For a clearer market perspective
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
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£1495/ 2160/$2875 June 2009
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Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
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Report Overview
Small and medium businesses (SMBs) represent an important and growing market for many IT product and services vendors. Although their individual budgets are smaller than those controlled by larger enterprises, SMBs understand that IT is critical to their business in order to keep them competitive and operating efficiently. ‘Effective Vendor Strategies for Targeting SMBs: Vendor positioning and the future outlook for the SMB IT market’ is a new report published by Business Insights that examines the market opportunities for IT vendors including security, communications and collaboration, business applications and systems management. This report provides insight into how vendors can enter the IT market and also uses a case study analysis to focus on the impact of the current economic downturn on SMBs in manufacturing and retail industries. Pages Figures Tables 148 17 3
“Examine the leading IT vendor profiles in each key area and gain go-to-market recommendations for targeting SMBs more effectively with this new report...”
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
Key Findings
Customer relationship management (CRM) has been the fastest-growing Software-as-aService (SaaS) segment and is expected to reach a value of $1.3 billion by 2010. Mobile solutions have displayed increased uptake in 2009 with SMBs investing far more in mobile devices and applications, driven by the fact that mobility can improve business functionality and create more flexible working. 59% of SMBs have not implemented software to protect ‘end points’ such as laptops, desktops and servers. SMBs are prone to attacks by viruses and security hackers as they often do not have the necessary protections in place.
Figure 3.9: 2009 SMB increase in uptake of mobile solutions compared to 2008
“In a recent survey of US SMBs, two-thirds of employees were more or less office-based. Of the remaining third, a small number were home workers, while the rest were split between moderately mobile employees and highly mobile employees. Overall, this makes SMBs on average more mobile than larger enterprises, which tend to have smaller numbers of mobile employees...”
An important SMB opportunity for vendors is service-oriented architecture (SOA) offerings. SOA solutions are expected to be deployed by 17.9% of SMB retailers by 2012. Vendors can help the SMB market move to SOA by focusing on the flexibility and scalability it offers.
Use this report to...
• Understand the areas of future IT investment for SMBs based on this report’s analysis on the latest IT spending and budgetary outlook for SMBs in 2009. • Enhance the competitiveness of your products and services with this report’s strategic recommendations detailing how to improve your go-to-market strategy, purchasing behaviour and vendor preferences within the SMB sector. • Assess the evolving SMB competitive landscape with this report’s insight into market drivers and barriers to technology adoption. • Examine the impact of the current economic climate on manufacturing and retail SMBs with the in-depth case studies on both these sectors provided in this report.
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
Explore issues including...
Systems management: SMBs find the formality and expense of many system management tools to be a barrier to adoption. Reaching target customers is a challenge faced by large systems management vendors in entering the SMB market. Unified communications: Packaged UC solutions specifically for SMBs have only recently become available due to the market being relatively immature. Competitive differentiation in UC will depend on software applications, in particular new and innovative collaboration applications that work with existing business applications from a wide variety of vendors Security: Viruses are SMBs’ biggest concern, yet spam and data breaches are also a major issue with 70 per cent of respondents expressing these as their top security worries.
Figure 4.11: Security and business continuity rank high amongst SMBs
“As with many security concerns, the threat isn’t always as great as the fear of attack. Yet SMBs should be aware of the potential risks to their IT operations. In May 2009, BitDefender, an anti-malware provider, warned that a number of new types of IT security attacks on SMBs had emerged – and SMBs did not always have the appropriate protection in place to safeguard their business...“
Discover...
• What areas of IT are SMBs investing in? • Who are the leading vendors serving the SMB market? • What is the competitive positioning of each of the leading vendors in the SMB space? • What influences SMB decisions on purchasing IT applications? • How should vendors target the SMB market? • What are the barriers to technology adoption? • Which technologies are SMBs investing in during the current economic downturn?
