• FEATURED INFOGRAPHIC

    FEATURED INFOGRAPHIC

    2023 Top 10 SMB Business Issues, IT Priorities, IT Challenges
    GET IT NOW
  • NEXT CHANNEL - THE FUTURE OF PARTNER ECOSYSTEM

    NEXT CHANNEL - THE FUTURE OF PARTNER ECOSYSTEM

    Networked, Engaged, Extended, Hybrid
    DOWNLOAD NOW
  • SIMPLIFY. EXPAND. GROW.

    SIMPLIFY. EXPAND. GROW.

    #SMB #MIDMARKET #UPPER MID-MARKET #CHANNEL
    LEARN MORE
  • 2022 SMB & MIDMARKET PREDICTIONS

    2022 SMB & MIDMARKET PREDICTIONS

    Top SMB & Midmarket Predictions for 2022
    READ NOW
  • 2022 CHANNEL PREDICTIONS

    2022 CHANNEL PREDICTIONS

    Top SMB & Midmarket Predictions for 2022
    READ NOW
  • BUYERS JOURNEY

    BUYERS JOURNEY

    Influence map & care-abouts
    LEARN MORE
  • CLOUD RESEARCH

    CLOUD RESEARCH

    SMB & Midmarket Cloud Adoption
    LATEST RESEARCH
  • DIGITAL TRANSFORMATION

    DIGITAL TRANSFORMATION

    Delivering Connected Business
    LEARN MORE
  • SECURITY RESEARCH

    SECURITY RESEARCH

    SMB & Midmarket Security Adoption Trends
    LATEST RESEARCH
  • MANAGED SERVICES RESEARCH

    MANAGED SERVICES RESEARCH

    US SMB & Midmarket Managed Services Adoption
    LEARN MORE
  • CHANNEL PARTNERS

    CHANNEL PARTNERS

    Transformation or Consolidation
    LATEST RESEARCH
  • ANALYTICS & ARTIFICIAL INTELLIGENCE

    ANALYTICS & ARTIFICIAL INTELLIGENCE

    SMB & Midmarket Analytics & Artificial Intelligence Adoption
    LEARN MORE
  • WHITE PAPER

    WHITE PAPER

    SMB Path to Digitalization - Prologue and Epilogue
    DOWNLOAD
  • HYBRID WORK IS HERE TO STAY?

    HYBRID WORK IS HERE TO STAY?

    NOT SO FAST SAYS THE DATA
    ANALYSIS
  • SAAS RESEARCH

    SAAS RESEARCH

    US SMB & Midmarket SaaS Adoption
    LEARN MORE
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15

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.

Dell Channels Power On

As uncertainty swirls around both the IT infrastructure needs of the SMB market and the channel that supplies these solutions, Dell’s channel team, led by Greg Davis and Bob Skelley, could not be more upbeat. And as Techaisle research shows, channel members of Dell’s PartnerDirect program continue to power on.

In a recent Techaisle study of channel partners selling Cloud, Mobility, Managed Services, Virtualization and Datacenter solutions to SMBs, 58 percent said that Dell is a trusted brand with 48 percent mentioning that Dell is a reputable brand. With today’s announcement on software competencies, Dell is looking to build on that presence with an expanded portfolio addressing essential (and high-growth) infrastructure software products.

Partner Voice

It is clear that Dell considers sales enablement and execution to be the keys to its channel success. The company exhibits very tight focus on issues like deal registrations and training. In qualitative interviews, Dell’s partners say that Dell is easy to work with. They report that Dell’s partner program is straightforward, with a low threshold to enter, reasonable certifications’ requirements and all training materials available online. Dell partner executive Marcus Lindqvist, Country Manager for Sweden’s Dustin AB highlighted the benefit of this approach when he shared with us his reasons for being upbeat on Dell: “deal registration, robust process that protects the partner investment in our engagement with Dell on a deal by deal basis. We register the deal at an early stage in the sales process, most deal registrations are approved, and from that point we are in the lead without any future discussions about other partners or Dell direct sales undercutting our work. Deal registration is done online with quick turnaround times.”

Echoing the sentiments, Daniel Serpico, President of FusionStorm, [partner of Dell] noted, “[there is] very real clarity around deal registration and partnering; there is significant value creation around integration and configuration and Dell has infused software and tools to win with Dell.”

