Techaisle Blog

Techaisle’s US SMB and Midmarket SaaS adoption trend data shows that 73 percent of small businesses (1-99 employees) and 97 percent of midmarket firms (100-999 employees) are using one or more SaaS application categories. 37 percent of SMBs (1-999 employees) are using < 5 SaaS categories, however, 28 percent are using more than 10 SaaS categories (driven by midmarket firms). Overall 72 percent of SMBs are currently using 10 or less SaaS application categories but planned adoption indicates there is room to grow for the SaaS market within the SMB segment. The pace of SaaS automation is being governed by business & IT challenges, security posture, deployment and integration capability and point of purchase. Initial SaaS adoption has been for non-core business processes; however, 57 percent of mature adopters are using SaaS for core business processes. Techaisle survey data also shows that 64 percent of SMBs are using collaboration-focused SaaS solutions and 60 percent finance focused, however, future plans indicate that 62 percent will use customer-focused SaaS solutions.

As per Techaisle, US SMB and midmarket firms are forecast to spend US$25.6 billion on SaaS solutions in 2019.

Techaisle’s latest US, Asia/Pacific, Europe and Latin America SMB and Midmarket Analytics and Artificial Intelligence adoption trends survey research shows that although 73% of midmarket firms (100-999 employees) and 10% of small businesses (1-99 employees) are using analytics (weighted data), only 6% of small businesses and 27% of midmarket firms are highly data-driven, that is, they have an evidence-driven culture, in which data helps defines requirements or opportunities thus enabling SMB executives to determine the best option for moving forward. Majority of SMB, 54%, are rarely data-driven and rely primarily on the insights and expertise of the senior management. Nevertheless, within the next one year, 23% of small businesses plan to adopt analytical solutions beyond spreadsheets and overall 30% of small businesses plan to engage with an external professional services firms to understand how they could provide assistance to deploy advanced analytics solutions. Cloud-based analytics is being used by 57% of midmarket firms and as compared to only 14% of small business but the intent to use within small businesses is significantly high at 48%.

Within 31% of midmarket firms, IT is being challenged with demand for increased analytics. As a result, overall 35% of midmarket firms are planning to engage with professional services firms to help develop and prepare data management systems, techniques and technology.

The whole product for analytics starts with cloud. 37% of SMBs consider cloud to be an essential analytics technology but when drilled down into midmarket firms, data reveals that 30% of midmarket firms believe that large scale local storage and fast processing infrastructure is necessary for deep analytics implementation.

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.

Enablement, execution, empowerment and experiences are the unwritten principles driving the entire IBM partner team in transforming the rules of partner engagement. At the recently concluded IBM PartnerWorld at Think conference in San Francisco, the term partner ecosystem was emblazoned across the entire IBM partner leadership team. Techaisle data shows that channel partners are faced with balancing investment in depth vs breadth and increasingly turning to a larger ecosystem for partner-to-partner collaboration. Between 2014-2018 there has been a 69% increase in opportunistic partner collaboration for sales. By using the power of artificial intelligence (AI) to empower its partners, IBM is formalizing partner-to-partner collaboration and ecosystem, named IBM Business Partner Connect, built on Watson.

With an instant match capability, IBM Business Partner Connect has been designed to accelerate solutions for end-customers by matching partners looking for assistance with partners offering expertise. Business Partner Connect also allows partners to join the business partner Slack community to share best practices and find new partnership opportunities. In its pilot stage, approximately 800 partners participated, which unveiled 300 matches.

Enablement to Empowerment

In the current channel world – where core business conditions, market opportunities and requirements are all in flux – an opportunity to provide relevant guidance, targeted business advice from IBM, plus peer-level input, is an enormously important and valuable capability. Partners need guidance to transition through current market and business changes and a community is an appropriate context for this guidance, and leading the community will be IBM at the center of this dialogue/activity. Over time, Business Partner Connect and the community platform will give IBM the ability to involve a large number of partners, increase IBM’s centricity, and provide a revenue line into the channel operation.

It is quite evident that a key factor in IBM’s partner program’s momentum and transformation has been John Telstch’s leadership and his own ecosystem of senior leaders (Carola Cazenave, Jacqueline Woods, Catherine Solazzo, Chris Oliver, Jamie Mendez, Ken Gregory and Rose Nunez). He has been listening, responding and committing to having the channel partner’s back. Techaisle’s latest study of channel partners shows that 52% of partners want their vendor partner channel chiefs to be setting a clear overall strategy and 44% value trustworthiness and accountability. John gets a check mark on both these value traits.

Vendor organizations usually focus on simplifying drivers of channel enablement, but IBM is consciously extending enablement to empowerment to deliver customer success. Enablement (usually incentives) is a short-term lever to change immediate partner behavior for achieving sales quotas and revenue targets. Regardless of addressing short-term objectives, it is necessary. In Techaisle’s study, 50% of partners mentioned that incentive programs are important for marketing and sales. Empowerment helps partners transform themselves from a vendor’s sales agents to sales advocates especially when increasingly partners are focusing on business outcomes with hybrid/as-a-Service delivery solutions and shared-risk partnerships. IBM has spent the last one year in understanding the present and is working consciously and furiously in shaping the future.

Simplifying partner experiences