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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.

SMB and Midmarket File Sharing & Collaboration Adoption to Grow by 52 percent

Techaisle’s study on SMB Collaboration Solutions Adoption Trends shows that for 59 percent of US small businesses and 93 percent of US midmarket businesses, collaboration is among the Top 5 IT priorities for investments. In Asia/Pacific, 63 percent of SMBs are turning towards it as a business growth driver and in Western Europe, 68 percent of SMBs are finding that collaboration drives better teamwork and customer responsiveness.

Overall 38 percent of US SMBs are currently using one or more collaboration solutions and another 20 percent are planning to use one within the next year, a growth of 52 percent. Overwhelmingly, SMB customers view online file sharing as the most important aspect of a collaboration solution as 64 percent of SMBs using collaboration are currently using online file sharing (24 percent of all US SMBs) and another 32 percent are planning to use it within the next one year.

The survey data also shows that the next stage in the SMB collaboration adoption is their need for online interaction, that is, simultaneously share and edits files from PCs and mobile devices, mobile video collaboration, integration with social networks, and richer media escalations, such as using chat, text, voice, video at the same time.

As per the study, key business drivers for SMB collaboration adoption are also changing. While currently there is a strong desire to build robust content repositories, the next wave of SMB collaboration adopters are emphasizing speed of innovation, demands for improved productivity, and imperatives for faster time to market.

In terms of brand solution adoption, the SMB market is quite fragmented with Google, Microsoft, and Cisco leading, but there are many other smaller collaboration solution brands that are being used extensively by SMBs. Further analysis of data also underscores the importance and use of collaborative capabilities within SaaS applications such as CRM, ERP, accounting, project management, HR management, business intelligence and content publishing.

With respect to file sharing, Dropbox has had a very strong impact on the SMB collaboration solutions market. By enabling mobile users to share files freely, they at once underscored the central importance of mobility, enabled individual users to be drivers of corporate collaboration activity, and proved the centricity of file-first rather than person-first collaboration models.

Box (another important vendor in the space), on the other hand has gone on record saying that SMBs are not its target market segment. There is a market opportunity for traditional backup and file-sharing IT companies such as Hightail, Carbonite, Egnyte as well as those delivering mobile workspaces such as Citrix and managed services platform providers such as Continuum and security IT vendors such as Trend Micro. However, the reach for each of these will be limited to the reach of their respective SMB focused channel partners.

Techaisle believes that there are additional file-centric developments that will further shape the nature of SMB file sharing solutions in the years to come. Today, most files are intrinsically connected to the applications that created them. If cloud and mobility are the key determinants of IT delivery, then there would be a need for the decoupling of data from applications. Application-independent data wrapped in rich metadata would allow new cloud-based applications (potentially based on BI platforms) to combine existing data to meet new business requirements. In addition, freed of originating applications, it is also likely that data could be optimally formatted for a wide range of displays: large screen PCs, smaller screen smartphones and tablets, and new display types ranging from signage to digital paper to wearable heads-up displays.

For more details on the report, click SMB and Midmarket Collaboration Adoption Trends

 

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Perspective: Cisco’s SMB Channel Partner Success Management

Cisco and the SMB market

Cisco has established an undisputed leadership position in the enterprise market. The company combines a widely-adopted and well-integrated portfolio of networking products with a highly-skilled (and paid) direct sales force to manage/expand its presence within major accounts.

The SMB market is a separate challenge. Here, buyers are less likely to require integration across multiple network components and more likely to emphasize price. They are also more likely to receive advice/management from channel partners, further reducing Cisco’s control over the acquisition process.

Against this backdrop, Techaisle’s SMB Channel Trends research illustrates the strengths and challenges Cisco must manage, as it looks to expand its share in the SMB segment.

Cisco Commands High Trust and Reputation within its Channel Partners

Within the channel community, Cisco enjoys a sound reputation and a high degree of trust. Techaisle’s SMB channel partner survey shows that 78 percent of Cisco’s SMB channel partners trust Cisco, a higher percentage than is registered by competitors such as HP and IBM. Nearly 70 percent of the partners believe that Cisco has quality products – again, the highest ranking recorded within the ‘hardware leader’ group including Cisco, HP, IBM and others. However, only 52 percent mention that Cisco has cutting edge technology, a percentage lower than that for both IBM and Microsoft. Moreover, 60 percent of Cisco’s SMB channel partners say that they Like Cisco, lower than corresponding rates for HP and Microsoft, only slightly higher than is found for IBM.

