Techaisle Blog

It should come as no surprise that marketing to SMBs is hard – harder in many ways than marketing to enterprises. The diversity and vast size of the SMB market is the primary reason for why getting and supporting SMB customers is such a hard task. Most Cloud vendors design their products with larger enterprises in mind with SMBs being an afterthought. Even if there are any SMB specific requirements that become part of the solution they are typically overshadowed by other enterprise requirements. This is a particular problem with Cloud based services which are designed to scale and so selling those to SMBs becomes a matter of configuring a price that SMBs can digest.

Little if any thought is given to whether a Cloud service has direct business relevance to SMBs. But as the Techaisle SMB computing survey data shows, vendors must demonstrate direct business relevance if they are to succeed in gaining SMB customers. Despite all the marketing around productivity and line of business Cloud services, SMB Cloud adoption is led by industry specific services. This aspect provides valuable insight into SMB decision making where Cloud services are concerned. When evaluating packaged software SMBs are more concerned with issues surrounding application compatibility, maintenance, cost, integration, training and support. It would appear, however, that this criteria changes when applications are evaluated as Cloud services. The key question appears to be how quickly can a Cloud service impact their business. This makes justifying purchase of industry specific services rather an easy one.

It is clearly not the only criteria though. The same survey shows high levels of adoption of hosted email, Cloud storage and security services. While all these have indirect business relevance in that they are foundational IT services, they are essentially a cost line item in an SMB income statement. SMBs are migrating these services to the Cloud because it is also an easy decision. SMBs are familiar with using email in the Cloud for personal reasons (Gmail, Hotmail etc.) and are therefore comfortable migrating the business email and storage to the Cloud as well. Similarly, migrating to Cloud based storage and security also are easy decisions for the same reasons.

Other services however, have not enjoyed the same success (yet). One can argue that this is simply a matter of giving SMBs time to get comfy with Cloud services. The problem as we see it is that most of the other services are marketed using a “reduce cost” value proposition. We believe a different sales and marketing approach is warranted. If reducing cost continues to be the centerpiece then for vendors this becomes a race to the bottom – which is not good for the industry as a whole.

Abhijeet Rane
Techaisle

A recently finished survey of 2900 small businesses across four countries- US, UK, Brazil and Germany shows that 1 in 5 small businesses own an iPad and 2/3^rd of these iPad owning small businesses will likely continue investing in iPads.

iPad owning small businesses are also more prolific users of social media platforms for both personal and business use. Survey shows that 1/3^rd of iPad owning businesses actively use one or more forms of social media such as Facebook, LinkedIn and Twitter whereas only 1/5^th of non-iPad users use social media.  Besides higher social media usage, these iPad owning businesses also seem to be early adopters of Cloud Computing. Nearly three times as many iPad businesses vs. non-iPad businesses are actively investing in Cloud Computing technologies.

On the question of iPads vs notebooks, not surprisingly, 15% of iPad owners prefer iPads over notebooks. On the flip side, non-iPad owners seem to be die-hard notebook users. Given a choice, 52% of non-iPad owners prefer to use notebooks only. 21% of small businesses consider all three: Notebooks, Netbooks and iPads to be important.  Those that use iPads have very low preference for Netbooks. The research shows that currently there is a clear polarization between iPad and Notebook users.

Besides being a “cool device,” the number one stated reason to purchase an iPad was sales and marketing. When specifically asked the most regular uses of iPad, the survey showed that iPads are being used for internet searches/news, emails, vertical applications and social media interaction.

96% of all small businesses that have an iPad also have a smart phone. In addition to smart phones, it is inevitable that iPads will become the center of SMB Future Workplace.

Tavishi Agrawal
Market Analyst
Techaisle

It is a given that SMB’s Cloud Computing adoption is growing. It is a given that SMB’s SaaS is fast replacing on-premise software. Does it even matter if the growth rate is 20 percent or 25 percent, whether it is US$100 billion market by 2012 or US$125 billion market by 2014? What really matters is how adoption can be accelerated. What really matters is how the right advice is given to SMBs that are adopting SaaS/Cloud Computing.

