Techaisle Blog

Every business is looking to build scalability into its operations. In IT terms, scalability is often tightly defined in terms of the potential to add capacity to specific system. This is part of the answer – but from an SMB perspective, scalability centers on the ability to increase the impact of each employee: by increasing productivity by delivering new functionality, new systems, and more capacity as needed. Techaisle’s SMB and Midmarket cloud adoption survey research shows that SMBs view cloud as the primary platform for scaling their IT systems – and their businesses. Techaisle global survey of over N=5000 SMBs discovered close connections between cloud and key business objectives:

● 65% of SMBs believe that cloud improves their ability to grow and scale their businesses
● 47% see cloud as a means of increasing agility in business operations – a core requirement for growth-oriented SMBs
● 41% state that cloud allows them to launch new products and services more quickly
● 40% report that cloud-based systems improve the productivity of business users.

It is no accident that 91% of SMBs (Source: 2020 Techaisle US SMB and Midmarket Cloud Adoption survey) are using cloud applications today, and 83% state that their businesses rely on technology. Cloud is the platform for small and midmarket businesses, and effective use of cloud is a key element in SMB viability. Similarly, 2020 Techaisle Europe SMB and Midmarket Cloud adoption survey data shows that 87% of SMBs are using cloud.

A recent report into the technology purchasing habits of SMBs in the Asia Pacific has revealed that a significant number of businesses are operating with dated PCs and operating systems – which has the potential to damage both productivity and profits.

The Asia SMB Tech Insights Report, conducted in September 2019 by Microsoft and Techaisle, was produced following a survey of 2,000 IT and business decision makers across the Asia Pacific region. The study specifically covered small and mid-size businesses only (up to 499 PCs).

Get the key insights by downloading the summary report for your region:

• Asia region
• Australia
• India
• Japan
• New Zealand
• South Korea
• Thailand

 Key findings from the report include:

• Over 1/3 of SMBs are using old PCs (4+ years old) and old Windows operating systems
• Over half of SMBs have no PC refresh policy (or aren’t following it)
• Using old PCs can cost a business up to US$2,657 per year
• 82% of SMBs agree that new PCs can make employees more productive, and 87% agree that new PCs reduce maintenance costs
• More than 50% of all SMBs in the region experienced security breaches in the past 12 months, and operating with older versions of Windows increases vulnerability

Techaisle’s SMB and Midmarket Cloud adoption survey of 3200 midmarket firms and 3000 small businesses globally shows that hybrid cloud has been gaining momentum in small businesses, and is already entrenched in the mid-market firms. Hybrid accounts for 37 percent of cloud using mid-market businesses today, up 28% from 2018, and is expected to capture a lot higher proportion of new spending in the next one year. Midmarket firms are moving from public clouds to hybrid deployments with current hybrid workload at 17%, up from 12% in 2018. The current penetration is the highest in the US but planned usage is highest in Europe and Asia/Pacific.

There is no clear trend on the types of workloads on hybrid environments which shows that most deployments are very specific to a customer’s needs and application delivery partner’s expertise. Typical hybrid workloads include ERP, HR, CRM, finance, operations, IoT, analytics, AI, Machine Learning, SAP 4/HANA deployments, disaster recovery, critical event management, mass storage, cloud security and cloud database. Both Azure and AWS are being used by over 90% of US midmarket firms. Red Hat OpenStack is the preferred private cloud platform for 74% of US firms and Red Hat Cloudforms is the most used cloud management solution by 80% of US midmarket firms followed by VMware vRealize. Hypergrid, Morpheus, platform9 and Scalr are in low single digits. Ansible is being used by most channel partners for orchestration and automation.

Corresponding Techaisle survey with partners delivering cloud solutions to SMBs and midmarket customers reveals that Azure Stack is the most popular platform because of Microsoft’s proactive engagement, powerful and extensive Microsoft ecosystem as well as deep product portfolio. Google Anthos and AWS Outposts are picking up pace. Interesting trend is being seen from AWS partners who are beginning to use Google Anthos instead of AWS Outposts. These partners are not only working with AWS native solutions, but offering cloud solutions which are based around other cloud platforms like GCP, Oracle or Microsoft. Some of these partners prefer to use Anthos because they find it to be more of an open technology and AWS Outposts and can be easily implemented across other environments. It gives them a wider approach in terms of compatibility. They have to pay a fixed amount when using using Anthos which is variable with Outposts. None of the application delivery partners are using tools and technology from only a single vendor. The use of Open Source is dominant.