In its 2013 Annual report Cisco has written, “A substantial portion of our products and services is sold through our channel partners, and the remainder is sold through direct sales.” With specific reference to SMBs, Cisco wrote, “Generally, we define commercial businesses as companies with fewer than 1,000 employees. The larger, or midmarket, customers within the commercial market are served by a combination of our direct salesforce and our channel partners. Small businesses or companies with fewer than 100 employees, within the commercial market are primarily served by our channel partners.” Techaisle’s data shows that Cisco has attracted positive attention within this channel partner community, but that its technology and relationships may not leave it especially differentiated from competitors.

Data shows Cisco's SMB Channel Partner Challenges

Cisco is seeking to capitalize on market transitions and is steadily driving its channel partners to offer products and services that deploy cloud, mobility, virtualization, managed services, data center solutions and now Internet of Things. This is by no means an easy task as most SMB channel partners are being actively courted by competitive vendors that also want to grow their emerging technologies’ business. SMB channel partners selling emerging technologies have an average of 3.46 vendor partnerships; this average jumps to 4.21 for Cisco SMB partners, a difference of 21 percent. With this increased contention for mind/market/wallet share, it can be difficult for Cisco to manage brand identity and its related messaging.

This difficulty is illustrated by study findings showing that of the Cisco SMB channel partners, 44 percent consider Cisco to be their top partner. The other 56 percent mention Microsoft, Oracle, HP, IBM and several other firms. Within the VAR/SI community, Cisco’s share of preference is 48 percent; this drops to 39 percent amongst the MSPs/SPs that are viewed as critical to the success of future cloud initiatives.

It is not enough to only measure customer satisfaction or brand awareness to identify overall channel and market presence. Techaisle believes that it is important for IT vendors like Cisco to measure their Brand Equity within SMB channel partners as well as SMBs. Techaisle’s Brand Equity Score, BES-360, helps to identify areas where IT vendors can improve to increase share of wallet.

Cisco’s SMB Channel Partner Brand Equity

Our research finds that Cisco has done extremely well in building trust and reputation within its own SMB channel partner base. Cisco’s Brand Equity Score within its SMB channel partners is higher than most – but lower than scores for both IBM and Microsoft. The implication of these findings is that even through Cisco has high brand equity amongst its channel partners; it is not necessarily true that its entire SMB-focused channel base is firmly wedded to Cisco’s game plan.

Breaking down the data for Cisco, Techaisle’s study finds that almost 25 percent of Cisco’s channel partners have a Brand Equity rating of 80+ (on a scale of 1 to 100). This group forms Cisco’s core partners. The data also shows that almost 35 percent of Cisco’s SMB channel partners have equity of less than 40. These are the partners that Cisco needs to work on.

Interestingly, small business focused channel partners give a higher Brand Equity Score to Cisco than mid-market focused channel partners. This is a segment that Cisco should address as the mid-market is a battleground for most IT vendors and there is yet no clear dominant player.

Among all SMB channel partners of Cisco, VARs are actually driving up the Brand Equity Score. In fact 41 percent of VARs constitute the HBE (High Brand Equity) group. On the other hand, MSPs constitute only 20 percent. In order for Cisco to continue to grow its CMSP program and build on its initial successes, Cisco has to turn its attention to the MSPs that serve the SMBs to understand the key reasons for lower brand equity.

Drilling down further into the data, Techaisle finds that Cisco is not doing better within the overall managed services community than it is within MSPs focused on cloud. A higher percentage of Cisco’s HBE partners are offering managed services to SMBs whereas a higher percentage of ABE (Average Brand Equity) partners are offering Cloud to SMBs. Cisco’s SMB cloud ambitions would benefit from moving some of these ABE cloud partners to HBE segment. The HBE segment offering cloud services need extensive training on cloud solutions to become more successful in offering cloud to their SMB customers. More than 40 percent of these channel partners are working with SMB customers that have private cloud. This may be good for Cisco in the short-term but it does not represent best practice in this segment, and it is misaligned with the ongoing acceptance of public cloud as a preferred IT delivery platform.

Product resale revenue is 43 percent for HBE partners as compared to 38 percent for ABE. Similarly, recurring revenue is 57 percent for HBE as compared to 61 percent for ABE. Naturally, this bodes well for Cisco’s current revenue as the High Brand Equity partners are driving higher revenues from products. However, if Cisco plans to increasingly promote services then a lot more work is required to identify partners with higher services revenues and move them into the High Brand Equity segment.

