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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.

Digital transformation on the radar of SMBs

Techaisle worldwide survey research data from over 3600 SMBs and interactions with hundreds of businesses shows that 51% of SMBs have stepped up their digital transformation investments and is prominent in the plans of 22% of SMBs who report that current crisis has amplified their “belief in organization-wide digital transformation”. SMB firms that were already committed to organization-wide digital transformation are experiencing 2.1x cost reduction, have 1.9x better levels of customer intimacy and 1.4x higher productivity levels than firms that have been ‘selective adopters’ of digital transformation. Data also reveals that nearly one-fourth of SMBs are not expecting to change (accelerate or decelerate) their plans and will continue with their pre-pandemic planned digital transformation journey and expect significant benefits and upsides in the near future. On the downside, 27% of SMBs are delaying their planned technology spend on digital transformation to reallocate funds to other essential immediate capital and operational expenditures.

Techaisle’s SMB research has found that the need to be more cost efficient is the single-most compelling reason for SMBs to embrace digital transformation. Other key drivers include initiating product innovation, enabling operational excellence, driving business growth and empowering organization productivity.

There are differences across geos (US, Europe, Asia/Pacific, Latin America) as well as variations between small and midsized businesses.

For 46% of SMBs achieving cost efficiencies is a natural ‘first step’ in exerting control over their businesses and ensuring viability in an uncertain market which is besieged with cash flow constraints, limited access to capital, competitive landscape, erratic revenue, and many more. While productivity is always top of mind, cost-efficiency is a more compelling need. In fact, 1.6X as many SMBs are investing in digital transformation to reduce costs as those investing to improve productivity. Most SMBs have already adopted one or more technologies that contribute to employee productivity improvements; however, these SMBs are moving past individual to organizational-level productivity goals.

techaisle smb digital transformation pillars final
Looking at five pillars of SMB digital transformation, it is clear that digital transformation is cast primarily as a means of addressing business objectives. This observation holds an important message for vendor suppliers: when defining a digital transformation path, look first at the business outcomes, and work backwards to the need for core technology and Interwork© solutions that support these outcomes.

Data reveals that there is a difference in approach to investing in core infrastructure solutions between SMB firms adopting organization-wide digital transformation strategy vs. those with a siloed and sporadic approach. The roadmap to successful digital transformation begins with the creation of a sound infrastructure - the ‘building blocks’ or ‘foundations’ of business infrastructure. Core infrastructure devices need to be kept in sync with the requirements of digital transformation initiatives; servers and storage and networking and security need to advance with the needs of the organization.

Clearly, core infrastructure has evolved to meet future digital transformation demands. But SMBs are also increasingly making moves to adopt forward-facing solutions (2nd order technologies after foundational technologies). There is a general sense that these solutions will increase insight into and control over key aspects of the operation, and deliver benefits in different ways, and to different ends. Once a scalable, secure and cost-effective infrastructure platform is in place, it is expected to support a range of digital transformation objectives through deployment of different, complex solutions.

Today's economy demands that technology support business activities. The future will be defined by business capitalizing on IT-enabled business options. But the question in front of most SMBs is, “what is the path forward, from today's foundation to tomorrow's opportunity?”

A lack of well-articulated answer has resulted in a growing ‘digital divide’ in the SMB business ranks which has become starkly visible throughout the crisis created by pandemic. SMB firms that are embracing an agile IT/business infrastructure and capitalizing on the advantages of digital transformation are developing sustainable competitive advantages that will define a path towards success in both the near and longer term.

Detailed survey research reports are available for individual purchase or are delivered as part of annua; retainership contract.

US SMB and Midmarket Digital Adoption trends research
Europe SMB and Midmarket Digital Adoption trends research
Asia/Pacific SMB and Midmarket Digital Adoption trends research
Latin America SMB and Midmarket Digital Adoption trends research

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Cisco Small business portfolio has landed at a good place - finally

It is no secret that Cisco has made several attempts and investments to address the needs of small businesses. It would not be out of place to quote an English proverb that states: "A cat has nine lives. For three he plays, for three he strays, and for the last three he stays". This time I believe that Cisco will stay. Cisco has landed at a good place.

