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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.

90 percent of US SMBs expanding cloud usage

SMB cloud is ubiquitous today and becoming even more so, central to the technology and management needs of both smaller and larger SMBs. Cloud is no longer a trend that is discrete from mainstream IT. Techaisle data shows that cloud is viewed as an IT priority by 96% of US SMBs and 90% of current cloud using SMBs are increasing their cloud usage within the next one year. Cloud is not a future issue, it is an essential component of SMB IT.

While cloud growth has been extraordinary, it is reasonable to expect continued high-trajectory growth resulting from three key factors:

  1. Cloud is established as essential IT infrastructure
  2. Cloud addresses real business needs
  3. Suppliers will work with buyers to overcome current SMB cloud adoption challenges

Where are these SMB firms who are planning an expanded cloud presence in the evaluation process? Techaisle asked SMB respondents to identify whether they would refer to themselves as “gathering information,” “identifying potential solutions” or “evaluating suppliers”.

As cloud adoption continues to expand within SMB organizations, Techaisle SMB & midmarket cloud adoption survey data demonstrates that 38% of SMBs are gathering information on cloud technology, solution options and appropriate cloud adoption steps. 32% have moved beyond to the stage of evaluating solutions and the balance are in the process of evaluating suppliers. However, Techaisle believes that these percentages are a moving target as SMBs continue to increase spending on cloud.

Among the midmarket businesses, fully 80% of those planning new cloud initiatives are at this stage, with only 7% focused on evaluating suppliers. Highest percent is within the 100-249 employee size businesses establishing a clear fact that as businesses transition from a small to a larger organization they increasingly gravitate towards cloud to solve their growing pains, establishing processes and supporting a dispersed workforce.

Combining the above information with the data that 94% of midmarket firms are already using some form of cloud solution, we get a picture of a midmarket enterprise market that is in the process of assessing where and how the use of cloud should expand through the enterprise. Small businesses, on the other hand, have a roughly normal distribution across these categories: 24% report that they are gathering information, 46% have moved on to identifying potential solutions, and 30% are evaluating suppliers.

techaisle smb midmarket dichotomous cloud adoption resized

Techaisle believes that the differences between the small and market organization findings reflect different stages of cloud adoption. The small business findings are consistent with a community that moves from point to point, working first on one discrete solution, and then on the next. The midmarket findings are consistent with a community that has already deployed point solutions, and is now trying to build a longer-term strategy for an integrated, flexible approach to incremental cloud expansion. This dichotomous approach is a real challenge for suppliers: they need to differentiate discrete solutions for the small business market, and demonstrate that their offerings are essential components of broader strategies for mid-market firms, while attracting attention to their companies and products and building brand preference in both segments.

This perspective is reinforced by data showing the current uses of cloud within SMBs. Generally, SMB IT departments have used cloud to supplement IT infrastructure resources – for example, by procuring cloud-based storage to offload data from on-premise drives, or by using cloud for backup. Cloud has also made its way into SMBs as a means of supporting non-core applications and related processes; for example, cloud might be used to automate previously manual tasks in HR or customer support that aren’t linked to financial and production systems. But data from the Techaisle SMB survey finds that use of cloud is expanding even into these business-critical applications.

When SMBs are asked to indicate the areas of their operations where cloud has been or will be applied, nearly half report that they are using/planning to use cloud for IT infrastructure, and 37% state that cloud will be deployed to support non-core processes and applications. However, nearly 30% state that they are using or are implementing cloud to run at least some of their core applications. Given that these core applications are not changed or re-platformed very often, 29% is a surprisingly high figure. Cloud is expanding beyond IT-specific uses and niche applications, and is increasingly seen as a viable platform for even business-critical process support.

techaisle-smb-midmarket-core-cloud-adoption-resized 

The shift in cloud’s positioning and dichotomous approach brings 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. SMB buyers need help in moving past initial cloud pilots and applications to integrated cloud systems that provide support for mission-critical processes. Cloud sellers need to adjust their messaging to address the needs of early mass market rather than early adopter customers.

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Addressing SMB and Midmarket buyers cloud & mobility journey

In the course of Techaisle’s SMB & Midmarket IT Decision Making Authority: IT vs LoB, BDMs (business decision maker) and ITDMs (technology decision maker) were asked to identify the “greatest benefits” and “key attributes” of both cloud and mobility solutions.

