Analytics and Big Data in the US SMB market

In today’s SMB market, it is critical for vendors to build detailed understanding of the small and midmarket segments, and to align resources and strategies with requirements as SMBs move from initial experimentation with sophisticated solutions towards mass-market adoption.

In the report, Analytics and Big Data in the US SMB market, Techaisle analyzes over 1100 survey responses to provide the insight needed to build and execute on analytics and big data solution strategies for the small and midmarket customer segments. Techaisle’s deep understanding of SMB IT and business requirements enables vendors to understand the ‘why’ and ‘when’ of solution adoption, current and planned approaches to solution use, the benefits that drive user investments, and key issues in aligning with buyers and building and intercepting demand.

Highlights of data presented in this report include:

• Regardless of the business issue, analytics provides an answer. SMBs are prioritizing a wide range of improved outcomes within their businesses: improvement within existing operations and processes, expansion of the customer base, profitability and the business as a whole, creation and accelerated delivery of new offerings, reduced cost, and enhanced ability to manage the unknown. Remarkably, each of the SMB business issues can be addressed with analytics solutions – and indeed, SMBs are using analytics to address each today. This provides analytics vendors with a powerful ability to link product/service capabilities with critical SMB ‘care-abouts’.

• Big Data/analytics is much more firmly entrenched in midmarket IT priorities than in the SMB market as a whole. Only 29% of all SMB s identify Big Data/analytics as an IT priority for 2016. However, 91% of midmarket firms have analytics/Big Data in their current IT plans. Limited IT resources may constrain IT-related innovation in small business, but the midmarket will prove to be a fruitful segment for analytics vendors.

• Analytics is widely deployed – and solidly funded – within the midmarket. Consistent with the previous observation, the survey finds that 77% of midmarket firms (100-999 employees) have deployed analytics solutions already, as compared to less than one-third of small businesses (1-99 employees). Spending on analytics is also very different across the two segments, with small businesses allocating an average of less than $10,000 per year to analytics, and midmarket firms allocating nearly $85,000.

• The migration from ad hoc/descriptive to predictive/prescriptive. The survey finds that nearly 80% pf small businesses describe their use of analytics as ad hoc or descriptive. Use of analytics in more advanced modes (predictive/prescriptive) is still relatively uncommon in the SMB market, with only one-third of SMBs describing this as their primary analytics approach.

• Integration and workflow are coming fast. Midmarket firms are very likely to be investing in integration technologies and workflow/orchestration technologies, providing evidence that analytics is moving from a means of supporting management decisions to an essential component of operational systems.

• Big Data has not yet reached the small business segment. The survey finds that less than 10% of small businesses are currently using Big Data. Momentum is building in the midmarket, though, with 30% using Big Data today and more than 50% planning to do so in the foreseeable future.

• Analytics investments are driven primarily by productivity and process improvements; Big Data investments are often linked to revenue generation. The top two reasons for SMB investments in analytics solutions are increased productivity and improved processes. For Big Data, the most important driver is the need to increase the accuracy of predictive analytics, but several other important investment rationales connect to revenue: optimization of current revenue streams, supporting the search for new revenues, analyzing customer churn, providing sales transaction and customer profiling.

• Data quality is an important Big Data inhibitor in the SMB space. Both small businesses (top ranked) and midmarket businesses (second ranked) place data quality high on the list of challenges associated with deploying Big Data solutions. Small businesses also struggle with skills and data ownership, while midmarket firms wrestle with expense and time to benefit.

• The ‘whole product’ for analytics starts with cloud. More than 50% of both small and midmarket businesses consider cloud computing to be an essential analytics technology. Both also view integration of social media channels as an important capability; midmarket firms also look for real-time data analytics.

• Small businesses are looking for managed or integrated analytics solutions; midmarket firms are much more apt to take a ‘roll your own’ approach. Small businesses view MSPs and VARs as preferred sources for analytics solutions, enabling them to deploy the technology in the absence of extensive internal resources. Midmarket firms are more likely to work with software vendors or components suppliers, defining and deploying their own solutions.

• Hadoop is the SMB Big Data platform of choice. More than half of midmarket Big Data users report that the Hadoop is their primary Big Data platform. Small businesses are relatively more likely to base their Big Data initiatives on NoSQL or standard RDBMS, but are also more likely to rely on Hadoop than either of these other Big Data platforms.

A detailed Table of Contents of the report titles, Analytics & big Data in the US SMB Market is available here.