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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.
Anurag Agrawal

Techaisle survey data shows BYOD is a major force in the US SMB Market

techaisle-smb-byod-trend-end-point-device-adoption

To set the context for a BYOD discussion Techaisle’s survey on end-point technology status of SMBs provide an intriguing set of statistics through which we can assess recent endpoint trends. BYOD is clearly a major force in the US SMB market. BYOD purchases accounted for 13% of all new laptops, 17% of all new tablets, and 22% of all new smartphones purchased by US SMBs in 2013. This creates challenges for both IT management, which needs to establish methods of managing these devices, and for suppliers, who need to work with SMBIT to secure their position in the main endpoint categories, and also appeal to business managers and individual buyers to ensure that they are not left out of a major portion of the market. Techaisle’s SMB End-point survey data shows that approaches to BYOD –brand selection, reimbursement, application download and support – vary with employee size, with small SMBs leaving most of the decision, cost and support to individual users, and larger SMBs tending to involve business and/or IT management in these activities.

The survey data also shows that overall frequency of device purchases, which speaks to the erosion of the notebook market as emphasis shifts to alternative screens; in 2013, a higher percentage of US SMB employees were using tablets and smartphones than notebooks purchased within the year.

Suppliers need to recognize the distinctions that are apparent across employee size categories, and structure their offerings accordingly. IT vendors courting the very small business (1-19 employee) segment should recognize that employees are most likely paying for and supporting these devise themselves; as a result, IT vendors will need to offer financing and vendor/carrier-supplied, business-grade support options. In larger SMBs, specifically, mid-market businesses, funding and support is more likely to come from business and IT management; in these segments, OEMs are advised to establish programs that make it easy to onboard, secure and support new devices and users. In both cases, there are gaps in policies; suppliers who help businesses to establish and implement effective BYOD practices may be able to position their products favorably as a result.

SMB employees driving much of the activity is also creating sales and marketing challenge for suppliers: opportunities to sell brands and configurations that are outside corporate specifications, and challenges in aligning channel strategies to a market that includes both IT and individual employees (business management) as important buying groups.

Within the SMB context, BYOD itself comes in several ‘flavors.’ Techaisle survey data shows that on hand an SMB employee both selects and pays for a new device, delighting the CFO, but causing problems for IT. On the other, the SMB employee pays for the device, but selects it based on guidelines or an approved list – an approach (referred to in some cases as CYOD) that appeals to both the CFO and IT, but might not be completely satisfactory for the employee. BYOD can take any one of these paths and add some level of reimbursement for the purchase from the company and/or technical support for the devices, which has both upside (because the employee selects technology that he/she is comfortable with) and downside (the cost burden rests, at least to some extent, with the company rather than the employee) for the SMB business owner. And regardless of the approach chosen, some SMBs are instituting formal contracts that provide them with authorization to secure and (if necessary) ‘wipe’ employee-owned devices.

Who selects the BYOD brand?


The most critical BYOD question for IT manufacturers revolves around brand selection: is it done by the employee or the employer? Survey data shows that the answer depends largely on the size of the SMB business.

Who pays the BYOD bill?


One of the contentious issues in BYOD is the matter of responsibility for funding the device purchase. Many employees view BYOD as an attempt by their SMB employers to shift costs from the business to its staff. Many SMBs, on the other hand, see BYOD as a means of ensuring that employees have access to the technology that they like best. Some employers view paying for the devices as a means of building goodwill with staff (and/or as a means of building a basis for exerting management control over the devices), while others believe that simply allowing the devices to be connected to corporate assets represents contribution enough.

Who is responsible for BYOD support?


In our survey, we asked respondents to identify the ways in which their organizations support BYOD devices. The findings provide a fascinating insight into the ways in which BYOD devices are integrated into the corporate endpoint portfolio from no support at all to commitment to full integration of BYOD devices.

What is the policy with respect to app downloads on BYOD devices?


