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  • SECURITY RESEARCH

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    SMB & Midmarket Security Adoption Trends
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    US SMB & Midmarket Managed Services Adoption
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    SMB & Midmarket Cloud Adoption
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    COVID-19 IMPACT

    on SMB IT Spend Growth Rates
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  • FEATURED INFOGRAPHIC

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    2020 Top 10 SMB Business Issues, IT Priorities, IT Challenges
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    Top 10 SMB & Midmarket Predictions for 2020
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    Channel Partner Predictions for 2020
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  • NEW SMB CUSTOMER RESEARCH

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    PC and software purchasing trends
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  • WHITE PAPER

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    SMB Path to Digitalization - Prologue and Epilogue
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    SMB & Midmarket Analytics & Artificial Intelligence Adoption
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  • BUYERS JOURNEY

    BUYERS JOURNEY

    Influence map & care-abouts
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  • SAAS RESEARCH

    SAAS RESEARCH

    US SMB & Midmarket SaaS Adoption
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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.

Top 5 technologies where small businesses are increasing investment

Techaisle worldwide survey of 2427 SMBs shows that collaboration, cloud, security, mobility and PCs are the top five areas where small businesses are increasing technology investments. Each of these address current business challenges and lay the foundation for the five pillars of small business digital transformation: 1/ achieve cost efficiencies, 2/ initiative innovation, 3/ enable operational efficiency, 4/ drive business growth, and 5/ empower organizational productivity.

techaisle top 5 technology areas small business

Collaboration: 66% of small businesses are increasing investments in collaboration solution as compared to 19% who are either decreasing or delaying investments. Collaboration is a critical solution priority. The enormous reliance on mobility, the trend towards flexible work within small businesses and the general trend of including customers within the framework of collaboration solutions have all contributed to much broader demand for collaboration solutions. Use of collaboration solutions within small businesses started as file-first but has quickly transitioned to person-first. The central requirement for a collaboration solution is the ability to share files from desktop or mobile devices, the second is to enable online interaction, and the third is to provide richer media and media escalation for person-to-person communications.

Cloud: 64% of small businesses are increasing investments in cloud. Cloud is no longer a trend that is discrete from mainstream IT. This shift in cloud’s positioning has brought with it a shift in the kinds of insights needed to help connect suppliers and buyers to address common interests in deployment, integration and expansion strategies. Small business buyers are needing help in moving past initial cloud pilots and applications to integrated cloud systems that provide support for mission-critical processes. Vendor suppliers need to adjust their messaging to address the needs of early mass market rather than early adopter customers.

Security: 61% of small businesses are increasing investments in security solutions. Although data shows that small businesses are more optimistic than they ought to be about their current security profiles, security is an important constraint on mobility within the small business segment. Vendor suppliers need to help small businesses to establish frameworks that protect against both external and employee threats to information security.

Mobility: 59% of small businesses are increasing investments in mobility solutions. If the “office” is defined by devices, so too is “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 both cost savings and increased market reach, with “improved productivity” and related answers connected to establishing “better ways of working” viewed as the greatest benefit of mobility within SMBs. Techaisle’s data shows that there are inherent challenges in supporting the mobile workforce: struggle with the “on ramps” to mobility (such as finding appropriate suppliers and solutions) and concerned with security/data protection and mobile management.

PCs: 56% of small businesses are increasing investments in PCs. PC is where work gets done. PC is still the centerpiece of business productivity and buying a new PC is likely to have a more significant impact on productivity than any other technology. Modern PCs deliver more than an incremental improvement in performance, manageability and security features and even price conscious small businesses benefit significantly from replacing older PCs with modern PCs.

There is a strong connection between cloud, mobility, collaboration. Mobility, cloud and collaboration are all important trends in today’s IT market, and Techaisle data indicates that they are tightly interconnected. Mobility is a key driver of collaboration demand, with worldwide total of 292 million small business mobile workers looking for framework technologies enabling them to connect with suppliers, customers and each other. At the same time, collaboration is seen as a key attribute of successful cloud solutions, with more than one-third of small businesses citing “the ability to provide or support collaboration” as a key success factor in cloud solutions.

