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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.

Navigating the Perfect Storm: The struggle of MSPs and IT suppliers in SMB technology adoption

SMBs are increasingly dependent on information technology. Techaisle SMB (1-999 employees) survey found that 78% of small (1-99 employees) businesses and 97% of midmarket (100-999 employees) businesses consider technology to be “somewhat” or “very important” to their success, and 28% of small and 43% of midmarket firms report that they have become more dependent on technology over the past 12 months. These SMBs deal with an ever-expanding portfolio of increasingly-complex applications and platform technologies. At the same time, these firms are struggling to rein in IT-related expenditures, including staff-related costs. This combination of increased reliance on technology as a critical element of business success, burgeoning complexity, and cost constraint has created a ‘perfect storm’ for using managed services.

Building an effective managed services channel is a long and complex undertaking. On the positive side, many channel members participate in managed service delivery today, and longer-term trends indicate that a sizable proportion of the channel community will develop managed services specializations. There is also compelling evidence that buyers need and value managed services and that this need has been growing over the past five years and will continue to increase. However, the data also shows that channel firms need help transitioning from delivering some managed services to building viable businesses on a managed services model. To be successful, vendors will need to set objectives spanning the three-year period over which the managed services specialization will emerge and invest in the tactics (and execution excellence) required to support partners through this period.

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Dell APEX Managed Device Service - The Secret Weapon for SMBs and Midmarket Businesses

Technology advances daily; how can SMB IT resources and processes keep pace? In March 2023, Dell announced its Dell APEX Managed Device Service subscription to help SMBs and midmarket firms keep devices secure and up-to-date. Dell APEX Managed Device Service is available to buy as a month-to-month subscription at $70 per device for SMBs. Techaisle data shows that 83% of SMBs are prioritizing outsourcing their device, security, and overall IT management. At the same time, 62% are increasing their use of as-a-Service technology adoption. With Dell APEX Managed Device Service, SMBs have peace of mind knowing their IT needs are handled with Dell’s industry-leading IT management and support capabilities. From PC management to device security to expert Dell support, all in a flexible monthly subscription, this newest addition to the Dell APEX lineup delivers the immediate value small businesses need to focus on growing their business, not managing IT.

SMBs increasingly depend on information technology and deal with an ever-expanding portfolio of increasingly complex applications and platform technologies. At the same time, these firms are struggling to rein in IT-related expenditures, including staff-related costs. This combination of increased reliance on technology as a critical element of business success, burgeoning complexity, and cost constraint has created a ‘perfect storm’ for using managed services, especially services covering devices and security. As a result, managed services has become an increasingly important force within the SMB IT portfolio because its key attributes tie directly to business and IT challenges. The reasons for this intense (and growing) interest in service delivery are varied and compelling. The top two issues are “to keep IT costs under control” (49%) and “improve security” (38%).

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Xerox – an SMB IT services company you did not know about

Xerox, an innovative technology company, was among the early pioneers of PC and ethernet technologies, which are indispensable in today's digital transformation. 3D printing and digital manufacturing are some newer areas of modernization. Among the more critical innovation focus areas is CareAR, which enables live visual interaction and contextual self-guided instructions. From an augmented reality standpoint, it empowers an agent to see what the customer is seeing and walks them through how to resolve customer support issues.

Unbeknownst to many, Xerox IT services is part of the next innovation cycle within the organization. Formed out of three wholly-owned companies, ESI, Lewan, and RK Dixon, Xerox aims to expand its IT services footprint, especially in the SMB segment, which Xerox defines from 25 employees to 2500 employees. Xerox has a growing SMB-focused IT services business, working either as an outsourced provider or in conjunction with existing IT teams to provide hardware and managed IT solutions to SMB clients through Xerox locations in the US, UK, and Canada. Xerox has aspirations to be the leading provider of professional IT solutions to the SMB Market. It is a challenging aspiration, but having deep partnerships with major IT manufacturers, being brand agnostic positions Xerox well in providing solutions that fit SMB customers' needs and budget. Xerox's uniqueness and differentiation lie in its ability to listen to the voice of the customer, offering the best technology solution possible with discipline, uniformity, and consistency.