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
Sample Information Chapter 3: Communication and collaboration
Unified communications
Over the last year or so, unified communications (UC) has become one of the most frequently heard buzzwords in telecoms and IT. The aim of UC is to bring together the world of software collaboration (e.g. email, instant messaging) with the world of IP telephony (e.g. voice, audio and video conferencing) to provide a more seamless and rich communications and collaboration experience for users. UC isn’t just an enterprise tool either: in the Microsoft survey mentioned in Chapter 2, UC was the highestrated productivity tool for the future amongst SMBs. However, it was rated low as an opportunity in 2009, which probably reflects the current economic environment more than anything else, especially as it was still highly rated as the current most demanded productivity tool. The UC market gained publicity after the release of Microsoft’s Office Figure 3.8: 2009 SMB ratings of productivity tools Communications Server (OCS) in October 2007. The market is becoming more crowded and similar UC solutions are offered by a number of vendors. Avaya, Cisco, IBM, Microsoft and Nortel are vying for market share as the market grows and the technologies mature. Most vendors have been targeting large enterprises where UC is more attractive to companies and more lucrative for vendors. Packaged UC solutions specifically for SMBs have only recently become available because the market is still relatively immature. However the competition in this space is increasing: Nortel, Mitel and Siemens are all targeting the SMB market with new solutions. Business Insights Nortel’s BCM50 platform, Siemens’s HiPath Open Office ME as well as Mitel’s InterTel 3000 are all a threat to BT’s Communications Complete offering. Vendor offerings UC has become key to the business strategies of both software players, such as Microsoft and IBM, and IP telephony vendors, such as Nortel, Cisco and Avaya. UC has become a fierce battleground for positioning these and many other players to win new revenues as enterprises of all sizes climb aboard the UC bandwagon. This battleground is made more interesting and challenging as players from opposite sides of the software vendor/telecoms vendor divide need to partner as well as compete. -45-
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
Table of Contents
CHAPTER 1: INTRODUCTION • What is this report about? • Who is this report for? • Defining the SMB market CHAPTER 2: THE SMB MARKET OPPORTUNITY • Summary • Introduction • Understanding SMBs - Presence - Employees - Telecom challenges • IT spending outlook for SMBs - The big picture - The recessionary impact on SMB IT budgets - “Green shoots” of recovery - Likely areas of future IT investment for SMBs • Competitive market - Wide choice of suppliers - Vendor types - Vendor overview • How SMBs buy - Direct vs. Channel - Trend watch: US providers go back to using account managers for SMBs - The SMB IT buyer - What SMBs want from an IT supplier - SMB turnoffs - IT services / outsourcing • Actions for vendors - Improving your channel offering CHAPTER 3: COMMUNICATION AND COLLABORATION • Summary • Introduction • Unified communications - Vendor offerings - BT - Cisco - Nortel CHAPTER 4: SECURITY • Summary • Introduction • Security concerns - SMB security spending • Security software for SMBs - Trend watch: a move away from point solutions - Firewalls - Intrusion detection and prevention - Content filtering/management - Security policy enforcement - Virtual Private Networks (VPNs) - Data protection • Security-as-a-Service - SMB concerns - The particular SMB need - Types of security-as-a-service - The pros and cons for users - Best practices in adopting security-as-a-service • Security vendors - McAfee - Symantec - SonicWALL - Juniper Networks - MessageLabs • Actions for vendors • Mobile - How mobile are SMBs? - Vendor offering - Sybase • Fixed mobile convergence • Collaboration - Vendor offerings - Cisco - IBM • Communications vendors - BellSouth - AT&T - Teleware - Cisco
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
Table of Contents
CHAPTER 5: BUSINESS APPLICATIONS • Summary • Introduction • Customer relationship management - Appetite for CRM • Business intelligence • Financial software • Software as a Service (SaaS) - Drivers behind SaaS - Popular SaaS applications - Benefits of SaaS for SMBs - Challenges to the model - Actions for vendors • Vendor activity - Business intelligence vendors - SAS Institute - Business Objects - Sage - NetSuite - SAP - Oracle - Microsoft - Etelos CHAPTER 6: SYSTEMS MANAGEMENT • Summary • Introduction • Systems management - Trend watch: blade servers for SMBs - Trend watch: virtualization - Increased interest in data protection • Cloud computing - Trend watch: local clouds for SMBs - Cloud computing in action: Singapore’s Alatum service • Vendor activity - Sun Microsystems - EMC - VMware - Novell - HP - IBM • Vendor actions FIGURES • Global IT market growth forecasts for 2009 • SMB IT spending plans 2009 compared to 2008 • SMB cost cutting-measures 2009 • The “green shoots” of recovery • Customer service and service performance influencing SMB IT buying decisions • Factors that could impact on a vendor’s ‘strategic’ status • 2009 SMB increased demands on partners compared to 2008 • 2009 SMB ratings of productivity tools • 2009 SMB increase in uptake of mobile solutions compared to 2008 • Communication and collaboration vendor summary • Security and business continuity rank high amongst SMBs • Security vendor summary • SMB interest in Business Intelligence compared to 2008 • Usage of SaaS by SMB customers • Business intelligence vendor summary • The IT infrastructure is viewed to be of great strategic value to SMBs • Systems Management vendor summary TABLES • Growth in the on-demand CRM market by sizeband, 2004-2009 ($m) • Growth in the on-demand ERP market by sizeband, 2004-2009 ($m) • Retailers in 2006 by region CHAPTER 7: VERTICAL CASE STUDIES • Summary • Introduction • SMB manufacturers - Actions for vendors • SMB retailers - Target market - Vendor actions - The SOA market opportunity
Effective Vendor Strategies for Targeting SMBs
Vendor positioning and the future outlook for the SMB IT market
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