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99.7_ of firms in the Canadian market have less than 500 employees

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99.7_ of firms in the Canadian market have less than 500 employees Powered By Docstoc
					99.7% of firms in the Canadian
  market have less than 500
          employees     991796




                                 31284
 Number of Businesses




                                          14433
                                                     6846

                                                                 1595         1178
                            Small
                            97.7 %            Medium
                                               2.04%               Enterprise
                                                                      0.26%


                         1-49    50-99    100-199   200-499     500-999      1000+
                                     Company size by employee
                                                    Source: Stats Can, Business Register June 2003
  Canadian SMB IT market spending hits
      C$9B in 2004…and growing!
$11,000 $9.08B $9.38B $9.67B $9.94B $10.2B         • 2004-2008 CAGR:
$10,000                                            • SMB (1-499)         3.1%
                                                   • Small (1-99)        2.6%
 $9,000
                                          $2,035
                          $1,860                   • Med. (100-499)      3.4%
 $8,000   $1,719                                   • Hardware            1.8%
 $7,000
                                                   • Services            4.2%
                                          $3,437
                          $3,131
 $6,000   $2,897                                   • Software            4.3%

 $5,000                                            • SMB Market Drivers:
 $4,000                                            • Services
 $3,000                   $4,682          $4,787   • Replacement cycles
          $4,464
 $2,000                                            • SMB Market Inhibitors:

 $1,000                                            • Canadian Economy
           2004    2005    2006    2007    2008    • IT Credibility
     Hardware         Services        Software
                                                          Source: IDC Canada October 2004
          SMBs account for 27% of
         Canadian IT external spend
                               Home
                                10%   Small
                                       11%
                                              Coverage Challenge
Competitive Challenge
                                              Medium
                                               16%


      Enterprise
         46%


                                         Large Small        1-99
                                          18% Medium        100-499
                                               Large        500-1000
                                               Enterprise   1000+
            Source: IDC 2004
              What telecom projects are
                 SMBs adopting?
At what stage in the implementation cycle are the following telecom and communication infrastructure projects over
the next 12-18 months?


                Internet connectivity                                     75%                            7% 16%

                     Network security
                                                                     61%                           18%           17%
                      infrastructure

           Virtual private networks                            46%                    15%                37%

                 Wide area networks                          42%                  9%                  46%

          Teleworking/Mobility/UM                         32%                 20%                     43%

                        Wireless LAN's                24%               22%                         52%

           Call centre technologies                16%       8%                            74%

              Implementation Complete/Rollout in Progress             Acquisition/Piloting/Considering         No Plans
                           VoIP Usage Remains in Infancy
                                   Stage - SMB
N=400;Does your organization currently use VoIP? Is it the predominate system in your
organization?

                                      0.00%
                            200-499
                                                        4%
Company size by employee




                                        0.50%
                            100-199
                                                                                         10%


                                         0.90%
                              50-99
                                                                  6%


                                       0.30%
                               1-49
                                                                         7%

                                                 VoIP - Usage   VoIP - Predominant

                                                                                     Source: IDC Canada, 2005
           Primary Benefits of VoIP
               Adoption - SMB
N=400; Which of the following do you consider to be the primary benefits of adopting a
VoIP solution?

        Reduce cost of
           business
                                                                                 24%
          operations
                                                                                   26%

     Long distance/toll                          10%
         savings                                                       19%
       Reduce cost of
      Telecom/network
                                                           14%
         operations
                                           7%

    Improve employee                                      14%
         mobility                          7%

    Improve customer                  5%
       interactions                                  12%

           Source: IDC Canada, 2005               Small 1-99   Medium 100-499
           VoIP Triggers for Adoption -
                      SMB
    N=400; From the following list, what event(s) or issue(s) actually triggered or would
    trigger the adoption of a voice over IP solution? – all that apply


       Replacement of PBX equipment
                                                                                          64%
                                                                                       58%

Want to fully leverage existing IP-based                                     47%
                 network                                                   42%

                          Re-organization                                 40%
                                                                         39%

                         Office relocation
                                                                        38%
                                                                        38%

            New office/branch opening                                 34%
                                                                         42%

         Critical business issue or pain                              34%
                                                                        39%
                Source: IDC Canada, 2005                 Small 1-99   Medium 100-499
    Primary Business Inhibitors to
        Adopting VoIP - SMB
N=400; What are the TOP business inhibitors preventing adoption of a voice over IP
solution?
 Capital investment                                                                  37%
   is too costly                                                    26%

