Techaisle Blog

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.

Precision is impossible but agility and resilience are realizable. In every crisis, there is opportunity. If history is any indication then the SMBs are well-placed to narrow the banks of uncertainty. With integrative thinking SMBs will be adept at maneuvering around the edges of flames that have been fanned by COVID-19. 

Over 12 years of Techaisle tracking data paints a fascinating picture in which SMB business goals established by unexpected challenges drove new IT priorities. Klaus Schwab, Founder, World Economic Forum observed that, "In the new world, it is not the big fish which eat the small fish, it's the fast fish which eat the slow fish." SMBs are the fast fish as compared to enterprise segment.

After every downturn, SMB IT spend has rebounded higher and faster than overall (consumer + SMB + enterprise + government + education) IT spends. Techaisle had published its forecast scenarios here.

But the questions remain. Is today the same as the past? Will the future be different? We know that to be uncertain is to be uncomfortable, but to be certain is to be ridiculous. There are already many discussions and surveys conducted by various firms on today’s devastating impact on SMBs. At Techaisle we agree that SMBs are currently desperately operating between the raindrops but our objective is to square the circle, to simplify the path forward for IT vendors and channel partners and see past the blind corner.

To understand the impact of COVID-19 on future of IT we conducted a survey of N=2427 SMBs in several countries. Regardless of the uncertainty, over 50% of SMB business leaders in Asia/Pacific and some countries in Europe are optimistic and are confident about a V-shaped recovery as compared to US and UK SMBs who believe in more of a U-shaped recovery.

Download free Techaisle Take document to understand:

• Why agility and adaptability will accelerate recovery for SMBs Worldwide? Global SMB IT spend vs Overall IT spend vs GDP growth rates
• Why SMB technology and business alignment will result in resiliency, agility and adaptability?
• What will be post COVID-19 impact on business and IT operations? Uncertainty and status quo.
• What will be the impact on tech investments? Increase, decrease, delay, no change
• Will digital transformation be the agility enabler for SMBs?
• What is the current non-technology related work-from-home challenge for SMBs?

Techaisle data shows that the percent of US SMBs using web-video conferencing solutions is likely to increase from 38% to 89%, a change of 184%. It is common knowledge that cloud is being adopted by SMBs and midmarket businesses for business agility and video-conferencing is playing an increasing role in contributing to SMB agility - decision agility, productivity agility, customer agility and innovation agility - for high-growth and innovative businesses. Businesses without modern collaboration solutions are scrambling to catch up with those that are already capitalizing on the benefits video-conferencing solutions. As new adopters are learning from firms that have already made early investments in the technology, Techaisle is seeing reasons for launching collaboration initiatives rapidly evolve. A comparison of early adopters to firms that are just now embracing advanced collaboration systems finds that the pace set by early adopters is forcing other SMB firms to invest in collaboration solutions to address current and future market issues.

This next generation of SMBs & midmarket business collaboration solution adopters is responding to specific pain points, more than their predecessors and video-conferencing is figuring in their collaboration strategies, specifically because:

• They cannot coordinate meetings involving employees in multiple locations
• Customer satisfaction is declining
• The pace of decision making is too slow
• Email is not an adequate means of connecting staff with each other and with customers
• They are trailing competitors and want to catch up
• They have to keep pace with market uncertainty and want to find new avenues for business viability and growth

Survey data finds that these firms have begun using video-collaboration solutions as a reaction to business problems that are preventing them from achieving their business objectives of growth, productivity, time to market, customer retention and operating cost reduction.

The Covid-19 threat to the global economy and to the IT industry is potentially as bad as, or worse than, the health impact. A global workforce that cannot collaborate effectively cannot deliver products that rely on timely supply of components from far-flung suppliers, and cannot create and implement complex solutions. The necessary isolation used to contain Covid-19 has a devastating effect on economic activity. Manufacturing does not work when people don’t. Chinese exports fell by 17.2% in January/February of this year. The impact on solutions is harder to quantify, but may well be even greater. However, with the slowing number of new cases in China, 80% of manufacturing plants have restarted with about 60% capacity which may restore supply-chain balance by addressing supply-side constraints. The freight (including trucking) and air-cargo routes between China and Asia is returning to normal but China-Europe and China-US routes may be impacted until the middle-to-end of Q2. 

Globally SMBs IT spend in 2019 was $662B with a projected spend of US$700B in 2020, a growth rate of 5.6%. It is natural, in the current economic situation to pare down these spends and slice expectations (perhaps deeply) based on beginning-of-the-year projections. As compared to the original SMB IT spend growth rate, the projected growth rates may drop from a low of 29% to a high of 84% depending upon Techaisle’s optimistic to gloomy scenarios, resulting in revised growth rate ranges from 4.0% to 0.9%. 

SMBs are a good indicator to measure the pulse of economy in any country as they constitute over 90 percent of global businesses. They are intricately linked to large businesses, government departments and educational institutions as both suppliers and customers. A large percentage of consumers rely on SMBs for products and services that they consume within their households. Technology plays an important part in daily operations of SMBs across all departmental functions including sales, marketing, operations, finance and customer support. 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 where they operate. In a downturn and uncertainty the investment capacity of SMBs is deeply affected. Techaisle conducted a global survey of SMBs to assess their investment intent which combined with Techaisle global SMB IT spend data presents four scenarios - Ideal, Optimistic, Pessimistic, Gloomy. 

Download to read full analysis and projected small business and midmarket IT spend growth rate scenarios.