Distributed, remote, mobile – these are the realities of today’s workforce. The workspace isn’t defined by windows and walls and common area couches. For millions of SMB employees, the workspace isn’t a physical location – it’s a virtual space defined by access from multiple screens which are used from multiple locations. Consider these data points from Techaisle’s SMB survey research. Pre-pandemic, 24% of SMB global workforce was mobile. Today, the number has jumped to 51% within small businesses and 47% in midmarket firms. These numbers are down from a high of 78% during country lockdowns. The category, “mobile workers”, is increasingly indistinguishable from “workers.” This means new ways of working, taking advantage of new technologies and capabilities to build an agile, mobile, secure work-style enabled by cloud, remote work, security and collaboration. When working remotely, 47% of SMB mobile workforce are using notebook to access corporate data, 9% tablets and 44% smartphones. If the office of an SMB is defined by devices, workplace is defined by the ability to work from wherever those devices and their users are located. As a result, 64% of SMBs are increasing investments in remote work solutions, and survey data shows there will likely be a whopping 380% increase in digital workplace adoption in the next one year within small businesses and 48% increase within midmarket firms.

The key focus is about the ‘future of work’: workflow, workspaces, workforce and the ways that an increasingly-connected world can support pursuit of previously-unattainable objectives for the SMBs and midmarket firms. Their most important technology-related effort is on connectedness – connected cloud, edge, applications, security, collaboration, workspaces and insights. Cloud and mobility are navigation routes but the always-on, everywhere-connected unified platform is the destination. These SMBs are looking for benefits arising from the interconnection of all types of resources: platforms/environments, information, devices and applications. Depth discussions and quantitative survey research with SMBs and midmarket firms points to a trend that is playing out across seven key areas as shown in the chart below:

Pandemic has changed how businesses operate, employees work, customers purchase and goods/services get delivered. This has also changed how small and midmarket firms are evaluating their core, cloud and edge technology needs to address their accelerated digital transformation objectives of cost efficiencies, operational excellence, innovation, business growth, organizational empowerment and customer intimacy. Clearly, core infrastructure has evolved to meet future digital transformation demands, but the question is how are small businesses and midmarket firms planning to adopt forward-facing solutions, like Artificial Intelligence, 5G, AR/VR, IoT, analytics and several others. There is a general sense within the SMBs that these advanced solutions will increase insight into and control over key aspects of their business operations and deliver benefits in different ways and to different ends.

Remaining true to the core belief of tracking the future of SMBs and channel partners, Techaisle studied global SMBs to determine future, planned and likely adoption patterns of several technology areas. The study of SMB and Midmarket digital transformation trends identified top 15 technology categories where the adoption growth rates will likely be highest in the next six months to a year. There are some surprises, for example, chatbots (for customer responsiveness), 5G (for enhanced mobility), open source (for cloud management, modernization and lower TCO), AI (for customer experience, security, operations) and several expected, for example, SD-WAN, HCI, WVD/VDI/DaaS and UCaaS.

In response to my question, “what defines HPE’s SMB go-to-market strategy?”, Tim Peters, Vice President and General Manager, SMB, put it eloquently, “local empowered presence as a business solution provider through the largest partner network”. Perhaps, therein lies the paradoxical problem. HPE GreenLake and Ezmeral are top discussion topics amongst partners, enterprise customers, media and analysts. But none of these are yet available and targeted towards the SMB customer. Regardless of having a wide portfolio of SMB solutions, HPE’s SMB go-to-market messaging strategy is getting drowned under the onslaught of “return to software” shift. As a result, channel partners have become the most important conduit for information source and SMB solution selling. But data also shows that 70% of an SMB buyer’s journey is complete before first contact with a supplier (channel partner or direct vendor).

Partners resolving the paradoxical problem

The paradoxical problem that HPE faces relates to marketing to two bookends of market segments – enterprise with a software solution approach targeting developers and IT buyers and the SMB customer with a yet to neatly defined as-a-service offering where the primary buyer is the business management. As HPE continues to design GreenLake enabled offerings for the SMBs, utmost reliance on partners is important. Partners contribute to creating, shaping and defining demand – in some cases by making customers aware of a new category or product, in others by helping to define solution requirements or specifications. To achieve partner success within the SMB market, HPE is focused on reducing friction across its enablement initiatives. Launched three years ago, HPE has brought to the forefront its enablement program Pro Series – Sales Pro, Tech Pro, Marketing Pro. Partners can tailor their experiences based on SMB market segment, a robust program for channel partners for a unified learning experience and digital marketing. (More on this in a future Techaisle Take analysis). So the question is, is HPE relevant for SMB customers?

