Techaisle Blog

Every year or two (or three), a new trend sweeps the IT industry, and breathless coverage asserts that the new phenomenon has arrived fully-shaped to transform technology and/or IT’s role in business strategy. This is, of course, very rarely true. Most trends play out over a long time, and change in technology tends to be incremental rather than revolutionary. For example – it is certainly true that digitalization (and digital transformation) are important issues today, and that they will have a transformative effect on IT and business strategy. But Techaisle research demonstrates, they are a recent highlight in a series of business issues and technology themes that stretch back at least 15 years, from 2003 to 2019.

Key SMB and Midmarket digitalization themes, 2003-2020

As we enter the next decade, it seems that online capabilities and activities are entering a new era. There are still advances to be made in the ‘net’ realm: there is constant pressure to expand the speed of the Internet, enabling it to handle the voracious demands of unstructured content like video, and the rise of IoT and 5G portends a coming tsunami of data from billions of connected devices. However, the key focus of web-based business investment is now less about the ‘net’ and more about the ‘work’: the ways that an increasingly-connected world supports pursuit of previously-unattainable objectives. The most important IT-related development in 2020 will be this focus on connectedness – connected cloud, edge, applications, security, collaboration, workspaces and insights. Internet and the web are the navigation routes that we have been developing since the 1970s; the always-on, everywhere-connected Interwork© platform is the destination that we will be creating in 2020 and for years to come.

This eBook has been written to provide guidance to supply-side management responsible for digitalization strategies that affect sales and marketing of advanced IT solutions to SMBs and midmarket firms. The document is structured into six sections:

1. What’s past is prologue – The Path to Digitalization
2. Closing the gap between business priorities and IT challenges and the rise of digital
3. Business Issues over the years – paving the route to digital transformation
4. The rise of innovation – and digital – as a business focus
5. IT challenges over the years – paving the route to digital transformation
6. What’s future is epilogue: Connected Business

Download the free eBook here

Techaisle research, US SMB and Midmarket IoT adoption trends, analysis of 1,135 unique SMB survey responses, leveraging its network of over 1.5 million b2b respondents globally, shows that for US SMBs and midmarket firms that have production-level deployments IoT has helped improve controls within their businesses through better operations monitoring, increased business agility by improving processes, enabled them to develop new products and delivered reduced costs by increasing productivity and automation. 34% of SMBs began their IoT deployment with the hope of improving customer experience, 32% were expecting better cost efficiencies and 29% were targeting increased revenues. However, these SMBs experienced unexpected business outcomes with 43% reporting improved controls within business through better operations monitoring, 42% achieved increased business agility by improving processes and 41% were able to develop new products and services. These business outcomes’ percentages are almost identical demonstrating the fact that two out of five SMBs using IoT are deriving multiple positive business outcomes from their IoT deployments.

IoT is still an early stage technology. Survey data shows that IoT solutions are deployed in just 8% of small businesses and 28% of midmarket businesses. But these figures overstate the number of IoT production systems deployed by SMBs; many of the reported projects are exploratory. However, planned adoption trends show that the IoT usage and penetration may exceed 60% in midmarket and reach 35% within small businesses in the next 2 years. Generally, early IoT adopters are focused on one or more of security/surveillance, proactive alerts, reducing inventory levels and asset tracking.

Comparing 2018 survey with 2019, data shows that small businesses seem to have either tempered their ambitions to deploy IoT solutions or they tried and abandoned their efforts. Except for the 100-249 employee size firms, most mid-market firms, on the other hand, have increased their IoT adoption efforts. As a result, IoT adoption within the SMB market is still at an early stage, hindered by limited budget, costs and lack of skills. In fact, more than 50% of current IoT systems are at early stages of maturity: 19% incorporate minimal sensor deployment feeding isolated systems or feature devices that support remote monitoring / service / control. Only 10% of firms that have deployed IoT can be categorized as advanced users, having real-time information feeding enterprise-wide data intelligence solutions or connected devices creating competitive advantage.

