Techaisle Blog

In 2018, 41 percent of US midmarket firms had set their ambitions on a “Holistic” digital transformation strategy, meaning that these firms believed that Internet and digital technologies impacted every aspect of their business and should be a core part of their organizational strategy. In 2019, midmarket firms have tempered their ambitions and only 27 percent believe in holistic strategy. Nevertheless, the percent of midmarket firms with “Inclusive” digital transformation has remained unchanged at 43 percent. These firms believe that digital transformation while important is still a subset of strategic planning but not seen as critical business-wide. Both the 2018 and 2019 surveys were conducted with 876 midmarket firms.

Good news is that 17 percent of midmarket firms have either completed or have substantially completed their digital transformation journey. Another 46 percent are focusing on digitally transforming their businesses in the next 1-2 years. Highest planned adoption at 41 percent is coming from high-growth midmarket firms.

So what changed in the last 1-2 years?

Techaisle’s 2019 US SMB and Midmarket Security solutions adoption trends survey research indicates that 55 percent of US SMBs suffered a security incident in the last one year. 20 percent of SMBs reported but as high as 70 percent did not formally report yet experienced PC security & data theft breaches in the last one year. In many ways data suggests that SMBs are regressing in their adoption of security solutions to protect their corporate and mobile environments. For example, in the 2019 study, 32 percent of SMBs believe that their IT security budgets are sufficient to meet their needs, which is substantially down from 43 percent in 2017 and 22 percent assert that they are better prepared than others when it comes to IT security, considerably lower than 32 percent in 2017. Even the presence of formal security protocols in case of a breach and/or security incident has gone down from being present in 34 percent of SMBs in 2017 to 26 percent in 2019. However, the belief that cloud usage/services puts them at a higher risk of a data breach has remained virtually unchanged from 40 percent in 2017 to 38 percent in 2019. To make a fair trend comparison Techaisle surveyed same number of SMBs in 2017 and 2019 with exactly same quota sampling.

It is not that SMBs are not concerned about security risks. Cloud security is the top IT challenge in 34 percent of small businesses and 42 percent of midmarket firms. 41 percent of SMBs feel vulnerable in the cloud and 34 percent worry about cyber-attacks and 39 percent consider password compromise to be a security risk to their business.

A review of cloud security threats to SMBs illustrates the fact that while cloud brings unique challenges. Data highlights many different points of security exposure that arise when applications, data and access extend outside the corporate facility. 38 percent of SMB survey respondents are concerned with data exposure during transfers to remote locations, 37 percent are concerned with the potential for cloud-based accounts to be hijacked. Similarly, other concerns are unauthorized access to or breaches of data repositories in the cloud, insecure interfaces used to access cloud-based systems, the potential for insiders within a cloud service provider to exfiltrate information, and denial of service (DDoS) attacks – all of which represent cloud-specific threats.

Techaisle’s US SMB and Midmarket SaaS adoption trend data shows that 73 percent of small businesses (1-99 employees) and 97 percent of midmarket firms (100-999 employees) are using one or more SaaS application categories. 37 percent of SMBs (1-999 employees) are using < 5 SaaS categories, however, 28 percent are using more than 10 SaaS categories (driven by midmarket firms). Overall 72 percent of SMBs are currently using 10 or less SaaS application categories but planned adoption indicates there is room to grow for the SaaS market within the SMB segment. The pace of SaaS automation is being governed by business & IT challenges, security posture, deployment and integration capability and point of purchase. Initial SaaS adoption has been for non-core business processes; however, 57 percent of mature adopters are using SaaS for core business processes. Techaisle survey data also shows that 64 percent of SMBs are using collaboration-focused SaaS solutions and 60 percent finance focused, however, future plans indicate that 62 percent will use customer-focused SaaS solutions.

As per Techaisle, US SMB and midmarket firms are forecast to spend US$25.6 billion on SaaS solutions in 2019.

Techaisle’s latest US, Asia/Pacific, Europe and Latin America SMB and Midmarket Analytics and Artificial Intelligence adoption trends survey research shows that although 73% of midmarket firms (100-999 employees) and 10% of small businesses (1-99 employees) are using analytics (weighted data), only 6% of small businesses and 27% of midmarket firms are highly data-driven, that is, they have an evidence-driven culture, in which data helps defines requirements or opportunities thus enabling SMB executives to determine the best option for moving forward. Majority of SMB, 54%, are rarely data-driven and rely primarily on the insights and expertise of the senior management. Nevertheless, within the next one year, 23% of small businesses plan to adopt analytical solutions beyond spreadsheets and overall 30% of small businesses plan to engage with an external professional services firms to understand how they could provide assistance to deploy advanced analytics solutions. Cloud-based analytics is being used by 57% of midmarket firms and as compared to only 14% of small business but the intent to use within small businesses is significantly high at 48%.

Within 31% of midmarket firms, IT is being challenged with demand for increased analytics. As a result, overall 35% of midmarket firms are planning to engage with professional services firms to help develop and prepare data management systems, techniques and technology.

The whole product for analytics starts with cloud. 37% of SMBs consider cloud to be an essential analytics technology but when drilled down into midmarket firms, data reveals that 30% of midmarket firms believe that large scale local storage and fast processing infrastructure is necessary for deep analytics implementation.