One of the key employee benefits associated with BYOD devices is that employees have a platform on which to run personal applications. What, though, is the implication for business applications? Are employees free to select any app that they choose, or should the business play a role in directing or determining the selection of business apps? Results from the survey suggest that the degree of formalization associated with app selection and installation varies from no formal policy to a very structured approach.

Is there a contract in place to govern BYOD use?


The final BYOD issue investigated by our survey related to the creation of contracts between employers and employees. Techaisle considers these contracts to be important to the success of BYOD strategies, as they provide explicit employee agreement to IT activities necessary to safeguarding corporate apps and data and we expect that this will become standard HR practice in BYOD-friendly SMBs over time.

About the Report

Coverage:

  • Current and Planned purchase Intentions of client devices

  • Tablet OS & Application software adoption – Behind the Screen

  • BYOD: Employers vs. Employees, or Micros vs. Larger SMBs?

  • Across the OS generations: XP, Windows 8 refresh intentions

  • The Android Opportunity: Google in the PC Market

  • Converged Mobility PCs: 2-in-1 PCs

  • PC Purchase Channel and Sources of Information


More details about the report can be found here.

Related Research Articles

Seven Key Trends and their Meaning: SMB Endpoint Device Market in 2014

SMB Purchase Intentions for Android PCs

Key Attributes of Successful SMB Mobility Solutions
Anurag Agrawal

Strong Need for SMB Cloud Channel Partners to offer Vertical Solutions

Techaisle’s SMB Channel Partner Trend study shows that there has been a big leap in percentage of SMB channel partners offering cloud computing services to SMBs in the last year across several countries. For example, in the US the percentage offering cloud services has jumped from 38 percent in 2012 to 64 percent in 2013 and another 22 percent are planning to offer cloud solutions. Similarly, in Australia the percentage has gone up substantially from 34 percent in 2012 and in Germany from less than 30 percent to over 60 percent. The biggest change is seen among the VARs. In 2012 only 34 percent were offering cloud solutions and in 2013 74 percent of them are offering cloud solutions to SMB customers. In Germany, the biggest jump has been within the SPs (Service Providers). However, not all channel partners (VARs, SPs, MSPs, SIs) have become successful in selling cloud to SMBs. Techaisle’s Winning Strategies of Successful SMB Cloud Channel Partners study finds that there are quantitative, meaningful and actionable differences between channel partners who are successful in the business of selling cloud and those that have not developed successful cloud practices.

Industry expertise and the ability to offer vertical solution is one such key area that is creating a distance between the successful and unsuccessful SMB cloud channel partners. Techaisle’s SMB studies have shown that SMBs are increasingly looking for vertical industry solutions but channels have been relatively slow in offering such solutions. Year 2014 will be important as this is the first year when SMB business issues have flip-flopped from reducing operational costs to increasing business growth and cloud-based line of business vertical solutions is an important area of investment.

Combining the data from Techaisle's SMB and Channel Partner studies we find that a significant gap exists between percent of SMBs adopting vertical cloud solutions and percent of SMB channel partners offering such solutions though it must be said that the gap has narrowed in the last 2 years as shown in the chart below.

techaisle-smb-cloud-vertical-solutions-blog-3

The Winning Strategies of Successful SMB Cloud Channel Partners study data shows (chart below) that 21 times as many successful cloud partners are offer vertical solutions to SMBs as those that are not successful.

techaisle-smb-cloud-vertical-solutions-blog-2

Most of the successful SMB cloud channel partners have product/service portfolios that are mapped to the full set of SMB technology needs: compute and storage infrastructure, applications, communications, support for test/development, and solutions addressing specific vertical requirements. The majority of unsuccessful SMB channel partners have limited their offerings to storage, backup, and basic SaaS offerings like Office 365 or Google Apps.

