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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Midmarket Hyperconverged Infrastructure adoption driven by Cloud and Hybrid IT

Techaisle’s global Midmarket Converged Infrastructure (CI) and Hyperconverged Infrastructure (HCI) adoption trends survey report(s) show that 28% of US midmarket firms are currently using HCI solutions and another 46% are planning to adopt in the next 1-2 years, more than doubling of penetration. US data is based on a survey of N=609 midmarket firms. Highest potential adoption rates are within midmarket firms that have a holistic digital transformation strategy, are born-in-the-cloud and are rapidly moving from Advanced IT segment to Enterprise IT segment. Input to HCI market positioning and marketing communications begins with a perspective on the drivers that lead midmarket firms to embrace HCI solutions. Survey data illustrates that three drivers – improved operational efficiency, cost reduction and improved scalability – are the most frequently-cited reasons for embracing HCI. Issues connected to core infrastructure renewal, “hardware upgrade” (34%), “data center consolidation” (29%), and “improved backup/DR” (27%) round out the list of top-rated drivers.

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The growing importance of IT and Security to SMB business

It is evident from even a casual tour of a modern SMB office that IT has become integral to business activities. Email and communications systems that meld conventional, web-based and mobile phones; and social collaboration tools on the web and within offices provide the basis for connections between companies and customers, across processes and with suppliers, and between staff members. Productivity applications like spreadsheets, graphic presentation packages and word processors enable users to complete tasks, while enterprise applications capture and report on financial data and organize processes.

Given the nearly-ubiquitous nature of IT, it is fair to wonder: are we “there” yet? Have all of the technologies that one needs been deployed? Results from a recent Techaisle survey of 1455 North American SMB IT managers (ITDMs) and business decision makers (BDMs) conducted by Techaisle indicate that there is still a voracious appetite for new IT-based business solutions. Asked to evaluate the business importance of current IT developments, 77 percent of SMB survey respondents reported that new IT systems would have a very high to high impact to their organizations. Only 6 percent believe that new IT products and services will have little impact on their businesses. Clearly, SMB BDMs and ITDMs agree that new technology will play an important role in making their businesses more profitable, and their employees more productive.

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The twin ladder approach to delivering digital transformation for SMB and Midmarket firms

Techaisle's most recent survey of 1600 SMBs & Midmarket firms (defined as 1 employee to 1000 employees), found that only 18% do not have any form of digital transformation initiative. Which means that 82% of SMBs are already on their digital transformation journey. And interestingly, 42% are taking a holistic view of digital transformation. What it means is that these 42% believe the Internet and digital technologies impact every aspect of the business and must become a core part of organizational strategy. What is more encouraging is that SMBs believe that in the next 2 years, 32% of their business activities would be digitized and increase of 30% from 2 years ago. Globally SMBs are expected to spend US$250 billion on digital transformation in 2018.

Techaisle’s extensive research also identified that successful implementation requires a journey through digitization and digitalization, from substitution to augmentation to modification and redefinition, spanning all of the functions in an organization and all of the technology used to support its activities. Based on both quantitative survey and depth-discussions with SMB and midmarket businesses on the transformation journey Techaisle has developed the twin ladder view of digital transformation. Figure below presents a single-image depiction of the ‘twin ladders’ of digital transformation. The bottom set of steps is labelled “the technology ladder,” and stretches from the deployment of modern, flexible infrastructure to advanced IT-enabled capabilities. The technology ladder begins with the building blocks needed to establish infrastructure that is capable of supporting digital transformation. It includes mobility, virtualization, hyperconverged infrastructure & converged infrastructure and other technologies essential to provisioning advanced IT services. Businesses need to deploy and make use of the building blocks and platform technologies before they can launch initiatives that are truly transformative for their businesses and customers.

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Techaisle research shows SMB and midmarket technology purchase process becoming more complex

We are in the midst of a transition from an IT industry shaped by small decision making units (DMUs) comprised of IT professionals to an industry that must respond to the varied needs of BDMs and ITDMs. This makes for a very complex selling environment; many IT suppliers would no doubt like to have ‘the genie hop back into the bottle,’ as many members of their sales and marketing teams lack the skills and understanding needed to sell to BDMs.

Techaisle research on SMB and Midmarket buyers journey and decision-making shows that ITDMs and BDMs have differences in ‘care-abouts, are focused on applying IT to different business objectives, have different perceptions of success measures, and use different information sources. The data is not only helpful in building relevant marketing messages, but also serves to underscore the complexity of working with a diverse DMU. This DMU becomes further complicated with the presence of IT conversant business specialists (embedded IT staff), increasingly residing within line of business units, reporting to business, and away from IT.

  • Business management has seized a much greater role in technology acquisition, deployment & management than IT management – varying from 3.4X in “needs identification” to 2.0X in “solution evaluation & selection”
  • Within small businesses, business management plays a more influential role than IT in five out of nine stages of technology solution adoption
  • Within mid-market businesses, role of business management is predominant in the first three stages of decision making (needs identification to solution options), equal to IT in the next two (solution evaluation & selection) and substantially higher than IT in the last two stages (determining solution effectiveness and optimization)
  • In nearly 1/4th of small businesses and slightly over 1/3rd of medium businesses, technology specialists (embedded IT staff) are employed within Business Units not reporting to IT management. In nearly 50 percent of midmarket firms that have IT specialists, they are the primary decision makers
  • Determining the need for new cloud business applications is the prerogative of business management. The balance of authority within SMBs is nearly 7:1 in favor of business management except in the case of mid-market businesses where it is nearly 2:1
  • Ad-hoc purchase and deployment of new cloud business applications is prevalent within 22 percent of mid-market businesses
  • In 15 percent of SMBs budget for new business application is usually created at the time of ad hoc decisions for purchase to meet business needs
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