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    SMB Path to Digitalization - Prologue and Epilogue
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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.

Zoho Creator Low-code platform blurring the IT-business divide to build, integrate applications, and analyze data

Coding is not everyone's inclination, yet there is a need to rapidly automate new workflows, generate new insights from scattered datasets, drive competitive advantage, improve customer interactions and make operational improvements. Low-code/no-code platforms such as Quickbase, Airtable, Microsoft Power platform, and Salesforce Lightning aim to equip and empower business users to be self-sufficient and agile to achieve their business objectives. But Zoho Creator Platform is different. It effortlessly enables both business and IT users to pursue their individual interests and is very well suited for the SMB and midmarket segments. It replaces the band-aiding of work processes with a permanent yet elastic fix to improve organizational efficiency. Business users can spin up applications. If IT needs to add additional complexity, the IT team can develop that through custom capabilities. Developers can write, store, and execute reusable code blocks in the Zoho Creator Platform using Deluge or Java or Node.js. These functions encourage IT and business teams to work together to build scalable and easily maintainable enterprise-ready apps faster. Developers can now launch solutions in different environments of choice—development, staging, or production, with a single click based on the application's readiness.

Most people associate Low-code with spreadsheet replacement, email replacement, automating, and digitizing them. Instead, the Zoho Creator Platform aims to help recreate processes to leverage everything a local platform can do in mobile, analytics, and governance.

Zoho Creator was introduced 15 years ago as an online database. Its latest version, Zoho Creator Platform, announced on March 3, 2022, aims to empower everyone to build applications solutions with a unified platform quickly. Specifically in the SMB and midmarket firms, IT is overloaded and has less time to codify new processes and modernize existing ones. Regardless, most organizations do not have well-defined business processes and want flexibility.

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US SMB IT spending will grow by 7.6 percent in 2021

US SMB IT spend is forecast to grow by 7.6% in 2021 over 2020. In July 2020, we had written that resiliency, agility, and adaptability would accelerate recovery for SMBs. Techaisle's survey of 1720 US SMBs confirms the prognosis for the US market. Data shows that 45% of US SMBs will be in the high growth segment, with IT budget increases ranging between 7.5% to 15%. However, 12% of SMBs will experience budget decreases of more than 5%. The majority of the declining IT growth segment will be in the 1-49 employee sizes. Regardless, the small businesses will grow their IT spend. There is an apparent dichotomy appearing in how technology is likely to be acquired by SMBs. Nearly two-thirds of micro-businesses prefer acquisitions structured around leases, whereas one-fourth of midmarket firms plan to move to "as-a-service" approaches.

IT services spending will grow by 8.6%, driven by managed services, data/platform integration, cloud orchestration, and business process automation. As cloud applications increase, the demand for hybrid IT is becoming a pressing requirement for SMBs.

2021 will be the year of the midmarket segment, with IT spending forecast to grow by 8%. Data illustrates a fascinating picture showing IT budget increasing in direct proportion with size, from 100-249 to 500-999 employee firms. The upper midmarket (1000-4999 employee size segment) will have an average budget increase of 6.1%, slightly lower than the 500-999 size business.

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SMB and Midmarket hybrid cloud adoption likely to explode exponentially

The explosion in cloud use has led to considerable increases in the extent of automation within SMBs. Techaisle SMB survey research data illustrates, SMBs are absorbing cloud systems at a very rapid rate: core infrastructure requirements (such as storage and productivity applications), systems of record (e.g., accounting), and systems of engagement (e.g., collaboration/conferencing) are increasingly cloud-based, and the cloud is paving the way for new automation in these areas, and in systems of insight (analytics) within SMBs.

As the adoption of cloud applications increase, there is a pressing demand for hybrid within SMBs. SMBs want to integrate multiple delivery sources into a single unified fabric. They also want to assign workloads to the best (rather than “best possible today”) location and connect data and critical services (notably, security) across platforms. Techaisle data shows that 34% of midmarket cloud workload is on hybrid cloud, 31% of midmarket firms are using advanced hybrid infrastructure with automated links between platforms. In 2021, the percentage is likely to increase by 45%. Techaisle expects hybrid momentum in the SMB market to grow in 2021 and beyond, with a 5X increase potential in the small business segment.

Comparing 2020 and 2021 data shows that although there was tremendous interest in expanding hybrid automation/orchestration in 2020, many SMBs put their plans on hold in favor of emergency responses to pandemic-related requirements. Still, though, the need for capable hybrid architecture and management is only becoming more acute over time.

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The connection between hybrid cloud use and focus on orchestration

Techaisle’s US SMB & Midmarket Orchestration, Integration & Automation study finds that use of multiple IT service delivery platforms – various forms of cloud, plus on-premise, colo-based and hosted infrastructure – increases the complexity associated with connecting, balancing and optimizing systems, and as a result, creates demand for automation and orchestration to ensure that these processes aren’t bottlenecked by requirements for operator intervention.

It seems intuitive that firms that are currently using hybrid cloud systems would register very high levels of use/interest in orchestration and automation tools. This is largely true. Roughly half of small businesses and two-thirds of midmarket firms are using or planning to use hybrid cloud. Two-thirds of small businesses and nearly 90% of midmarket firms using/planning use of hybrid consider orchestration tools to be “critical” or “very important.” Expanding the midmarket data survey shows that 20% of midmarket firms that use hybrid cloud systems say that orchestration tools are critical to deploying workloads on hybrid platforms and another 69% say orchestration tools are very important.

When analyzed by IT maturity data shows that nearly half of the Advanced IT group and two-thirds of the Enterprise IT group are already using hybrid cloud, with use projected to rise to/beyond 70% over the next 12 months. Despite these high current usage levels, though, Advanced and Enterprise IT users do not, for the most part, currently consider orchestration tools to be “critical” (less than one-quarter across the two segments), though they do classify orchestration as “very important.”

Techaisle also analyzed data by current digitalization strategy and cloud maturity level. “Holistic” firms (with organization-wide digital transformation strategy) are both much more likely to be using hybrid cloud today and to consider orchestration to be “critical;” these firms would appear to be good targets for SMB/Midmarket-focused orchestration campaigns. More than half of both “mature” and “born-in-the-cloud” firms are using hybrid today, with penetration expected to rise to 70%-80% over the next twelve months. Fully 40% of BITC and more than a quarter of “mature” cloud users also view orchestration as critical – making this another useful segmentation for marketers of orchestration tools looking at the SMB/Midmarket opportunity.

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