Some may argue that there is a ‘chicken and egg’ effect: that successful partners have broader portfolios because they have more engaged SMB customers. As with the chickens and eggs themselves, though, it may not matter where the cycle begins, if SMB channel partners that are not currently successful in the cloud wish to compete with those that are, they will need to develop portfolios that extend beyond IaaS to vertical-specific applications.

techaisle-smb-cloud-vertical-solutions-blog

Above chart from the Winning Strategies study shows that 50 percent more successful cloud channel partners than unsuccessful partners report that vertical industry knowledge is a key component of the value that they bring to their SMB customers. These successful channel partners are able to demonstrate knowledge of the SMBs’ industry, and are therefore able to create confidence within their SMB clients. These channel partners are also the most likely to build and maintain long-term relationships with their SMB customers. Unsuccessful channel partners claim that they are able to demonstrate understanding of their SMB customers’ business needs – but at a technical level – and are constrained by a lack of vertical understanding. 70 percent of unsuccessful channel partners emphasize their technical expertise during interactions with SMBs as they lack the understanding of their SMB customers’ industry vertical to be able to offer sophisticated cloud solutions. They emphasize service quality without necessarily understanding what this means in a cloud context. In addition, many of the unsuccessful partners tend to stress price when positioning cloud computing solutions.

Therefore it is imperative for SMB channel partners to go beyond technical knowledge and really understand the dynamics of industries in which their SMB customers operate and become industry subject matter experts.

Techaisle’s Winning Strategies of Successful SMB Cloud Channel Partners study covers critical differences between the activities and approaches of successful and unsuccessful cloud partners in three key areas: Business Priorities and Resource Allocations, Current and Planned Cloud offerings, Sales and Marketing Strategies and Tactics

Techaisle’s SMB Channel Partner Trend report covers: Mobility, Cloud, Managed Services, Virtualization, Backup, Data Integration, Sales & Marketing including Social Media & Lead Generation

 

 
Anurag Agrawal

Brand Equity - A New Prescription for Cisco’s SMB Channel Partner Success

Cisco and the SMB market

Cisco has established an undisputed leadership position in the enterprise market. The company combines a widely-adopted and well-integrated portfolio of networking products with a highly-skilled (and paid) direct sales force to manage/expand its presence within major accounts.

The SMB market is a separate challenge. Here, buyers are less likely to require integration across multiple network components and more likely to emphasize price. They are also more likely to receive advice/management from channel partners, further reducing Cisco’s control over the acquisition process.

Against this backdrop, Techaisle’s SMB Channel Trends research illustrates the strengths and challenges Cisco must manage, as it looks to expand its share in the SMB segment.

Cisco Commands High Trust and Reputation

Within the channel community, Cisco enjoys a sound reputation and a high degree of trust. Techaisle’s latest SMB channel partner survey shows that 78 percent of Cisco’s SMB channel partners trust Cisco, a higher percentage than is registered by competitors such as HP and IBM. Nearly 70 percent of the partners believe that Cisco has quality products – again, the highest ranking recorded within the ‘hardware leader’ group including Cisco, HP, IBM and others. However, only 52 percent mention that Cisco has cutting edge technology, a percentage lower than that for both IBM and Microsoft. Moreover, 60 percent of Cisco’s SMB channel partners say that they Like Cisco, lower than corresponding rates for HP and Microsoft, only slightly higher than is found for IBM.

In its 2013 Annual report Cisco has written, “A substantial portion of our products and services is sold through our channel partners, and the remainder is sold through direct sales.” With specific reference to SMBs, Cisco wrote, “Generally, we define commercial businesses as companies with fewer than 1,000 employees. The larger, or midmarket, customers within the commercial market are served by a combination of our direct salesforce and our channel partners. These customers typically require the latest advanced technologies that our enterprise customers demand, but with less complexity. Small businesses, or companies with fewer than 100 employees, require information technologies and communication products that are easy to configure, install, and maintain. These smaller companies within the commercial market are primarily served by our channel partners.” Techaisle’s data shows that Cisco has attracted positive attention within this channel partner community, but that its technology and relationships do not leave it especially differentiated from competitors.