Is HPE relevant for SMB customers?

Yes, despite an intense focus on the enterprise segment, HPE is one of a handful of vendor suppliers with a dedicated SMB executive team, and a partner organization, under Paul Hunter, that is stepping up its commitment to SMB channel partners.

Enabling Digital transformation

79% of SMBs are on the road to digital transformation. The roadmap to successful digital transformation begins with the creation of a sound physical infrastructure - the ‘building blocks’ or ‘foundations’ of business infrastructure. The most advanced and digitally transformed SMB firms are looking to improve their ability to effectively manage IT delivery into the future – cost efficiencies, operational excellence, innovation, business growth, organizational productivity and IT’s speed and agility. HPE solutions lay the foundation for effective, agile, secure modernization and transformation.

I like that HPE does not have a catch-all process for selling digital transformation solutions to the SMB customers. There is a deliberate process to empower partners to understand an SMB customer's workloads and digital transformation stages before recommending, architecting, deploying and managing digital transformation solutions to deliver business outcomes.

Adopting Hybrid IT

Techaisle research shows that SMBs use a mix of public, private and public clouds – and that businesses often use two or three of these approaches simultaneously but they are definitely settling on the “best approach” which is hybrid. Workloads on hybrid has gone up by 30% in the last one year and basic hybrid deployment is expected to increase by 56% in the next one year. Hosted infrastructure will likely see a growth of 131% in the next one year.

HPE has several offerings for hybrid environments, including HPE OneSphere, HPE ProLiant for Azure Stack and Cloud-Ready Storage. Specifically, for SMBs, HPE has a set of five hybrid cloud solutions. Built upon the core features of HPE ProLiant Gen10 servers and Microsoft Azure services, these hybrid cloud offers provide a path to SMBs to enhance productivity, improve IT service delivery and manage cost efficiencies. The offering includes – Hybrid Remote Workers, Hybrid File and Backup, Hybrid Virtualization, Hybrid Development and Test, Hybrid Database.

In addition, HPE has solutions tailored for small businesses. Leading with its HPE ProLiant MicroServer Gen10 Plus featuring remote management and security capabilities. The solutions include Office in a Box, Scalable File and Backup as well as Edge to Cloud for simplified access to cloud services.

Deploying Hyperconverged Infrastructure

Techaisle data shows that HCI adoption is within the top ten IT priorities for SMB customers. Although a distant third in HCI deployment, HPE’s SimpliVity solution has been growing at the edge for SMBs. It requires only 2 nodes to start, does not require separate storage and backup, and restoration can be done from a point in time. HPE’s dHCI is ideal for SMBs who want their compute or storage or network to scale independently. The entire environment is managed through vCenter and monitored through InfoSight making it easy for SMBs. It separates compute and storage so that they can grow independently giving the SMB customer flexibility of HCI.

Implementing Networking

Aruba Instant On announced last year, is suited for 100 users and below, extends to 7 switches and has both wired and wireless unified management through Aruba Central. However, it is only offered as a subscription service. John Moran, Sales Director, North America, HPE Aruba, points out that HPE has not come across Cisco’s Meraki Go in a competitive environment. I believe it is because Aruba Instant On is truly meant for the midmarket customers whereas Meraki Go is for the small businesses. Many SMBs still prefer outright purchase rather than subscriptions.

Is there a missing middle – midmarket segment?

Ignite Midmarket initiative, announced at HPE Discover in 2019, seems to have retreated into the background. As per Antonio Neri, President and CEO, HPE, midmarket initiative is still active and very important to HPE’s success. Within the HPE GreenLake Cloud services, HPE has designed 17 pre-configured offerings, available in small, medium, large pre-configured services which can be installed within 14 days. Some of the services are suitable for the midmarket segment.

