Techaisle Blog

Over the last two decades, the global small and mid-market businesses, SMB (1-999 employee size) market has been the growth engine for the IT industry at large. The reason is quite simply that SMBs account for over 80 percent of businesses in any country – developed or developing. For much of those two decades, SMBs have primarily focused on building core infrastructure with the bulk of their investment allotted towards buying PCs and desktop applications such as Office, desktop publishing and other industry specific software.  This initial phase was followed by a longer continuing phase wherein SMBs shifted their investments to Networking technologies. However, this was still part of core infrastructure investments made by SMBs.

The reason for this lengthy investment cycle was that investments occurred at different times for different SMBs depending upon firm size and geographies. SMBs form the essential thread of the economic fabric of any country and to a great extent their fortunes and investment capabilities are dependent on the economic situations and policies of the countries they represent. So as the fortunes of the emerging world turned favorable, so did the investment capacity of these SMBs. Conversely, as economies have stalled in recent times, investment capacity of SMBs has been deeply affected. 

Tough economic times bring investment decisions into sharp focus. The result is typically lower investment levels. It also sharpens medium and longer term priorities. That leads to smart investments. But also investments made at this time become longer term drivers of investment for adjacent areas. We at Techaisle believe that the recent economic implosion acts as a catalyst for such action and change among SMBs.

The New SMB Imperative: SMBs are sharpening their medium and longer term priorities leading to smart investments.
Value Shift: SMBs are now looking beyond infrastructure investments as their respective countries slowly emerge from the global downturn.
Enablement v/s Empowerment: SMBs are being driven towards empowerment technologies that are outside of normal technology adoption curve.
Empowerment Technologies: SMBs in emerging market countries show greater intentions of investing in these new priorities than SMBs in mature markets.
Implications for Channel Partners: Shift to newer priorities is and will impact channels the most in next five years.
Conclusion: New priorities bring to light new opportunities for vendors and channel partners to positively impact the success of SMBs on a global basis.

Download Detailed Techaisle SMB Point-of-View Document

G20 SMBs to spend US$455 Billion on IT in 2010 accounting for 89 percent of Global SMB IT spend
G20 Consumer/Households will Likely Spend US$96 Billion on IT in 2010 with a Household PC Penetration of 44 Percent

We at Techaisle just completed a large 10 country survey of SMBs. I will showcase interesting data from that study from time to time. One of the key things the data reveals is that small businesses are very likely to drive Netbook sales in the coming months. There are two things that the data reveals

1. SBs in emerging markets are particularly interested in acquiring netbooks

2. SBs with > 20 employees show higher purchase intent than smaller SBs

The last point is particularly interesting because while the Netbook was conceived as a low cost consumer device, it is being rapidly adopted by businesses. This has several implications

- There is significant latent demand for a low cost ultra-mobile device in business markets

- The lines between "consumer" and "business" devices in the mobile computing world are clearly blurred. Thank the Blackberrys and the iPhones for that. Any distinction now is typically propagated by device manufacturers to avoid potential cannibalization of existing products

- Computing is no longer defined solely by "Intel/AMD + Microsoft + Google". While these players remain dominant, there is a lot of entropy in this eco-system now. nVidia is spreading its wings with the Tegra chips for mobile devices and GPU based processing (already available in the MacBook Air).

While a lot of applications on these new devices will likely be purely consumer oriented, there is no doubt that the creativity of software developers will lead to interesting applications for the business world as well. For example, Tegra chips deliver 1080P HD video - a boon for consumer devices but no doubt business users could use it for HD videoconferencing and other applications.

For small businesses it will invariably mean more choices for computing on the go. Ultimately though the decision to use one device over another depends upon the applications available once the initial excitement and hype of a new user experience has waned. So while these devices will be battlegrounds, the defining battles will largely be between software companies.

More information about the survey can be found here

Abhijeet Rane

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Qualcomm and Freescale today amnounced plans to launch "Smartbooks" - a family of internet connected devices. The name is an obvious attempt to distance themselves from the Netbook category. So what are smartbooks? The primary function is to connect to the internet. The cost Qualcomm claims will be lower than Netbooks. The battery life will be longer. They will run a Linux based OS as opposed to Windows XP or Windows 7.

But is there really a market for all these devices? or are vendors segmenting the market so finely that each segment is a mere sliver? Let us consider the full spectrum of mobile devices today from smartphones to notebooks.

As shown in the chart, the space in the lower left quadrant copmprising of smartphones, smartbooks and netbooks is a key competitive battleground with potentially Netbooks getting squeezed. while both smartphones and netbooks exposed a latent need for lighweight mobile computing devices, how that space consolidates is too early to tell.

One things is clear though - the traditional business computing space is not likely to be cannibalized by these devices for two reasons

1. These devices will likely be used in addition to traditional notebooks. Further these devices (netbooks excepted) will not be running Windows which is a major problem for business adoption

2. The impending release of ULVs or ultra low voltage processors will lead to lighter business PCs running industry standard OSs (Windows)

Fighting for a slice or a sliver?

Whether or not these devices will succeed depends largely on the appetite for consumers and businesses to adopt multiple devices. Given the overlap in functionality buyers will be hard pressed to make choices about which device suits them the best. Currently smartphones and netbooks have the greatest momentum. At techaisle we believe that smartphones will win. The scenario where a smartphone such as an iPhone or an Android based phone get paired with a large screen and a keyboard is an intriguing one and could well destroy the opportunity for other types of devices. Even if that doesn't happen, the market appears poised to fragment as more devices appear. While that may increase the size of the pie, vendors could be left fighting for slivers rather than slices.

Abhijeet Rane

This email address is being protected from spambots. You need JavaScript enabled to view it.