Techaisle worldwide survey of midmarket firms shows that collaboration, security, cloud, remote work and digital transformation are the top five areas where midmarket firms are increasing technology investments.

Collaboration: 72% of midmarket firms are increasing investments in collaboration solution as compared to 15% who are either decreasing or delaying investments. Collaboration is a central component to virtually all business activities and is evolving in response to new market conditions and those collaborative technology solutions are being acquired which are positioned as a framework that integrate and extend the value of discrete capabilities, rather than as a “first step” platform.

Security: 69% of midmarket firms are increasing investments in security solutions. IT security is no longer being viewed as a necessary and unwelcome cost, rather as an enabler of business solutions, a viewpoint that is reinforced by a clear need for IT security in the face of increasing threats to information security and business continuity. Effective security practices are going beyond merely “raising the shields” around users, data and networks – they are being seen as enabling innovation throughout the IT/business infrastructure.

Cloud: 66% of midmarket firms are increasing investments in cloud. Cloud addresses real-world IT issues and business challenges. Cloud represents a powerful way of addressing budget constraints: cloud infrastructure can be deployed quickly and at low cost. Cloud is linked with mobility solutions, particularly security solutions, as data that is accessed via a mobile device can be available anywhere/anytime via cloud, but remain separate from the devices themselves, protecting corporate information from loss or theft or malware. And cloud’s pay-as-you-go approach meshes very well with the need to align IT investment with business benefits.

Remote work: 65% of midmarket firms are increasing investments in remote working. Mobile devices, technologies and services are perhaps the most exciting space today, remaining resilient even in a downturn. Midmarket firms are investing to automate control of sprawling mobile assets. The list includes security solutions (MDM, mobile app security, secure mobile data sharing) that address widespread concern over the exposure that accompanies mobility, as well as methods of automating management (mobile network control, enterprise mobile management) and of deploying infrastructure tuned to the needs of mobile workers (Windows-as-a-Service, VDI, DaaS).

Digital transformation: 61% of midmarket firms are increasing investments in digital transformation. Mature cloud adoption does not equate to high digitization of the business. Data shows that only half of the 47% of mature midmarket cloud adopters are holistic adopters of digitalization. It is true that these firms believe in cloud and its effect on digitization but they also believe that true digital transformation requires advanced adoption of multiple technology solutions. The roadmap to successful digital transformation begins with the creation of a sound physical infrastructure - the ‘building blocks’ or ‘foundations’ of business infrastructure.

The long game has just begun. Competition is at bat and IBM has thrown its first pitch.

IBM calls its new PartnerWorld a reimagined business partner program. I see it as the most radical shift in the rubrics of partner engagement and enablement in IBM’s last decade. The new IBM PartnerWorld expands the program framework to three specialized tracks—Build, Service and Sell—each with tailored offers which have the potential to help partners unlock meaningful benefits faster than before and quicker than competitors. By adding the new Build and Service tracks alongside the existing Sell track, IBM is focused on aligning with the growing trend of partners shifting and expanding their models to better compete in a market driven by cloud adoption, compete better with leading hyperscalers and help partners develop new revenue streams as they create value for clients. The program focuses on three channel practicalities:

1. Driving growth
2. Enabling innovation
3. Delivering value

IBM announced a $1 billion incremental investment over three years in its public cloud ecosystem to help IBM Business Partners accelerate clients’ digital transformation initiatives and cloud adoption. IBM is expected to provide partners with architectural guidance and support.

IBM also outlined new partner resources for digital marketing, digital selling and financing including providing refunds of 100 percent on digital co-marketing activities, extending the PartnerWorld revalidation grace period so that partners do not decrease in program level or lose a competency achievement before 2021, and free Cloud/AI resources for 90 days.

IBM’s new My Digital Marketing platform (which replaces existing Digital Content Marketing Platform) is a no cost benefit for all registered IBM Business Partners and is available in 13 languages. More than a content repository, it is a marketing automation engine which can be used to execute campaigns and syndicate web content to drive demand generation and track opportunity. Staffed 24 hours a day, 5 days a week, it is billed as an end to end platform that allows a partner to plan, personalize, execute and measure marketing efforts.

Techaisle Take

It is no secret that the explosive growth of cloud over the past several years has dramatically and permanently altered the ways ‘the channel’ – especially, resellers – organize their businesses. The pressure is building on all sides of the traditional channel business model. The impact of cloud on traditional channel business models is wrenching at all levels of business operations.

