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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

SMBs Using Cloud Applications Experiencing Terrific Improvements

Techaisle’s SMB Cloud Adoption survey shows that SMBs that are using Cloud applications are experiencing tremendous improvement in customer acquisition, retention and work satisfaction. In fact, 1 in 4 SMBs say that customer retention has improved, and nearly 1 in 3 says that customer acquisition has improved.


In general SMBs have experienced improved customer acquisition and retention after using cloud applications, however, SBs (1-99 employees) and MBs (100-999 employees) differ. Typically, SBs are more hard-pressed to acquire customers, a top business issue for them. With the adoption of cloud, 32 percent SBs say that they have seen improvement. MBs on the other hand, have better direct sales force for customer acquisition, but after equipping the sales force and marketing with cloud applications they have seen marked improvement in customer retention. Additionally, an important point to note is that 29 percent of SBs have reported improved group productivity and 34 percent improved employee satisfaction.

The survey also showed that B2C and B2B SMBs have had different experiences in customer acquisition and retention.  Specifically, B2B SMBs have reported nearly twice as high improved experiences as B2C SMBs. Many B2C SMBs are using social media platforms such as Facebook and twitter and marketing automation solutions to build a set of followers to improve their customer retention and acquisition. On the other hand, comparatively higher percentage of B2B SMBs are using LinkedIn, Twitter and specialized platforms such as Chatter, Yammer and GageIn to track news and conversations with their customersaction.


CRM has become the central application and the core around which other features and functionality are deployed as required by an SMB organization, department within an SMB or an individual user within the SMB. CRM is that core cloud business application. After the SMB CRM base has been built (or simultaneously), the order of implementation depends on the SMB’s focus but is likely to be business intelligence, marketing automation, Financials, HR/Payroll, customer service for service companies, ERP, fulfillment (SCM) and industry vertical applications.


There are four key areas of SMB cloud usage and deployment. Each has got many sub-sets of applications. These four areas are:

  1. Infrastructure and Platforms (US$13.0 Billion SMB Opportunity by 2016)

  2. Communications and Collaboration (US$7.9 Billion SMB Opportunity by 2016)

  3. Business productivity & Applications (US$15.5 Billion SMB Opportunity by 2016)

  4. Industry specific applications ((US$2.7 Billion SMB Opportunity by 2016)


While there are many niche vendors addressing each niche area, the complexity grows manifold as businesses move from one application to another, from one device to multiple devices. As Cloud computing adoption among SMBs grows, the real issue of data integration continues to come into play and it will become imperative for each of the four areas to communicate with the other. And once that “integration enlightenment” happens SMBs will witness even higher improvements in productivity, satisfaction, acquisition and retention.

Anurag Agrawal
Techaisle
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Lots of Clouds in the Forecast and a Holiday Story


Clouds come floating into my life, no longer to carry rain or usher storm,
but to add color to my sunset sky.”
- Rabindranath Tagore

 

The Global SMB Cloud Computing market will reach $23.5B this year and double to $47B by 2016, according to our latest forecast which is being updated using several thousands of survey responses and results of and segmentation and predictive analytics studies conducted in the first three quarters of 2012.


SMB Key Cloud Computing Segments, 2018

Rapid market growth in the Cloud Computing arena, especially for SMBs, is not a surprise to those watching the market, but our latest forecast shows that several segments will offer more than $1B in opportunity, as shown in the attached chart. Among those that will cross the $1B threshold are Other SaaS, ERP/SCM and Storage, the latter growing at ~30% CAGR. Keep in mind that the five types of arrows show relative growth relationships; the actual rates are very healthy and range from 10% to over 30%.

Other important points in the forecast include:

Approximately 60% of the volume growth is expected to come from North American SMBs, or $14B of the incremental volume of the global $23B, while Western Europe is expected to add $3.7B growing at a rate of 11%, and Asia/Pacific (excluding Japan) continues to develop rapidly – in the 20% range - on the back of China’s expansion and Korea’s continued economic strength in IT and global production, and is expected to add almost as much total volume as Western Europe, or about $3.4B vs. the $3.7B mentioned above.

Regional Share of SMB Cloud Computing Growth - 2012 - 2016Eastern Europe is expected to develop into a ~$1B market over the forecast period as is Latin America, both growing rapidly from a relatively small base. And as has historically been the case, Africa and the Middle East continue to lag with a very small share of both volume and growth.

“A picture is worth a thousand words.”
- Napoleon Bonapart


With all the movement around VDI, as analysts we tend to think in abstract terms about what is means to the market at large and our clients. With my daughter home from college this week I got a firsthand look at what the next generation is doing with technology and how real it actually is.