It is important to note that while 23% of small businesses were conducting ad hoc pilots in 2018, only 13% are conducting such pilots in 2019. This however does not mean that all small businesses have migrated their ad hoc pilots to production – some have abandoned the project and some others have set loftier objectives. The biggest changes from 2018 to 2019 are in their objectives for creating new revenue opportunities, new levels of collaboration between suppliers, partners and customers as well as supporting predictive maintenance.

Techaisle has released its annual research infographics on top 10 IT priorities, business issues and IT challenges of SMBs (1-999 employees), midmarket firms (100-999 employees) and small businesses (1-99 employees) for 2019. In its detailed SMB survey Techaisle investigated 21 different technology areas and several technology sub-categories, 23 different IT challenges and 21 different business issues. This is the 9th year of Techaisle’s annual survey research initiative that probes for top business issues, IT priorities and IT challenges. Tracking history provides a fascinating evolution in which new business goals drive new IT priorities and uncover challenges that must be addressed to enable progress on business objectives.

Primary research was conducted among senior IT and business decision makers from Techaisle network of 1.2M B2B IT professionals spread across 30+ countries.

There are some interesting differences in IT priorities as compared to 2018. IoT and VR/AR fell below top 10 (but still within top 15) and replaced by Voice/Digital assistants as well as Open source solutions. Across all regions (US, Europe, Asia/Pacific, Latin America) digital unified workspace and software-defined are becoming a priority for both SMBs and midmarket firms. Security many places within the top 10 IT challenges in different forms – cloud security, mobile device security, data protection/recovery/business continuity – with Cloud security as the top IT challenge.

Global SMB & Midmarket IT spend (excluding telecom services) in 2019 is projected to be US$665B and corresponding cloud spend is expected to be US$115B. Research also found that IT budget growths in 2019 will be the highest in Asia/Pacific (6.2%) and lowest in Latin America (1.8%). While IT budget constraint is not the top challenge within SMBs in the US and Asia/Pacific, it is the top concern in Latin America.

Managing data growth is continuing to pose challenge for SMBs and when probed further Techaisle research found that only 11% of SMBs and 29% of midmarket firms have evidence-driven culture with data-driven decision-making business processes in which data defines requirements or opportunities and management then determines the best option for moving forward. In the US, 17% of small business and 34% of midmarket firms consider themselves to be innovative.

2019 Top 10 SMB business issues, IT priorities, IT challenges

The question of whether an SMB IT buyer benefits most from a strategy of working with a single or primary supplier responsible for integration and management of all resources, or whether it is better to procure individual components, systems and services from a larger group of ‘best of breed’ suppliers, is nearly as old as IT itself. The question is especially important to SMBs, which generally have limited internal resources, and would benefit from third party integration and streamlined procurement processes. Techaisle has observed a trend towards a more holistic procurement strategy as small businesses encounter increasing requirements for cross-product integration supporting digital business practices and develop greater appreciation for the value of a trusted technology advisor.

Preference for a single supplier

Over time, Techaisle’s SMB research has consistently found that a large proportion of SMB buyers would be comfortable dealing with a single primary vendor if that firm was able to supply all of the technology required to deliver on the full scope of IT/business requirements. Taken as a whole, the commentary from those in favor of a single supplier strategy highlight three imperatives:

1. Breadth of product portfolio matters
2. Services matter
3. Economics matter

The SMB IT solution stack

Figure below illustrates the Techaisle SMB & Midmarket IT solution stack. It is comprised of four main sections. At its core, the stack defines an SMB’s core systems (compute infrastructure) requirements. The software stack is positioned at the top of the systems components. The left-hand side of the figure highlights major categories included in the services stack. The right-hand side of the figure contains many of the major categories that comprise the security stack. A clearly-defined IT stack matters to a definition of what the ‘art of the possible’ looks like in the SMB IT world.