Three tracks – Build, Service, Sell

Partners are invited to participate in all three tracks, regardless of their primary business model. A Build partner can develop and validate solution through new competencies and publish to the IBM Global Solutions Directory (IBM software catalog). It is not uncommon for partners to not only build their own applications but also provide services and act as resellers. Data shows that Services’ success depends on Build and Sell, Build’s success depends on not only themselves but also Sell and Sell channel cannot sustain sales cycles that are longer than 6 months. To drive success for the Build channel – which seems to be IBM’s focus to catch-up with AWS and Azure - IBM plans to rely on its Business Partner Connect platform that encourages partner to partner connection. With an instant match capability, IBM Business Partner Connect is designed to accelerate solutions for end-customers by matching partners looking for assistance with partners offering expertise. The three tracks together with Business Partner Connect are essential cogs for the ecosystem to thrive.

Ecosystem is nice but revenue is essential. Vendor suppliers who assemble catalogs of tested, interoperable solutions provide a service to customers and those who enable sales of these products do a service for ecosystem members. Enabling sales will likely be a challenge for IBM. But in the words of David La Rose, GM, IBM Partner Ecosystem, “we are at the start of a journey”.

Enabling innovation

Techaisle data also shows IP-led solutions will be key to partner success. By the end of 2021, 40% (from current 29%) of channel partners’ cloud revenue may be attributable to products they have built internally. A key aspect of IBM’s Build track (develop own IP) is the basket of incentives – cloud credits, techline pre-sales and consultation, dev/test support and marketing/sales support. This moves partner go-to-market support needs well beyond traditional market development funds (MDFs) to what we call as Solution Development Funds incentives; vendor programs and sales approaches will need to further evolve to meaningfully attract IP-oriented channel partners. In fact, for 47% of partners, solution development funds are more important than MDFs (which is at only 21%).

More than 50% of cloud partners have one or more cloud app development capabilities and MS Azure is the hyperscaler of choice. But the real race is between GCP and AWS and surprisingly a higher percent of partners are building in-house expertise in GCP over AWS. The question is if IBM’s $2500, $15000 and $85000 cloud credits are good enough to attract and retain partners when AWS, Azure and GCP offer significantly more. The answer lies in IBM’s commitment on customer incumbency in areas of specialization – financial services, cognitive, industrial and automotive and regulated workloads specifically focused on app modernization and migration services. Furthermore, there are opportunities for partners to purchase cloud booster packs. In the enterprise package, the cloud booster packs are unlimited, therefore the partner can gain access to as many cloud credits as they want through this program.

Driving growth

For 42% of channel partners, driving growth is the top business issue for the next one year, especially with a clear focus on increasing effectiveness of sales and marketing. Driving growth is also a function of digital discovery. To maximize addressable market, channel partners need to embrace digital marketing as a way to gain entry to accounts that have not yet self-identified as prospects. Marketing has not been a major focus for most channel businesses, and those that have invested in marketing staff have typically tasked them with optimizing access to vendor investment (MDF, etc.) funds. Marketing’s need to add advanced digital competencies is challenging most channel firms. To that extent, IBM is providing My Digital Marketing platform that supports content and digital marketing to ensure their partners are in a position to engage with the largest possible number of prospective clients.

Delivering value

IBM’s messaging around “delivering value” is about IBM partner packages and partner support desk. Partner Packages deliver value by giving IBM partners the flexibility and scalability for learning, development and test. IBM Support Desk delivers value for the partner by providing on-boarding and continuous support of navigating the PartnerWorld Program to ensure the partner takes advantage of all benefits available to them. Essentially, IBM is doing what in fact is a default expectation of almost every partner, which is, simplifying partner experiences.

However, increasingly, a vendor’s perspective on delivering value is less relevant than the buyer’s view of whether/how their suppliers are creating value for their businesses. In other words, value begins from the customer - the channel partner’s customer. IBM needs to ensure its channel partners’ sales and marketing resources and customer commitments align with business outcomes rather than technical thresholds.

The long game has just begun. Competition is at bat and IBM has thrown its first pitch.

The above article is a synopsis. Download for free detailed Techaisle Take report here

Techaisle worldwide survey of 2427 SMBs shows that collaboration, cloud, security, mobility and PCs are the top five areas where small businesses are increasing technology investments. Each of these address current business challenges and lay the foundation for the five pillars of small business digital transformation: 1/ achieve cost efficiencies, 2/ initiative innovation, 3/ enable operational efficiency, 4/ drive business growth, and 5/ empower organizational productivity.