Final Perspective

Brand Equity Score findings help indicate areas of expansion or exposure as vendors, like Cisco, assess their potential for expanding the footprint of their brands within the SMB channel partner community. The composition of Cisco’s BES across its channel indicates the core strength of its brand. Techaisle’s analysis indicates that Cisco has both strengths to build on and areas requiring focus as it moves to position its next-generation solutions (especially, cloud solutions) through its channel to the SMB market.

Techaisle’s brand management work is anchored in the belief that if a vendor’s brand equity is good, then it can compete successfully with vendors with lower brand equity for sales of comparable products or services. Vendors with sound products/services but low brand equity will struggle to maintain parity with competitors that have higher brand equity, even if that vendor’s products/services are (somewhat) inferior.

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Brand Equity - A New Prescription for Cisco’s SMB Channel Partner Success

Cisco and the SMB market

Cisco has established an undisputed leadership position in the enterprise market. The company combines a widely-adopted and well-integrated portfolio of networking products with a highly-skilled (and paid) direct sales force to manage/expand its presence within major accounts.

The SMB market is a separate challenge. Here, buyers are less likely to require integration across multiple network components and more likely to emphasize price. They are also more likely to receive advice/management from channel partners, further reducing Cisco’s control over the acquisition process.

Against this backdrop, Techaisle’s SMB Channel Trends research illustrates the strengths and challenges Cisco must manage, as it looks to expand its share in the SMB segment.

Cisco Commands High Trust and Reputation

Within the channel community, Cisco enjoys a sound reputation and a high degree of trust. Techaisle’s latest SMB channel partner survey shows that 78 percent of Cisco’s SMB channel partners trust Cisco, a higher percentage than is registered by competitors such as HP and IBM. Nearly 70 percent of the partners believe that Cisco has quality products – again, the highest ranking recorded within the ‘hardware leader’ group including Cisco, HP, IBM and others. However, only 52 percent mention that Cisco has cutting edge technology, a percentage lower than that for both IBM and Microsoft. Moreover, 60 percent of Cisco’s SMB channel partners say that they Like Cisco, lower than corresponding rates for HP and Microsoft, only slightly higher than is found for IBM.

In its 2013 Annual report Cisco has written, “A substantial portion of our products and services is sold through our channel partners, and the remainder is sold through direct sales.” With specific reference to SMBs, Cisco wrote, “Generally, we define commercial businesses as companies with fewer than 1,000 employees. The larger, or midmarket, customers within the commercial market are served by a combination of our direct salesforce and our channel partners. These customers typically require the latest advanced technologies that our enterprise customers demand, but with less complexity. Small businesses, or companies with fewer than 100 employees, require information technologies and communication products that are easy to configure, install, and maintain. These smaller companies within the commercial market are primarily served by our channel partners.” Techaisle’s data shows that Cisco has attracted positive attention within this channel partner community, but that its technology and relationships do not leave it especially differentiated from competitors.

Technology Shift has Created SMB Messaging Challenges

In recent years SMB technology demands have shifted to cloud, mobility, analytics, social media, collaboration, managed services and virtualization. Cisco is seeking to capitalize on this market transition through the development of cloud-based product and service offerings that enable its customers develop and deploy their own cloud-based IT solutions.

In communications channel partners in the U.S. including those specializing in the SMB segment – Cisco has been steadily driving them to offer products and services that deploy cloud, mobility, virtualization, managed services and data center solutions. This is by no means an easy task as most SMB channel partners are being actively courted by competitive vendors that also want to grow their emerging technologies’ business. SMB channel partners selling advanced technologies have an average of 3.46 vendor partnerships which average jumps to 4.21 for Cisco SMB partners, a difference of 21 percent. With this increased contention for mind/market/wallet share, it can be difficult for Cisco to manage brand identity and its related messaging.

This difficulty is illustrated by study findings showing that of all the Cisco SMB channel partners, 44 percent consider Cisco to be their top partner. The other 56 percent mention Microsoft, Oracle, HP, IBM and several others. Within the VAR/SI community, Cisco’s share of preference is 48 percent and drops to 39 percent amongst the MSPs/SPs that are viewed as critical to the success of future cloud initiatives.

Cisco’s SMB Channel Partner Brand Equity

Techaisle believes that it is time for a new metric to represent presence (and opportunities for growth) within the SMB market. Techaisle refers to this second-generation measurement approach as Brand Equity Management. It is measured by a robust proprietary index, the Techaisle Brand Equity Score (BES-360).