There is an interesting pattern apparent in the survey research findings. When adopting mobility solutions small business BDMs are focused on addressing near-term pain points: attracting new customers, improving accuracy, addressing work/life balance. The ITDMs appear to be taking a longer view, focused on applying automation to bring structure to business processes – improving the quality of interaction through application of mobility solutions, improving the quantity of those interactions, increasing process efficiency.

Midmarket BDMs are looking to mobility to help increase business process efficiency and customer interaction quality. Midmarket ITDMs, on the other hand are focused on increasing the quantity of customer interactions, which would logically impact other core areas (such as business user productivity and process efficiency) as well.

When discussing the mobility solution attributes that BDMs and ITDMs consider important to delivering on mobility benefits BDM and ITDM buyers have similar and common perceptions across all business sizes. “The ability for the mobile solution to be integrated seamlessly with existing corporate systems” – ensuring consistency across devices – is ranked as the most important mobility solution attribute by small business BDMs, and the second-most important attribute by midmarket BDMs. The ability to create and sustain secure connections for remote workers and the ability to deliver seamlessly across the “three screens” of PCs, tablets and smartphones are also priorities for BDMs in both small and midmarket businesses. ITDMs also have some key common areas of focus: the ability to integrate multiple media types into outbound communications and the ability to read or write data from/to corporate systems are the two top-ranked attributes in both employee size categories.

It is clear that each IT and business professional’s perspective on the mobility journey is shaped by their context – by their business objectives, and by the requirements imposed by the size of their organization. In the figure below we have taken the results from the Techaisle survey and plotted them in three dimensions.

techaisle-itdm-bdm-smb-mobility-attributes-resized

A look at the findings from parallel questions on cloud also reveals differences between ITDMs and BDMs, but similarities between small and midmarket firms. Looking at cloud benefits, BDMs, especially in small businesses, view cloud as a means of introducing capabilities that would have been cost or time prohibitive, and of reducing business process costs. ITDMs, on the other hand, view cloud primarily as a means of reducing IT costs. ITDMs in both small and midmarket businesses recognize that cloud can enable their organizations to be more agile, which connects well with a theme expressed by BDMs.

When analyzing the key attributes leading to realization of the above cloud benefits, data shows some differences in emphasis between small and midmarket firms. The most important difference between BDMs and ITDMs is the BDMs’ emphasis on collaboration: BDMs in both small and midmarket businesses are more likely than their ITDM counterparts to view support for collaboration as a key cloud solution attribute. BDMs are also more likely than ITDMs to look to the cloud for detailed reporting and for support of features – disaster recovery, on-demand data access, and mobility support – that may be lacking in their current environments. ITDMs, on the other hand, are focused on technical attributes (scalability, integration, IT management capabilities) that are difficult and/or expensive to develop without third party support.

Understanding the requirements, preferences, success metrics and areas of focus of BDMs and ITDMs within both small and mid-sized businesses is critical to structuring an effective SMB sales and marketing strategy. The findings open the door to an important issue: the requirements in structuring and communicating messages to ITDMs and BDMs within small and midmarket businesses. To effectively engage with and manage the increasingly-diverse decision making unit, IT suppliers will need to structure messages that address the "care-abouts" of BDMs and ITDMs, and deploy those messages through the channels that are most effective at reaching each community.

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Influencing the SMB technology buyer – rapidly shifting information sources

There is one common issue that IT firms across the spectrum face: the need to find an effective way to attract and engage prospective SMB customers. Techaisle’s global SMB survey research shows that there is no one method that will engage technology buyers within the small business or midmarket segments: in both markets, SMBs use a mixture of multiple reach and multiple depth vehicles to understand and evaluate options.

Over the years, Techaisle has been asking survey respondents to identify their “sources of information for technology solutions” in their technology buying journey. Respondents are prompted through a list of 14 options, spanning traditional and online media and advertising, websites, whitepapers and case studies, face to face sales calls, personal recommendations, blogs/forums, and search engines.

Comparing data across several years provides a fascinating trend. As the number of technology options, vendor choices and sources of purchase channels continue to increase both in number and complexity SMB technology buyers have also progressed in their choice of types and numbers of trusted, reliable and useful information sources for technology guidance.