Technology Shift has Created SMB Messaging Challenges

In recent years SMB technology demands have shifted to cloud, mobility, analytics, social media, collaboration, managed services and virtualization. Cisco is seeking to capitalize on this market transition through the development of cloud-based product and service offerings that enable its customers develop and deploy their own cloud-based IT solutions.

In communications channel partners in the U.S. including those specializing in the SMB segment – Cisco has been steadily driving them to offer products and services that deploy cloud, mobility, virtualization, managed services and data center solutions. This is by no means an easy task as most SMB channel partners are being actively courted by competitive vendors that also want to grow their emerging technologies’ business. SMB channel partners selling advanced technologies have an average of 3.46 vendor partnerships which average jumps to 4.21 for Cisco SMB partners, a difference of 21 percent. With this increased contention for mind/market/wallet share, it can be difficult for Cisco to manage brand identity and its related messaging.

This difficulty is illustrated by study findings showing that of all the Cisco SMB channel partners, 44 percent consider Cisco to be their top partner. The other 56 percent mention Microsoft, Oracle, HP, IBM and several others. Within the VAR/SI community, Cisco’s share of preference is 48 percent and drops to 39 percent amongst the MSPs/SPs that are viewed as critical to the success of future cloud initiatives.

Cisco’s SMB Channel Partner Brand Equity

Techaisle believes that it is time for a new metric to represent presence (and opportunities for growth) within the SMB market. Techaisle refers to this second-generation measurement approach as Brand Equity Management. It is measured by a robust proprietary index, the Techaisle Brand Equity Score (BES-360).

Techaisle believes that it is important for IT vendors to measure their Brand Equity within SMB channel partners as well as SMBs. Techaisle’s Brand Equity Score, BES-360, helps to identify areas where IT vendors can improve to increase share of wallet. BES-360 is a KPI (Key Performance Indicator) that measures the strength of brand within a segment.

Cisco’s Brand Equity Score within its SMB channel partners is higher than most competitors – but lower than scores for both IBM and Microsoft. The implication of these findings is that even through Cisco has high brand equity amongst its channel partners; it is not necessarily true that its entire SMB-focused channel base is firmly wedded to Cisco’s game plan.

SMB Channel Partner Brand Equity Measurement– the New Prescription

Breaking down the data for Cisco, Techaisle’s study finds that almost 25 percent of Cisco’s channel partners have a Brand Equity rating of 80+. This group forms Cisco’s core partners. The data also shows that almost 35 percent of Cisco’s SMB channel partners have equity of less than 40. These are the partners that Cisco needs to work on.

Interestingly, small business focused channel partners give a higher Brand Equity Score to Cisco than mid-market focused channel partners. This is a segment that Cisco should address as the mid-market has become a battleground for most IT vendors and there is yet no clear dominant player.

Among all SMB channel partners of Cisco, VARs are actually driving up the Brand Equity Score. In fact 41 percent of VARs constitute the HBE (High Brand Equity) group. On the other hand, MSPs constitute only 20 percent. In order for Cisco to continue to grow its CMSP program and build on its initial successes, Cisco has to turn its attention to the MSPs that serve the SMBs to understand the key reasons for lower brand equity which when fixed can lead to better wallet share among MSPs.

Drilling down further into the data, Techaisle finds that Cisco is not doing better within the overall managed services community than it is within MSPs focused on cloud. A higher percentage of Cisco’s HBE partners are offering managed services to SMBs whereas a higher percentage of ABE (Average Brand Equity) partners are offering Cloud to SMBs. Cisco’s SMB cloud ambitions would benefit from moving some of these ABE cloud partners to HBE segment. The HBE segment offering cloud services need extensive training on cloud solutions to become more successful in offering cloud to their SMB customers. More than 40 percent of these channel partners are working with SMB customers that have private cloud. This may be good for Cisco in the short-term but it does not represent best practice in this segment, and it is misaligned with the ongoing acceptance of public cloud as a preferred IT delivery platform.