Techaisle believes that it is important for IT vendors to measure their Brand Equity within SMB channel partners as well as SMBs. Techaisle’s Brand Equity Score, BES-360, helps to identify areas where IT vendors can improve to increase share of wallet. BES-360 is a KPI (Key Performance Indicator) that measures the strength of brand within a segment.

Cisco’s Brand Equity Score within its SMB channel partners is higher than most competitors – but lower than scores for both IBM and Microsoft. The implication of these findings is that even through Cisco has high brand equity amongst its channel partners; it is not necessarily true that its entire SMB-focused channel base is firmly wedded to Cisco’s game plan.

SMB Channel Partner Brand Equity Measurement– the New Prescription

Breaking down the data for Cisco, Techaisle’s study finds that almost 25 percent of Cisco’s channel partners have a Brand Equity rating of 80+. This group forms Cisco’s core partners. The data also shows that almost 35 percent of Cisco’s SMB channel partners have equity of less than 40. These are the partners that Cisco needs to work on.

Interestingly, small business focused channel partners give a higher Brand Equity Score to Cisco than mid-market focused channel partners. This is a segment that Cisco should address as the mid-market has become a battleground for most IT vendors and there is yet no clear dominant player.

Among all SMB channel partners of Cisco, VARs are actually driving up the Brand Equity Score. In fact 41 percent of VARs constitute the HBE (High Brand Equity) group. On the other hand, MSPs constitute only 20 percent. In order for Cisco to continue to grow its CMSP program and build on its initial successes, Cisco has to turn its attention to the MSPs that serve the SMBs to understand the key reasons for lower brand equity which when fixed can lead to better wallet share among MSPs.

Drilling down further into the data, Techaisle finds that Cisco is not doing better within the overall managed services community than it is within MSPs focused on cloud. A higher percentage of Cisco’s HBE partners are offering managed services to SMBs whereas a higher percentage of ABE (Average Brand Equity) partners are offering Cloud to SMBs. Cisco’s SMB cloud ambitions would benefit from moving some of these ABE cloud partners to HBE segment. The HBE segment offering cloud services need extensive training on cloud solutions to become more successful in offering cloud to their SMB customers. More than 40 percent of these channel partners are working with SMB customers that have private cloud. This may be good for Cisco in the short-term but it does not represent best practice in this segment, and it is misaligned with the ongoing acceptance of public cloud as a preferred IT delivery platform.

Product resale revenue is 43 percent for HBE partners as compared to 38 percent for ABE. Similarly, recurring revenue is 57 percent for HBE as compared to 61 percent for ABE. Naturally, this bodes well for Cisco’s current revenue as the High Brand Equity partners are driving higher revenues from products. However, if Cisco plans to increasingly promote service-centric partners then a lot more work is required to identify partners with higher services revenues and move them into the High Brand Equity segment.

Practicing the Prescription

Techaisle’s brand management work is anchored in the belief that if a vendor’s brand equity is good, then it can compete successfully with vendors with lower brand equity for sales of comparable products or services. Vendors with sound products/services but low brand equity will struggle to maintain parity with competitors that have higher brand equity, even if that vendor’s products/services are (somewhat) inferior. Hence, Brand Equity Score findings help indicate potential areas of expansion or exposure as vendors, like Cisco, assess their potential for expanding the footprint of their brands within the SMB channel partner community. The composition of Cisco’s BES across its channel indicates the core strength of its brand. Techaisle’s analysis indicates that Cisco has both strengths to build on and areas requiring focus as it moves to position its next-generation solutions (especially, cloud solutions) through its channel to the SMB market.

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What is Cisco’s Brand Equity Score among its SMB Channel Partners?

SMBs are being deluged with IT solutions that aim to address their pain points of reducing costs, improving sales and marketing, penetrating new markets, improving employee and group productivity as well as managing more IT with less. The channel comprising of SIs, VARs, SPs, MSPs and IT Consultants form the essential cogs of an IT vendor’s eco-system that puts products and solutions in the hands of the SMBs.

Today’s SMB channel has numerous vendors to partner with to build and grow its business especially if they are targeting the SMB segment. Each channel partner has usually has multiple vendor partnerships. It is therefore essential to have a positive mindshare of the channel which would potentially translate to wallet share.