HPE GreenLake Hybrid Cloud is of huge interest to the midmarket segment because it offers the promise of consumption-based cloud solution for on-premise scalability, security, performance and cost management without over-investment in infrastructure allowing cloud management of both public and private resources from one console. HPE is extending its GreenLake offerings for the midmarket for quick deployments of workloads with right sized and ready to go storage, compute and virtualization. For midmarket firms which do not own and manage their own data centers, HPE has partnered with Equinix and CyrusOne to offer co-location solutions. To help its channel partners that serve the midmarket segment, HPE has developed a new quoting tool that reduces quote time from 18 hours to 15 minutes.

HPE’s everything-as-a-Service enablers

HPE GreenLake

It is no secret that HPE has strategically dived into its swim-lane with a commitment to offer “everything-as-a-service” by 2022 - entire portfolio through a range of subscription, pay-per-use and consumption driven offerings. HPE GreenLake, which offers a flexible alternative to traditional on-premise IT hardware consumption, is the foundation for HPE’s as-a-service strategy. HPE’s GreenLake platform hosts servers, storage and networking in-house while retaining connectivity to multiple clouds overlaying with its own software and services. Cray acquisition in May 2019 is enabling HPE to offer HPC as-a-service for some of the most demanding workloads. HPE says that GreenLake has 90%+ customer retention rate (99% in July 2019).

HPE’s vision is to become the Edge-to-Cloud Platform as-a-Service company with a focus on customer use cases and solutions and HPE Ezmeral is core to its strategy. HPE already competes against Dell in storage, servers, and networking, with Cisco in networking, and with Lenovo in servers and NetApp in storage. With the launch of Ezmeral, HPE has expanded its competitive footprint to include VMware Tanzu and Red Hat OpenShift, but HPE is quick to point out that Ezmeral is the only solution with built-in persistent storage. VMware and Red Hat are also partnering and HPE is working with both to define where Ezmeral can really add value. As customer traction is increasing, the competition is also stepping up, specifically, Dell Technologies On Demand, Azure Stack, AWS Outposts, Lenovo TruScale Infrastructure Services.

Once HPE launches GreenLake for SMB segment and provides access to GreenLake Central to MSPs and channel partners we could very well see a welcome arrival of HPE's everything-as-a-service strategy into the SMB segment.

Hybrid Cloud focus

Public cloud, private cloud and hybrid cloud approaches each offer unique business benefits to the adopting organization. While public cloud can deliver rapid scale for temporary workloads or support smaller businesses that find appeal in OPEX procurement models, private cloud can deliver scale at better cost in some circumstances, while hybrid cloud offers better, faster access to formerly siloed sources of information. In each case, cloud capabilities, including automation, programmability, self-service access to on-demand resources and consumption metering, can help transform IT from a cost center to business enabler.

HPE has an alliance with Google to adopt Kubernetes in hybrid cloud environments and extend reach of its software-defined infrastructure for building private clouds to legacy ProLiant servers, HPE Nimble Storage dHCI and HPE Cloud Volumes Block. HPE is giving its customers an option of deploying on-prem servers with virtual machines with either a VMware vSAN storage software or the HPE SimpliVity hyperconverged infrastructure platform. Additionally, customers have the option of deploying Kubernetes on bare-metal server. HPE is also embedding its HPE OneView IT infrastructure management and HPE Composable Fabric networking solution to create a composable rack environment. HPE’s partnership with Nutanix provides an integrated hybrid cloud as a Service (aaS) option by leveraging Nutanix’s Enterprise Cloud OS software, AHV hypervisor and delivering the solution through HPE GreenLake for a fully HPE-managed hybrid cloud.

The scene stealer - Ezmeral

No doubt Ezmeral was a scene stealer at HPE Discover Virtual Event. It is a complete software portfolio spanning container management, AI/ML and data analytics, cost control, IT automation and AI-driven operations and security. It is expected to speed innovation, transform applications and data from edge to the cloud. All of these are within the planned technology adoption path and essential to enabling digital transformation for 83% of midmarket firms to reduce IT deficit and deliver previously unimaginable business outcomes. HPE’s initial focus is the enterprise segment. I strongly urge to not leave the midmarket segment behind. It is the true battleground segment.

