Techaisle Blog

'Knowing what we don't know' is often the thorniest complication in decisions. A unified and contextual insights strategy mitigates this risk by ensuring that data from within the organization is aggregated, giving decision-makers the most complete and up-to-date information possible. Zoho One promises to deliver contextual critical business insights for Midmarket firms and SMBs.

Zoho has 500,000 customers, over 70 million users, and 40,000 customers on Zoho One, a product introduced to the market in 2017. One of the customers has 32,000 employees using Zoho One. What is Zoho One? It is a collection of 45 apps that span all primary business functions, with CRM, analytics, and communications being the most used, followed by accounting, helpdesk, and Sales IQ. Driven by the need for increased team collaboration and conversation in the last year, Zoho Cliq, a chat app, has become the third most used app within Zoho One. Having great success in the services vertical industry, Zoho is making quick inroads into the real estate, banking, and other financial services market segments.

Do businesses subscribe to Zoho One all at once or plod and pedal from one app to many? The answer lies in the market segment. Small businesses adopt and use all apps simultaneously, mainly because they see Zoho One as a path to transformation and digitalization with the least friction. It is relatively easy to adopt a single app, connecting its inputs and outputs to relevant internal systems and processes. Likewise, it is possible to adopt a handful of apps, hand-wiring the interconnections between them and adjacent applications. But this craft-built approach to digitalization is not aligned with longer-term visions of scale, flexibility, and agility. It creates management overhead and performance and security risks for small businesses. Zoho One, an integrated platform, quickly offers a cohesive approach to addressing several business pain points concurrently.

Midmarket firms often explore multiple apps before committing to Zoho One. Either through experience and education, one or several Zoho application parleys to adopt Zoho One or many midmarket firms prefer to work with only a few apps. Zoho's integration with its competitors helps the midmarket firms immensely, making it a more straightforward decision than identifying resources for automation and integration.

While we generally consider "SMB" as a single segment, there are often differences between the "S" and "M" segments – and their approach to cloud business application adoption illustrates one such difference. Midmarket businesses usually have complex deployments. The most common midmarket cloud application workloads provide a technology platform for enabling processes rather than an application platform for expanding the depth of specific tasks within the organization. Small businesses look to the cloud to primarily enable agility, while midmarket firms are also interested in improving IT efficiency.

What is next for Zoho One? There are five new apps, three new services, and seven platform enhancements to help "businesses unify systems, data, and teams." Two announcements interest me the most because they are universally applicable to all small and midmarket businesses regardless of cloud maturity, size, and vertical industry.

One of the most exciting insights available from Techaisle channel partner survey research and corresponding SMB and midmarket survey research is the extent of divergence between what customers value in their relationships with channel partners and how the channel presents its value to its customers. The extent to which the two sides do – and don’t – connect is again diverging, first noticed by Techaisle in 2012. Data shows that the channel is emphasizing benefits that have relatively minor effects on customer/channel relationships.

As seen in the data, quality of services provided by the partner and technical expertise are the most important reasons why customers embrace their channel suppliers, followed by industry knowledge and long-term relationships, understanding of business needs, deliver business outcomes, and pricing. On the other hand, “features and functionality,” “affordable price,” and “availability as a subscription service” are messages used by more than 50% of the channel, “ease of use,” “robust security,” and “industry/vertical-specific relevance” by about 40%, and “affordable maintenance and support,” “customizable to meet business needs” and “deliver business outcomes” by 30%-36% of channel members. Thus, the messaging by partners differs from what customers value.

Another interesting pair of findings from the channel survey compares customers’ most critical technology requirements with the positioning channel firms strive to attain within their customer bases.

It was once thought that the cloud would reduce the technology deficit SMBs face relative to larger firms – but it is difficult to say that this has proved to be the case. Indeed, the cloud has lowered the barriers to adopting new systems, giving SMBs access to applications and infrastructure resources that would have been well beyond their means five years ago. However, Techaisle’s SMB and Midmarket Cloud adoption trends research data show that cloud, and hybrid IT, has posed other challenges: difficulties in integrating systems with each other and with business processes, and in integrating data across applications (ensuring that data created by one application is input automatically into others); difficulty in securing systems that are based in multiple locations and managed by various organizations, each with their own set of operational rules; difficulty in applying appropriate levels of security and governance to an ever-expanding pool of data that moves at accelerating pace through an ever-more-complex constellation of systems, users and locations. Large organizations have IT teams dedicated to addressing specific issues within this shifting and complex set of requirements. SMBs rely on limited internal resources (often, small groups of generalists), supplemented by fractional headcount support from third-party channel members, to keep pace with the change that results from the constant advance of cloud and hybrid.