There are many forecasts in the market. Depending upon which market research firm one follows each has its own stated forecast, definition and defensible methodology.

Market will grow, it has to grow. Industry is driving SMBs towards Cloud and increasingly taking on-premise alternatives off the market. Everyone that is in the IT business is talking about Cloud Computing. There are hardly any alternatives left for SMBs.

So we should really get off the forecast and market sizing train. Instead we should concentrate on factors that will help vendors and channels to accelerate adoption. Now one may argue that all analyst firms have conducted their own surveys to determine the reasons for adoption or non-adoption. However, each of them misses the point of finding those important nuggets that identify a path for vendors and channels, a path that will lead them to Cloud Computing nirvana.

Analysts and analyst firms like us should seek answers to burning questions such as:

1. What applications should vendors focus on?
2. What comes first – back and storage, mission-critical applications, CRM, vertical applications or something else?
3. What should channels be doing in targeting the SMBs?
4. What should be done to convert the non-adopters to adopters?
5. How should SMBs be educated?
6. What is the role of multi-touch devices?
7. What will happen 3 years from now?
8. Which SMBs will regret and which will rejoice after adopting Cloud Computing?
9. How to educate channels?
10. Which market segments are more important than others?

Hence, instead of talking about SaaS/Cloud Computing Spend and growth rates, let us begin a sensible dialog about 10 “thundering” questions about Cloud Computing. You can even check out Techaisle’s Cloud Computing reports here.

Tavishi
Techaisle

The desktop virtualization juggernaut continues to gather steam as more and more companies choose to use the technology to improve security and for systems management. Large vendors have firmly jumped into the game, numerous Total Cost of Ownership reports have been published and the message from vendors to IT departments is clear – desktop virtualization is the way to securing desktops and reducing costs of management.

In our view, it is a warning sign that perhaps the message around desktop virtualization may have gotten out of hand. Technologies are often designed with specific scenarios in mind but as the market grows a technology often becomes a broad replacement for older traditional technologies. Indeed, it starts becoming a “standard” way of doing things regardless of the actual scenario. The issue is that functionality is typically optimized for a specific set of scenarios. As usage broadens, functional advantages of the new technology over the old may erode and users experience diminished returns.

This appears to be happening with desktop virtualization as well – the virtualization mantra is being repeated and chanted around IT departments like gospel and the real question is whether it makes sense to accept desktop virtualization as the universal panacea as pushed by vendors or should IT decision makers take a hard look at traditional systems management technologies and decide where the use of each is appropriate. In a recent survey conducted by Techaisle of over 300 desktop virtualization users, nearly two in five respondents stated that the primary reason for deploying desktop virtualization was to improve security of corporate desktops and 22 percent stated making desktops and notebooks easier to manage as the primary reason. The same survey also highlighted some interesting perceptions surrounding desktop virtualization and its benefits.  

Misperceptions Abound

The majority of IT managers and departments who have deployed desktop virtualization have likely been using traditional systems management tools and techniques prior to deploying virtualization technologies. The survey data indicates however that users are making generalizations regarding virtualization that may not be true in every situation. For example, 99 percent of virtualization users believe that it is a better way to manage PC assets compared to traditional systems management tools and methods and 96 percent believe that virtualization leads to more savings. The strength of these perceptions leads us to believe that there are two primary issues:

1. The cacophony surrounding desktop virtualization is leading to confusing generalizations: Marketers would do well to guide customers better in this regard. While the virtualization market has developed, systems management tool vendors have continued to enhance the capabilities of their products. However, these advances are being drowned out by the virtualization message. It would be useful for IT vendors and the channel to provide guidance to customers underscoring when it would or wouldn’t be useful to deploy virtualization.


