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Tavishi specializes in quantitative research focusing on Small and Medium (SMB) market segments and emerging technologies such as Mobility, Cloud Computing and the effect of Social Media on marketing strategies.

Windows 8: Microsoft’s Bridge to the Mobile Market

On Feb 29th, 2012, Microsoft officially unveiled its new operating system, Windows 8 at the World Mobile Congress in Spain (the Beta version is now available for download by end users). We feel that Windows 8 will lay the foundation for not just Microsoft’s survival in the mobile devices space but also help it grow in the face of intensifying competition from other operating systems (e.g. Apple’s iOS and Google’s Android).

The first thing to remember is that Windows 8 is not just a desktop or a notebook operating system and, given Microsoft’s dominance in the PC operating systems, the primary objective of Windows 8 would not be to defend its share on the PC market but rather to extend its reach to the ARM chips and various mobile devices.

The immediate demand for Windows 8 will come from the large proportion of Windows XP users who were so satisfied with that older OS that they never even bothered to upgrade their PCs to Windows 7, in spite of its substantial enhancements over Windows XP and Vista. Windows 8 further enhances the capabilities of previous versions of Windows, making it an attractive upgrade for PCs.

However, Microsoft is intensely focused on the mobile market and has designed Windows 8 to work with both x86 and ARM processors and has also designed it to work with a multitude of mobile devices, (e.g. notebooks, tablets, etc.), making it highly attractive to business users as well as consumers who want to access not just the Internet and various mobile apps available for Apple and Android but also their traditional PC-based apps
including, and especially productivity applications like Microsoft Office.

In the last few years, we have seen exponential growth in mobile devices (e.g. smartphones and tablets) based on Apple and Android.

    1. While iOS has primarily been seen as a premium brand targeted at early SMB adopters, it is now expanding its base to price-conscious SMB users by offering its older versions at lower prices.

 

    1. Android-based devices come at a multitude of price points from various vendors. This is especially important among SMBs in price-conscious emerging markets.

 

    1. Given the rapidly evolving market conditions, Windows 8 should ideally start at the low-to-medium end of the SMB price segment to prevent further expansion by Apple’s iOS and Android and then steadily move up the value chain by offering products with more features/ functionalities at comparatively higher price points to intensify competition against iOS and Android.



There are essentially four key areas that will be critical for Microsoft’s success in mobile market: operating system, mobile devices, applications and service providers (carriers).

Mobile Operating System

After several years of lagging significantly behind other vendors, Microsoft’s Windows 8 is a significant improvement over its predecessor mobile operating systems. The current version will not give it the kind of dominance it has in the PC market. However, if it halts, or slows the rapid growth of Apple and Android devices, it would be a major success. Even as it releases the current version, we can be sure that the company is already planning new future versions with significant improvements that would help it grow its share vis-a-vis Apple and Android.

It is important to highlight a couple of differences between Microsoft Mobile and its key competitors. While Apple’s iOS is available only on Apple’s devices, Google goes to the opposite extreme and allows limited OS customization to device vendors to help them differentiate their products. While the device manufacturers may like this idea initially, this is likely to create tremendous variety in the market, causing much confusion for the app developers as well as customers. Microsoft, on the other hand, specifies the hardware requirements for its operating system and app developers and customers will know exactly what they get when they buy a Microsoft-based device.

Mobile Devices

One of the greatest requirements for success in the mobile space, and where Microsoft has an advantage is the ecosystem of OEMs, ISVs and other channel partners.

    1. Microsoft has the largest number of OEM partners for PCs (e.g. HP, Dell, Lenovo, Acer, LG, etc.), who will be very quick to offer mobile devices based on Microsoft’s new operating system. In addition, many of the OEMs who currently offer Android-based devices will hedge their bets by offering Microsoft-based mobile devices also (rather than focus on just one OS like Android).

 

    1. Nokia (Microsoft’s strategic partner) has the largest subscriber base of mobile phones, especially outside the US. In addition, other phone vendors like Samsung and LG also have significant subscriber bases and are well-regarded in  select markets. They will also be quick to offer Windows-based devices, enlarging the potential base of Windows Pone users.