Despite these challenges, though, evidence suggests enormous scope for cloud growth in the global SMB segment. Data indicates an apparent leader/laggard dichotomy between midmarket and small businesses concerning IT-enabled innovation. Over 20% of midmarket firms have internal teams dedicated to “finding ‘what’s next?’ technology-driven innovations,” and 40% “have IT budgets specifically for technology-driven innovation;” 11% report that they have embedded IT professionals charged with finding innovations into business units. Small businesses are, on average, about half as likely to have taken these steps; instead, nearly half of firms with 1-99 employees state that their organizations do not expect IT to drive innovation actively.” Making the assumptions that a) midmarket firms will benefit from the express linkage of IT and innovation, and b) that the gap between large enterprises and midmarket firms is likely as significant as the delta between midmarket and small business. Additionally, large enterprises will, over time, capture IT-enabled business innovation benefits even more rapidly than midmarket competitors. Data illustrates the foundations of a cascade, where IT-enabled innovation drives business success and further cloud investments in larger firms, defining success patterns that small organizations then adopt.

The findings also expose the uncertainty that SMBs face as they structure their IT/business strategies. The most significant proportion of SMBs – 42% of small businesses and 32% of midmarket firms – state that they are unsure of what the next 10-15 years will look like for their industry. Other SMBs worry about their ability to cope with the pace of change: an average of about 25% of SMBs report that they “are struggling to keep up with the pace of change,” and nearly 20% state that they “do not know if they will be able to complete over the next decade.” Against this backdrop, a cadre of forward-looking organizations – 15% of small businesses, roughly a quarter of midmarket firms – “are battling barriers to become a digital business by 2030.” The successes that these firms realize over the next several years will increase their appetite for further cloud investments and encourage their peers to commit additional resources to cloud-based business initiatives. Techaisle expects that if and as these digital leaders realize tangible benefits from cloud and hybrid, the cloud will become an essential element of SMB business operations. As a result, SMBs will become a significant force in the cloud market. Moreover, suppliers to the SMB market and the SMBs themselves can align to bring about this positive change. Techaisle believes that mutual benefit will drive commitment and innovation on both the supply and demand side of the cloud equation.

SMBs are an excellent indicator to measure the economy's pulse in any country as they constitute over 90 percent of global businesses. They intricately link to large companies, government departments, and educational institutions as both suppliers and customers. In addition, a large percentage of consumers rely on SMBs for products and services that they consume within their households. Technology plays an integral part in the daily operations of SMBs across all departmental functions, including sales, marketing, operations, finance, and customer support.

Over the last three decades, the global SMB (1-999 employee size) market has been the growth engine for the IT industry at large. The path to business growth, strategy to deal with the competitive landscape, route to profitability were predictable and linear. And the way to adopting technology was also predictable and linear. The business pressures existed, but they were few and came on slowly. But it is not so anymore. Today, business pressures are increasing, coming from all directions - cash flow constraints, access to capital, competitive landscape, need for innovation, digital transformation, erratic revenue, uncertainties, the pace of technology change, and many more. A Techaisle survey found that a typical business leader deals with an average of five business pressures daily.

What is more telling is that 52 percent of SMBs deal with more than five pressures daily. These would be enough to put the brakes on any regular business operation. COVID did just that. Small businesses are struggling with revenue loss, attracting and retaining workforce, and lacking access to capital. As a result, technology has become even more important than two years ago. To manage costs, drive growth and enable resiliency, Techaisle data shows that 41 percent of small businesses have accelerated their digital transformation initiatives. However, for 55percent of small businesses IT budget is not sufficient to meet their needs. In addition, 63 percent of small businesses are actively looking for external guidance on cost-effective technology solutions.

Launched in July 2021, Lenovo's "Evolve Small" is a purpose-driven campaign centered on lending small businesses a helping hand. Founded on the principles of aid, mentorship, and community, the "hug and a hand" approach essentially focuses on three primary vital areas:

1. Financial assistance
2. Business mentoring and consulting
3. Rallying local communities to support their small businesses

The chief architects of the "Evolve Small" campaign are John Bischof (Executive Director, SMB Sales) and SMB Segment Marketing Managers, Megan Wine & Michelle Wiese.

As part of the program, Lenovo has committed US$1 million in grant funding to support BIPOC-owned (Black, Indigenous, and People of Color) small businesses. To facilitate and administer the grants, Lenovo has partnered with LISC, a non-profit organization in the US and a non-profit organization in Toronto, Canada. What is unique about the grants (average of US$10,000 per small business) is that they come with business development support. Techaisle believes that business development mentoring and community outreach is essential differentiation. Techaisle data shows that small businesses prioritizing growth are more likely to thrive in today's unpredictable economy than those focusing primarily on cost reduction or other 'business as usual' objectives. Business growth is more than simply increasing the top line in the digital world – though, of course, expanding the top line is a crucial measure of success. But growth also includes the ability to reach into new markets, identify and capitalize on adjacencies, and identify and integrate with suppliers who can extend the relevance of the small business in new ways. There is also follow-up, built into the campaign, where business development organizations that partner with the non-profit, LISC, help small businesses identify the best ways to use the funds (e.g., prioritize paying off some rent or paying employees) which new technologies they need.

The campaign has been rolled out across seven geographically diverse cities, including Raleigh, Chicago, Austin, Minneapolis, Phoenix, Seattle in the USA, and Toronto, Canada.