Techaisle Analyst Insights

Techaisle’s SMB Cloud Adoption survey shows that SMBs that are using Cloud applications are experiencing tremendous improvement in customer acquisition, retention and work satisfaction. In fact, 1 in 4 SMBs say that customer retention has improved, and nearly 1 in 3 says that customer acquisition has improved.

In general SMBs have experienced improved customer acquisition and retention after using cloud applications, however, SBs (1-99 employees) and MBs (100-999 employees) differ. Typically, SBs are more hard-pressed to acquire customers, a top business issue for them. With the adoption of cloud, 32 percent SBs say that they have seen improvement. MBs on the other hand, have better direct sales force for customer acquisition, but after equipping the sales force and marketing with cloud applications they have seen marked improvement in customer retention. Additionally, an important point to note is that 29 percent of SBs have reported improved group productivity and 34 percent improved employee satisfaction.

The survey also showed that B2C and B2B SMBs have had different experiences in customer acquisition and retention.  Specifically, B2B SMBs have reported nearly twice as high improved experiences as B2C SMBs. Many B2C SMBs are using social media platforms such as Facebook and twitter and marketing automation solutions to build a set of followers to improve their customer retention and acquisition. On the other hand, comparatively higher percentage of B2B SMBs are using LinkedIn, Twitter and specialized platforms such as Chatter, Yammer and GageIn to track news and conversations with their customersaction.

CRM has become the central application and the core around which other features and functionality are deployed as required by an SMB organization, department within an SMB or an individual user within the SMB. CRM is that core cloud business application. After the SMB CRM base has been built (or simultaneously), the order of implementation depends on the SMB’s focus but is likely to be business intelligence, marketing automation, Financials, HR/Payroll, customer service for service companies, ERP, fulfillment (SCM) and industry vertical applications.

There are four key areas of SMB cloud usage and deployment. Each has got many sub-sets of applications. These four areas are:

1. Infrastructure and Platforms (US$13.0 Billion SMB Opportunity by 2016)


2. Communications and Collaboration (US$7.9 Billion SMB Opportunity by 2016)


3. Business productivity & Applications (US$15.5 Billion SMB Opportunity by 2016)


4. Industry specific applications ((US$2.7 Billion SMB Opportunity by 2016)

While there are many niche vendors addressing each niche area, the complexity grows manifold as businesses move from one application to another, from one device to multiple devices. As Cloud computing adoption among SMBs grows, the real issue of data integration continues to come into play and it will become imperative for each of the four areas to communicate with the other. And once that “integration enlightenment” happens SMBs will witness even higher improvements in productivity, satisfaction, acquisition and retention.

Anurag Agrawal
Techaisle

Announcement

Cisco has announced a new Cloud and Managed Services Program (CMSP) that integrates its currently existing Cloud Provider, Cloud Services and Managed Services Channel Programs (MSCP) into one. Besides streamlining incentives, discounts and payments for its partners, the program also aims to simplify pricing for Cisco-based cloud and managed services offerings. The program will also enable collaboration and sharing of complementary opportunities between partners through a microsite via Cisco’s partner portal. All partners are expected to transition to the CMSP by August 2013.

Techaisle Take

We believe that with one master move Cisco is strategically addressing the US$94 billion global SMB opportunity by 2016.

Techaisle’s global channel surveys have shown that Cloud, Mobility, and Managed Services Solutions together are changing the SMB channel landscape as these solutions are revolutionizing IT utilization by SMBs. The new paradigm would be the "3-in-1" Channels offering Mobility, Cloud, and Managed Services as a single offering. We first wrote about the 3-in-1 channel here. And now Virtualization is quickly becoming a potent arsenal in the SMB channel partners offerings.

Techaisle’s corresponding SMB research has consistently shown that SMBs want mostly integrated solutions to limit complexity and therefore seek partners that are capable of such deliverables but very few partners currently do so as they are all camped in either one or two solution corners and few seem to embrace a holistic solution view - and this is making SMBs unsure of overall benefits and desire to spend.

With its current announcement Cisco is removing some of the barriers by bringing channel partners serving managed services and cloud needs of SMBs under a common cluster. Since many SMBs want to obtain all services from a single provider, it is important for broad product/solution vendors to evaluate all their partners, seek and cluster partners based on where they are with regards to capabilities of delivering complete solutions and introduce programs to support development. As the dividing line between cloud and managed services is becoming thin, Cisco has just done it, that is, created a single program that should:

• Enable channels to build more dynamic and serious partner-to-partner collaboration to collectively address complementary opportunities


• Enable Cisco partners to add capabilities, such as, managed services to an existing cloud services


• Attract newer partners to join Cisco program


• Help current channel partners qualify and move up Cisco’s channel partner pyramid

The data on the right from Techaisle’s channel study (N=2851) shows that channels that serve the SMB segment are keen to offer multiple services that straddle cloud and managed services. Cisco’s new program should open up opportunity for its channel partners to offer both cloud and managed services using Cisco platforms.

If we look at the survey data at micro-level, we find that is a higher percentage of Channel Partners that are offering some type of Managed Services Solutions than they are offering Mobility Solutions or even Cloud Computing. The channels falling in the green columns will benefit immediately, those in the blue columns will find the program attractive but those within the red columns in the chart would be of immense importance.