Software Competencies

It was only a matter of time before Dell extended the PartnerDirect program beyond its roots, from enabling and incentivizing hardware sales to rolling out software competencies. Over the past year, with numerous acquisitions and the hiring of John Swainson to helm Dell’s software operation, Dell has launched an aggressive strategy to build scalable enterprise software offerings into its solution portfolio, with emphasis in the areas of datacenter and cloud management, information management, mobile workforce management, and security and data protection.

On September 3, Dell announced four new PartnerDirect software competencies, including:

  • Security: Includes identity and access management, as well as network, endpoint and email security

  • Systems Management: Includes client management, performance monitoring, Windows Server management, virtualization and cloud

  • Data Protection: Includes enterprise backup/recovery, virtual protection, application protection and disaster recovery]

  • Information Management: Includes database management, business intelligence/analytics,  applications and data integration, and big data analytics


Dell partners now have the flexibility to decide between reselling hardware only, software only (via resale or a referral fee program) or both hardware and software. As per Techaisle’s Marketview, worldwide SMB (1-999 employees) spend in 2016 for the above four competences will be US$11.1 billion. Combine it with traditional datacenter solutions that includes servers, storage, networking the market spend jumps to over US$40 billion by 2016. This is a huge opportunity indeed for Dell and its channel partners.

Best-of-breed Solutions

The latest Techaisle channel partner study found that 54 percent of channel partners prefer to offer best-of-breed solutions to their SMB customers, with 28 percent preferring single vendor solutions. The key to successfully addressing both preferences is to combine best of breed offerings under a single brand, allowing partners to also take advantage of integration and volume benefits. HP and IBM have been active in staking out this territory; with the September 3 announcement, Dell has signaled its intention to compete aggressively for leadership within the small and mid-market business market segment.

techaisle-solutions-preferred-by-smb-channel-partners

In the cloud infrastructure area, Dell’s partner program rests on three pillars - Cloud Builder, Cloud Provider and Cloud Enabler. For all three pillars, best-of-breed solutions take on an entirely different meaning as shown in another study recently conducted by Techaisle. The study was done to understand the Winning Strategies of Successful and Profitable SMB Channel partners selling cloud.

techaisle-smb-cloud-winning-strategies


The study revealed that channel partners that are comfortable and profitable with cloud solutions combine best-of-breed solutions and wrap them tightly under their own offerings & services. These channels have also begun to utilize reference architectures from their vendor partners.

Training as the Lead-in

Channel partners prefer to partner with IT vendors that have quality products and innovative technology solutions that solve SMB pain points. This presents a complex challenge to vendors like Dell: partners need suppliers to both address customer requirements (with innovative, reasonably-priced and easily-deployed technology that addresses SMB pain points) and partner business requirements, such as training, pre-and-post sales support, and lead generation. As the results of Techaisle’s research demonstrate, product training is particularly important in this context. Dell is clearly cognizant of this demand: Marvin Blough, executive director of Worldwide Channels and Alliances for Dell Software is on record as observing that “Trained partners sell four times more than their untrained counterparts,” and Dell is said to be on plan to deliver over 250,000 training sessions this year.

Techaisle has observed, however, that most vendor training focuses on product attributes, and does not address development of the skills (building and advising on infrastructure strategy and workload roadmaps, establishing effective sales tactics and compensation models, developing the services competencies needed by customers) required for VARs to migrate successfully to advising on and deploying hybrid infrastructure. These advanced management-level training offerings will be essential for vendor differentiation, especially for the complex hardware/software solutions that are at the core of Dell’s evolving strategy.

techaisle-smb-channels-support


Concluding Remarks

Clearly, building leadership in the SMB infrastructure market is an ongoing challenge: requirements continue to evolve, entrenched vendors have strengths and relationships that have developed over many years, and Techaisle’s research has found that trusted brand figures for Dell are lower than for some of its competitors. Its brand equity score (BES) among channel partners is also lower than its competitors. It seems clear, though, that Dell is aware of market requirements and willing to invest in its SMB market and channel success, rolling out training modules, integrating partners acquired through acquisitions and combining both hardware and software for end-to-end solution delivery.

Michael O’Neil, Consulting Analyst with Techaisle, notes that “Infrastructure delivery has become a very challenging issue for business partners. Hardware-only sellers are at a significant disadvantage in a market where buyers are looking for hybrid solutions involving both on-premise and cloud-based platforms that combine server, storage and networking hardware with system management and security software to build solutions that will seamlessly support application delivery, data protection and backup, and many other key operational objectives. By offering a wide range of product types, and focusing on making the selling motion as clean as possible, Dell is enabling partners to focus on customer requirements rather than product silos.”