 

    1. User-friendliness of hardware devices will also be critical to Microsoft’s success in the mobile space. OEMs like Nokia and Samsung have shown significant potential for innovation in design and incorporating user-friendliness in their     devices that we feel quite optimistic about their ability to accelerate acceptance of Microsoft as a mobile operating system. Collectively, these OEMs (in Microsoft’s ecosystem) account for bulk of the market and they will undoubtedly find it easier to sell Windows Phones to their existing customers instead of phones based on alternative operating systems.



Mobile applications

Apple and Android have had a head start in getting apps for their devices due to their early expansion. Their relative advantage in applications will diminish in the next 2-3 years very significantly.

    1. Most ISVs who currently develop Windows-based applications will be quick to port their apps to Windows–based mobile devices also.

 

    1. Similarly, developers who have already invested significant amounts in developing new apps for Apple and Android will be unable to resist the urge to supplement their revenues by adapting their apps for Windows Phones with minimal incremental investments and tapping into the expanding base of Windows users.

 

    1. Already, many applications are available for use on Windows phones from the Windows Phone applications store and the number of these applications will increase significantly in the future.

 

    1. These developments will be possible if and only if Microsoft encourages and provides incentives for its own ISVs as well as ISVs of Apple and Android-based apps to migrate to Windows 8. Given that this may be the last major window (pun unintended) of opportunity for Microsoft to gain market share in the mobile space, it is reasonable to assume that it will allocate adequate resources for this     (it has already made senior-level leadership changes in this regard.)

 

    1. All these developments, which might take a few years to implement, will result in a very large number of mobile apps for Window 8-based mobile devices, reducing the app gap with Apple and Android and vastly reducing the ISVs developing apps for WebOS and RIM’s Blackberry.



Service Providers

The final key element that will determine Microsoft’s success are the service providers (or the wireless carriers). Many of the OEM vendors like Samsung and LG, who are likely to develop Microsoft-based mobile devices already have long-established relationships with carriers in local markets, making it easier for them to sell Windows-based devices to or through them. In addition, if the carriers see significant adoption among the end customers, they may not need much convincing at all.

Other Considerations

    1. Considering that SMBs use different devices to access same apps and data, the display should adapt to the device being used automatically. VDI vendors are already offering such capabilities and Windows 8 should not be left behind in this race. Microsoft could even consider buying Citrix for this (and selling off its online division, with which Microsoft has significant overlaps).

 

    1. Automatic synching of apps and data on various data used on various devices. Microsoft already has the SkyDrive to help in synching up the data. VDI would help its users synch their apps also and reduce the maintenance and support costs for businesses and hosting companies

 

    1. Small Business users and consumers are somewhat similar in terms of their needs, motivations and budgets. Since Windows 8 is in the best position to bridge the gap between notebooks/ desktops and tablets by offering its range of business applications, it should go all the way and also offer consumer apps that Small Business users might want on their mobile devices, including integration with     social media.

 

    1. SMB Users carry their mobile devices wherever they go and, if the experience of cell phones is any guide, they will lose these mobile devices. Microsoft, along     with its service providers should provide remote locations/lockout/wipe-out capabilities as a standard feature. This will be especially important for security conscious users.

 

    1. Microsoft Office should be available on all versions including mobile devices.

 

    1. Battery life will be an important consideration for SMBs.



Many customers have been waiting eagerly for the launch of Windows 8. Techaisle’s latest Ultrabook study (completed in January 2012), SMBs cite the availability of Windows 8 as the 2nd most desired feature which will spur the demand for new client devices.

Microsoft and Nokia were among the first ones to identify the mobile device market and Microsoft launched its first tablets nearly a decade back while Nokia launched its Communicator even earlier than that. While their vision was ahead of the market practicalities, they lost their focus when the requisite technologies and customer work styles did ripen up, allowing first Apple and then Android devices to grow rapidly. But given Microsoft’s vast and resourceful ecosystem, a few years from now, all past rumors of its death in the mobile space might seem premature. With the launch of Microsoft 8 and its strategic partnership with Nokia, it has taken first concrete steps to gain its rightful place in the mobile market.

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Sound Planning for Deployment of Cloud-Based Solutions Ensures Success for SMBs

IT projects are notorious for running over budget and time frames. This is especially true for implementation of new technologies, whether on-premise or in the cloud. Therefore, SMBs should carefully plan for the deployment of new cloud solutions.

