Dell continues to show that it is serious about small businesses. In an economy where consumer purchases are slowing down, small businesses are continuing to refresh their technology and are showing growth rate in IT spends.
Dell today introduced the Vostro V131, a thin, powerful, and sleek laptop designed specifically for small businesses. It is an ultrathin laptop housing Intel® Core i3 or i5 processors, geared towards maximizing small business productivity. A removable 6-cell battery with 2nd generation Intel Core processors, both available as an option, is expected
to deliver up to 9.5 hours of battery life, allowing SMB users to work virtually anytime, anywhere.
Techaisle’s small business survey shows that not only enhancing IT is important for small businesses but also improving productivity through automation is extremely important. Among the newer technologies that they are currently investing in include: Windows 7, refresh of PCs and servers, as well as smart phones. It is quite clear that small businesses are seriously looking at enhancing their IT infrastructure, migrating from older technologies to more modern hardware platforms are key initiatives for reducing cost of operations. Over 60% of small businesses think that it is time for a refresh of their PCs and servers. To that extent, the timing for the introduction of Vostro V131 could not be any better.
Not only is Vostro V131 designed for improved productivity and enhanced mobility as
repeatedly by small businesses, but the laptop has also addressed the need for data security and backup. Remote back up and disaster recovery is still a top of the mind IT initiative for small businesses.
The Vostro V131 has very useful collaboration options including a full HD camera, SRS Premium Voice Pro, digital array mics and built-in Skype. In addition, the laptop offers two USB 3.0 ports, a chiclet keyboard with a backlit option, and quick launch keys. These additional collaboration features play extremely well into the new small business workplace scenario. Techaisle’s small business mobility report shows usage of relevant collaboration applications used by SMBs when traveling.
Of the options available in My Business Toolkit, that comes loaded on V131 (from September onwards), the most appropriate and useful for a small business are the Ruby Receptionists, a virtual reception service and Trend Micro Worry-Free Business Security Services.
Speaking about the announcement, Sam Burd, Vice-President of Dell’s Consumer & SMB Product Group said, “We designed the Vostro V131 to deliver fast, uninterrupted multitasking for today’s business challenges, the result is a feature-rich laptop for mobile professionals who want full performance to support their technology demands without sacrificing design and portability. In addition, the V131 offers services and software solutions that improve productivity and data security.”
V131’s starting price available on Dell.com is US$499 with a Celeron processor and a backlit keyboard which is a great price for a small business. An i3 based model is available for US$599. The price point is even better for small business owners that may be contemplating using Tablets instead of notebooks. V131 not only serves as a great content creator but also a secure and reliable collaboration tool while enhancing productivity.
We fully recommend it.
Anurag Agrawal
Techaisle
Techaisle Blog
In the US, there are 2.3 million SMBs that are using some sort of SaaS solution. However, only about 1 million are using CRM. This represents approximately 98 CRM customers for each CRM SMB Channel Partner. With an average number of seats per SMB being not too high, one can easily guess as to how the Channel Partners can effectively make money in providing just CRM based SaaS solutions. This is with the assumption that all SMBs using CRM SaaS are going through Channel Partners. The only logical progression for both the Channel Partners and SaaS Vendors is to verticalize their applications, and that is where the actual demand is as both SBs and MBs are exhibiting high adoption levels for industry specific applications.
Top tier SaaS vendors such as salesforce.com initiated the No Hardware/No Software model and SMBs were quick to jump onto that messaging. However, salesforce.com should be in a state of dilemma in terms of addressing the needs of the SMBs as the market becomes increasingly saturated with generic CRM applications. SaaS vendors such as salesforce.com and Sugar CRM, besides enabling their applications for Mobile Solutions and Social Interaction, have to increasingly move towards offering applications which pertain to an SMBs line of business.
Vendors such as Intuit or Intacct have not been written about much but they have successfully gravitated towards offering solutions that are integral to an SMB operation. It is not surprising that Channel Partners are constantly asking each other as to how and where money can be made. Even with the roll out of Microsoft Office 365, where 5 out of every 6 Channels is a Microsoft Partner, not everyone wants to resell Office 365. It seems that the time is right for the Vendor and the Channel Community to once again come together to not only revamp the SaaS Business Model but also for the vendors to enable their Channel Partners for vertical solutions.
SAP is on a growth path with the SMBs as they have successfully transitioned their SaaS offerings to specific industry verticals as well as solution requirements of SMBs. This also strengthens the commitment and confidence of the Channel Partners to resell SAP. Agreed that SAP solutions are still used more by the mid-market businesses than the small businesses but the path defined by SAP is clearer than the rest.
