2018 Top 10 SMB and Midmarket Business Issues and IT Challenges and IT Priorities

They are here - Techaisle's annual SMB and Midmarket Top 10 IT Priorities, IT Challenges and Business Issues infographics. This is the 7th year of Techaisle tracking at a WW level and is much sought after by IT vendors, channels and media. There is an ongoing trend – in both the buy-side and supplier communities – towards positioning IT initiatives and expenditures in a business context.

To help readers connect positioning with core market drivers, Techaisle research provides insight into the most pressing business issues, IT priorities and IT challenges faced by small (1-99 employees) and midmarket (100-999 employees) businesses in 2018.

For 2018, Techaisle investigated 21 different technology areas, each with several sub-technology categories, 24 different IT challenges and 24 different business issues. At the request of our clients, this year, not only are we releasing data & infographics (shown below) as usual for SMBs (1-999 employee segment), Midmarket (100-999 employee segment) but also for Small businesses (1-99 employee segment).

In 2018, the new and upcoming IT Priorities within SMBs are Virtual Reality (VR)/Augmented Reality (AR) and Hyperconverged infrastructure (HCI). Within midmarket firms, Artificial Intelligence (AI) appears for the first time for 2018. Workplace transformation is one of the new top IT challenges for SMBs – number 1 on the list for midmarket firms and overall at number six across all SMBs. This obviously points to a need for unified workspace experience. In addition, Cloud orchestration and integration are among the top five key IT challenges for both SMBs and midmarket firms.

The survey data shows that the top business issues for small and midmarket firms are virtually identical. This has happened the first time, ever. The two groups share nine of 10 top concerns, in nearly identical order. Improved productivity and reduced operational cost are top-two business issues for both groups, and profitability, quality improvements and increased profitability round out the top five on each list. Marketers should ensure that their messaging draws a clear line from their products/services to one or more of these objectives.

The top ten lists of IT priorities are also consistent across small and midmarket firms: cloud, mobility and managed services top both lists, and analytics and collaboration round out the top five issues. Firms looking for traction in the SMB market will want to demonstrate how their products/services offer compelling means of building viable approaches in one or more of these categories.

There is a high degree of consistency in the 2018 IT challenges cited by small and midmarket firms as well – but here, the category labels may obscure some meaningful differences between the two groups. For example, both cite budget constraints as a top-2 issue, but this phrase has different meanings in the context of “S” and “M”.

Small businesses often lack formal budgets, so constraint here means ‘we’re having trouble keeping pace with refresh requirements and user demand for new functionality.’ Midmarket firms generally do have formal budgets, so they interpret the heading as meaning ‘we’re having trouble budgeting for refresh and the technologies that are on our 2018 ‘new but needed’ list – and we’re also struggling to keep pace with the emerging requirements associated with digital transformation, which are demanding additional IT deployments within LOB-managed processes.’

In the first case, buyers are looking simply for cost-effective means of meeting a set of requirements; In the second, buyers need access to XaaS or managed services offerings that provide near-term benefit on a pay as you go basis, without needing CAPEX allocations as a starting point.

Clearly, some issues – mobility security, data protection/recovery/business continuity, integration across clouds and between cloud and on-premise systems – are important to both groups, and messaging addressing these topics will resonate at all levels of the SMB market.

However, suppliers focused on midmarket rather than small businesses may want to take note of the prominence of “workplace (or ‘digital’) transformation” on the midmarket challenges list. It appears that midmarket firms are looking to reinvent the ways that they support employees (individually and in workgroups) to drive productivity and efficiency. Suppliers to this segment would be wise to emphasize how their offerings pave the way to a more agile and productive future work state.