SMB Technology Market Predic5ons in detail 

2012 Top 10Sanjeev Aggarwal

Laurie McCabe

SMB Group | 17 Lancaster Rd., Northborough, MA 01532 | 508‐410‐3562 | informa5on@smb‐gr.com

Economic Anxiety Lowers SMB Revenue Expectations & Tightens Tech Wallets

To loosen tight SMB purse strings, vendors must :

•Deliver a rock-solid case for how their solutions help address top SMB

challenges--attract new customers, grow revenues and maintain profitability.

•Broaden subscription-based cloud solution options

•Offer flexible, alternative financing

• SMBs are less confident about their revenue prospects for 2012 than

they were in 2010

• Many SMBs are tightening their tech wallets: more SMBs are

forecasting flat or decreased IT spending for 2012 compared to

2011.

1

77%

56%

77%

63%

Smallbusinesses

expectinggrowth

Mediumbusinesses

expecting growth

2011

2012

2011

2012

The SMB IT Progressives Gain Ground

Technology vendors need to:• Develop different marketing campaigns and more sophisticated solutions for Progressive

SMBs to win in this very important segment.

• Progressive SMBs plan to increase IT spending--they see technology

as vital for business transformation, creating market advantage and

leveling the playing field against bigger companies.

• Progressive SMBs are more likely to rate factors such as easier to

customize for my business, strong reputation and brand and ability

to provide local service and support higher than other SMBs.

2Investing more

73%expect revenue

increase in 2012

Investing less

only17%expect revenue

increase in 2012• They invest more on technology and see the

results in terms of higher revenue expectations.

The SMB Social Media Divide Grows

Technology vendors need to:• Provide the “have-nots” with better social media guidance and easier to use, better

integrated and more affordable social media management solutions.

• These “strategically social” companies use social media for more activities, use more channels and are more satisfied with the business results than more informal, ad hoc social media users.

• Ad hoc users say that they don’t have enough time to use social media effectively; they can’t decide what social media strategies and tools will work best; it’s too difficult to integrate social media with sales, marketing, service and other business processes; and that they are unable to measure value from social media.

• SMB social media “haves” will gain business ground on the “have-nots” in an exponential manner.

3SMBs already

using social media

50%

SMBs who plan touse social media inthe next 12 months

25%SMBs who take a strategic andstructured approach to social media

50%

4In the past 24 months

% of small businesses purchased or upgradedcloud accounting/ERP solutions,

7%

Cloud Becomes the New Normal

Technology vendors need to:• Recommend cloud computing based on reduced capital costs, speed to deploy, real-

time collaboration and visibility-compelling.• Cater to demand for anytime, anywhere any device mobile access to applications

will also accelerate cloud adoption

SBs that plan to purchasethem in the next 12 months. 

 

13%• Demand for cloud-based solutions is accelerating in almost all

solution areas.

• Areas that show the biggest potential for cloud gains in 2012 are

marketing automation, business intelligence/analytics, and desktop

virtualization solutions and services.

5 Mobile Application Use Extends Beyond Email to Business Applications

5-49employees

• SMBs plan to significantly increase spending on mobile devices and services in the next 12 months.

• Mobile use of collaboration apps (email, calendar, etc.) is now mainstream.

• SMBs are now mobilizing business applications.

52% 59% 59% 69%

The strongest areas for current and planned mobile app use :

Mobilepayments

Customerinformationmanagement

Fieldservice

Timemanagement

Highest increase spending on mobile devices and services in companies with :

>50employees

<5employees

6 Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate

mediumbusinesses

•! Roughly a third of SMBs use or plan to use cloud-based BI and analytics solutions—and an expanding array of cloud options will make it easier and more affordable for more SMBs to deploy these solutions.

Purchased/upgraded a BI solution

smallbusinesses

Within thepast 24 months

In the next12 months

16%

16% 29%

28%

• The social-mobile-cloud triumvirate will fuel new and increased SMB investments in this area.

• As SMBs try to get a better handle on customers’ and prospects’ opinions and influence networks, interest in sentiment analysis and social graphing solutions will grow.

