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    Influence map & care-abouts


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    US SMB & Midmarket SaaS Adoption


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Worldwide focus on SMB and Channel Partners market research and industry analysis.

Cisco shows discipline, pragmatism in SB focus

I recently attended and "Small Business Analyst" event hosted by Cisco in which the Company talked to us analyst types about their strategy in approaching the SB market on a worldwide basis. The conference lasted a day, the group of attending analysts was small but well represented including leading names in the IT analyst market such as Gartner, Forrester and Yankee Group.

New products were showcased and strategies outlined and while I won't go into detail about new products due to non-disclosure conditions on many of them and also because it wasn't the products that impressed me the most. Make no mistake the products did impress me and my colleague - enough for us to decide that we should evaluate them for our own business.

What impressed me the most was the focus and disciple Cisco has brought to bear. Too often we see companies that are leaders in the enterprise space take on the SB market opportunity under the rationale that what's good for enterprise is good for SBs - with a few changes. Wrong. Too often we have seen it doesn't work and when it doesn't these firm redefine "SB market" to simply mean companies that are a little bit smaller than their traditional market and calling it SB or worse "SMB". The latter often used as a catch all for all those firms that are currently not being sold to be the comapny's sales force which is too boxed in in their thinking of who their customers are and how they should be sold. Its organizational inertia at work.

Cisco, themselves a leader in the enterprise space is approaching the market as any company in it's position should - with a strategy, products and organization designed to address SB needs. Here are some of the key elements

    • Cisco has created an entirely new group to not just market products to SBs but to design products that fit SB needs. The product development group will re-think products ranging from simple routers, switches to telephony products keeping SB needs as their sole perspective. For a company used to enterprise style margins on products they have realized that they may not be able to gain the same kind of margins on thee SB products but the important point is that they are incorporating that reality into their strategy. This is a very difficult shift to make for most companies but Cisco realizes it is not just about how products are manufactured but how the organization is structured as well.
    • Speaking of organization, the Cisco SB organization is in many ways a company within a company with its own set of priorities and complete in that it has its own sales, marketing, services, support and product development initiatives.

        • Marketing: Cisco has come to terms with some market realities such as the fact that the Cisco brand is not well known among SBs. Cisco's VP of Small Business Marketing Rick Moran, stressed this point as a major component of their SB marketing strategy. Here again we see Cisco's pragmatism, willingness to adapt and learn come through. For a company traditionally used to talking about speeds and feeds their SB marketing efforts exhibit a focus on SBs and the people running them. The importance of SB to Cisco as a company is evident from the fact that there is a link to a variety of SB related pages on the Cisco home page. Cisco has established a place where SBs can have a conversation with Cisco, its employees and its partners called Cisco Community Central. the site is less used to market Cisco products and more to help SBs learn about the developments relevant to them - technological or otherwise. It's a young site - barely a year old but a promising start.

        • Sales/Channel Development: Cisco has always relied on a strong network of channel partners to sell, service and support its products. Now Cisco has introduced a special certification for channel partners selling to SBs called "Cisco Select Certification". Achieving that certification requires taking training and an exam. Interestingly, Cisco has laid out the return in investment for a channel partner to help them decide whether it is worth it to achieve that certification or not. Achieving the certification comes with the usual benefits of support and market development funds.

        • Regional Sensitivity: Cisco is showing a lot of pragmatism by not taking a "one-size-fits-all" approach to SB marketing. The bulk of the current SB effort appears to be targeted towrads countries where Cisco has a leadership position in the enterprise space. In other words, given their penetration of enterprise markets its seems logical to go after SB markets in order to increase revenues from a region. Also not all solutions are being marketed aggressively to SBs in all regions. For example, in countries such as India where are large opportunity still exists among enterprise markets for solutions such as collaboration or enterprise network hardware, the SB market is taking a back seat - for now.

        • Services and Support: Cisco VP Sherri Liebo introduced the services and support offerings targeted towards SBs. These include add-on warranties and varying levels of support for channel partners as well as end customers. The support solutions range from entry level technical support (branded as Smart Foundation services) to ongoing monitoring of network resources (SmartCare and SmartNET). All have varying levels of support and hardware replacement options. These will also be sold through the burgeoning network of SB channel partners.