Another view of the data collected in the survey provides fascinating insight into the extent that midmarket cloud users are willing to align different delivery methods with internal requirements. Detailed analysis and segmentation of data reveals that there are pockets of demand (and overlap in these pockets) that exist for public, private and hybrid models in each segment.

Mid-market businesses
Looking at the mid-market segmentation, we see that larger firms are likely to employ multiple cloud delivery strategies. Overall, 51 percent rely on a single delivery approach for cloud, for example, 31 percent use only private. 29 percent of mid-market businesses use two different delivery approaches, with the most common being a combination of private and public models (but not in a hybrid setting). Firms in these overlap areas are not, on average, larger than those using a single delivery method, but they do face added complexity in that they tend to have more locations.

It is clear from Techaisle SMB and Midmarket buyers journey research that both ITDMs (IT decision makers) and BDMs (Business decision makers) play important roles in the (formal and shadow) acquisition of IT products and services. However, Techaisle research has also found that the distinctions between these roles are not evenly applicable across all types of IT-enabled solutions: in some areas, the business will look to IT for leadership, and in others, it will take direction from BDMs.

The positioning of these solutions is important to technology vendor sales and marketing strategies. Solutions in the “IT led” category need to have strong IT-focused positioning, with detailed information on product attributes; this material should be supported with a second layer of collateral containing information on the business case for the solutions, and aimed at BDMs. Solutions in the “BDM led” category require very different positioning: here, vendors need to make a strong case for the business benefits and relevance of the solution and orient these messages towards BDMs, supporting this campaign with accompanying technical information designed to provide clear deployment and integration guidance to ITDMs. The “IT/BDM collaborative” category is the trickiest to address. It requires deep information on business benefits and the process steps required to capture those benefits targeted at BDMs, and deep information on how to assemble, deploy, integrate and support/optimize these solutions targeted at ITDMs – and an understanding of how to position and convey the messages to each audience.

Virtualization is IT-led
In micro businesses, BDMs are reported to provide virtualization solution adoption leadership – but in all other employee-size segments, ITDMs are seen as driving adoption. Within mid-sized business, ITDMs are 2.5 times more likely than BDMs to be leading virtualization adoption, and ITDMs are viewed as having complete responsibility for virtualization solutions in nearly one-third of companies with 100-999 employees.

Managed services is IT-led
Survey responses tell a remarkably consistent story about managed services: accounts in each of the employee-size segments ascribe a rating of 36-42 (out of 100) to ITDMs as of managed services initiatives. This is a natural connection; in general, SMBs adopt managed services to reduce IT labor costs, to free up scarce IT resources to take on other tasks, and/or to provide management of complex technologies, such as services. However, BDMs may also have an interest in managed services, as they often provide access to cloud-based capabilities matched with human IT resources.

IaaS is ITDM/BDM collaborative-led
IaaS is deployed in two very different ways: as a cost-effective means of supporting IT infrastructure, generally sourced by IT, and as a means of supporting the specific (and sometimes, short-term) requirements of a business-led project, often paid for by the business team. The data suggests that the IT use case is more prevalent, and indeed, anecdotal evidence (such as the fact that market leader AWS has a very strong presence within the IT developer community) would tend to support this view. However, there is clearly supplier opportunity in the ‘BDM IaaS’ category as well.

SaaS is ITDM/BDM collaborative-led
SaaS is another category that can affect ITDMs and BDMs, as part of a collaborative initiative or individually. SaaS applications themselves can be seen as belonging to many different categories, including SaaS applications that support IT management functions (such as software development, migration/version management, and IT asset management applications) and applications CRM, ERP, HR/talent management, customer service applications, social marketing, etc.) that are designed to be used by specific non-IT users and departments. Use of multiple SaaS applications adds additional complexity, with the need to integrate and secure multiple data streams; this is likely one reason why IT’s influence over SaaS is greater within mid-market firms (which have a greater variety of users and applications) than within small businesses. Data illustrates, these issues eventually define a category in which BDMs are generally seen as having the primary influence over adoption, but where relatively few accounts (no more than 24% in any employee-size segment, and generally 9%-16%) report that BDMs have sole authority over SaaS initiatives.