• New mobile access capabilities and applications that provide SMBs with just the information they need, when and where they need it, will spur interest as well.

1/3

7 Managed Services Meet Mobile SMB adoption of mobile phones and

tablets is now on par with that of traditional landline phones.

• Many SMBs will continue to use existing on-premises apps even as cloud momentum grows.

• SMBs will continue to grapple with IT infrastructure management—even as new mobile device management and governance challenges grow.

• Many employees are more likely to lose a smart phone than a laptop, which increases security issues.

• The “bring your own device” (BYOD) phenomenon creates additional concerns, not least of which is to create a firewall between personal and business data.

The opportunity for vendors :

• Ample opportunity for wireless carriers, networking

vendors, MSPs and others that can provide integrated

and automated managed services that encompass

management of cloud-based infrastructure, all end-

point devices, and network services.

8 The Accidental EntrepreneurSpikes Demand for No-Employee Small Business Solutions 27 million

small business companies

Annual sales

$887 billion.

• According to the U.S. Census Bureau, small businesses without a payroll make up more than 70% of America’s 27 million companies, with annual sales of $887 billion.

• More accidental entrepreneurs view what they’re doing as a long-term business venture instead of a short-term stopgap.

• They see themselves more as business owners than as freelancers or contractors—but they have no intention or desire to hire employees.

• This will spike demand for—and growth of—applications and services that help them to achieve their business goals without adding employees.

70%

30%

Small businesseswith no payroll

Small businesseswith payroll

9 Increased Adoption of Collaboration and Communication Services in Integrated Suites• The SMB pendulum is swinging from point solutions for

voice, communications, social media and collaboration solutions to integrated suites.

• Small businesses are slower to make this leap, but a transition is under way here too.

• By moving from disparate point solutions to an integrated offering, SMBs can avoid the hassles of learning to use multiple user interfaces, going to different sites to login and remembering different passwords—in short, things that waste time and frustrate users.

• They also can lower costs and improve their ability to collaborate effectively.

• A growing roster of low-cost (or free), easy-to-use integrated collaboration suites are adding fuel to the convergence fire—although vendors will still need to address the obstacle of user resistance to learning something new.

28% 35%

Medium businesses usingIntegrated collaboration suite

currently using will do so in the next 12 months

10• As with any significant inflection point, the cloud-social-mobile trend necessitates that older

partner models continue to move aside as new, more relevant ones take shape.• Cloud computing reduces the need for hardware, software and infrastructure deployment skills,

and ups the ante for educational guidance, business process transformation and integration skills.• Non-traditional IT partners, such as creative and marketing agencies, have stepped in to fill a gap

by providing social media and digital marketing services for solutions such as Radian6 and HubSpot

• Partners need to bring more mobile know-how to help SMBs develop and implement mobile strategies, and offer solutions to manage mobile devices and applications and provide better network performance, reliability and redundancy.

The IT Channel Continues to Shape-Shift

HARDWAREConsulting

andBusinessSolutions

ManagedServices

CloudMobileSocial

Information

ERP

I n t e g r a t i o nSecurity

Search

Managed Mobility

VoIP

Content

B u s i n e s s P r o c e s s

Cloud Services

Collaborate

ECR

M

Marketing AutomationVirtualization

An

aly

tics

SMB GROUP, INC.

The SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is composed of many smaller, more discrete markets. Within the SMB market, the SMB Group’s areas of focus include Emerging Technologies, Cloud CompuKng, Managed Services, Business and MarkeKng ApplicaKons, CollaboraKon and Social Media SoluKons, IT Infrastructure Management and Services, and Mobile SoluKons. Read our 2012 Top 10 SMB Technology Market PredicKons for our views on game changers in these and other areas of the SMB market.

Click the links below for informaKon about  our SMB market studies:

2010 SMB Mobile SoluKons Study, December 20102011 Impact of Social Business in Small and Medium Business Study, April 20112011 SMB CollaboraKon and CommunicaKon Study, September 20112011 Small and Medium Businesses Routes to Market Study, November 20112012 SMB Mobile SoluKons Study, February 2012

SMB MARKET STUDIES