 Don't fix what isn't                                         21%
       broken                                                 21%

  Lack of business                               15%
       needs                                                  21%

Senior management                          10%
    resistance                                    16%

Waiting for a robust                  7%
application/solution                        13%

           Source: IDC Canada, 2005              Small 1-99   Medium 100-499
    Primary Technology Inhibitors
       to Adopting VoIP - SMB
N=400; Of the choices you selected, which would you consider your TOP technology
challenge?
          Cost of upgrades to existing IT                                     30%
                   infrastructure                                           28%

                   Quality of service issues               12%
                                                            14%

Network can't carry additional data traffic                      17%
                                                      7%

        Current technology doesn't meet               7%
                 business needs                            12%

                             Security concerns          10%
                                                       9%
        Legacy IT/ Telecom environment                8%
                    concerns                         7%
           Source: IDC Canada, 2005                      Small 1-99   Medium 100-499
           Who has influence in the
            ‘Identify Need’ stage?
Within your firm, who plays the largest role in influencing the formal purchase
decisions at the „Identify Need‟ stage of the technology acquisition cycle in 2004?


                                                IT Manager & Bus Executive
 IT Manager

                       54%
                                                                    47%
                                                                       43%

                             20%
  5% 5%6% 3%                    8%                                                7%
                                               3% 0% 0%0%

               100-499                                      500-999

    CEO                         CIO                         CFO
    CTO                         IT Manager                  Business Executive
    Executive Committee                                            Source: IDC, iPanel 2004
       Unlike enterprise market - SMBs buy on
           pain, where need triggers action
                        Window of Opportunity




Pain




                                    Time
        Inefficient Sales Efforts
                                                  Typical Selling Cycle
                                      SMB Technology Buying Behaviour
‘Need’ originates from both internal
   and external forces for SMBs
What influence do the following groups have on WHAT technology
products/services your company buys?

  Head                                                        “Every single piece of
 Office                                                       software, including our
                 Staff                                        accounting systems are
  43%                                                         approved by our client.”
                 27%
                                                              (Oil and Gas)
                                Suppliers
                                               Customers
                                       11%
                 41%                                           “100% - There are
                                                   12%         certain things you
                                       35%
                                                               need     and     certain
  27%                                              28%         things you must do
                                                               right down to where
                                                               your training is done –
                                                               all    mandated      by
                                                               Ford.” (Automotive)

               Significant influence         Some influence
                                                                                   N=905
           Who has influence in the
           ‘Allocate Budget’ stage?
Within your firm, who plays the largest role in influencing the formal purchase
decisions at the „Allocate Budget‟ stage of the technology acquisition cycle in 2004?

            36%                                                     33%
                                             IT Manager
CFO
                      24%

 16%                                             17%                      17%
                                                    13%
                              9% 8%           10%                                10%

        3%        4%
                                                               0%

              100-499                                      500-999
   CEO                         CIO                         CFO
   CTO                         IT Manager                  Business Executive
   Executive Committee
                                                                   Source: IDC, iPanel 2004
        Who has influence in the
      ‘Evaluate Alternatives’ stage?
Within your firm, who plays the largest role in influencing the formal purchase
decisions at the „Evaluate Alternatives‟ stage of the technology acquisition cycle?


                                                                     77%
                        69%
                                               IT Manager
IT Manager




         8%7%
   2%              3%          6% 5%            3% 3% 7%0%                  7% 3%


               100-499                                       500-999
CEO   CIO    CFO   CTO    IT Manager    Business Executive   Executive Committee
                                                                   Source: IDC, iPanel 2004
SMBs look to the internet and
Peoplecolleagues for direction
  • Friends
  • Colleagues
  • Customers
  • Competitors                              Best Sources:
  • VARs                                      Informal Networks
  • Consultants                                        &
                                               3rd Party sources
Internet
  • Search engines (most common) “I Google it”
  • Manufacturer Web sites
  • Third-party websites (e.g. tomshardware.com, zdnet.com, experts)
  • Webinars
Paper
  • Vendor proposals
  • Trade magazines & publications
  • Technology publications
  • Industry specific publications
                                               Worst Sources:
Other                                      Ads/Sales Calls/Mailings
  • Industry associations
  • Technical seminar
  • Trade shows
            Who has influence in the
            ‘Select Vendors’ stage?
Within your firm, who plays the largest role in influencing the formal purchase
decisions at the „Select Vendors‟ stage of the technology acquisition cycle in 2004?
                                                                   83%
                       69%
                                             IT Manager
IT Manager




