Techaisle Blog

Microsoft today announced that they were developing a new OS to be deployed on ARM based devices. This is the final acknowledgement that the world has moved past the Windows – Intel controlled computing sphere. Announced initially in June as Windows EC7, this has been on a steady development path leveraging earlier Win CE efforts that have been successfully deployed on ARM devices albeit as an embedded OS. The Company is not giving up on x86 development which will continue to dominate the PC computing market. It is however giving a nod to the fact that newer devices which are expected to drive additional volumes of web usage have different requirements from a hardware and software perspective. The key has been being able to balance battery power and performance requirements – something Intel’s Atom has not done very successfully leading to a huge opportunity for ARM.

What impact does this have on developers? Microsoft’s move to support ARM provides an incentive for developers to port mainstream apps to ARM. But ARM based development is not a new beast for developers to tackle. Those that have jumped into developing apps for Android and/or iOS are already familiar with developing for the ARM platform.  What developers need to focus on are the unique usability requirements related to consumption of apps on these various mobile devices.

Overall, the impact on existing Wintel market should be minimal but it seems that Intel will lose out on newer opportunities to come. You cannot count Intel out completely though for the company is fully capable of competing and “arm”-wrestle its way back into the game.

Abhijeet Rane

A recently finished survey of 2900 small businesses across four countries- US, UK, Brazil and Germany shows that 1 in 5 small businesses own an iPad and 2/3^rd of these iPad owning small businesses will likely continue investing in iPads.

iPad owning small businesses are also more prolific users of social media platforms for both personal and business use. Survey shows that 1/3^rd of iPad owning businesses actively use one or more forms of social media such as Facebook, LinkedIn and Twitter whereas only 1/5^th of non-iPad users use social media.  Besides higher social media usage, these iPad owning businesses also seem to be early adopters of Cloud Computing. Nearly three times as many iPad businesses vs. non-iPad businesses are actively investing in Cloud Computing technologies.

On the question of iPads vs notebooks, not surprisingly, 15% of iPad owners prefer iPads over notebooks. On the flip side, non-iPad owners seem to be die-hard notebook users. Given a choice, 52% of non-iPad owners prefer to use notebooks only. 21% of small businesses consider all three: Notebooks, Netbooks and iPads to be important.  Those that use iPads have very low preference for Netbooks. The research shows that currently there is a clear polarization between iPad and Notebook users.

Besides being a “cool device,” the number one stated reason to purchase an iPad was sales and marketing. When specifically asked the most regular uses of iPad, the survey showed that iPads are being used for internet searches/news, emails, vertical applications and social media interaction.

96% of all small businesses that have an iPad also have a smart phone. In addition to smart phones, it is inevitable that iPads will become the center of SMB Future Workplace.

Tavishi Agrawal
Market Analyst
Techaisle

It is a given that SMB’s Cloud Computing adoption is growing. It is a given that SMB’s SaaS is fast replacing on-premise software. Does it even matter if the growth rate is 20 percent or 25 percent, whether it is US$100 billion market by 2012 or US$125 billion market by 2014? What really matters is how adoption can be accelerated. What really matters is how the right advice is given to SMBs that are adopting SaaS/Cloud Computing.

There are many forecasts in the market. Depending upon which market research firm one follows each has its own stated forecast, definition and defensible methodology.

Market will grow, it has to grow. Industry is driving SMBs towards Cloud and increasingly taking on-premise alternatives off the market. Everyone that is in the IT business is talking about Cloud Computing. There are hardly any alternatives left for SMBs.

So we should really get off the forecast and market sizing train. Instead we should concentrate on factors that will help vendors and channels to accelerate adoption. Now one may argue that all analyst firms have conducted their own surveys to determine the reasons for adoption or non-adoption. However, each of them misses the point of finding those important nuggets that identify a path for vendors and channels, a path that will lead them to Cloud Computing nirvana.