Develop a project plan with measurable milestones and assign authority and accountability to specific individuals
While this may seem too obvious to even mention, many SMBs don’t pen down specific detailed project plans for cloud deployment. While the cloud vendor is responsible for hosting the hardware and software on behalf of the customers, SMBs need to understand what specific steps need to be taken – both for developing/customizing new services and for migrating on-premise solutions to the web. This includes all the steps starting with stating the objectives, specifying the requirements, prototyping, testing, training the users and final deployment, with criteria for successful deployment being clearly defined. Some cloud vendors have standard plans for standard services and help SMBs customize these plans for custom service development and deployment.

Measure the actual progress against the plan
This requires working with the vendor’s staff to ensure that actual progress meets the specified milestones and the project is not going over-budget or time schedules.

Take corrective action when actual progress deviates from the plan
Taking corrective action becomes much easier if the original plan provides the required authority to relevant individuals to implement the plan and these individuals can be held accountable for their results.

Test the new service to ensure it performs according to expectations
Even the most experienced cloud provider or developer cannot ensure that the new service is 100% error-free. It is important to test the service not only to ensure that it works error-free but also provides full intended functionality so that the business can realize the full benefits of the service and justify its investment.

Provide training to the end-users to use the new services
It is often very difficult to get end-users to dedicate the required time for training as many end-users perceive it as a distraction from their regular duties. However, lack of training can result in under-utilization of all the functionalities of the new service.

There are some key lessons to learn from those SMBs that have gone through not one but several deployment cycles. Selection of right vendor is not only important but imperative to have a smooth and uneventful deployment.

Tavishi Agrawal
Techaisle

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Cloud Computing Levels the Playing Field for SMBs

Since the emergence of the Internet in early 90s, experts have been predicting the use of software applications over the Internet, whereby users did not need to install any applications software and servers on their own premises. Instead, they could simply connect to the Internet and access their applications and data from their service providers, much like the telephone, where all the telephony networks and infrastructure are installed at the telephone company’s operating centers and users only need to buy a phone to use all the telephone-related services they need.

The concept was particularly appealing for small and medium businesses (SMBs) that did not have adequate financial and technical resources or the scale of operations required to install the required IT infrastructure in-house. Indeed, up until recently, many SMBs found themselves at a disadvantage in competing with large companies, which implemented the new (and often resource-intensive) complex applications to improve their productivity, develop new products and services better and faster, and provide superior customer service.

In recent years, however, the playing field has begun to be leveled with the emergence of cloud computing, whereby the servers, applications and networking equipment are installed at an external hosting company and users can use the applications they need using any device they want (e.g. desktops, notebooks, tablets, smartphones) without incurring any large capital expenditures upfront, paying for the use of applications on an as-needed basis. One of the most famous examples of such cloud computing is the CRM application offered by Salesforce.com, the single largest pure play cloud computing vendor in the world. While large companies spent tens, or even hundreds of thousands of dollars to install, maintain and periodically upgrade their CRM applications from large vendors like Oracle and SAP to serve their customers, SMBs can now acquire similar capabilities by paying a few dollars a month per user.

Several changes have taken place in recent years and now the stars seem to be finally all aligned for a rapid and sustained growth of cloud-based solutions.  Enter cloud computing accelerated by mobility and the work from anywhere and anytime culture.

The New Economy and Increased Demand from SMBs
The dramatic shock to the global economy in 2008 had a multifold effect on the decision making of businesses. With sharp drop in revenues and profits and decreased availability of credit, SMBs found themselves starved of the capital they required to invest for in-house IT infrastructures to meet their increasing IT needs to improve their employee productivity, develop new products and services and provide higher levels of customer service to compete in the globalized economy. With the global economy unlikely to recover anytime soon and resume its long-term growth of earlier years, SMBs have become quite averse to make large capital investments and prefer to pay on an as-needed basis. Cloud computing meets this need of the SMBs by converting capital expenditures into operating expenditures.

Increased Employee Mobility
A second factor that has increased the demand for cloud solutions is the increasing mobility among SMB employees and their need to be able to access their applications anytime from anywhere using any device (e.g. desktops, notebooks, tablets, and smartphones). Cloud solution providers have developed new capabilities in recent years that allow SMB employees to do precisely that. Applications and data can be accessed over fixed and wireless connections and they adapt the data views automatically depending upon the access devices being used by the mobile workers.

