Techaisle Blog

Techaisle’s latest SMB and Channel partner research shows that Dell more than doubled its approval scores among channel partners since 2013, and improved 15% among SMB tech buyers compared to 2014. 52% of US SMBs say they like Dell, which is up from 45% in 2014 and 53% of SMB channel partners, up from 26% in 2013. Dell is still vying to acquire a seat at the enterprise CIO table but at least within SMBs and midmarket firms Dell’s impact is being felt.

Dell is in a good place. Bolstered by its decade of purposeful targeted acquisitions and thrust into the center as its competitors disintegrate and regroup. Perhaps, without the confluence of these fortuitous events Dell may have been the engine that could but did not. While it has some ways to go before it reaches its destination, Dell’s end-to-end solutions train is on the move, on the right track and making good progress. Faster, stronger, better infrastructure solutions that span from the center of IT to the edge of network can only fuel growth to a certain extent. In an industry which is vying for the mindshare of buyers, Dell has to rise above with expanded branding and general awareness initiatives, including thought leadership campaigns, and not rely exclusively on its massive sales strengths. There is some good work being done by Dr. Jai Menon, Chief Research Officer & Vice President on technology evolution such as SBDC (Software-based Data Centers), HVC (High Velocity Clouds), NVM (Non-Volatile Memory) and DLP (Data Loss Prevention). Dell is also doing a great job of leading conversations on the importance of entrepreneurship around the globe to help spur innovation, employment and economic growth. Dell acquired more patents in 2014 (20+% growth) than any year in Dell history. However, most SMB buyers are yet unaware about Dell’s full capabilities and investments in these areas and how they affect the future readiness of SMB and midmarket firms' own IT.

Let us break down some key areas of SMB IT investment and Dell’s relevance.

Mobility

Mobility is a top IT priority for 76% of global SMBs and in US alone SMBs spent US$50B on mobility in 2014 (Source: Techaisle 2015 global SMB and Midmarket Mobility Adoption Study). There is no doubt that Dell has a strong presence in the mobile device segment with its laptops (especially XPS13), and Venue tablets. Dell has chosen not to participate in the Smartphone segment and rightfully so. But question remains: How does Dell stay relevant in emerging economies such as India which have moved overwhelmingly to the mobile phone and are moving rapidly to the smartphone, where Dell is not a significant player? The answer may lie in Dell’s focus on commercial PC segment where the market is both under-penetrated and has low PC to employee density.

SMB mobility is usually defined not by devices but by the workplace where those devices and their users are. Accordingly, SMBs are not only planning to adopt mobility applications, but are also seeking mobility solutions that enable their mobile workforce - specifically solutions that provide management, security and infrastructure needed to connect mobile devices and applications into corporate IT environment. Mobility solution is Dell’s strongest suite of offerings built from various components such as Dell KACE, Dell SonicWALL, Dell Cloud Client Computing (Wyse thin clients), Dell Data Protection software and Dell Mobile as well as Desktop Workspace (Wyse vWorkspace).

However, Dell is not the first mobility solution supplier that comes to mind. A category that is in high growth mode today, which responds to a rapidly-growing SMB market need and drives high spending levels within SMB accounts is clearly attractive to a wide range of potential suppliers. Ordinarily, one would expect to find that large horizontal IT vendors like Dell with its portfolio of mobility security and mobile management offerings have staked out the high ground in a market of this type, and that channel members are acting as guides to their SMB clients. However, data from Techaisle’s SMB Mobility Adoption survey shows that SMB buyers are predominantly turning to specialized firms for mobility solutions.

Recognizing the need to be front and center Dell is investing in training its channel partners on mobility solution offerings but to be really successful Dell must define its offerings in more commonly understood categories - Mobile device management, Enterprise mobile management, Windows-as-a-service, thin clients and mobile app security.

Cloud

Cloud is no longer a trend that is discrete from mainstream IT. Techaisle’s global SMB and Midmarket Cloud Adoption trends survey data shows that cloud computing is viewed as an IT priority by 96% of US SMBs and a similar percent globally. Within the US alone, SMBs spent US$30B on cloud in 2014. Cloud is established as essential IT infrastructure for SMBs and Techaisle expects cloud momentum to continue as cloud addresses some of the key IT issues faced by SMBs.