Tavishi Agrawal
Techaisle
The World is Flat (© Thomas L. Friedman) and so has become IT, especially for SMBs. With a Flat world, rises an opportunity for SMBs to employ workers who are globally distributed, travel and telecommute. With a Flat world comes Flat IT. And the IT vendors are missing the dialogue with their SMB customers- some vendors more than others. They are also missing a new understanding of SMB IT adoption cycle.
But we are getting ahead of ourselves. Let us first understand the world of Flat IT.
Waves have Evaporated to Form Clouds
Analyst firms typically use words such as IT waves or eras in describing SMB IT adoption - client/server wave, networking wave, Internet wave, etc. There is nothing wrong with this wave theory except now that there are no more waves left, all water is evaporating to form clouds. But some analysts still continue with that philosophy and call the coming wave as mobility wave. These do not do any good to either a vendor or the end-customer. Mobility started with notebooks & Wi-Fi. An SMB does not buy IT considering the wave, it does not even think whether the wave is waxing or waning. A typical SMB buys IT because it needs IT and the SMB with the help of channel partners becomes smart enough to understand what IT to buy to make itself more efficient, productive and profitable.
Waves were relevant more than a decade ago when technology products were evolving in piecemeal basis. Today all technologies are available at the same time and its adoption among SMBs is dependent upon the business plan.
Building Block IT
Enter the building blocks. SMBs started off their journey into IT by unknowingly using simple building block concepts. Their first purchase was always a PC which served as the foundational block. When they added employees and file sharing became important, they built a network and added a server – the next block stacked up on the foundational block. When they reached a certain size they added more servers, the third and subsequent blocks became applications such as CRM, ERP and Line of business. All of these blocks could not be added without the existence of the previous block. Very soon when an SMB reached a mid-market level of operation, the blocks were neatly stacked one on top of another. And when the blocks became vertically unstable, they brought in external experts such as consulting organizations to help manage these blocks and possibly break them into small chunks that could be easily maintained. SMBs looked for Enablement.
IT vendors thrived. Dell concentrated on the foundational block, Cisco connected the blocks, HP played with all block layers while IBM refocused to the top layers. Vendors like Microsoft, SAP and Oracle provided the layers that enabled the blocks.
The process of an SMB growth and its relative steps to absorb IT were steady and predictable. Some SMBs stacked the blocks faster than others but steps to get to the top of the block were always same. It was also dependent upon the financial capacity of an SMB to the extent that those with large dollars available for investment built the blocks faster not necessarily having the same end-results as SMBs with limited investment capabilities and which moved slower. Call it cutting edge versus laggards, but such nomenclature also never proved that the cutting edge SMBs were more efficient or profitable than the laggards. IT vendors and channels made money as they exploited the IT imbalance among various SMBs creating a race to reach the top of building blocks as fast as possible.
Flat IT
Enter Flat IT. Cloud, mobility, virtualization, and managed services have effectively toppled the blocks down in one fell sweep and have laid everything flat on the table. SMBs are now automatically empowered but they do not know it yet, because nobody has told them so directly. The concept of cutting edge and laggard has been torn apart because
it carries little meaning as SMBs now have a rich menu of solutions available that can be plugged into in a very short time. Now it is not a race to the top, but how can an SMB reach its full potential in the shortest period of time.
In a Flat world, with Flat IT, similar technology is now available across all countries and gap between developing and developed worlds is narrowing. In some of the emerging markets, IT is not only Flat but leapfrogging technologies as building blocks are not fully present. Where converged infrastructure is becoming a possibility, Cloud services will
be delivered via wireless.
Next week we will discuss how SMB IT has become Time & Size Agnostic and how the SMBs of today are transforming themselves.
Anurag Agrawal
Techaisle
There are 30,288 channel partners in India, out of which 24,850 are PC resellers. As per Techaisle research, volume resellers account for 12 percent of all resellers but they constitute 47 percent of PC shipments. 50.2 percent of the PCs sold by these volume resellers go to the SMB segment. On the other hand, micro-resellers account for 16 percent of reseller PC shipments but constitute 50 percent of reseller universe. Their main customers are the consumers, nevertheless 28 percent of their shipments also go to the SMBs. India is a country where dealers are evolving from a mono-brand approach to a competing multi-vendor offerings, where low margin in hardware sales is driving dealers towards value-added services and a creation of a more skilled dealer channel. India is also a country where mall-like culture is sprouting to embrace the consumer segment and small businesses and selling is focused on price conscious provisioning of PC devices. Techaisle Channel Research also shows that there are many stages in the value chain before a PC reaches the end customer affecting the price structure. With additional presence of 6,340 system builders, India channel landscape is not only complex but constantly evolving.