Product resale revenue is 43 percent for HBE partners as compared to 38 percent for ABE. Similarly, recurring revenue is 57 percent for HBE as compared to 61 percent for ABE. Naturally, this bodes well for Cisco’s current revenue as the High Brand Equity partners are driving higher revenues from products. However, if Cisco plans to increasingly promote service-centric partners then a lot more work is required to identify partners with higher services revenues and move them into the High Brand Equity segment.

Practicing the Prescription

Techaisle’s brand management work is anchored in the belief that if a vendor’s brand equity is good, then it can compete successfully with vendors with lower brand equity for sales of comparable products or services. Vendors with sound products/services but low brand equity will struggle to maintain parity with competitors that have higher brand equity, even if that vendor’s products/services are (somewhat) inferior. Hence, Brand Equity Score findings help indicate potential areas of expansion or exposure as vendors, like Cisco, assess their potential for expanding the footprint of their brands within the SMB channel partner community. The composition of Cisco’s BES across its channel indicates the core strength of its brand. Techaisle’s analysis indicates that Cisco has both strengths to build on and areas requiring focus as it moves to position its next-generation solutions (especially, cloud solutions) through its channel to the SMB market.

Anurag Agrawal

Michael Dell on Global Strategy and Emerging Market Focus

michael-dell-techaisle-blog-2

Michael Dell is one of the very few CEOs I know that walks the hallways with almost no posse of overprotective PR and communications personnel. It was therefore no surprise that in my meeting with him he walked into the room unassumingly and on time to discuss his vision and focus on the Emerging Markets.

Much has been written about how happy and relaxed he looks after privatization. For me, however, the tell-tale signs of tranquility and a zip in his walk first appeared two years ago when he announced Dell’s intent to be an end-to-end solutions provider for businesses of all sizes. He had a roadmap to reach the flag at the end of a long, unpredictable race-track. And he knew that he was at the starting gate with the right set of acquisitions. He just had to make everyone believe in Dell.

Fast forward to present, privatization has emboldened Michael Dell and his entire leadership to take their message on the road that the new Dell is “100% customer focused, providing best value, ease of use & flexibility” aligned to the four tenets of Dell solutions – Transform, Connect, Inform, Protect.

Michael Dell is “Investing to Accelerate” around five key areas, one of which is the emerging markets, the topic of our meeting.

    1. Invest to expand solution offerings (R&D plus M&A plus Venture Fund)

 

    1. Enhance & Simplify customer experience

 

    1. Increase pressure in emerging markets around the globe

 

    1. Grow PCs, tablets and virtual computing services

 

    1. Expand sales force and channel relationships to better serve and support customers



Dell as a company made several major announcements at its recently concluded Dell World 2013:

    • Public cloud ecosystem partnerships with Google Cloud, CenturyLink, Microsoft Azure

 

    • Dell Red Hat OpenStack partnership for co-engineered enterprise-grade OpenStack private cloud solutions

 

    • Partnering with Dropbox to enable businesses and their employees work in a mobile work-environment while providing the security and manageability with Dell’s data protection solutions

 

    • Dell FluidCache for  SAN storage delivering over 5 million IOPS in a converged infrastructure of storage, server and networking

 

    • Revamped PartnerDirect program giving partners bigger profit opportunity than ever before – access to tens of thousands of Dell accounts

 

    • US$300 million Strategic Innovation Venture Fund to help identify, fund and fuel visionary technologies that anticipate and address future IT needs



Not all of the above announcements are applicable to and can be used by businesses in the emerging markets immediately. Therefore, I began our conversation by asking him if there is a difference in his strategies for established and emerging markets and what top characteristics defined his emerging market strategy.  Michael Dell recognizes that in many emerging market countries, there are essentially two markets (upgrade in automated environments, greenfield in businesses that are not yet automated) and therefore he has to gear up to address their needs accordingly and investing in localization of products and services for the emerging market buyers.

Looking back at my discussion with Michael Dell, I see one strategy but three approaches that are critical to Dell’s growth in emerging markets.