Related HPE Techaisle Takes

HPE ProLiant MicroServer Gen 10 Plus focuses on SMB Digital Transformation
HPE boldly pivoting headlong into post-transactional market
HPE addressing SMB and channel partner Hybrid IT demands
HPE vs Dell SMB IT solution stack
HPE – doubling down to be SMB’s IT partner of choice
Dell, HPE, IBM, Cisco competing for global SMB US$1 trillion IT Spend
Hyperconverged Infrastructure on a high-growth trajectory within SMBs and midmarket firms

It is no secret that Cisco has made several attempts and investments to address the needs of small businesses. It would not be out of place to quote an English proverb that states: "A cat has nine lives. For three he plays, for three he strays, and for the last three he stays". This time I believe that Cisco will stay. Cisco has landed at a good place.

Today at Cisco Live 2020, Cisco unveiled latest updates to its Cisco Designed portfolio of small business solutions that are aligned with top five problems that Cisco is solving for small businesses.

1. Work from home: how to meet and collaborate with employees and customers securely
2. Cybercrime protection: how to safeguard from identity theft, hackers and internet attacks
3. Always-on business: how to provide easy installation and reliable IT services using cloud technology
4. Workplace monitoring: how to enable safe social distancing and real time monitoring
5. New office: how to improve productivity and security at shared physical workspaces

The announcements

1. Cisco Business Switches and Dashboard - easy to set up, secure connectivity for small businesses which are powering connections across remote and in-office workforce. The two new series of switches – CBS 250 Smart Switch and CBS 350 Managed Switch - provide essential functionality along with advanced security options and are priced right – starting at US$200 - for small businesses. Both switches support PoE+ and have integrated DoS protection and time-based ACLs. The switches are stackable and come with limited lifetime warranty (usually unheard of). Techaisle small business research on buyer care-abouts for technology solution selection supplier shows that price (67%), reliability (66%) and support (54%) are ranked top 3 criteria. Cisco switches are purpose-built to appeal to the care-abouts. The dashboard, which directly integrates with the switches, is a network management tool with a streamlined user interface (a “single pane of glass” for all Cisco devices that eliminates the need to work with Cisco’s command line interface) to manage entire network with integrated lifecycle management and automated alerting. With zero-touch plug and play deployment, and hosted in the cloud or on premises, it allows small businesses to set-up, monitor and operate network devices from a simple interface on any device.

2. Tools to manage network in the Cloud – Cisco Meraki Health and Meraki Insight allows small business customers to monitor all aspects of their network and applications from Meraki Dashboard and API as well as detect and fix issues in minutes. As per Techaisle’s managed services research only 4% of small businesses have internal full-time IT staff and even within the 20-249 employee size segment, less than half are staffed with internal IT. Regardless of the size of IT staff, 79% of their time is spent on support and maintenance, majority in troubleshooting which creates not only IT efficiency deficit but also negatively impacts organizational productivity. Meraki Health’s objective is to make troubleshooting simple for the lean and almost non-existent and over-burdened small business IT staff.

3. Cloud Mailbox Defense for Office 365 – enhanced email security solution, designed for use with Office 365, with no changes to mail flow or DNS and can be made operational with 5 minutes. O365 (renamed to M365) adoption is on a meteoric increase. For example, Techaisle research shows that 48% of US small businesses are planning to use M365 within the next year. However, a vast majority of small businesses worry about malware and phishing attacks, password compromise and account hijack. Only 3% of very small businesses and 27% of small businesses have internal full-time IT security staff. These small businesses usually fail to add a secure email gateway, because they are unable to manage operational overhead and lack expertise to change mail flows and operate complex policies. They prefer a solution that can be easily deployed and managed. Powered by Cisco Talos threat intelligence, Cloud Mailbox Defense, runs natively in MS Azure, can be plugged into O365 with minimal policy configuration and does not require any specialized training to manage. Minimum seat count to get started is 25.

4. Webex Work bundle - a complete cloud collaboration solution that combines Webex Calling, Meeting and Messaging services in a single subscription, with attractive flexible monthly pricing for small businesses - per user/per month Webex licenses starting at $19.95/month. Techaisle research shows that within small businesses collaboration adoption efforts are being driven by demands for decision agility, speed of innovation, customer intimacy and faster time to market. 47% of small businesses are increasing investments in collaboration solutions because a lack of teamwork is impacting productivity. While the creation of a central information repository was the most important business driver for collaboration solutions initially, new adopters want to address the needs of increased employee mobility, dispersed team members and ad hoc scheduling.