SMB portfolio of services offerings – device procurement to complex consulting

As we had written in our 2021 predictions, SMB executive and corporate interest in digital transformation is a unique business driver for IT services' scale-up. The fear of digital inequality is acute. To accelerate migration to support a mobile workforce, anxious SMBs prioritize automation, application bandwidth, and analytics, each of which requires outlay services. SMBs increasingly need support for hybrid IT environments spanning conventional and cloud infrastructure, which strains the IT staff necessitating professional services skills. There is an urgent need to provide business consulting aligning cloud capabilities with SMB's business requirements, map specific cloud services to these needs, integrate cloud services with existing infrastructure and each other, and provide ongoing support. SMB issues in servicing hardware at home are demanding home office software/hardware packs for service.

Xerox has developed an entire portfolio of offerings that address each of the above.

  • IT Hardware and Software - trusted advisor to source and support all foundational hardware and software needs
  • IT product support services – deployment, installation and configuration, PC imaging and asset tagging, depot repair, warranty services
  • IT Professional Engineering Services - Cybersecurity & device security, policy-writing, and threat assessment, Cloud technologies and migration, Data Center and network design, staffing
  • Managed IT Services - Help desk support, Virtual CIO, network admin, remote monitoring & management, data Backup & Recovery

Techaisle expects strong growth for services spend. Techaisle market sizing data shows that the US SMB and Midmarket spend on IT services will be US$244B in 2023. Data also shows that 97% of SMBs have become more dependent on technology over the last three years because technology delivers enormous productivity, efficiency, reach, and related advantages. However, these benefits are not always readily accessible to SMBs with limited resources. Moreover, the complexity associated with advanced technology can discourage firms from investing in new technologies – to the extent that 61% of midmarket firms admit to ignoring technologies even though they may be helpful to the business. And the issue is unlikely to disappear in the future: more than half of midmarket firms believe that technology adoption is becoming more complex.

SMBs seeking to keep pace with global enterprises boasting far more extensive IT resources – are increasingly reliant on technology but have a limited pool of skilled IT staff members capable of delivering the services their operations require. Techaisle's research shows that many small and midmarket firms are making extensive use of external assistance – IT services provided by suppliers, rather than internal staff – and that use of service suppliers correlates directly with IT sophistication. Techaisle's research divides midmarket operators into three groups: basic IT or firms that are "focused on delivering core IT capabilities to internal users, but lack ability to expand into more sophisticated applications and technology categories;" advanced IT, businesses that have "progressed beyond core applications and are actively working with more sophisticated solutions;" and organizations with enterprise IT operations, in which "IT is run as a business, providing enterprise-grade support to all aspects of the organization. Roughly 60% of firms in the more sophisticated groups use managed services today, compared with less than half that number for organizations with only "basic IT." And even those that aren't already capitalizing on external services are moving in that direction: more than half of sophisticated IT user organizations who are not currently using managed services plan to do so soon. Xerox is aiming to bridge the gap between fully outsourced and on-staff capabilities to reduce the digital divide.

Xerox trains its sales personnel to sell products that fit the SMBs' needs and are not limited to Xerox's portfolio. As Rich Artese, General Manager, Xerox IT Services, says, "our brand agnostic approach to IT Services enables us to design the right solution for customers while taking into account their brand preferences and budget requirements."

Not a box pusher, not a copier supplier only – but an eight-story building

Xerox is not a box pusher. It is far from it. Besides deploying and managing laptops and desktops, Xerox serves cloud subscriptions. Its in-house solution architects design complex solutions for SMB customers, whether cloud migration or cloud technologies in general or data center solutions and wireless networking.

Xerox illustrates its portfolio of offerings in an eight-story building, representing a typical technology stack, technologies that SMBs require – and require integration across – to support current and emerging business requirements. Partnerships with Acer, Dell, HP, Lenovo for computing devices fit into the bottom floor. Moving up the building takes one to managed services requiring a specific skill set, managing software, and licensing for Microsoft, VMware and Cisco. Middle of the building are infrastructure technology solutions such as data centers, networking, storage, unified communications, security, and at the top are cloud solutions. The Xerox IT Services team holds many industry certifications. In fact, one of their engineers holds the prestigious HPE Aruba Ambassador designation, which is granted to only a limited number of people.

techaisle xerox floors image blog

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