PC Led Go-to-market Approach

Regain its hegemony in end-point devices (excluding smartphones): by building innovative end-user computing products at extremely competitive prices. In countries like China, India and Brazil. Dell is aggressively opening its own Dell stores for customers to experience the products first-hand. Michael Dell does not view todays IT landscape as a post-PC era. He reminds me that when the term was first coined in 1999, approximately 100 million PCs were sold, but in 2012 over 300 million were sold, defying the very notion of the PC fading from view. “It certainly is not a post-PC era”, he insists.

Techaisle Take: It is certainly the right entry-point into most businesses. With global PC market slowdown, PC market penetration will continue to be driven by emerging market countries with new business formation and increase in PC to employee density. Our research shows that there are 1.26 billion addressable households in emerging markets but only one in four have a PC. Similarly, there are 44.7 million SMBs in emerging markets, but only two in five have a PC. Both of these figures indicate a huge opportunity for new PC sales as there are still 26.4 million SMBs and 994 million households that have yet to buy a PC – a huge gap indeed. Dell will need to exert more pressure than other PC OEMs in terms of customer pull: creating demand through marketing, and relying on its own stores and channel partners to close prospects after they are engaged.

 

Many of the emerging market countries are embracing mobility faster than established markets which create unique challenges for Dell to push its Tablets in the face of high adoption of Android and iOS devices. Market share of Android and iOS tablets vs. Win8 would seem stacked against Dell but one should not discount Dell’s expanded tablet portfolio including Android OS and Dell Chromebook plus well-received Win 8.1 tablets. Dell also has had emerging market success with Dell Wyse cloud clients and new opportunities with ultra-mobile cloud devices (Project Ophelia/Dell Wyse Cloud Connect) – all of which create customer entry points for Dell. Additionally, Dell’s mobility strategy extends beyond Dell-branded devices and includes software and services to ensure that any device is secure, manageable and reliable, part of the end-to-end solutions strategy.


Channel Partner Led Go-to-market Approach

Grow with channel partners:  Channel partners are the essential cogs of the IT landscape, especially for the SMBs that are so important to PC growth – and this is truer in the emerging market countries than established markets. Dell plans to continue to recruit channel partners that align with Dell’s value proposition and can add business value to a customer’s needs by giving the customers choice of best-of-breed solution components. The recent announcements of the revamped PartnerDirect program and the corresponding re-organization of its channel organization were made to address the changing needs of the channel partners across all geographies. Apart from growing the channel base, Dell is also planning to increase spending on sales/marketing within the emerging markets thereby creating enough pull in the marketplace to enable channel partners not only sell more but also sell more effectively within and across its channel friendly solutions - PowerEdge VRTX, Storage, Networking, Software, Thin Client, Workstations, and SecureWorks. However, not all solutions, especially, software solutions, can be sold without proper localization; Dell recognizes this, and is investing in R&D to make sure that products and solutions are enabled for the emerging market countries.

Techaisle Take: As per Techaisle research there are over 340,000 channel partners in emerging market countries. To support growth Dell has to have a rich landscape and integrated fabric of channel partners that are moving in unison with Dell as its trusted supplier. As Dell moves to create better alignment with the channel, it needs to be mindful of two interesting changes that are occurring within the emerging market channel partner community – members now refer to  themselves as solution providers, (not as VARs, SIs, or resellers), and they have started calling their customers “clients” much like a consulting organization would do. To be successful in emerging markets channels, Dell has to capitalize on these changes. It also has to quickly develop a timeline for the roll-out and implementation of its new PartnerDirect Programs and Incentives for countries outside of North America. Dell may not be able to make bold statements of how many accounts have been opened up (similar to the US) for collaborative sales efforts with channels but at a minimum it has still to identify named accounts that are being transitioned to channel-led, and a compensation accelerator to incent direct sales force to work with channel partners.