Techaisle’s SMB Channel BES-360 provides an actionable path for IT vendors to manage their channels. Techaisle’s BES-360 Model looks at the equity of the brand on six overall independent dimensions:

    1. Emotional,

 

    1. Likeability,

 

    1. Rational,

 

    1. Dispositional,

 

    1. Visibility, and

 

    1. Human Connect



The data is collected by conducting a primary research and thereafter using ANN (Artificial Neural Networks) we model the responses on several variables with action variable using a non-linear model. Action variables are crucial to measuring brand equity, since having a brand equity which does not lead to action is useless. Techaisle’s BES 360 uses ANN for computing the dimensional weights as opposed to assigning arbitrary weights or no weights at all.

Cisco’s Brand Equity Score with SMB Channel Partners = 41

The model reveals that the BES of Cisco is 41 on a scale of 1-100. The question is, is this good or bad? Since the highest BES is 56, 41/56 is “Good”. Two other IT vendors including IBM have a higher BES than Cisco.

techaisle-cisco-bes-channel-partners

 

 

 

 

 

 

 

Breaking down the data for Cisco we find that almost 25 percent of Cisco’s channel partners have a BES of 80+. They form Cisco’s core partners. The customized report can delve deeper into the typical profile of these SMB channel partners of Cisco. The data also shows that almost 35 percent of Cisco’s SMB channel partners have equity of less than 40. These are the partners that Cisco needs to work with to try and raise the brand equity. Further research could also be conducted to check and see what these partners contribute to Cisco’s business and their relative importance.

If we look at Cisco’s equity among its own channel partners and non-partners, the difference in equity is substantial. The BES of Cisco among its partners is 55 and among non-partners the BES is 29. A polarised equity pushes a brand in to a niche status, which may not be desirable for all brands Cisco’s BES is the highest among the channel partners of Avaya and even among the channel partners of SAP too the BES is quite high. These could be potential channel partners for Cisco. techaisle-bes-cisco-3

  techaisle-bes-cisco-score-3


 Techaisle’s BES-360: Why is Brand Equity Score Important?

Companies no longer produce products and services but deliver a brand experience through their products and services. It is widely recognized that the status of a brand in the mental space of the customer is best measured through brand equity. If the brand equity is good then a product or service that is similar to another brand with lower brand equity will sell better. Additionally, a brand with a good product or service but lower brand equity has a lower customer satisfaction compared to a brand with a higher brand equity that offers the same, if not an inferior, product or service. Hence measuring and tracking brand equity score is of critical importance to brand management.

What is the key information that I will get from Techaisle’s BES-360 to manage my brand?

Our customized report answers following nine relevant questions:

    1. What is my BES and my competition in the industry?

 

    1. What is my BES among my channel partners? Understanding overall equity is fine but this equity should also be good among its own channel partners and the difference between the equity among a vendor’s own channel partners and the non-partners should be significant. Otherwise it indicates a non-exploitation of the market completely.

 

    1. What is my Brand Equity profile of my channel partners? The data and analysis provides critical information for assessing the potential for expanding the foot print of the brand to the other channel partners. The composition of the BES among the channel partners of a brand indicates the core strength of the brand. A brand needs to know what proportion of their customers are at, say, half the total BES? If a small portion of the channel partners have high brand equity and a large number have low brand equity then the customer base is shaky.

 

    1. What is my BES among the partners of other channels?

 

    1. What is the composition of my channel partners at various levels of BES? A brand would like to know the business that their partners generate at different levels of brand equity. For example: what is the number of solutions offered by a channel partner whose equity is twice the average brand equity? Such information can be quite useful to build a complete business strategy by better equity management.

 

    1. How is the BES affecting my business among my channel partners?

 

    1. What do I do to improve my brand equity? We measure brand equity on nine variables. We can dive and pick up the dimensions on which the brand needs to score. In fact we can even suggest using an optimization scheme the best values of the dimensions that the brand should achieve.

 

    1. What business improvement do I expect at 5% increase in my brand equity from my channel partners? We can do a detailed analysis of our data to indicate what will be the impact of an increase of 5, 6, 7 or more points on the business, using the survey data.

 

    1. Which brands’ partners should I choose to enlarge my foot print?



For SMBs, channel partners are the trusted advisors. Addressing the channel partners directly contributes to raising the brand equity among SMBs (measured separately by Techaisle). We call it BES-360 because it covers all the dimensions as well as competition.

If more information is needed for developing a comprehensive and successful marketing strategy Techaisle has the capability to provide the necessary information. From the current data itself we can get more information by looking at the scores on each of the nine variables. However, we can also do a dedicated BES 360 Survey for a specific brand and get a comprehensive picture of the brand that can identify and answer strategic questions like “Why my score is low on the VISIBILITY dimension and what should I do about it?”

 

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