Collaboration: 66% of small businesses are increasing investments in collaboration solution as compared to 19% who are either decreasing or delaying investments. Collaboration is a critical solution priority. The enormous reliance on mobility, the trend towards flexible work within small businesses and the general trend of including customers within the framework of collaboration solutions have all contributed to much broader demand for collaboration solutions. Use of collaboration solutions within small businesses started as file-first but has quickly transitioned to person-first. The central requirement for a collaboration solution is the ability to share files from desktop or mobile devices, the second is to enable online interaction, and the third is to provide richer media and media escalation for person-to-person communications.

Cloud: 64% of small businesses are increasing investments in cloud. Cloud is no longer a trend that is discrete from mainstream IT. This shift in cloud’s positioning has brought with it a shift in the kinds of insights needed to help connect suppliers and buyers to address common interests in deployment, integration and expansion strategies. Small business buyers are needing help in moving past initial cloud pilots and applications to integrated cloud systems that provide support for mission-critical processes. Vendor suppliers need to adjust their messaging to address the needs of early mass market rather than early adopter customers.

Security: 61% of small businesses are increasing investments in security solutions. Although data shows that small businesses are more optimistic than they ought to be about their current security profiles, security is an important constraint on mobility within the small business segment. Vendor suppliers need to help small businesses to establish frameworks that protect against both external and employee threats to information security.

Mobility: 59% of small businesses are increasing investments in mobility solutions. If the “office” is defined by devices, so too is “workplace” defined by the ability to work from wherever those devices (and their users) are located. Small businesses are investing in mobility because it contributes to both cost savings and increased market reach, with “improved productivity” and related answers connected to establishing “better ways of working” viewed as the greatest benefit of mobility within SMBs. Techaisle’s data shows that there are inherent challenges in supporting the mobile workforce: struggle with the “on ramps” to mobility (such as finding appropriate suppliers and solutions) and concerned with security/data protection and mobile management.

PCs: 56% of small businesses are increasing investments in PCs. PC is where work gets done. PC is still the centerpiece of business productivity and buying a new PC is likely to have a more significant impact on productivity than any other technology. Modern PCs deliver more than an incremental improvement in performance, manageability and security features and even price conscious small businesses benefit significantly from replacing older PCs with modern PCs.

There is a strong connection between cloud, mobility, collaboration. Mobility, cloud and collaboration are all important trends in today’s IT market, and Techaisle data indicates that they are tightly interconnected. Mobility is a key driver of collaboration demand, with worldwide total of 292 million small business mobile workers looking for framework technologies enabling them to connect with suppliers, customers and each other. At the same time, collaboration is seen as a key attribute of successful cloud solutions, with more than one-third of small businesses citing “the ability to provide or support collaboration” as a key success factor in cloud solutions.

Techaisle’s worldwide survey of N=5505 SMBs covering 1-999 employee size segment reveals that 34% of small businesses (1-99 employees size segment) experienced one or more cyberattacks in the last one year. The percent jumps to over 50% when mobility security attacks and internal malicious thefts are included. Technology is to businesses in the 21st century what roads and assembly lines were in the 20th: the platform on which all processes are based, on which all business is conducted. But with the limitless potential of IT/business infrastructure comes a vast and growing set of threats. Small businesses cannot simply rely on regulators or the ‘rules of the road’ (from telcos or hyperscale cloud providers) for protection – they need to take action to safeguard their customers, their staff, their devices and their confidential corporate information.

Large enterprises have the means to hire SWAT teams of infosec professionals. But what can and should smaller businesses do, to grasp the potential of technology without opening themselves up to cyber threats? Survey data shows that only 3% of small businesses have full-time internal dedicated IT security staff. Let that data point sink in. Regardless of the relatively tiny presence of security staff, as compared to 87% within midmarket firms and 100% in enterprise segment, 55% of small businesses are currently handling their security needs internally and if the projected plans are followed-through then it will increase by another 25%. However, small businesses are not naïve. 61% are also outsourcing either all or some of their security needs to MSPs and other channel partners and plan to increase their outsourcing commitment by 41%. For 37% of small businesses, insufficient IT budget is a major constraint towards seeking outside expert advice, deployment and security management. Although 55% of small businesses are confident about recovering from a cybersecurity incident, 32% are quick to admit that they need external services to define an overall security strategy, help select right-fit security technology/products and assist in determining the risks faced by the organization.

The next question is - what worries small business executives?