Looking at Dell’s approach from a partner’s perspective, Daniel Serpico provided an apt summary: “Dell sales teams cover all markets, which allows us as a partner to be able to have discussions with the Dell account manager on a specific account or deal, giving us a counterpart that understand the end-customers actual requirements and needs. Both teams have a laser sharp focus on the customer and to jointly win the deal [supported by] shorter turnaround and quick responses from Dell.”

 
  0 Comments

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?”

 

  0 Comments

Vendor Showcase – NetSuite in the Sweet Spot

In what we saw as an awesome display of moving the bar higher, Evan Goldberg, NetSuite’s CTO, demonstrated in his Keynote Thursday that NetSuite continues to deliver industrial-strength innovations and solutions using tools that are increasingly easy to use, intuitive and particularly well suited to fast-growing Mid-Market companies with global aspirations.

Picking up from a summary paragraph from a 2009 blog post I wrote on NetSuite in a previous life:

“After looking at this demo it will be a little clearer why IMHO this is what the future looks like – all applications will have built in BI and reporting capabilities much stronger than has previously (been available) – without third party BI and lots of integration services – a big differentiator for SaaS vendors that provide this type of visibility as a standard component of their value proposition.”
- Collaborative Innovation Blog post, April 4, 2009

Among others, there are two things that seem like very good strategic moves for NetSuite: Fishing where the Fish Are, and being in a unique position to leverage the new Enterprise Applications Platform for companies that are ready to expand into global markets.

Fishing where the Fish Are
NetSuite positioned itself from the beginning as an Enterprise Software company, starting with ERP and then building other complex, traditionally on-premises software applications into the platform as successive SaaS waves hit the market and customer acceptance increased; Customer Relationship Management, Supply Chain Integration, Customer Service, Professional Services Automation – all tightly coupled with Billing and Fulfillment for a truly integrated workflow that almost covers the gamut of the Traditional Multi-user Systems requirements (Integrated Front and Back Office). Now adding deeper focus to e-Commerce, Global Financial Reconciliation and Industry Vertical implementations, NetSuite can enable Mid-Market firms to be truly competitive in a global market; leveraging speed and agility to outperform larger slower companies.

We have seen a very steady increase in the willingness (and need) for SMBs to embrace Cloud Computing and SaaS Models that move them out of the annual cycles and cost-center mentality that used to define IS Departments. A good indicator of this is how eager the SMB Channel is to offer a wide range of products and services and here we have seen amazing growth; even from last year to now surveys show the laggards are rapidly jumping on board, as seen in this table:

SMB Channel Offering CloudOf the 615 US-based SMB Channel partners interviewed, 86% were now offering or planning to offer Cloud-Based Services, those Not Planning to Offer Cloud dropping from 38% to 14% of the channels. This data represents aggregate results for VARs, SIs, MSPs, SPs and ISVs. In addition to Cloud Services fast growing areas for the SMB Channel include Mobility Solutions, Managed Services and a wide variety of applications in all three of these categories.

SMBs are Hungry for Enterprise-Level Capabilities
Based on early success in SaaS and basic Cloud Services such as Email, Storage, Back Up and Recovery, and CRM/SFA, Small and Medium Businesses have seen the light at the end of the tunnel. Security, availability and usability objections have been overcome and the cost to implement with lower complexity and higher focus on the core business have resulted a very compelling value proposition in widespread adoption worldwide.

SMB Business PrioritiesTo survive in an increasingly globalized and optimized business environment, SMBs need to be growing faster than the market and their competitors, reflected by their Priorities:  #1 Increasing Revenue (56%), #3 – Increasing Productivity (34%), #4 – Penetrating New Markets and Customers (32%), and #6 – Speed to Market / Keeping Pace with Competition (28%). On the other hand, rapid growth without an increase in efficiency is unsustainable, so the rest of the priorities revolve around scaling the business efficiently; including #2 – Reducing OPEX (45%), #7 – Collaborating Efficiently (29%), and Reducing Cost of IT (27%).

 

Because Cloud Computing has been able to deliver these benefits much more effectively than the previous generation of Client/Server architecture did, SMB customers report between 75-80% satisfaction levels of “Satisfied” or “Very Satisfied” with their Cloud-based implementations.