Bottom line - I believe Cisco is off to a good start in the SB space exhibiting the focus and discipline required to gain share in this very difficult market.

Abhijeet Rane


Empower Me! - The Coming Change in SMB IT Priorities

Download Techaisle SMB PerspectivesOver the last two decades, the global small and mid-market businesses, SMB (1-999 employee size) market has been the growth engine for the IT industry at large. The reason is quite simply that SMBs account for over 80 percent of businesses in any country – developed or developing. For much of those two decades, SMBs have primarily focused on building core infrastructure with the bulk of their investment allotted towards buying PCs and desktop applications such as Office, desktop publishing and other industry specific software.  This initial phase was followed by a longer continuing phase wherein SMBs shifted their investments to Networking technologies. However, this was still part of core infrastructure investments made by SMBs.

The reason for this lengthy investment cycle was that investments occurred at different times for different SMBs depending upon firm size and geographies. SMBs form the essential thread of the economic fabric of any country and to a great extent their fortunes and investment capabilities are dependent on the economic situations and policies of the countries they represent. So as the fortunes of the emerging world turned favorable, so did the investment capacity of these SMBs. Conversely, as economies have stalled in recent times, investment capacity of SMBs has been deeply affected. 

Tough economic times bring investment decisions into sharp focus. The result is typically lower investment levels. It also sharpens medium and longer term priorities. That leads to smart investments. But also investments made at this time become longer term drivers of investment for adjacent areas. We at Techaisle believe that the recent economic implosion acts as a catalyst for such action and change among SMBs.

The New SMB Imperative: SMBs are sharpening their medium and longer term priorities leading to smart investments.
Value Shift: SMBs are now looking beyond infrastructure investments as their respective countries slowly emerge from the global downturn.
Enablement v/s Empowerment: SMBs are being driven towards empowerment technologies that are outside of normal technology adoption curve.
Empowerment Technologies: SMBs in emerging market countries show greater intentions of investing in these new priorities than SMBs in mature markets.
Implications for Channel Partners: Shift to newer priorities is and will impact channels the most in next five years.
Conclusion: New priorities bring to light new opportunities for vendors and channel partners to positively impact the success of SMBs on a global basis.

Download Techaisle SMB POV DocumentDownload Detailed Techaisle SMB Point-of-View Document

G20 SMBs: PCs and Servers will be the top areas of IT investment as Economy Improves

G20 SMBs to spend US$455 Billion on IT in 2010 accounting for 89 percent of Global SMB IT spend
G20 Consumer/Households will Likely Spend US$96 Billion on IT in 2010 with a Household PC Penetration of 44 Percent
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Small Business - I Want My Netbook!

We at Techaisle just completed a large 10 country survey of SMBs. I will showcase interesting data from that study from time to time. One of the key things the data reveals is that small businesses are very likely to drive Netbook sales in the coming months. There are two things that the data reveals

1. SBs in emerging markets are particularly interested in acquiring netbooks

2. SBs with > 20 employees show higher purchase intent than smaller SBs

The last point is particularly interesting because while the Netbook was conceived as a low cost consumer device, it is being rapidly adopted by businesses. This has several implications

- There is significant latent demand for a low cost ultra-mobile device in business markets

- The lines between "consumer" and "business" devices in the mobile computing world are clearly blurred. Thank the Blackberrys and the iPhones for that. Any distinction now is typically propagated by device manufacturers to avoid potential cannibalization of existing products

- Computing is no longer defined solely by "Intel/AMD + Microsoft + Google". While these players remain dominant, there is a lot of entropy in this eco-system now. nVidia is spreading its wings with the Tegra chips for mobile devices and GPU based processing (already available in the MacBook Air).

While a lot of applications on these new devices will likely be purely consumer oriented, there is no doubt that the creativity of software developers will lead to interesting applications for the business world as well. For example, Tegra chips deliver 1080P HD video - a boon for consumer devices but no doubt business users could use it for HD videoconferencing and other applications.

For small businesses it will invariably mean more choices for computing on the go. Ultimately though the decision to use one device over another depends upon the applications available once the initial excitement and hype of a new user experience has waned. So while these devices will be battlegrounds, the defining battles will largely be between software companies.

More information about the survey can be found here

Abhijeet Rane

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