Techaisle Analyst Insights

As mentioned in a previous post on Marketing Automation, the adoption patterns and benefits of these applications and services differ by size of company.  In this post we will focus on the applications and functionality currently used and planned for purchase by Mid-Market companies, from 100-999 employees.

What we found in a recent SMB survey of just over 1,200 respondents is that typically, the larger the company the more likely they are to be using Marketing Automation Apps/Functions within their existing software solutions. By the time SMBs reach the 500-999 employee level, certain applications such as outsourced email and campaign management are used in 70%+ of the accounts surveyed, expected to reach 90%+ by this time next year. Other fast growing areas include Personalization, CRM Integration and Web Analytics, all expected to reach a  penetration level of at least 80% by 2013 in the upper segments of the SMB market.

Research also shows that adoption has been spurred by the changing characteristics of the market today; there is much less risk involved in adopting SaaS and/or Cloud-based software applications than there used to be - when internal groups were responsible for rolling out complex solutions involving purchase and configuration of hardware, software licenses and provisioning of datacenter services. Ability to take advantage of this Enterprise-level functionality based on a monthly subscription and minimal impact on HR requirements is a no-brainer for most SMBs.

In the coming few weeks, we will provide additional analysis from our latest including Virtualization, Mobility and Managed Services as well as Cloud Computing.

Davis Blair
Techaisle

Please click through for a quick snapshot of Current Adoption and Purchase Intentions for Marketing Automation within the US Small and Medium Business (SMB) Market:

In this WSJ article, the Congress is investigating the meteoric rise of Huawei, China’s major telecommunications equipment provider and accusing it of using technology theft and government handouts as the path to its’ incredible growth. The article insinuates that IBM is a major cause of this situation because they have shared advanced technology and management best practice approaches as a shortcut, and summing it up with:

“U.S. government concerns culminated this week in a report by the House intelligence committee that labeled the company a security threat and warned U.S. telecom companies against doing business with it.”

Huawei counters that they have spent over $400M with US consulting firms like IBM, Accenture, BCG, PWC and others since 1997, and at one point after signing a strategic agreement, they had 200 IBM consultants onsite to optimize core systems and train management in the most efficient approach expand internationally. If there is real evidence of technology theft (none in the article), that would be basis for retaliation, but it did not seem like IBM and others were complaining during the bonanza: Gerstner’s IBM made the transition from antiquated mainframe manufacturer, about to be broken up, into the world’s largest professional services provider on the back of international deals like this, and probably got a couple of large US government contracts in the process. McDonalds, Wal-Mart, Oracle and Boeing have done pretty well also, and American consumers have been blessed with an abundance of all the “stuff” they can buy for the absolute lowest price (not cost). According to the venerable Adam Smith:

“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
-Adam Smith, The Wealth Of Nations, Book IV Chapter VIII, v. ii, p. 660, para. 49.

This is a technology blog and we try to steer clear of politics, but sometimes you have to scratch your head when you read articles like this. We have written on the effects of optimization on society, including the leading role of IBM with its’ Smarter Cities initiative to build global intelligent and optimized networks.

The telecom services and equipment segment is a cornerstone of a country’s infrastructure and economic development, which is why virtually every country controlled it through government monopolies and trade barriers until global trade pressure forced them to open it – through direct pressure or infrastructure loan programs that directed spending. There was certainly value to opening the markets, as it is impossible to function in the global economy without a robust telecommunications infrastructure; the point is that there is a balance between internal development of capabilities and purchase of imported materials. We discussed this last week in our post comparing the evolution of the Internet in China and Korea. The article also hinted that trade friction was caused by onerous conditions that went into the negotiations between GM, GE and Google: “Companies such as General Electric Co. and General Motors Co. have had to contribute valuable assets and technology to participate in markets such as aviation and automobiles that China considers critical to its economy. Google Inc. lost market share after moving its Web- search and other services to Hong Kong to avoid complying with China's censorship policies.”

Some might find it difficult to find sympathy for those three - didn’t GM get a public bailout to prevent it from disappearing? And doesn’t Google own the market in virtually every country in the world except China? And how many times does GE fail to negotiate profitable terms in international infrastructure projects? By making them such a large trading partner and buyer of our national debt, we have become inextricably linked to China economically. Decisions have long term consequences.  They are flexing their muscles and  it is not the first time, nor will it be the last, especially as their economy continues to slow.

Again, from the Father of Capitalist thought:
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.”
-Adam Smith, The Wealth Of Nations, Book I, Chapter II, pp. 26-7, para 12.

In other words, China is going to do what is good for China and America is going to do what is good for America. Don’t be surprised when the pupil tries to snatch the pebble from the master’s hand.

 

Having the right information in the right context in the right format at the right time is critical to making business decisions these days, and increasingly that means access through mobile devices – whether it is the roughly 30% of consumers who own tablets or those tens of millions who get information from a Smartphone. A recent Techaisle survey of over 600 channel partners uncovered several important similarities and differences between how SMB channels are approaching three of the most important trends in the market: Cloud-Computing, Mobility Solutions and Remote Managed Services. In this post we will offer a snapshot of some characteristics of Mobility in the SMB Channel.

From a demand perspective, 60% of partners reported having SMB customers request Mobility Services, with almost 80% of ISV customers topping the list. Not surprisingly, email – the killer app, is the most used and offered service with about 50%, followed by Payment Processing with over a quarter. As we have found in other surveys, the front-office, revenue-related applications of CRM, especially among ISVs, and SFA, especially among SPs and Social Media Marketing, especially among SPs, were all being adopted by almost a quarter of respondents. We expect a rapid uptake in 2013 in the area of Mobile Analytics, which is being embedded into many front office SaaS applications in the form of dashboards and self-configured KPI management with proactive communications, or from the several cloud-based pure-play BI vendors in the market. As mentioned following the recent Citrix announcements, we also believe the market is ripe for adoption of Cloud-based Productivity Suites, which will also drive adoption of mobility among SMBs.

In many areas of Cloud Computing and especially Remote Managed Services, the big inflection point in both adoption and average spending does not happen until the 100-249 employee segment, but not so with Mobility; approximately 60% of the demand comes from the 1-9 and 10-49 employee segments, with the increase in email (across the board) and Social Media Marketing and Mobile Advertising (ISVs, SPs) driving the trend.

There are differences in the approaches, needs and challenges between SMB channel types when offering Mobility Solutions to customers, typically falling into Cost and Complexity, Management and Employee, Network and Device and Security categories. In this example, we see some key differences between the VAR/SI and SP partners related to the provision of Mobility solutions. Poor Network Service is the biggest challenge for VAR/SI partners, followed by Insufficient Network Speeds, Lack of Integration/Compatibility, and Immature Platform Choices. Both were challenged equally by Slow Performance of Mobile Apps and Device Management issues. SPs biggest challenges relative to VAR/Sis included Lack of Applications Availability, followed by Poor Mobile Web browsers, and Network and Device Issues.

As the market matures, these challenges should dissipate with increased mobile responsiveness built into websites and applications, more affordable device and data plan pricing and wider adoption of smart mobile devices. For now, the perennial SMB issue of cost and complexity of new technology balanced against perceived and demonstrated return on investment remains the most important barrier for channels to overcome.