All of this bodes well for NetSuite as the market matures and moves further into the cloud looking for Enterprise-Level capabilities. And timing is also very good as we can see from the additional results of the 2013 SMB Channel Partner Survey:

SMB Channel Solutions For Channel Partners Offering or Planning to Offer Cloud Services (85%), the left column shows the top 12 applications cited by Partners based on currently offered Cloud Applications, the middle column represents Cloud Applications that Partners plan to offer this year, while as the title suggests, the “No Plans” column shows the share who say they have no plans to offer the Application. It is pretty clear that the areas of focus and strength for NetSuite are lining up with the opportunity, or put in another way, the Mid-Market needs are maturing to a level that can benefit from NetSuite’s focus. And while there are many companies in the market who can provide these as point solutions, there are very few who can provide them in a unified suite of applications, with an integrated group of cross-department KPIs that can be used to get at a single version of the truth.

In terms of product coverage and timing, we feel the rapid adoption in the Mid-Market towards Cloud Infrastructure, successes in overcoming basic Security, Functionality and Availability concerns and the need for Mid-Market customers to grow rapidly and efficiently, all support NetSuite’s strategy and roadmap as presented at the conference, providing a lot of runway for the next few years.

Leveraging A New Enterprise Applications Platform
The second major point is that by building their platform from the very early days of the Internet as a transaction platform NetSuite has been able to been able to take advantage of both technology and market advances. In 1997, the critical weakness of the Internet was that while it was very good for moving brochureware around the world quickly, more mature applications that required a lot of integrity and accuracy – such as OLTP in Financial Reconciliation and Supply Chain Integration – were not reliable enough; the Databases, Middleware and Network Management needed to improve and there was a serious shortage in programmers who could do this kind of heavy lifting.

Fast forward five years and the dotcom bust had made commercial broadband access ubiquitous and the tools and skills had (almost) caught up to the hype. CRM, the Killer App was being brought online to the SMB community through SalesForce.com and the benefits of a SaaS model were becoming very clear, albeit with some remaining hiccups and most enterprises waiting on the sidelines for critical applications.

NetSuite started with one of the most difficult challenges back in 1998; ERP Applications with all the Enterprise-level OLTP and Database Management challenges that came with them. By doing this, the ability to grow an integrated set of applications using a single foundation, has paid off in terms of functional leadership. Others in the market, most notably SAP for Back Office and Oracle for Front Office, have taken an “Acquire and Integrate” approach, which is complicated and time consuming in comparison. The fact that NetSuite has survived and thrived in this environment is testament to vision, determination and execution.

Without getting too abstract, we see long term patterns in the software market that seem to ring true over time – the first is to win a narrow space, shore up the position, look left and right and take the adjacent space that is most lucrative and easy to assimilate (by hook or crook). Repeat. The second is that network effects rise in proportion to the number of users: Market Share is King. The third is to focus on the Scalable model and ensure to develop an ecosystem of partners who can add value profitably. Finally, at a very abstract level, the history of IT has been a steady, long march to Data Integration for Process Automation and Optimization. Whether you call Big Data, Distributed Database Management, Supply Chain Integration, Enterprise Performance Management or Google Search, it boils down to integrating disparate data and making it useful for decision making, with a relentless concentration on efficiency. As seen in the Business Intelligence segment, those who started with an Internet-based implementation approach rather than one of everything to every mapping, have ended up with an easier road to implementation; consider Siebel vs. SFDC, SAP vs. NetSuite, BoA Merchant Banking vs. PayPal, or Cognos vs. Domo. New, better tools and focus on specific data integration points rather than mapping every possible permutation of interaction between systems has resulted in faster time to value, less complexity for the channel and much less risk for customers. Breakthroughs such as scalability with Multi-Tenant Architecture have also resulted from solving the problem from a clean slate.

SMB Integrated PlatformIn our 2012 SMB 2020 Technology Report, we described our perspective of the IT Environment of the future, Client, Server and Network. This graphic shows a functional view of the Multi-user System, traditionally called the “Server” within a Client/Server Architecture. This view has CRM as the Hub component, surrounded by an increasingly integrated suite of Applications areas that eventually cover the complete information requirements of the Front and Back Office to run the business using a highly customized group of integrated KPIs. This type of integrated Nirvana has been an objective for a long time; however, it seems to be closer, clearer and much less complicated than it used to be when looking at the NetSuite Roadmap, i.e., we are not counting the dozens of modules that need to be installed, configured and integrated (and who is responsible to manage it). NetSuite’s rapid increase in large customers and decision by the traditional big Systems Integrators to jump on board seem to indicate that timing is good and the functionality is there.