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US SMB and Midmarket Video-collaboration adoption may increase by 184 percent

Techaisle data shows that the percent of US SMBs using web-video conferencing solutions is likely to increase from 38% to 89%, a change of 184%. It is common knowledge that cloud is being adopted by SMBs and midmarket businesses for business agility and video-conferencing is playing an increasing role in contributing to SMB agility - decision agility, productivity agility, customer agility and innovation agility - for high-growth and innovative businesses. Businesses without modern collaboration solutions are scrambling to catch up with those that are already capitalizing on the benefits video-conferencing solutions. As new adopters are learning from firms that have already made early investments in the technology, Techaisle is seeing reasons for launching collaboration initiatives rapidly evolve. A comparison of early adopters to firms that are just now embracing advanced collaboration systems finds that the pace set by early adopters is forcing other SMB firms to invest in collaboration solutions to address current and future market issues.

This next generation of SMBs & midmarket business collaboration solution adopters is responding to specific pain points, more than their predecessors and video-conferencing is figuring in their collaboration strategies, specifically because:

• They cannot coordinate meetings involving employees in multiple locations
• Customer satisfaction is declining
• The pace of decision making is too slow
• Email is not an adequate means of connecting staff with each other and with customers
• They are trailing competitors and want to catch up
• They have to keep pace with market uncertainty and want to find new avenues for business viability and growth

Survey data finds that these firms have begun using video-collaboration solutions as a reaction to business problems that are preventing them from achieving their business objectives of growth, productivity, time to market, customer retention and operating cost reduction.

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COVID-19 Impact on Global SMB and Midmarket IT Spend

The Covid-19 threat to the global economy and to the IT industry is potentially as bad as, or worse than, the health impact. A global workforce that cannot collaborate effectively cannot deliver products that rely on timely supply of components from far-flung suppliers, and cannot create and implement complex solutions. The necessary isolation used to contain Covid-19 has a devastating effect on economic activity. Manufacturing does not work when people don’t. Chinese exports fell by 17.2% in January/February of this year. The impact on solutions is harder to quantify, but may well be even greater. However, with the slowing number of new cases in China, 80% of manufacturing plants have restarted with about 60% capacity which may restore supply-chain balance by addressing supply-side constraints. The freight (including trucking) and air-cargo routes between China and Asia is returning to normal but China-Europe and China-US routes may be impacted until the middle-to-end of Q2. 

Globally SMBs IT spend in 2019 was $662B with a projected spend of US$700B in 2020, a growth rate of 5.6%. It is natural, in the current economic situation to pare down these spends and slice expectations (perhaps deeply) based on beginning-of-the-year projections. As compared to the original SMB IT spend growth rate, the projected growth rates may drop from a low of 29% to a high of 84% depending upon Techaisle’s optimistic to gloomy scenarios, resulting in revised growth rate ranges from 4.0% to 0.9%. 

SMBs are a good indicator to measure the pulse of economy in any country as they constitute over 90 percent of global businesses. They are intricately linked to large businesses, government departments and educational institutions as both suppliers and customers. A large percentage of consumers rely on SMBs for products and services that they consume within their households. Technology plays an important part in daily operations of SMBs across all departmental functions including sales, marketing, operations, finance and customer support. SMBs form the essential thread of the economic fabric of any country and to a great extent their fortunes and investment capabilities are dependent on the economic situations and policies of the countries where they operate. In a downturn and uncertainty the investment capacity of SMBs is deeply affected. Techaisle conducted a global survey of SMBs to assess their investment intent which combined with Techaisle global SMB IT spend data presents four scenarios - Ideal, Optimistic, Pessimistic, Gloomy. 

Download to read full analysis and projected small business and midmarket IT spend growth rate scenarios.

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2020 Top 10 SMB and Midmarket business issues-challenges-priorities

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 2020. In its detailed SMB survey Techaisle investigated 27 different technology areas and several technology sub-categories, 25 different IT challenges and 24 different business issues. This is the 10th 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 1.8M B2B IT professionals spread across 30+ countries.