The scenario went like this:

Virtualization for LearningWith a week before finals in Organic Chemistry and a major paper due after Thanksgiving break, my daughter needed some freeware called ChemSketch, but it does not run native on her MacBook. Nonplussed, she downloaded an Oracle VirtualBox client, Windows XP, and the ChemSketch, created a new system disk and shared folder and was working on her chemistry paper, drawing molecules and all the other things that I don’t pretend to understand.  While I was proud to see how quickly she overcame the problem, what really struck me was that thirty years ago I was in front of a blinking CRT using a timeshare network learning FORTRAN with a prompt – the C: prompt that my daughter used triggered the memory and caused a major episode of deja vu. It is really amazing to see how both the context and content change over time.

We at Techaisle want to wish all of our friends a Happy Thanksgiving and  beginning of the Holiday Season!

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India SMB Cloud Adoption: Ready to Take-off?

In India, SMBs’ awareness of cloud computing trails only slightly behind mature markets. Predictably, awareness is significantly higher among mid-market businesses than small businesses. However, awareness of the term increases significantly among companies with 20 or more employees suggesting interest in cloud computing jumps once businesses grow beyond a certain size. In addition, mid-market businesses with 250-999 employees have the highest awareness about cloud computing as these firms have are still building their in-house IT infrastructure and are evaluating all options to meet their IT needs. SMBs also agree largely on what the term means – about half of all SMBs surveyed agreed that the term included all of the following aspects.

    • Subscribe to IT services that are hosted by third-party

 

    • Subscribe to Servers hosted by a third-party

 

    • Subscribe to applications hosted by third-party

 

    • Access applications using a web based interface

 

    • Subscribe to storage and security hosted and provided by third parties



Over the last few years, as the market has evolved and more vendors have entered the fray, a number of new terms have become commonplace each meant to either truly represent a component of the market or a marketing gimmick by some vendors to try and create and legitimize a niche for themselves. The rising sophistication of SMBs is evident in that they are at least familiar with the various terms being bandied about. This is not to say that SMBs do not differ in their views of what each term actually means.

Familiarity with the term cloud computing is rising among SMBs suggesting vendors’ evangelism activities are having some effect in terms of recognition and awareness. However, a good understanding of the benefits of cloud computing varies significantly among the SMBs. More importantly, awareness among channels that serve the SMB segment is limited with pockets of misinformation. Even if the SMBs and channels know about the benefits of cloud computing they still worry about security and data privacy.

Cloud computing has been touted as the next big thing but as far as the Indian market is concerned while there is a lot of hype and interest generated around this technology the ground realities reflect a more sobering truth: that SMBs in India are still some way off from shifting to the cloud in a big way and that the initial vendor push is more oriented to the upper mid-market businesses and large enterprises.

In India, Infrastructure, also known as IaaS, has the potential to change the way IT hardware is purchased, designed and used. With its promise of infinite scalability and a pay-as-you-go pricing model, the primary benefit that cloud IaaS services extends to the SMBs is efficiency at lower IT costs. It lowers the barriers to market growth by lowering technology costs and upfront investments. This is true both for small and mid-market businesses for many applications. The picture is substantially different for mid-market businesses and small businesses taken separately. Mid-market businesses display a greater willingness to adopt hosted infrastructure and platform solutions than small businesses which is understandable.  Small businesses prefer business appliacations and industry vertical solutions. Cloud platform vendors should therefore actively seek partnerships with such vertical ISVs in order to drive utilization of their own services and data center resources.

Gitika Bajaj
Techaisle

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Pick of the Week: Dell’s SMB Integrated Cloud Front Office

Solution for End-to-End Lead-to-Cash Workflow

As part of our Pick of the Week series, we requested an online demonstration of what sounded to be too easy, and were privy to a demo of Dell’s DCBA (Dell Cloud Business Applications) to see the lead to cash process from building customer awareness to sales contract. We were impressed at how far the industry, and Dell, has come in the last few years at solving the practical challenges around marketing and sales integration. Dell is providing enterprise-level CRM capabilities to SMBs that might have run into seven figures (and a year-long implementation) only 10 years ago. And going even further by tying all this front-office activity together with accounting to synchronize invoicing and billing into the process, insuring that sales staff can be paid without spending 12 hours a week updating their CRM records, and Finance does not have to chase down account managers for collections and accounts receivable updates on the 29th of every month.

Small and Mid-Market Companies Choose Online CRM as the Shortest Path to Revenue

SMB CRM Integration

The killer Enterprise Application to emerge at the end of the Client/Server era was CRM, which spawned a huge ecosystem of sales process, configuration and customization experts. The next step was online CRM solutions led by Salesforce.com, a true multi-tenant architecture and Cloud ecosystem in and of itself. The ample supply of CRM expertise, along with the market needs to generate revenue as quickly as possible resulted in a wave of online CRM start ups and then pure-play Marketing Automation vendors that were eager to plug into the accelerating number of customers opting for a services model.