        7%7%                  8% 4%                                       10%
  3%              3%                           0% 3% 3%0%                         0%

              100-499                                       500-999
CEO   CIO   CFO   CTO    IT Manager    Business Executive   Executive Committee


                                                                   Source: IDC, iPanel 2004
     Quality & expertise important factors when SMBs
                          determining where to buy
Importance of these factors when deciding whether to purchase direct from a vendor
or through an independent product reseller or services/solutions provider?




               69%    65%   50%    48%
                                          34%
                                                 39%    28%    21%


                                                               59%
                                          53%           52%
                             46%   46%           43%
                                                                           Very Important
                      33%
               29%                                                         Important


                                                                                N=908
   A number of sources influence
        where SMBs buy
What influence do the following groups have on where your firm buys
technology products/services?




     9%
                  10%
    41%                         8%
                  34%
                               30%
                                              27%            27%
                                                                      22%




              Some influence         Significant influence
                                                                      N=898
            Partners are provider of
               choice for SMBs
Name the one provider through which you purchase the bulk of your technology
products/services?

    Partners                                                    42%

                                               "I like the idea of being able to put
          Dell                          21%    my hands around somebody‟s throat
                                               if something goes wrong. If they are
         IBM                    14%            there when I need them, even if it is 4
                                               in the morning - that is critical. I
                                               don‟t like to be kept waiting.”
           HP                11%               (Professional Services)

                          "With a VAR you have a
          Bell     2%
                          face - someone you're         “I personally don‟t like
                          dealing with and someone      working in a company where
   Microsoft       2%     to talk to. It's probably     I‟m 50 or 100 people away
                          more difficult to call a      from the top. I feel
                          vendor directly to get        employees care much more
        Telus     1%
                          anywhere." (Automotive)       in a smaller company.”
                                                        (Medical/Health)
                                                                            N=840
          Top Vendors Groups for
             Hosting Services
    N=443; Who do you currently Buy HOSTING services from?


  Telecom Vendor                                          25%
                                                       22%

  Services Vendor                                              28%
                                                         24%

System Integrators                     12%
                               7%

          Retailers   1%
                             5%
      Value Added     1%
       Resellers      1%

Managed Internally                                                       32%
                                                                                35%

                                           Small    Medium
                                                             Source: IDC Canada, 2004
                Churn - Plans to Change Long Distance
                Service Provider in the Next 12 Months
N=453; How likely is your organization to switch to a different LONG DISTANCE
SERVICE PROVIDER in the next 12 months


            Very Likely
                              4%
                               6%


      Somewhat Likely
                              4%
                               5%

     Neither Likely nor             9%
          Unlikely                    13%


    Somewhat Unlikely
                                               23%
                                             21%


        Not at all Likely
                                                                                    58%
                                                                              53%

                                                                Source: IDC Canada, 2004
What is important to SMBs in a technology
                provider:
    – Understand their business
    – Be there for them and build long-term
      relationships
    – Do not “force-feed” them enterprise
      solutions
                            “I have a short list: spend time
    – Solve their business issues not their in
                            with me and be an expert
                            your field. I know your
      technology issues     competition so tell me what you
                                           know about your competition
“Vendors need to gear their sales pitch    and why you are the best. Don‟t
and attitude towards us. We can‟t          try to pull the wool over my
spend millions of dollars at the drop of   eyes because I‟ve done my
a hat. There are smaller sales bites,      research and so now you do
but with longer-term relationships”        yours.” (Medical/Health)
(Medical /Health)
          Who has influence in the
         ‘Approve Purchase’ stage?
Within your firm, who plays the largest role in influencing the formal purchase decisions at
the ‘Approve Purchase’ stage of the technology acquisition cycle in 2004?

  34%
                                                                 Owner/C-Level Exec
               Owner/C-Level Exec                  30%

                                                               23%
             20%
                         15%
                                                                             13%13%
                                 9% 9%                                    10%
                    7%                                               7%
         5%                                              3%


                100-499                                          500-999
CEO   CIO    CFO    CTO     IT Manager    Business Executive     Executive Committee

                                                                         Source: IDC, iPanel 2004

				
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