WW SMBs are expected to spend US$1 trillion on IT in 2028, growing at a faster rate than the enterprise segment. Innovation is increasingly becoming a line-item of IT budgets. 40% of midmarket firms and 15% of small businesses are carving out budgets specifically for technology-driven innovation. But there is a flip-side as well. Within 47% of small businesses and 22% of midmarket firms, IT is not expected to actively drive innovation. As data suggest, nearly half of the SMBs assert that either they do not have the right IT skills or not enough IT staff. However, data does show that move to pay-as-you-use/consumption-based financing is likely to reach an irreversible trend with 14% of SMBs either currently using or planning for it. But a mass-move to only OPEX-based technology acquisitions is still in distant future with 30% of SMBs still preferring a mix of CAPEX and OPEX.

2020 top10 smb it priorities business issues techaisle infographics blog

Download 2020 SMB infographic here

For 2020, data shows that for the first-time customer experience has appeared within the top 5 challenges being faced by IT within SMBs which has a direct correlation to the top business issue of attracting and retaining customers. A direct result of the new challenge and focus is in the increase in plans for adopting integrated CRM and customer service solutions (in some cases replacing one brand of CRM with another), acceleration in use of artificial intelligence and analytics. A small business CEO of a manufacturing firm told Techaisle, “we are planning to purchase more cloud-based applications to save time and effort. See being a start-up, currently we do not use many cloud applications and we know that there are requests from our sales and HR department to purchase additional cloud applications. Right now, we are not using any cloud application for customer service and for evaluating our progress, growth and tackle pain point of our business, we need to be more connected to our consumers. So, we are trying to purchase a cloud application like Salesforce or Zoho that can enable us connect with our consumers for feedback and registering customer support / complaints”.

For small businesses, upgrading to digital marketing and utilizing social media is among the top 10 IT challenges. These small businesses are not only experimenting themselves but seeking external assistance in how best to use major digital platforms like Google and LinkedIn to make their customers aware of the services and products that they have to offer. They are also hoping that such initiatives may help them get valuable feedback from their customers.

Security is not only the biggest IT challenge but it is also a key top priority in every region and across all employee size segments. As one SMB CIO told Techaisle, “security has been our biggest concern. The more we try to deploy latest technologies and software hackers always find new ways to breach. So, we are hiring more experts in our cyber security team and we are evaluating more vendors to have the best software and tools for security”. In fact, US survey data shows that 3% of small businesses and 94% of midmarket firms have employed IT security specialists within their organizations. If data from 1-19 employee size segment is excluded, then the percent of small businesses with full-time cybersecurity staff increases to 25% within 20-49 segment and 57% with 50-99 employee segment. The data is no different in Europe and Asia/Pacific, in fact, the percentages are higher in Europe. A small business IT director in Germany told Techaisle “as our company grows and evolves, security concerns are increasing. There are increasing number of cyber risks and we have plans to implement new security solutions, amending policies and hiring additional security professionals for protecting our organization from any cyber breaches or threats”.

Controlling IT costs, although number nine on the top 10 list is a challenge for SMBs. IT is known to be kinetic, complex and risky and costs can spiral out of control rapidly or SMBs are unable to realize the ROI of the investment in the shortest time. Most SMBs find controlling cost to be a major challenged because there have been situations where their spend was higher than budget allocation resulted in losses. Therefore, SMBs are becoming better on their budget forecasts and moving towards cloud eliminating Capex.

Accelerating cloud adoption is a given but there is a new initiative to consolidate IT workloads. A Vice President of IT in Asia/Pacific elaborated on this topic, “we have a lot of IT workloads that is spread over public and private cloud. It is very important for us to have our data consolidated at a single place that would be a private cloud so that only our internal team has access to it and no one else could access the data without our permission. We have plans to work on private cloud provided by Microsoft Azure and AWS”. There are many other SMBs and midmarket firms who have tasked their IT departments to research and add new cloud technologies based on business requirements.

Hyperconverged Infrastructure (HCI) has moved up in its list of IT priorities driven by the promise of agility, reduced costs, scalability and centralized management. SMBs and midmarket firms are showing their preference for VMware, Cisco and Nutanix HCI offerings.

Cloud-managed SD-WAN service is a new top 10 IT priority for midmarket firms because of faster deployment, optimization of WAN bandwidth and improved operational efficiency due to automation and self-provisioning.

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