Analysts and analyst firms like us should seek answers to burning questions such as:

1. What applications should vendors focus on?
2. What comes first – back and storage, mission-critical applications, CRM, vertical applications or something else?
3. What should channels be doing in targeting the SMBs?
4. What should be done to convert the non-adopters to adopters?
5. How should SMBs be educated?
6. What is the role of multi-touch devices?
7. What will happen 3 years from now?
8. Which SMBs will regret and which will rejoice after adopting Cloud Computing?
9. How to educate channels?
10. Which market segments are more important than others?

Hence, instead of talking about SaaS/Cloud Computing Spend and growth rates, let us begin a sensible dialog about 10 “thundering” questions about Cloud Computing. You can even check out Techaisle’s Cloud Computing reports here.

Tavishi
Techaisle

Despite the bank bailout, American small businesses have had limited access to financing. The blame game has focused on the greed of bankers who are taking advantage of the “free” (meaning zero interest) dollars given to them by the government and using that to make Wall Street bets as opposed to lending to small businesses and homeowners. But are they really to blame? Money is efficient. It finds its way to places that give the best returns. It so happens that the best returns no longer come through lending activities but from high frequency trading. The fact that the bankers asked for and were given the money to engage in this activity at no cost to them was a mistake the Bush and Obama administrations made. No question about it. But why blame the bankers? They are simply fulfilling their obligations to their shareholders. Should they make such obscene amounts of money in bonuses? Why not? The amount of money they contribute back to the country is a matter of taxation and tax reform. That said, proprietary trading seems to be on its way out and banks are gradually returning to their boring old lending practices.

In a recent survey, nearly 35% of small businesses clearly mention that availability of credit/loans is impacting their business, as shown in the chart below.



The real issue though is the lack of good options for delivering financing to small business in an efficient manner. Bank consolidation over the last decade has left business lending to small businesses largely in control of large and mega banks. Small businesses can and often do turn to the Small Business Administration (www.sba.gov) for financing. The SBA has a number of micro-financing schemes that allow small businesses to borrow a maximum of $35,000. SBA data suggests the average amount borrowed hovers around $13,000. The delivery of those loans however is done through various local, community and national/global banks. The process is onerous, locks in collateral and is often not available to the weakest of small businesses. These initiatives also do not help START small businesses as most loans require a documented operating history. Small businesses therefore often start businesses by using credit cards as a way to finance ventures. This is dangerous as cards have higher interest rates and defaults can negatively impact personal credit histories for years to come. The result is a dampening of the ability of individuals to take risks. The result is less innovation and fewer small businesses.

Perhaps this is an opportunity for us to look to the third world where micro-finance lending has created whole new businesses by the hundreds. These businesses are small but successful enough that loan repayments are above the 90% level. Because of the small amount of money in each loan, the risk per loan is low often requiring no collateral commitments. Micro-financing organizations such as Grameen Bank have turned in impressive performances both in terms of the amount of money they have lent over the years and the number of businesses they have helped. Grameen Bank’s history is well documented having been in existence since 1976. In some ways they could be hailed as the world’s most successful venture capital firm. By the end of 2009 Grameen had lent over $8 BILLION (since inception) in micro-credit to nearly 8 million small businesses. What is impressive is the low default rate. At the end of 2009 less than 3% of the loans outstanding were overdue. All of this has been accomplished in an impoverished country like Bangladesh with 2500 branches and about 13000 loan agents.

Can the model be replicated in the US? Absolutely! But it demands structural change in the way small businesses access financing today. Perhaps the solution lies in establishing a micro-finance exchange – a clearinghouse for micro-credit made specifically to allow people to start businesses. What would the benefits of such an exchange be?

1. Access to low interest financing with low or no fees. Access is limited to companies with fewer than 20 employees (80% of all small businesses)

 

1. A cap equivalent to current micro-finance initiatives or slightly lower (say a maximum of $35,000)

 

1. No collateral requirements but the applicant must submit a business plan

 

1. No impact on personal credit history if the loan is not repaid

 

1. Operational support for small businesses including better rates on things like internet access, mobile service plans, transportation and logistics, import/export, legal services, banking, insurance and talent acquisition.

Micro-finance in developing countries has proven to work well and it demands serious consideration as an option here as well.

Abhijeet Rane
Techaisle