improve the most as a result of digital transformation in the organization.

The constraints
Building customer intimacy is a little bit like making Baked Alaska: the promise is delicious, but the method is mysterious. With Baked Alaska, it’s the notion that ice cream can emerge from an oven unmelted. With customer intimacy, it’s the mystery of how to successfully aggregate data and integrate it with customer-facing activities.