Suppliers Incorrectly Addressing SMB Cloud Market: Techaisle
Cloud is clearly established within the US SMB market, in a way that is unique in the global context: nowhere else have the vast majority of SMBs leapt into the cloud and is gaining acceptance in Asia/Pacific and Europe. In India, particularly, Cloud is being seen by SMBs as solving real business problems. But most suppliers are peddling their technology assets, focusing on non-viable channel relationships and showcasing wrong-sized solutions for workloads that have very short acquisition & deployment time window.
Rightsized IT for workloads
In the above context, ‘unique’ means that suppliers will have to navigate uncharted waters as they chart their strategies. There is some insight to be gained from the experience of large enterprises. Techaisle cloud survey data shows that SMBs are moving quickly beyond the exploration stage of cloud to hybrid IT strategies that meld on-premise and cloud resources into a unified platform that is responsive to workload needs, ‘rightsized’ with respect to provisioning needed resources, and manageable via automated tools. Techaisle SMB cloud adoption report shows, there is evidence that many SMBs have already moved along this path.
Short line between technology acquisition & deployment
Similarly, it could be argued that like their larger peers, SMBs will move quickly to embrace advanced methodologies (such as DevOps/Agile) and technologies (such as containers). For all of the cloud momentum in the SMB market, SMBs are not large enterprises; they do not have the depth of resources and the breadth of operations that will allow them to test new options in a meaningful sandbox and migrate them to production once they are understood and proven. SMBs manage workloads with a much smaller staff, typically comprised of IT generalists, and are most likely to have limited infrastructure resources available for exploration. In the SMB market, there is a very short line between acquisition and deployment of new technology. SMBs have fewer chips to place on the table, and need to quickly reap return from their investments.
Uncertain cloud supplier-channel relationship viability
The difficulty that the channel has had in embracing cloud within its operations and portfolios is another complicating factor in understanding how cloud is likely to evolve in the SMB market. SMBs have relied on the channel for strategic guidance, planning support, technology implementation (and the end-user guidance needed to translate IT potential into business benefit), and both technical and business support. If the channel can’t find a way to profitably work with the cloud – and/or if cloud suppliers can’t find a viable way to work with the channel – the evolution of cloud from an edge technology to the resource at the core of IT service deliver will be slowed.
Less importance on cool technology, more focus on easy-to-deploy solutions with direct link to business benefits
Techaisle believes that these challenges are surmountable, and that they will be addressed – but the path itself will be rocky for many suppliers. With broad penetration, the SMB market is beyond the point (except, perhaps, for AWS and Microsoft, and possibly Google) where cool technology will be a compelling factor in building market leadership. In a widely-penetrated market, growth relies on delivery of integrated, easy-to-deploy solutions with a direct link to business benefits, available through a broad network of motivated suppliers. In the large enterprise market, suppliers like SAP and Oracle have succeeded in establishing these conditions. In the SMB market, Microsoft (with both Windows and Office) has shown how integration and a robust channel can build ubiquitous presence; HP (printers) is another good example of how a product company can build this kind of traction.
Leaders will be determined by what they do to address key customer needs in the future, not by the assets that they bring to the table today
There is, however, no real analogue in the SMB cloud market. AWS is a clear cloud market leader, but its strength is with a technically-savvy developer community – not a group that is representative of the SMB market as a whole. IBM, for its part, relies heavily on its massive services organization for customer success – but this, too, is not a model that can be overlaid on the SMB segment.
There are reasons to believe that Microsoft (presence, channel expertise), Google (ubiquitous in the browser, and with substantial Apps adoption) and Salesforce (strong application category leadership, well-integrated ecosystem) can build success in the SMB market. But suppliers like Salesforce have many SMB related issues such as learning curve, data extraction, price complexity, data size limitations and overall attitude of its sales staff toward SMBs.
However, focusing on these firms misses the main point of Techaisle’s cloud survey and report(s) analysis. Rather than start with what individual suppliers do today, it is best to start with what small and midmarket firms are doing with cloud, where they are going, and what they need to be successful. The market ‘pie’ for cloud in the SMB market is not yet baked: leaders will be determined by what they do to address key customer needs in the future, not by the assets that they bring to the table today.
For more details and coverage on Cloud please visit www.techaisle.com/cloud-reports
(The author is heading Techaisle, a data-driven global SMB IT Market Research and Industry Analyst organization. He is a veteran Market Research executive with over 25 years of proven track record in market research and data analytics.)
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