Data shows that the larger SMB cloud trend is towards deeper use of SaaS. There is still scope for additional use of cloud infrastructure to replace and/or supplement physical back-office gear, but there is a limit to how much infrastructure is required by an SMB. Dell is a cloud infrastructure supplier with a formidable set of offerings and services which includes its converged infrastructure solutions, cloud client computing capabilities, and infrastructure management and integration solutions for cloud environments. But again, despite its investments, Dell is not the most widely recognized suppliers of converged infrastructure by SMB end-users and SMB channel partners (Sources: Techaisle SMB Converged Infrastructure Adoption Study & SMB Channel Partner Trends study). Nor is it mentioned among the top 5 IT suppliers for cloud infrastructure solutions by SMBs as per Techaisle’s recent survey.

But for those SMBs and midmarket firms that are moving rapidly to private or hybrid cloud deployments Dell combines the scale and efficiencies of its PowerEdge FX portfolio with solutions like Active Systems Manager and Dell Cloud Manager to deliver the infrastructure building blocks and management capabilities needed for private or hybrid environments. Furthermore, Dell works closely with partners, such as VMware (for EVO: RAIL) and Microsoft (for Azure) in delivering tightly integrated and engineered cloud solutions. There is tremendous merit in what Dell is doing and specific SMB segments are paying attention. As per Techaisle’s SMB attitudinal segmentation, Dell is becoming a go-to supplier of on-premise cloud infrastructure for “growth-aspiring” and “innovation-driven” SMBs and Midmarket firms.

Big Data

Techaisle’s study on SMB and Midmarket Big Data Adoption and Trends shows that 7 percent of small businesses and 20 percent of midmarket businesses are currently using Big Data solutions and that another 17 percent & 38 percent respectively is planning to adopt within the next 1-2 years. The promise of superior data-driven decision making is motivating SMBs to invest in Big Data technology. This represents a sizable opportunity considering that the segment is relatively new, it requires a certain level of IT sophistication and a history in linear investment in IT enablers to be successful. In 2014 US SMBs spent slightly over US$3B on big data. Specifically, midmarket attitude towards Big Data has transitioned from “over-hype” to must-have technology with the increase in employee size.

Dell has certainly dipped its toes into big data analytics with its acquisition of StatSoft and its Statistica advanced analytics solution. Its other two big data products Dell Kitenga and Dell Toad Data Point are incidental yet complementary to Dell’s big data solution stack. It is not out of place to mention that both Kitenga and Toad Data Point came from acquisitions. But the overarching anchors of Dell’s big data strategy are its partnerships with Cloudera & Intel (integration of Dell’s in-memory appliance with Cloudera Enterprise) and Dell’s professional services. Statistica may have one leg up on SAS due to its visualization capability and another leg up on Tableau with its statistical functionality. But it will be interesting to see where and how much of resources will Dell commit to drive its big data solution stack adoption beyond the healthcare vertical (where it has tremendous strength due to acquisition of Perot Systems). For now, most SMBs and midmarket firms are turning to Dell for their big data infrastructure platform. In a most recent set of depth interviews conducted with midmarket firms, Techaisle found that almost 9 out of 10 big data implementations were on Dell platform. Techaisle’s expectations are that, in true Dell fashion, Dell may be best positioned to commoditize big data solution and bring it out from the farmers’ market to the freezer aisle for SMBs to accelerate adoption.

Supplemental to big data, IoT is another relevant area for SMBs. Techaisle’s most recent global SMB technology adoption study shows that 52% of US midmarket firms and 18% of small businesses are either currently investing or planning to invest in IoT predominantly for security, fleet management, asset tracking and supply-chain visibility. Dell has a new IoT division and its first product is a US$500 gateway (re-purposed Wyse Thin Client) which supports Ubuntu, Wind River and Thinkworks PTC. Although one may argue that Dell is going back to its product DNA and building commoditized IoT solution but Dell may well have an advantage. By combining security from SecureWorks, analytical engine of Statistica and wrapping with Dell professional services, it may be well ahead with an end-to-end IoT solution. At least, Dell’s IoT offering is easy to understand and deploy for small and midmarket businesses.