Winning Streak
In the last 2 years, Dell has established itself as a leader in the Consumer PC market and is now trying to extend the same winning streak to the SMB market. But was it a stroke of luck, its own strategy that worked or the fault of others? Stroke of luck does not play into a market which is still considered nascent and growing. Dell has been winning due to equal measure of its own efforts and missteps of others. This winning position is for Dell to lose and others, namely HP to regain.
Let us break it down. Dell started its winning streak with the consumer segment. Initially rejected by Redington and Ingram, Dell motivated and signed up with Supertron to make them their National Distributor. Supertron with no presence beyond the Eastern Region quickly became a useful crutch for Dell to expand and establish itself in the India market. With the success of Supertron, Dell also picked up Global as a Distributor. With an explosive growth in consumer notebooks, Dell began establishing regional distributors for reach and market penetration. Their goal - to sell 5 notebooks for every 0.75 desktops.
During the growth phase of Dell in India, HP began to falter for a variety of reasons. Redington, a trusted partner for HP, which had initially rejected Dell’s offer now chose to drop HP and partner with Dell; albeit for some products only.
Targeting SMBs
To address the SMB market in India, Dell developed a “Direct-to-Dealers” strategy. It is a two pronged strategy where Dell deals directly with end-tier of channel partners for Tier 2 and 3 cities bypassing the distributors. However, for the Tier 1 cities, Dell follows the traditional route of selling through distributors. Dell itself does not stock and sell with channel partners but sells on a back-to-back basis. Targeting low-end products for SMBs, Dell is also using the retail channel to sell Vostros, a PC specially created for SMBs. This is key since traditionally vendors have shied away from selling commercial SKUs through predominantly consumer channels. Needless to say, Dell has recognized that the small businesses, especially less than 20 employee size companies use retail channel for their PC purchases. For its lower mid-market customers, Dell is encouraging its channel partners to sell on a solution based approach.
New strategies always tend to bring teething problems. With limited experience in dealing directly with the VAR/Dealer channels, signs of frustration are becoming visible, not yet within Dell but among the channels. Account managers are pushing channels to “pick-up vendor mandatory stocks” even if the inventory is not sold out. At the same time, channels mention that Dell does not provide any price protection nor does it yet understand the buying cycles in India which is different than many of the mature markets. In lieu of price protection, Dell has designed a rebate program for its channel partners and empowers them with white papers and training programs to help them achieve better profitability.
Even if channels show some negative sentiments, there may be positives to Dell’s PartnerDirect program, such as provisioning of single point of contact for SMBs to reach channel partners.
Targeting the SMB Market of Tomorrow
Dell is trying to not only target today’s SMB but also keep in sight the Future SMB. Besides a distribution channel strategy, Dell is trying to focus on Cloud and Mobility for the SMB market. This itself is a great strategy but is yet lacking on execution. Vendors such as HP may have a much better chance of executing on the Cloud and Mobility front. Both these solution areas require extensive and experienced channel partners. Dell is in the early stages of partner development and majority of them are focused on basic building block products such as PCs and Servers. HP on the other hand has the capability to analyze its partner network and segregate them by expertise levels, creating partnerships among them to design a coherent and executable Cloud and Mobility strategy. On the flipside, since Dell’s channel ecosystem is relatively new, it has a rare opportunity to build a long-term program based on learnings from its own missteps and partner feedback.
Although Cloud Computing in India is on the rise, there is more hype than substance, and there are more free services being used than paid. With a limited bandwidth and internet speeds, it may not be long before cloud services get delivered over wireless. Because of a heavy adoption of Smart phones and other mobile devices, the march towards mobility in India cannot be stopped. However, SMBs mostly want integrated solutions to limit complexity and therefore seek channel partners that are capable of delivering cloud and mobility solutions integrated. Unfortunately, very few channel partners currently do so – especially for Dell. Those that do are financially out of reach of a typical SMB customer. And this is making SMBs unsure of overall benefits of Cloud and Mobility and desire to spend. Dell has to identify channel partners that could be ramped up and focused on delivering Cloud based solutions that have higher relevancy to SMBs.
Dell may be winning at this stage but its competitors are hot on its heels.
Tavishi Agrawal, US
Gitika Bajaj, India
Techaisle