Technological Developments
Cloud computing is also being enabled by the fact that new applications are increasingly being developed with Internet delivery in mind rather than just adapting the older client-server technologies for the Internet. A key element of this new trend is the evolution of integration platforms that allow users to integrate the web-based and on-premise applications to work together and exchange data on an as-needed basis automatically. Over time, this will allow SMBs to have multiple applications that work seamlessly like a single system without SMBs having to be concerned about transferring the data accurately and quickly for use by different applications thereby reducing their needs for internal IT skills.

Cloud computing is also becoming more economical by the increasing use of virtualization, which allows use of fewer servers to serve the needs of multiple SMB customers. Virtualization also allows for greater security, backup & recovery and higher levels of IT availability, which have become increasingly important for SMBs with their increasing reliance on IT.

Development of the Cloud Computing Ecosystem
Finally, a more complete ecosystem is evolving, consisting of cloud solution developers (e.g. Salesforce.com, Netsuite, Taleo, Concur) , infrastructure providers (e.g. Dell, IBM, Cisco, HP, etc.), hosting companies (e.g. Equinix, Savvis, Rackspace) as well as local channel partners that collectively have the capability to develop and deliver cloud-based solutions to the large number of SMBs spread out all over their markets. Furthermore, collectively they have the financial & technical resources and credibility to convince SMBs to adopt the new technologies.

Tavishi Agrawal
Techaisle

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SMB Business Intelligence Spend & Adoption: Market Ripe for Growth

Global SMB Business Intelligence spend is estimated to be US$2.9 Billion in 2011, a little more than half of estimated spend by Enterprises at US$5.7 Billion. However, confusion abounds because of proliferation of front-end analytics tools and back-end Business Intelligence tools, analytical platforms, as well as data marts. And now more than ever the need for business intelligence is strong, especially among SMBs as they have to increasingly carry an added burden of managing, maintaining and developing insights from raw data.

Business Intelligence is among Top 5 investment solutions planned by SMBs. The current economic scenario has businesses of all sizes focused heavily on identifying profitable customers to improve the ROI on marketing dollars spent. While a number of SMBs have already deployed formal CRM solutions and many others have internally developed CRM processes, the next focus is on making sense of the data captured, linking it to business objectives and monitoring business performance. Large businesses have over the last decade spent billions in improving data analytics capabilities; however, typical business intelligence solutions have been out of reach for majority of SMBs due to cost and deployment complexity. But there are a host of new entrants in the field that are resetting the price bar and filling the gap between low-end MS Excel based solutions and high end solutions such as SAP Business Objects and IBM Cognos.

For example in the US alone, when Techaisle asked 850 SMBs:
Please tell us which of the following technologies you are either “investing in”, “investigating”, or “Ignoring”; [Investing: Have completed purchase, Post purchase deployment phase; Investigating: researching or in pilot phase; Ignoring: not considered important]


Results below for US SMBs shows that the market is ripe for growth and adoption.


Historically, businesses have used a hub-and-spoke model, that is, an enterprise-level data warehouse with dependent data marts.  But this poses a problem as business intelligence and analytics are required by businesses to have high quality and incredible execution speeds because time-to-market is of essence.

As per Techaisle research, 50 percent of mid-market businesses (100-999 employees) and 53 percent of Enterprises (1000+) say that “Improving effectiveness of sales, marketing and business decision making through investments in data mining & business intelligence solutions” is critical. In such a dramatic scenario it becomes more useful for businesses to utilize a virtual data warehouse that pulls data dynamically from various applications as needed.

Similarly, on a scale of 1-9 where 9 is extremely critical, SMBs rate “Improving responsiveness to changing customer needs” as 6.5. These data points cannot be ignored.

Many upper-mid-market businesses use on an average of 6.1 different types of business intelligence solutions. These could be in-house development or a combination of SAS, IBM-Cognos, SAP Business Objects, Microstrategy, Oracle-Hyperion and several other players that provide point solutions. This leads to unclear KPIs, conflicting dashboards and only few metrics that are actionable. These mid-market businesses are trying to turn to analytics-as-a-service.

It would do well for vendors that are targeting the business intelligence to focus on analytics-as-a-service offering for SMBs. However, a key of aspect of any such solution would be the ability to quickly integrate applications or if not, ability to seamlessly pull data for the stakeholders in an easy to use format.

Tavishi Agrawal
Techaisle

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