Security and Virtualization are two other areas of importance for an SMB organization. Dell is present in both these areas. In security Dell has its own IP whereas for virtualization Dell is platform agnostic and has designed a set of blueprints that works with VMware, Citrix and Nutanix. However when the security market is growing at double digits, Dell’s software security growth in the area has been 7% (Dell does not disclose its entire security revenue details). Dell may well be suffering from a 1 vs. 1 selling as opposed to wider knowledge of Dell’s security offerings.

Final Techaisle Take

Dell has successfully put together a full set of flexible and scalable technology solution building blocks. Its sales organization is learning how to use these “blocks” successfully to build robust and future ready IT solutions for its SMB customers. Dell’s channel organization has also been focusing on equipping its channel partners with the same level of understanding. Dell has also set up cross-functional teams as Centers of Excellence that are empowered to educate and guide channel partners. These blocks may look very easy to assemble but articulation of their capabilities is very tough unless a complete picture of the end outcome is shown beforehand. And Dell has its homework assigned – demonstrate business outcomes through use cases and show thought leadership by expounding forward thinking because within the eyes of many SMBs and SMB channel partners, Dell still lags other IT suppliers on innovative and cutting edge technology front (Source: Techaisle 2015 SMB survey). That said, Dell Blueprints, for integrating piece parts into whole solutions, may just be the answer that SMBs and channel partners are looking for.

If the “office” is defined by devices then “workplace” is defined by the ability to work from wherever those devices (and their users) are located. In this vein, “work” typically includes a requirement to access corporate data with mobile devices.

Data from the Techaisle 2015 SMB Mobility Adoption and Trends survey finds that more than 80% of small business employees and 55% of workers in midmarket firms require mobile access to company data. Providing this access and the applications, devices and solutions represents an enormous investment for SMBs that are typically very conservative in their IT budget allocations.

By more than a 2:1 ratio, SMB respondents believe that mobility is a means of driving growth in the business. But mobility does not deliver business benefits painlessly. The introduction of mobility solutions has created new issues for IT management, and suppliers who can help to address these issues will gain favor in this community.

Addressing the needs of the “dual mode” user is a non-trivial issue. In the Techaisle survey, both small and midmarket firms report that users access a combination of business and personal resources via their business-connected (both corporate-owned and BYOD) mobile devices. This reinforces the importance of some of the solutions being currently used or planning to be used by SMBs. These are solutions that help manage mobile devices that deliver access to corporate information without downloading data and applications themselves (such as thin clients and Windows-as-a-Service) and methods of securing data when it is exchanged between mobile devices and external users and where users themselves move seamlessly between corporate and personal usage modes on devices that are connected to corporate networks.

Mobile devices are an essential component of mobility but mobility itself extends beyond hardware to applications, solutions and work habits. Techaisle’s 2015 SMB Mobility Adoption Trends research shows that the “dual mode” SMB user represents a specific problem for SMB IT staff and the challenges of supporting a mobile workforce go well beyond the device.

Small and midsized businesses have different challenges in supporting the mobile workforce

Looking first at the small businesses, we see that managing TCO – which includes, in addition to typical IT expenses, service charges that are unique to mobile devices – is rated as the most significant challenge by small business respondents. These firms also struggle with the “on ramps” to mobility: finding appropriate suppliers and solutions and integrating multiple screens are also ranked in the top five challenges encountered by 1-99 employee firms in support of the mobile workforce.

Midmarket firms also count TCO as their most significant challenge. Rather than struggling with mobility on ramps, though, midmarket firms are more concerned with security/data protection and mobile management. Network security, protecting corporate data on mobile devices and managing these devices are all top-five mobility challenges for midmarket IT – and further evidence of why mobility solutions addressing these issues are essential to this community.

Techaisle’s 2015 SMB and Midmarket Mobility Adoption study shows that to emerge as leaders in the mobility solution market, suppliers will need to tailor their offerings and strategies to specific clusters within the SMB market. Successful suppliers will need to be cognizant of, and visible in addressing, key SMB selection criteria.

Figure below presents an analysis of SMB mobility solution evaluation criteria, tied to the attitudinal groups used for SMB segmentation analysis. This segmentation and perspective highlights how increased sophistication changes the requirements that SMB users have of suppliers.