Today at Cisco Live 2020, Cisco unveiled latest updates to its Cisco Designed portfolio of small business solutions that are aligned with top five problems that Cisco is solving for small businesses.

  1. Work from home: how to meet and collaborate with employees and customers securely
  2. Cybercrime protection: how to safeguard from identity theft, hackers and internet attacks
  3. Always-on business: how to provide easy installation and reliable IT services using cloud technology
  4. Workplace monitoring: how to enable safe social distancing and real time monitoring
  5. New office: how to improve productivity and security at shared physical workspaces

The announcements

  1. Cisco Business Switches and Dashboard - easy to set up, secure connectivity for small businesses which are powering connections across remote and in-office workforce. The two new series of switches – CBS 250 Smart Switch and CBS 350 Managed Switch - provide essential functionality along with advanced security options and are priced right – starting at US$200 - for small businesses. Both switches support PoE+ and have integrated DoS protection and time-based ACLs. The switches are stackable and come with limited lifetime warranty (usually unheard of). Techaisle small business research on buyer care-abouts for technology solution selection supplier shows that price (67%), reliability (66%) and support (54%) are ranked top 3 criteria. Cisco switches are purpose-built to appeal to the care-abouts. The dashboard, which directly integrates with the switches, is a network management tool with a streamlined user interface (a “single pane of glass” for all Cisco devices that eliminates the need to work with Cisco’s command line interface) to manage entire network with integrated lifecycle management and automated alerting. With zero-touch plug and play deployment, and hosted in the cloud or on premises, it allows small businesses to set-up, monitor and operate network devices from a simple interface on any device.
  1. Tools to manage network in the Cloud – Cisco Meraki Health and Meraki Insight allows small business customers to monitor all aspects of their network and applications from Meraki Dashboard and API as well as detect and fix issues in minutes. As per Techaisle’s managed services research only 4% of small businesses have internal full-time IT staff and even within the 20-249 employee size segment, less than half are staffed with internal IT. Regardless of the size of IT staff, 79% of their time is spent on support and maintenance, majority in troubleshooting which creates not only IT efficiency deficit but also negatively impacts organizational productivity. Meraki Health’s objective is to make troubleshooting simple for the lean and almost non-existent and over-burdened small business IT staff.
  1. Cloud Mailbox Defense for Office 365 – enhanced email security solution, designed for use with Office 365, with no changes to mail flow or DNS and can be made operational with 5 minutes. O365 (renamed to M365) adoption is on a meteoric increase. For example, Techaisle research shows that 48% of US small businesses are planning to use M365 within the next year. However, a vast majority of small businesses worry about malware and phishing attacks, password compromise and account hijack. Only 3% of very small businesses and 27% of small businesses have internal full-time IT security staff. These small businesses usually fail to add a secure email gateway, because they are unable to manage operational overhead and lack expertise to change mail flows and operate complex policies. They prefer a solution that can be easily deployed and managed. Powered by Cisco Talos threat intelligence, Cloud Mailbox Defense, runs natively in MS Azure, can be plugged into O365 with minimal policy configuration and does not require any specialized training to manage. Minimum seat count to get started is 25.
  1. Webex Work bundle - a complete cloud collaboration solution that combines Webex Calling, Meeting and Messaging services in a single subscription, with attractive flexible monthly pricing for small businesses - per user/per month Webex licenses starting at $19.95/month. Techaisle research shows that within small businesses collaboration adoption efforts are being driven by demands for decision agility, speed of innovation, customer intimacy and faster time to market. 47% of small businesses are increasing investments in collaboration solutions because a lack of teamwork is impacting productivity. While the creation of a central information repository was the most important business driver for collaboration solutions initially, new adopters want to address the needs of increased employee mobility, dispersed team members and ad hoc scheduling.