It is clear that Managed Services has been the most important offering for Channel Partners, as they evolved from a typical value added channel to offering break-fix services and remote managed services.



The path being chosen by Channels to move from one offering to the next is strongly dependent upon their current offering. Those that are in the mobility space are moving to cloud, while those in the cloud are moving to managed services.

Understanding the channel dynamics and current offerings gives clues in the direction they will move. For those that are offering only one of the services there is a clear path to adding services. In fact Techaisle survey shows that the channels have chosen their path of selection.

Channels are also interested in offering mobility solutions, however, it is also clear that mobility has become possible due to cloud and managed services allowing employees to work from anywhere, anytime and from any device.

 

The responsibility now lies with both the channel partners and Cisco to make the program a success. However, there some other steps that Cisco needs to take as well.

• Extend the reach of its Smart Care to cover cloud based services


• Develop capabilities that not only work with Cisco's networking devices but also with client devices. Although it must be said that Cisco is addressing some of those needs through its partnerships with other vendors


• Further the agenda on not only BYOD but also just BYO


• Market the program aggressively. Channel partners are being courted and trained by many other vendors


• Use the program to establish a strong presence in the datacenter space

With the latest move, Cisco may have begun to shift the tide in its favor more decisively.

Anurag Agrawal
Techaisle

Dell (Power to Do More) is buying Quest Software (Simplicity at Work) for US$2.4B, its second largest acquisition after Perot Systems. Combining power and simplicity is not easy to achieve but is a potent combination if done successfully. And throwing Wyse and SonicWALL in the mix can lead to a catalytic reaction in the right direction that may become hard to contain and beat. It is all in the execution, messaging and channel commitment.

A lot has already been written about how the Quest acquisition is a brilliant move by Dell to augment its software portfolio and complete its end-to-end solutions offerings from PC hardware, servers to security, storage, software, datacenters and integrated datacenters. It is not important to know, understand, praise or fault Dell for how vWorkspace will fit into its partnership with Citrix or VMware, or how Quest’s Identity management will be combined with SonicWALL or how Dell will address Windows migration with Quest tools and on, and on. What is important to understand is that Dell is demonstrating its steady and unflinching commitment to be an end-to-end solutions company for enterprises, SMBs, government and education segments.  Dell gets it.

Following the announcements we had the opportunity to speak with senior executives at two of Quest’s partners, dinCloud and En Pointe Technologies; Ali Din, Senior Vice President and CMO, dinCloud and Naveed Khan, Director, Vendor Management at En Pointe. dinCloud provides hosted desktop and server services and En Pointe is a Quest software VAR. On one hand, dinCloud is eager to start a relationship with Dell, whereas on the other, En Pointe, already a Premier partner of Dell has had some preliminary discussions with Dell. They are at two spectrums of the same light and both are excited about the opportunities that can be explored, exploited and consolidated with Dell as a vendor.

There was a common refrain of hope and aspiration from both dinCloud and En Pointe. Quest has lots of business units; most of the times these units and their products are not integrated with each other. The hope is that Dell will be able to assimilate and integrate the business units and products quickly. And both were unflinching in their commitment to Dell and for that matter even other vendor partnerships they have. Committed partners have the capacity to make the ‘power to do more’ and ‘simplicity at work’ even more noticeable. Combined Dell and Quest can solve big problems for IT with products and solutions that are simple to use.

Techaisle’s recent survey shows that 72 percent of SMBs agree that IT vendors should work towards simplifying technology. 54 percent also mention that their technology pain points have increased in the last 3 years and 44 percent agree that technology has become more complex to understand now as compared to 3 years ago. To these SMBs Dell may want so say, “we give you the power to do more combined with simplicity for your business”.

Anurag Agrawal
Techaisle
@anuragtechaisle

Rapid fire announcements from Intuit, all directed towards the betterment of small businesses. Today Intuit announced the availability of Intuit Small Business Revenue Index, which is based on aggregated data from QuickBooks Online. By the very meaning of the term “aggregated” it should be understood that the data is anonymous, that is democratized across 200,000 small businesses. This index is the first of its kind in the market that provides current information on monthly small business revenue. It complements Intuit’s monthly Small Business Employment Index to provide a more complete picture of the economic health of US’s small businesses based on revenue, hiring and compensation trends.

With its latest announcement, Intuit has demonstrated that it is bringing data-driven insights to small businesses, sole-proprietors; insights that were previously only available to large enterprises. This information should empower small businesses to compare themselves against benchmarks and thereby effect changes in their organizations.

It certainly places in the hands of Intuit’s small business customers, power of the data. Both the Employment and Revenue Indexes are updated monthly by Intuit which is far more often than government stats and take a snapshot that is more targeted and pertinent to small business owners. They could use it as a signal for whether it’s time to hire, cut back or increase employee salaries.

As Techaisle had mentioned in its own press release on big data on April 26, 2012, data analytics is equally relevant for small businesses. 12 percent of small businesses using business intelligence are interested in big data analytics. However, they are looking for an IT vendor or partner to collect, collate, and analyze big data and present to these small businesses as a resource, in other words, democratization of big data. The collected data is an aggregation of information being created by other small businesses within the same vertical segment or employee size category. Intuit to my mind, just did it.

Timing by Intuit could not be more perfect.

Anurag Agrawal
Techaisle