Look at the figures presented below comparing data across two years, 2013 & 2015. Several observations immediately jump out for both small and midmarket business.

In 2015, small businesses are using completely different set of information sources than they relied on in 2013. A consistent top source from 2009 to 2013 - “Recommendations from friends, colleagues or partners” has fallen to seventh position in 2015. This is certainly not surprising as most of the “recommenders” are in the same predicament as the small business buyers, that is, grappling to understand the rapidly changing technology options and corresponding ability to solve with business issues. The role of TV advertising has percolated to the top and the usefulness of articles in technology websites and magazines cannot be understated.

techaisle-small-business-influencing-the-technology-buyer

The midmarket segment has increased the number information sources in 2015 than in the previous years. Data presented in the figure below shows some interesting observations for midmarket. Although percent of midmarket businesses using “IT Company website” has remained unchanged its relative position has fallen from 1st in 2013 to 5th in 2015. It is neither the most dominant source nor it is the first point of influence for midmarket businesses. Similar to small businesses, TV advertising and technology websites, magazines have percolated to the top for midmarket businesses.

techaisle-midmarket-business-influencing-the-technology-buyer

Use of content marketing avenues such blogs has remained unchanged at between 8% - 14% of SMBs. Its position in the list of information sources has also stayed the same, between 12th and 14th in terms of ranking. It is of course true that different vendors (and SMBs) use similarly-named options in different ways – for example, visits to an IT company website can be cursory or can be an intrinsic part of a detailed supplier evaluation, and “blogs/forums” encompasses both some of the most superficial and some of the deepest content on the web.

The data provides several important perspectives on the challenges facing technology marketers generally, and cloud marketers in particular, who need to attract new SMB customers to their offerings.

The first issue is the sheer number of vehicles used by buyers in both the small and midmarket segments: in each case, the data suggests that they use an average of more than five sources of information when evaluating potential solutions and suppliers.

The second issue that is evident is that marketers need to use a mix of mass-market tactics to attract initial interest, transitional marketing options to deepen and shape that interest, and in-depth materials to establish preference within buyer accounts. Clearly, there is a “buyer’s journey” that needs to be overlaid across these many marketing vehicles, to manage the process from initial interest to sale.

Thirdly, to complicate the influence points further, BDM influencers usually differ from ITDMs. No one information source is used by more than 65% of members within the four buyer segments considered in the research (small business ITDMs and BDMs, mid-market ITDMs and BDMs).

The findings also show that “shallow” vehicles represent about one-third of overall sources used by small businesses, and just less than 25% of those used by midmarket buyers; that “moderate” vehicles capture 41% of total small business attention, and about one-third of midmarket buyer interest; and that “deep” options represent just over 25% of the information mix in small businesses, and 45% in firms with 100-999 employees.

IT marketers today will need to take a portfolio approach to marcom targeted towards SMBs. There are some areas that clearly need to be covered and executed well and some sources that should be of particular focus for specific SMB segments. The stakes around effective communications are high; with estimates currently holding that SMB buyers are 60%-80% or more of the way through their evaluation processes before they contact an IT vendor.

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SMB Collaboration advocacy - the coming changing of the guard

Staffs within IT suppliers often like to remind each other that “people sell to people.” Generally, this is said to remind IT suppliers that marketing programs alone won’t (generally) make a B2B solution successful, that sales staff are important as well. The other side of the equation is important too, though: who within the SMB should IT suppliers target for collaboration solutions?

In SMB Collaboration Adoption Tends survey, Techaisle asked ITDM and BDM respondents, “who is the primary advocate for your organization’s collaboration efforts?” Looking at collaboration today, executive leadership is the key driving force behind collaboration solution investments. In many ways, this makes sense: collaboration has been positioned as a platform, and as a result, represents a major investment; and collaboration platforms become a central, every-day resource touching all users within an organization, meaning that senior leadership’s influence may be needed to align all stakeholders behind a single course of action.

Current vs. Future SMB Collaboration buyers
When we compare current users vs. future SMB buyers, though, we get a different perspective on this issue. Executive leadership will continue to be the primary driver of collaboration solution initiatives, but new solution initiatives are increasingly being driven from other quarters.

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