Small Business Segments
Within the small businesses, the Pre-IT segment is looking first and foremost for a trusted brand. These small business buyers opt for horizontal suppliers for their first step into mobility solutions. Data from other segments suggests that increasing sophistication leads to more exacting expectations.

Basic IT buyers are looking for help with managing BYOD and for effective customer support, while Advanced IT buyers look for assurances of information security, for manageability, and for suppliers’ credible brands.

Midmarket segments
“Manageability” is the most essential attribute for suppliers targeting midmarket firms. The basic IT segment is looking for assistance in supporting a large number of mobile platforms as a means of dealing with the BYOD needs of a larger (relative to small business) workforce, and/or as a means of supporting customer access to public systems.

The midmarket Advanced IT group, like its small business peers, requires a combination of manageability and information security, and adds customer support and the requirement for multi-device/platform support.

The enterprise IT group –the largest spenders represented in this chart – have a few unique requirements. This group demands interoperability and customizability as it seeks to integrate mobility solutions within the broader IT infrastructure, and looks as well for ease of use as it rolls out mobility solutions to a (relatively) large and diverse workforce. Techaisle expects that over time, an increasing number of SMBs will pursue these capabilities as they, too, tie mobility into their overall IT/business architectures.

Techaisle’s 2015 SMB and Midmarket Mobility Solutions Adoption study shows that the trend towards increased diversity and sophistication of mobile app portfolios within SMBs is driving a concurrent requirement for enterprise mobility management solutions capable of automating management, security and infrastructure associated with complex mobile portfolios.

Although much of the public debate around mobility involves hardware brands and feature sets and overall penetration rates and even BYOD (which is now passé), the real business benefit of mobility is delivered via applications that address specific task requirements within the business, and mobility management solutions that overlay the management and security structures needed to integrate these apps with corporate IT systems.

Figure below provides a snapshot of current and planned usage of mobility solutions. It shows that today, use of mobility solutions has crossed 50% in the small business segment, and that aggressive 2015 purchase plans – especially amongst 1-9 employee and 10-19 employee microbusinesses – will boost this figure closer to 80% in the near term. Initial penetration is nearly complete within midmarket enterprises, where well over 90% report current use of mobility solutions.

Focusing on Enterprise Mobility Management Solutions

Consider the perspective included in the figure below. The left-hand text box includes eight mobility application categories predicted (by the Techaisle SMB 2015 Mobility survey) to have the greatest increase in adoption in the next one year. Half of the list is comprised of advanced applications: web/video conferencing (foundational), location-enabled applications and mobile marketing and advertising (emerging technologies) and business intelligence (second-order application). The SMB mobile application portfolio is both growing explosively and becoming more complex.

The right hand side of figure highlights the top mobility management solutions that SMBs are investing in to automate control of these sprawling assets. This list includes security solutions (MDM, mobile app security, secure mobile data sharing) that address widespread concern over the exposure that accompanies mobility, as well as methods of automating management (mobile network control, enterprise mobile management) and of deploying infrastructure tuned to the needs of mobile workers (Windows-as-a-Service, thin clients). Also included on this list is email, which is in the process of making the leap from an application that is accessed remotely to an integrated solution that connects seamlessly across environments and devices – a progression that will likely occur with other applications (especially foundational applications) over time.

This link between more sophisticated mobile deployments and the need to invest in mobility solutions to provide for management, security and infrastructure is apparent in survey data outlining SMB use of and investments in mobile solutions.

However, mobility management solutions are not a “set it and forget it” type of technology. These solutions require continuous tuning and ongoing investment as their scope expands to match the burgeoning requirements of an increasingly-complex mobile environment. Techaisle 2015 SMB Mobility study data also captured expenditure levels for mobility solutions by employee size. Comparing this data and connecting the dots with Techaisle’s other data on cloud, virtualization, managed services and analytics we find that mobility drives increased IT investment, especially amongst small businesses and as a market force, mobility “grows the pie” of IT spending in the overall SMB market.

Upcoming blogs on SMB Mobility:

• Mobility solution providers: not limited to traditional IT suppliers – VMware AirWatch, Citrix and IBM MaaS360 become important
• What drives mobility solution supplier evaluation, especially in the midmarket?
• What are the SMB IT challenges associated with mobile workforce support?