Techaisle Take

To understand the profundity of Cisco’s small business solutions let us harken back to three of the top 10 SMB predictions I had written in 2015:

• Collaboration becomes a much bigger concept. In years past, “collaboration” was a big-company issue in which IT professionals used something called “presence” to connect staff to each other. What a quaint time that was! In 2015, I had said that this concept of collaboration will be swept into the dustbin of history. and it will become clear that collaboration spans files and people, staff and customers. It includes file exchange and multi-point editing; it extends beyond the corporate staff (and as a result, beyond large enterprises) to include customers; it has broken through the corporate walls, and demands support for mobility. In fact…
• Collabmobilicloud becomes an SMB management reality. There is a tendency in the press and in vendor product literature to treat collaboration, mobility and cloud as separate solutions. There is a tendency from the user perspective to treat them as aspects of a single approach to accessing, working with and sharing information. The users pay the bills, and in 2015, their perspective will predominate. Collaboration initiatives are part of mobility strategies, mobility is at the core of collaboration initiatives, and both are dependent on the cloud. This will have a major impact on application development and…
• Connected security becomes “security”. At one point, there was a debate in the security world - what was better – unified threat management (UTM) systems that ensured that there are no cracks between security products, or best-of-breed (BoB) products that could evolve as quickly as the threat landscape itself? BoB won that debate decisively; in fact, what used to be called “UTM” is now referred to as “next-generation firewalls,” one of many important “shields” around enterprise data, applications and users. However, with the expanding threat perimeter (caused in no small part by the trends towards hybrid and collabmobilicloud), 2015 is time to take a fresh look at how to ensure that all of the aspects of security infrastructure are integrated to protect against intrusion.

The above were true then and are even more poignant today. The Cisco Designed portfolio of small business-focused solutions directly addresses the needs and threat vectors for secure workplaces, better collaboration, simplified manageability and organizational productivity empowerment. Cisco has also made it easy for small businesses to buy the solutions, deploy and manage them either through their own internal staff or externally with the help of channel partners such as MSPs.

If the office of a small business is defined by devices, so too is the workplace defined by the ability to work from wherever those devices (and their users) are located. Small businesses are investing in mobility because it contributes to cost savings, increases market reach, improves productivity and establishes better ways of working. Security remains the top constraint for accelerating remote work adoption as small businesses struggle with data protection and mobile management. Techaisle global survey reveals that cloud, mobility, collaboration and security are among the top five technology priorities for over 60% of small businesses. 42% of small businesses are looking for solutions that are easy to buy, deploy, manage and support.

However, designing simplified products does not guarantee success in the small business segment. In an IT environment that is already very complex and likely to become more so, trusted advisors are very important to small businesses. Three quarters of small businesses rely on a trusted party – an internal employee with expertise in IT and/or external consultants – to provide advice on IT strategy. In most cases (over 60%), these advisors are trusted because they are viewed as unbiased and experienced, and able to provide the “right guidance” to the buyer. While the ‘unbiased’ observation would seem to rule out product vendors, small businesses exhibit a clear preference for advisors who can move seamlessly from advice to procurement and deployment. Cisco needs to invest in nurturing “super consultants”, both internally and externally (within channel partners) who can not only advise but also architect, deploy, manage and support Cisco Designed for Business portfolio solutions.

Regardless of the thoughtfully designed solutions, they are still discrete and transactional offerings. But we are increasingly immersed in a post-transactional market, where discrete sales of individual products or integrated systems are being replaced by agreements to provide IT functionality “as-a-Service.” Inexorably, the market is shifting from one defined by discrete purchase-and-deploy deals aligned with refresh cycles to one where businesses take a ‘hybrid IT’ approach that blends a limited number of on-premise assets with a growing range of on-demand services. To participate in this shift and stay relevant Cisco needs to create bundled solutions, including managed services with a recurring “as-a-service” offering.

Cisco should plan a larger product vision that aligns with digital transformation trends within small businesses. The vision should cover technologies such as HCI, SD-WAN, security, IoT, and workspaces. These integrated solutions will create reasons for small businesses to remain connected with Cisco.

Cisco has landed at a good place, finally. And it is ready to take off and soar within the small business segment. (Don’t muck it up)

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