Techaisle Take

To understand the profundity of Cisco’s small business solutions let us harken back to three of the top 10 SMB predictions I had written in 2015:

  • Collaboration becomes a much bigger concept. In years past, “collaboration” was a big-company issue in which IT professionals used something called “presence” to connect staff to each other. What a quaint time that was! In 2015, I had said that this concept of collaboration will be swept into the dustbin of history. and it will become clear that collaboration spans files and people, staff and customers. It includes file exchange and multi-point editing; it extends beyond the corporate staff (and as a result, beyond large enterprises) to include customers; it has broken through the corporate walls, and demands support for mobility. In fact…
  • Collabmobilicloud becomes an SMB management reality. There is a tendency in the press and in vendor product literature to treat collaboration, mobility and cloud as separate solutions. There is a tendency from the user perspective to treat them as aspects of a single approach to accessing, working with and sharing information. The users pay the bills, and in 2015, their perspective will predominate. Collaboration initiatives are part of mobility strategies, mobility is at the core of collaboration initiatives, and both are dependent on the cloud. This will have a major impact on application development and…
  • Connected security becomes “security”. At one point, there was a debate in the security world - what was better – unified threat management (UTM) systems that ensured that there are no cracks between security products, or best-of-breed (BoB) products that could evolve as quickly as the threat landscape itself? BoB won that debate decisively; in fact, what used to be called “UTM” is now referred to as “next-generation firewalls,” one of many important “shields” around enterprise data, applications and users. However, with the expanding threat perimeter (caused in no small part by the trends towards hybrid and collabmobilicloud), 2015 is time to take a fresh look at how to ensure that all of the aspects of security infrastructure are integrated to protect against intrusion.

The above were true then and are even more poignant today. The Cisco Designed portfolio of small business-focused solutions directly addresses the needs and threat vectors for secure workplaces, better collaboration, simplified manageability and organizational productivity empowerment. Cisco has also made it easy for small businesses to buy the solutions, deploy and manage them either through their own internal staff or externally with the help of channel partners such as MSPs.

If the office of a small business is defined by devices, so too is the workplace defined by the ability to work from wherever those devices (and their users) are located. Small businesses are investing in mobility because it contributes to cost savings, increases market reach, improves productivity and establishes better ways of working. Security remains the top constraint for accelerating remote work adoption as small businesses struggle with data protection and mobile management. Techaisle global survey reveals that cloud, mobility, collaboration and security are among the top five technology priorities for over 60% of small businesses. 42% of small businesses are looking for solutions that are easy to buy, deploy, manage and support.

However, designing simplified products does not guarantee success in the small business segment. In an IT environment that is already very complex and likely to become more so, trusted advisors are very important to small businesses. Three quarters of small businesses rely on a trusted party – an internal employee with expertise in IT and/or external consultants – to provide advice on IT strategy. In most cases (over 60%), these advisors are trusted because they are viewed as unbiased and experienced, and able to provide the “right guidance” to the buyer. While the ‘unbiased’ observation would seem to rule out product vendors, small businesses exhibit a clear preference for advisors who can move seamlessly from advice to procurement and deployment. Cisco needs to invest in nurturing “super consultants”, both internally and externally (within channel partners) who can not only advise but also architect, deploy, manage and support Cisco Designed for Business portfolio solutions.

Regardless of the thoughtfully designed solutions, they are still discrete and transactional offerings. But we are increasingly immersed in a post-transactional market, where discrete sales of individual products or integrated systems are being replaced by agreements to provide IT functionality “as-a-Service.” Inexorably, the market is shifting from one defined by discrete purchase-and-deploy deals aligned with refresh cycles to one where businesses take a ‘hybrid IT’ approach that blends a limited number of on-premise assets with a growing range of on-demand services. To participate in this shift and stay relevant Cisco needs to create bundled solutions, including managed services with a recurring “as-a-service” offering.

Cisco should plan a larger product vision that aligns with digital transformation trends within small businesses. The vision should cover technologies such as HCI, SD-WAN, security, IoT, and workspaces. These integrated solutions will create reasons for small businesses to remain connected with Cisco.

Cisco has landed at a good place, finally. And it is ready to take off and soar within the small business segment. (Don’t muck it up)

Download the full pdf report here

 

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Top 5 technology areas where midmarket firms are increasing investment

Techaisle worldwide survey of midmarket firms shows that collaboration, security, cloud, remote work and digital transformation are the top five areas where midmarket firms are increasing technology investments.

techaisle top 5 technology areas midmarket

Collaboration: 72% of midmarket firms are increasing investments in collaboration solution as compared to 15% who are either decreasing or delaying investments. Collaboration is a central component to virtually all business activities and is evolving in response to new market conditions and those collaborative technology solutions are being acquired which are positioned as a framework that integrate and extend the value of discrete capabilities, rather than as a “first step” platform.