 

Falling Through the Cracks

Even with the best CRM software and a lot of customization, even for those who spent the most on these systems, and especially large organizations, getting to a state of accurate and current information has always been a challenge. The perpetrators tend to be too many steps in the process, unclear roles and responsibilities, limitations in the software that force workarounds, ineffective hand-off of customer relationships, different levels of process and software maturity, and many others. Much of this was caused by contention for capital budgets, the complexity and expense of internal systems integration and never being able to get ahead of the technology curve, resulting in a large percentage of CRM implementations failing outright. Properly selected and integrated Cloud-based Applications like this one from Dell have already gone a long way to eliminate many of these challenges by offering a shared customer database approach from the very beginning.

Dell SMB Lead to Cash Application

 

Following the image above, it is quickly apparent that the demand and supply cycles are covered by this approach: Lead to Opportunity, to Proposal, to Customer Support, which is good for the customer. The internal operational cycle is also enabled from Marketing to Sales to Invoicing and Billing, to Customer Service, which makes life a lot easier for everyone involved.

Dell End to End SMB SalesThe demonstration was recorded and we have included relevant excerpts that follow the process. Dell offers Pardot, a leading Marketing Automation Solution for marketing which connects automatically to Salesforce.com by synchronizing User-IDs from each component, in less than a minute. Sales Funnel, Alerts, Dashboard, Forecast are coordinated out-of-the-box, and rules are customizable between the applications.

Next comes Conga, which merges customer information, selected products and services, proposal template and cover letter into a print-ready quotation that shares all data with the appropriate customer and pipeline records.

EchoSign, an e-Signature solution from Adobe follows, allowing the customer to authorize the order securely and purchase immediately, which is always a good thing in Sales.

The next part of the solution solves the ever-present issue of ensuring the Sales and Accounting Systems contain and report the same information. This is accomplished using the process integration presented below:

 



Dell SMB Lead to Cash Process Automation 1 from Techaisle on Vimeo.

 

As shown in the image, the same information that is incrementally collected throughout the marketing and sales process is used to auto-populate the agreement, invoice and collections data within the accounting package, for our demo, this was done using QuickBooks Online, one of several pre-configured packaged integrations that do not require manual intervention except for company-specific policies and table structures.

Again, seeing it is more impressive than reading about it:



Dell SMB Lead to Cash Process Automation 2 from Techaisle on Vimeo.

What was the name of your company again?

The benefits of sharing information between Marketing, Sales and Accounting are equally or more important with Customer Service, which is the lifeblood of all companies’ online reputation these days. Taking the data one step further into customer service affords the advantage of having the full customer history at your fingertips while fielding support calls – which provides a higher level of satisfaction and smarter service capabilities.

 



Dell SMB Lead to Cash Process Automation 3 from Techaisle on Vimeo.

 

Why this is Important

This is important because it goes back to some basic principles that improve information system management, including:

Move Data, don’t type it more than once. Whether using drop downs to input categories and exact descriptions or whole sections of records or groups of records, moving data will result in fewer errors than typing it into the system. In addition to the accuracy this offers, it eliminates a lot of the drudgery associated with maintaining CRM systems and allows sales people to get back to selling.

Build Information Incrementally. Capturing the same data repeatedly will annoy customers and staff, records should be built up over time and sections of data moved to populate application modules as they are brought online. Dell’s solution does this through progressive web forms for customer records and by sharing data between marketing, sales, accounting and customer service.

Centralize Data. Trying to manage multiple customer databases is confusing, inefficient and causes a lot of frustration. Accuracy, Consistency, Reliability and Timeless are hallmarks of data quality and all suffer from running disparate databases of the same information. While data tends to take on a life of its’ own with volume and increased usage, starting with a design that shares information between systems will eliminate problems down the line and can actually give Small and Mid-Market businessesan advantage over Enterprise customers who have been wrestling with huge CRM database and internal IT for the past 15 years.     

Keep it Simple, Get Going Fast. In a recent survey 77% of SMB complained that even there has been a lot of progress in the past few years, complexity managing IT has grown faster than the problems it is designed to eliminate. SMBs want to spend money on revenue generating activities and reducing costs, which means focus on the core business, not hiring people to manage IT adoption that cannot stay engaged full time on building the business. We were surprised at how easily this whole integrated solution came online, easy enough for a power user to manage and available to use in a matter of days, quicker for those who are familiar with CRM systems.  The Dell solution comes with fixed fee, fixed scope implementation services for all of the applications they sell, making it easy for SMBs to get going quickly with a single vendor for support.

The Bottom Line

Dell’s DCBA solution was announced last September and has come a long way since introduction. In this example the demo provisioned a new account without need for any coding; userIDs tied Sales and Marketing together.  Customers signed the necessary paperwork and and Invoicing data was moved automatically once the new account was opened in QuickBooks. For small and medium sized organizations, finding ways to make best use of their IT investments-- to streamline their sales processes, as in this example here, can be the path to increased sales and help them realize greater business success, and is certainly much easier and cost effective than it used to be.

 

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