2. Customers risk slipping down the slope of the diminishing curve unless a more pragmatic approach is considered: Given the strength of these perceptions among desktop virtualization users, it is very likely that some of these users are experiencing sub-optimal returns on their investment. Take into consideration the typical customer of an IT department – the Information Worker. A recent study conducted by Microsoft comparing PC management costs using traditional systems management techniques versus desktop virtualization found that in the case of PCs used by Information Workers, using traditional tools and methodologies would likely lead to lower total costs of ownership relative to desktop virtualization. The primary reason was that while desktop virtualization lowers costs if rich clients are replaced with thin clients and therefore eliminate physical visits to the desktop it also injects new costs resulting from implementing and managing a sophisticated virtualization infrastructure. Indeed, the study found the costs to be approximately 11 percent higher if virtualization was deployed.

 What these findings essentially suggest is that the deployment of virtualization be made considering specific usage scenarios rather than a generic solution to reducing desktop management costs.

Defining the Scenarios

There are a number of considerations when looking at defining scenarios where virtualization may be a good fit:

1. The type of work being conducted


2. The nature of the information being consumed/created


3. The primary tasks of the user


4. The need for mobility and ad-hoc connectivity


5. Regulatory requirements

Of these, we believe the first three to be most important largely because they apply to nearly all companies regardless of size or industry. The last point – regulatory requirements – apply to specific sensitive industries (such as national security) that providing virtual desktops may be the only choice.

The first three points – the type of work being conducted, the nature of information and primary tasks are tightly intertwined with each other. Workers whose task primarily relate to creating, manipulating and acting on information – so called “Information Workers” benefit the most from rich clients. Business or Enterprise PCs are typically designed to support Information Workers given that they form a large part of the workforce. These workers demand a highly responsive IT infrastructure and place value of reliability and performance. IT departments looking to provide the same experience via a virtualized environment are likely taking on a task that will strain the existing infrastructure. Upgrading the infrastructure will very likely reduce or erase any cost savings. Under such conditions, full featured PCs are a better choice.

Other scenarios however favor deploying desktop virtualization as a way to reducing systems management costs. For example

1. Where the need for rich clients is reduced because of simpler content authoring needs


2. Where it makes sense to maintain a single instance of the application that is shared by many (for security purposes)


3. Scenarios where offline access is not a key requirement or there is a specific application that is the sole basis for the primary task (e.g. – managing a calendar, setting appointments)

Rich Client Support and Management

An obvious question then is that for scenarios where rich clients are being used in a non-virtualized environment, are there technologies that provide a similar level of control for managing PCs? Indeed such solutions are available from both Microsoft and Intel. Microsoft’s Systems Center is a mature product that has been consistently enhanced over the years. The latest enhancement includes System Center Service Manager 2010, a new addition to the System Center suite of products, delivering an integrated platform for automating and adapting IT Service Management. Pre-built processes based on industry best practices provide for incident and problem resolution, change control, and asset lifecycle management. Through its configuration management database (CMDB) and process integration, Service Manager automatically connects knowledge and information from System Center Operations Manager, System Center Configuration Manager, and Active Directory Domain Services.

Intel too has been developing technologies at the hardware level to improve manageability of rich clients. PCs using Intel’s Core vPro processor are specifically designed for better, easier manageability. Intel has enhanced this functionality via a service pack for Microsoft’s Systems Center Service Manager. The solution now allows IT support personnel to remotely control KVM resources of the problem computer for easier resolution. Further, remote boot capability allows for support personnel to boot from a remote image regardless of the client’s operating system state.

Conclusion

IT decision makers have a lot of tools in their arsenal when it comes to tackling the cost of maintaining and managing PCs. Desktop virtualization has emerged as a key technology in this regard and while replacing rich clients with thin clients and serving up a centrally managed desktop image may be attractive to IT decision makers, they should not forget the advances made in existing systems management tools that make it easier to better manage rich clients.

The decision to deploy desktop virtualization versus using traditional systems management tools need not be a binary one. Specific user scenarios should be considered before deploying desktop virtualization and the technology should be deployed where it makes the most sense.

Abhijeet Rane
Techaisle