Channel Implications
As the functionality and capabilities of the platform have changed with Cloud Computing, so have the dynamics of the Channel, especially in the Small and Medium Business space. Access to capabilities that were previously far out of the reach of SMBs has fueled the adoption of increasingly complex applications. Ironically, the benefits of the SaaS architecture have compressed and digitized the sales process, allowing companies to sell directly through an online channel, with demand generation, research, pre-sales, sales demonstrations, etc., conducted through inbound sales organizations rather than relying on channel partners to push products and services to the market. The proliferation of horizontal SaaS applications, such as email, webinars, Storage and Back Up has spawned a generation of self-configured apps that have made the customers question the need for third party involvement. It has also shorted the decision cycle substantially; many times cutting the channel out completely and giving rise to a “trusted advisor” role, especially in the lower Mid-Market.

Our research has shown that generally the more complex a solution, the more likely it is to have a partner involved in the implementation. Because NetSuite offers relatively complex solutions, it will have to play on both sides of the fence here – avoiding conflict with large partners for direct sales and providing profitable opportunities to the SMB channel partners, this was one area we felt might be a yellow flag in the distance.

Mobility is coming on Strong
With the installed base of Tablets and Smartphones exceeding that of PCs this year and annual sales of the former expected to number in the hundreds of millions higher by 2018, we see a fundamental shift in the way customers access and manipulate data. “Fundamental” meaning the difference between double-entry ledger accounting in physical books to a software application or the move from IBM Selectric Typewriter to PC-based Word Processing applications; nothing will ever be the same, and it is inevitable. There has already been a steady stream of casualties in the wake of Smartphone sales – single function GPS devices, midrange Digital Cameras and landline phone sets have all peaked in global consumption in the wake of accelerating handset sales. Just as the Internet itself essentially changed all business where value could be digitized (Financial Services, Travel, Shopping, and Advertising), so will ALL industries change as the primary mode of information consumption to the Internet is by mobile device.

SMB Channel Mobility SolutionsThis is the area that saw the greatest change in our 2013 SMB Channel Survey, from 56% of partners who said they were not planning to offer Mobility solutions in 2012, the number dropped to 8% this year, representing a doubling of Mobility Solution partners in the market as they implement the plans.

We did not hear that much about mobility from NetSuite during the conference, but given their strength in operational visibility through dashboards across departments, we think focus on this area could help both channels and end users.

  0 Comments

Software-Defined-Networking (SDN) Promise for SMBs

The Quotes

In a recent Techaisle depth-interview, the CIO of a Network Dependent (Techaisle’s proprietary Segmentation) Mid-Market business with 950 employees, 110 servers, 50 percent of servers virtualized, said, “Yes, I have heard about SDN. It’s a service where the architecture can be dynamically reconfigured or driven by a software personality layer as opposed to being hard-wired. Yes, we are planning to invest in it. Today the trend is towards intelligent networking. Software defined networking is something that can be used to automatically handle the traffic in the network. So, we can expect reduced costs from this type of a service. Brocade and Cisco are the two companies that have good solutions about these services.”

Although the awareness starts to fall rapidly for lower employee sized businesses Software Defined Networking (SDN) holds promise within the SMB and Mid-market business segments.

The IT Manager of a 70 employee size business with 4 servers using cloud, virtualization and managed services belonging to Network Increases Efficiency segment (Techaisle proprietary networking segmentation) said in another depth interview, “Yes, I have heard about SDN. I think it probably has an advantage of being much more flexible because of the different approaches that it has to dynamic network management. It has certain development tools that can be used to operate different network services. We, first of all need to investigate more about this technology and then see how well it fits in our infrastructure and only after we find enough information of it fitting the bill, should we implement it.”

The Opportunity

Techaisle’s research finds that 3 percent of small businesses and 11 percent of mid-market businesses globally have heard about Software Defined Networks. In the US the awareness jumps to 19 percent among mid-market businesses. SMBs that have some knowledge about SDNs, exhibit enhanced interest to adopt them in next 12-18 months with the objective of reducing their network related CAPEXs and managing their growth in cloud, mobility, big data technology usages.

Techaisle’s market sizing estimates that the SMB market for SDN will be US$204 million in 2016 growing at CAGR of nearly 81 percent. The market could open up more once the awareness and use cases increase.