Security: 69% of midmarket firms are increasing investments in security solutions. IT security is no longer being viewed as a necessary and unwelcome cost, rather as an enabler of business solutions, a viewpoint that is reinforced by a clear need for IT security in the face of increasing threats to information security and business continuity. Effective security practices are going beyond merely “raising the shields” around users, data and networks – they are being seen as enabling innovation throughout the IT/business infrastructure.

Cloud: 66% of midmarket firms are increasing investments in cloud. Cloud addresses real-world IT issues and business challenges. Cloud represents a powerful way of addressing budget constraints: cloud infrastructure can be deployed quickly and at low cost. Cloud is linked with mobility solutions, particularly security solutions, as data that is accessed via a mobile device can be available anywhere/anytime via cloud, but remain separate from the devices themselves, protecting corporate information from loss or theft or malware. And cloud’s pay-as-you-go approach meshes very well with the need to align IT investment with business benefits.

Remote work: 65% of midmarket firms are increasing investments in remote working. Mobile devices, technologies and services are perhaps the most exciting space today, remaining resilient even in a downturn. Midmarket firms are investing to automate control of sprawling mobile assets. The list includes security solutions (MDM, mobile app security, secure mobile data sharing) that address widespread concern over the exposure that accompanies mobility, as well as methods of automating management (mobile network control, enterprise mobile management) and of deploying infrastructure tuned to the needs of mobile workers (Windows-as-a-Service, VDI, DaaS).

Digital transformation: 61% of midmarket firms are increasing investments in digital transformation. Mature cloud adoption does not equate to high digitization of the business. Data shows that only half of the 47% of mature midmarket cloud adopters are holistic adopters of digitalization. It is true that these firms believe in cloud and its effect on digitization but they also believe that true digital transformation requires advanced adoption of multiple technology solutions. The roadmap to successful digital transformation begins with the creation of a sound physical infrastructure - the ‘building blocks’ or ‘foundations’ of business infrastructure.

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COVID-19 Impact on SMB Tech Investments

Precision is impossible but agility and resilience are realizable. In every crisis, there is opportunity. If history is any indication then the SMBs are well-placed to narrow the banks of uncertainty. With integrative thinking SMBs will be adept at maneuvering around the edges of flames that have been fanned by COVID-19. 

Over 12 years of Techaisle tracking data paints a fascinating picture in which SMB business goals established by unexpected challenges drove new IT priorities. Klaus Schwab, Founder, World Economic Forum observed that, "In the new world, it is not the big fish which eat the small fish, it's the fast fish which eat the slow fish." SMBs are the fast fish as compared to enterprise segment.

After every downturn, SMB IT spend has rebounded higher and faster than overall (consumer + SMB + enterprise + government + education) IT spends. Techaisle had published its forecast scenarios here.

But the questions remain. Is today the same as the past? Will the future be different? We know that to be uncertain is to be uncomfortable, but to be certain is to be ridiculous. There are already many discussions and surveys conducted by various firms on today’s devastating impact on SMBs. At Techaisle we agree that SMBs are currently desperately operating between the raindrops but our objective is to square the circle, to simplify the path forward for IT vendors and channel partners and see past the blind corner.

To understand the impact of COVID-19 on future of IT we conducted a survey of N=2427 SMBs in several countries. Regardless of the uncertainty, over 50% of SMB business leaders in Asia/Pacific and some countries in Europe are optimistic and are confident about a V-shaped recovery as compared to US and UK SMBs who believe in more of a U-shaped recovery.

Download free Techaisle Take document to understand:

  • Why agility and adaptability will accelerate recovery for SMBs Worldwide? Global SMB IT spend vs Overall IT spend vs GDP growth rates
  • Why SMB technology and business alignment will result in resiliency, agility and adaptability?
  • What will be post COVID-19 impact on business and IT operations? Uncertainty and status quo.
  • What will be the impact on tech investments? Increase, decrease, delay, no change
  • Will digital transformation be the agility enabler for SMBs?
  • What is the current non-technology related work-from-home challenge for SMBs?

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