Techaisle Blog

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.

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.

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.

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.

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.

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.