Solution & Services Led Go-to-market Approach

Provide end-to-end solutions for businesses of all sizes: No end-to-end solution portfolio is complete without software and applications. After a long slog, Dell software is finally coming together with its systems management offerings covering BI for IT, mobility management, data center management, cloud management as well as “connected security” that reduces the seams in a customer’s infrastructure. The software solutions are being complemented by Dell Services (which was given more visibility at Dell World than ever before, with keynote sessions led by services). Dell has achieved some great successes in countries like India within the healthcare segment, but it has still a lot to work on. In emerging markets as in North America, the mid-market segment is the primary target for Dell’s end-to-end solutions.  As Michael Dell said, “it is not easy to put feet on the ground effectively and uniformly across all countries”. He also said, “Many new change vectors are going on and Dell has the ability to understand where the puck is going”. Taken together, we at Techaisle view these statements as outlining an approach where Dell will commit resources selectively to high-growth segments within the emerging economies.

Techaisle Take: Dell is almost at the finish line with its converged solutions that include storage, security, servers and networking, the services needed to deliver end-user solutions that help businesses compute in environments with pervasive data access. Growth in sales of this type of sophisticated solutions in emerging markets cannot be cracked without the support of channel partners. Dell has to articulate a message that serves the needs of customers of hybrid solutions that combine server, storage and networking hardware with systems management and security software to seamlessly support application delivery, data protection and backup. By offering a wide range of product types, and focusing on making the selling motion as clean as possible, Dell can enable its partners to focus on customer requirements rather than product silos.

 

One early indication of the force of this direction is the fact that Dell has finally been able to put a stake into the ground with its cloud strategy. To put forth the point more forcefully Michael Dell said, “When you go with Cloud, go with Dell”. Dell’s mobility strategy has also started to take shape with aggressive roll-out of devices and its EMM (Enterprise Mobility Management) solution that includes both end-point and container management. Dell is still working on its Big Data/Analytics strategy. But more importantly, Dell clearly hits 7 out of Top 10 2014 SMB IT priorities and addresses 7 out of Top 10 2014 SMB IT Challenges. It is also in a strong position to speak to the Top 10 2014 SMB Business Issues.


Final Techaisle Take

Emerging markets are more complex than we usually imagine, having a mix of mature and very immature segments based on local infrastructure. For example, Tier 1 cities are akin to US as a country – they are advanced in their infrastructure development and employment and have a high GDP while Tier 4 cities are fast developing, less populated, in some cases even rural. When we analyze our SMB (a segment that Techaisle tracks globally) survey data across cities we see that SMBs in Tier 1 cities are the early adopters of cloud whereas Tier 3 and 4 cities although aware of cloud are constrained in their adoption by channel competency and vendor penetration. Reliable and high quality bandwidth is a critical factor in bringing the benefits of cloud to local business, one that underscores the importance of central government investment in telecommunications infrastructure and Internet access. Dell recognizes these challenges and short-comings, and the new Dell is primed to aggressively address the challenges.

There is yet no clear leader in the emerging markets in cloud, mobility and Big Data solutions. Specifically with respect to the SMB segment and the channel partners that serve it, the new IT solutions of cloud, mobility, social media, virtualization and analytics are rapidly moving SMBs from enablement to empowerment. Using technology, SMBs are reaching their full potential in the shortest period of time possible. The process of an SMB’s growth and steps to absorb IT are no longer steady and predictable as compared to five years ago. Understanding the drivers of SMB transformation and the relevance of cloud-based IT, and marketing to both customers and channels accordingly, will be critical steps in enabling Dell and its channel partners to achieve market success.

Over the last 2-3 years, Dell has heavily expanded and calibrated its enterprise solutions capabilities and more recently doubled down on further investment in its PCs and Tablet business. As the company has adjusted the levers of these key drivers for its business, it appears that these two critical areas for Dell are coming further into balance. Post-privatization Dell has begun the process of finding its feet on the ground and it knows where it wants to land. It will be a year before we will know if Dell has managed to land firmly or has caught the slippery slope.

Research You Can Rely On | Analysis You Can Act Upon

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