The Concept

Software-defined networking (SDN) is a new approach to building computer networks that separates and abstracts the underlying networking elements thereby making the network more agile. SDN allows system administrators to quickly provision and program network connections on the fly instead of manually configuring policies. Administrators have programmable central control of network traffic without requiring physical access to the network's hardware devices.  Some even call this 'virtualizing the network', in the sense that each individual hardware switch may be part of multiple Layer 2 and Layer 3 networks and have its configuration and traffic management policies dynamically changed by the master network controller.

The Strides Made

Most of the large IT vendors have made very strong commitments to providing SDN solutions. Prominent among the larger IT vendors are:

    • Avaya with its Application Development Network (ADN)

 

    • Brocade with its Vyatta acquisition

 

    • Cisco with its Open Network Environment (ONE) and Cariden acquisition and funding of Insiemi

 

    • Dell with its Virtual Network Architecture (VNA)

 

    • HP with its Virtual Application Networks (VAN)

 

    • IBM with its Distributed Overlay Virtual Ethernet (DOVE)

 

    • Juniper with its Contrail Systems acquisition

 

    • VMware with its Nicira acquisition



Then there is OpenFlow, closely associated with SDN, an industry consortium of about 70 members, much like the Wi-Fi Alliance, a non-profit group that oversees development of the OpenFlow protocol. Both Google and Facebook have adopted OpenFlow (ONF) protocol within their data center operations. And most of the new switches from networking vendors like Arista, Brocade, Dell/Force10, Extreme, Huawei, HP, IBM, Juniper, NEC, and Pronto are OpenFlow compatible.

‘OpenDaylight’ Project which includes Big Switch Networks, Brocade, Cisco, Citrix, Ericsson, IBM, Juniper Networks, Microsoft, Red Hat, NEC and VMware, aims to provide an open-source software-defined-networking (SDN) controller, with vendor-agnostic interfaces thereby accelerating innovation around the SDN controller itself.

All of the above points to tremendous jostling for leadership roles and confusion in the market place. In spite of the confusion, SDN will continue to gain acceptance as enterprises will develop proof of concepts and the market itself will shake out the true leaders in the next 3-4 years.

The Promise for SMBs

SDN is ideally suited for the SMB segment with its promise of reducing complexity, costs and management along with easing implementation of cloud, mobility, social and big data connectivity.

Specifically within the mid-market segment, SDN will begin to pop-up in conversations among CIOs and IT Directors when they find their businesses faced with:

    • Increased public and private Cloud adoption

 

    • Network's inability to provide flexibility required to support virtualization, cloud, and mobility

 

    • Inefficient network and traffic management with the explosion of devices, worker locations and applications

 

    • Deployment of ultra-low latency networks to effect real-time transactions especially for the financial services vertical and those working on big data analytics



Announcement from HP

However, it must be said, that SMBs will look for product solutions with embedded SDN. We are already starting to see some solutions for the SMB market segment along the same lines. A new BYOD solution bundle was announced at HP’s recent Global Partner Conference. The solution includes end-to-end management software, switches with integrated wired and wireless capabilities, and is extended with a software-defined security solution. Ever bullish on the SMB market, HP believes this is an easily deployable, complete solution for a small to medium sized-business, very cost-effective and that provides investment protection with free switch software upgrades for OpenFlow support. Not only does it mean lower capex, but also less maintenance and less complexity.

Indeed, there’s a viable play for SDN for SMBs. A perfect use case could include implementation of virtual routed network on hypervisors, a web-based unified management application for provisioning, monitoring and control of the entire distributed network.

Technology complexity is continuing to increase for SMBs. And Techaisle is finding that majority of SMBs are required to re-architect and re-configure their networks to make a move to cloud or virtualization. Most of these SMBs take external assistance either from an IT Consultant or their channel partner. Nevertheless, they all have one refrain that reconfiguration is extremely complex, time-consuming and resource intensive.

Final Remarks

SDN is yet very complex even for the most cutting edge and aggressive technology adopter SMBs. It requires tools and structures that are still evolving. Managed services was introduced into the market several years ago but the RMM, PSA and other tools are still being refined so one should not expect the channels or the SMBs to jump onto SDN immediately.

sdn-smb-techaisle-blog

There will be a lag between the enterprise and the SMB adopters. However, once products are available with SDN capabilities, SMBs will adopt SDN faster than enterprises. The SMBs that have virtualized their servers and storage will be the early adopters. Looking at potential savings SDN will a difficult opportunity to pass up on by the SMBs.

  0 Comments

Search Blogs

Find Research

Blog Archive

Research You Can Rely On | Analysis You Can Act Upon

Techaisle - TA