Techaisle Blog

“IT and cloud orchestration” reflects the reality of a multi-platform world in the era of digital transformation. Techaisle research shows that within the SMB & midmarket segment, orchestrated connected cloud and technology will be the focus of substantial new investment over the next few years. Connected cloud itself forms the basis for an Interwork platform for successful digital transformation and is crucial for competitiveness and growth.

• Upper midmarket firms use an average of 2.5 of the four leading public cloud providers (AWS, Microsoft, Google, IBM) – a true multi-cloud environment
• For 25% of small businesses and 51% of midmarket firms, workloads and data migrate across cloud and/or on-premise platforms
• 89% of midmarket firms state that orchestration tools are critical to their ability to deploy workloads on hybrid platforms
• 46% of SMBs do not know which cloud services to use and in what order
• 47% of SMB/midmarket-focused channel partners are offering orchestration but only 24% are delivering, but 55% are expecting substantial revenue increases in the next 1 year
• Use of orchestration is poised for growth as 40% of midmarket firms and 15% of small businesses are implementing cloud connectivity

Using a large number of on-premise technology as well as cloud platforms is escalating complexity beyond reasonable manual management limits. In response to this conundrum, many SMBs & midmarket firms are turning to orchestration as a strategy for optimizing use of multiple platforms and multiple technologies (topic of another blog another time). But help and guidance are missing. Even Techaisle’s latest channel partner study shows that although 47% offer orchestration but only 24% are delivering, and that also partially. Their vendor partners are not helping because of intense focus on enterprise segment.

In the quest for digitalization and digital transformation there has been ad hoc adoption of technology – both cloud & on-premise - as responses to paint points within SMBs.

The first step in influencing the potential of a technology to impact business outcome is identifying the extent to which technology aligns with or supports executive ‘care-abouts’ of the SMB buyers. Technologies that connect directly to C-level objectives are most likely to obtain support. Techaisle survey data shows that digital transformation is very prominent in executive-oriented IT discussions but influencing the SMB & midmarket IT and non-IT buyer is no cakewalk. Consider these statistics from Techaisle surveys:

• 72% of SMB IT purchases are triggered by an acute business pain point & number of pain points are increasing
• 52% of SMBs are facing 5+ business challenges
• SMB IT Purchase Decision Making Unit (DMU) has grown by 250% over the last decade
• Average of 5.2 decision makers are involved in technology purchase decisions in midmarket firms & 2.1 in small businesses
• 43% of IT buyers are millennials
• SMBs have 7 distinct business processes
• Channel partner is involved at only 50% decision making stage
• 70% of the buyer’s journey is complete before first meaningful contact with a potential supplier
• 17% of SMBs use six or more information sources
• Average channel partner sales cycle is 7.7 weeks

Where, when and who to influence is a key challenge, especially when digital transformation impacts more than one buyer segment and business process.

Techaisle survey shows:

• 73% of US SMBs are using at least one SaaS application, up from 27% in 2011
• 51% of global SMBs begin their cloud journey with SaaS
• Global SMB spend on SaaS in 2018 will be US$40 billion
• Cloud is the agility platform & SaaS is a zero-friction option for automating business processes
• 74% of SMBs achieved increased business agility with connected business processes

Techaisle forecasts worldwide SMB (1-999 employee segment) IT spend will reach US$735 billion in 2021 and cross US$1 trillion in 2028, growing at 2X the global GDP rate and 3X the enterprise segment. With slightly over 72 million SMBs (excluding home-based businesses), the market segment presents itself as lucrative and yet incredibly difficult to penetrate. Within each employee-size category there exists segments by IT sophistication, cloud maturity, digital transformation strategy, SaaS adoption, cloud first to cloud selective segments. As per Techaisle survey digital transformation is on the minds of most SMBs who are expected to spend US$275 billion on DX in 2018. And 42% of SMBs have become more dependent on technology over the last 12 months for better business outcomes.