Having the right information in the right context in the right format at the right time is critical to making business decisions these days, and increasingly that means access through mobile devices – whether it is the roughly 30% of consumers who own tablets or those tens of millions who get information from a Smartphone. A recent Techaisle survey of over 600 channel partners uncovered several important similarities and differences between how SMB channels are approaching three of the most important trends in the market: Cloud-Computing, Mobility Solutions and Remote Managed Services. In this post we will offer a snapshot of some characteristics of Mobility in the SMB Channel.
From a demand perspective, 60% of partners reported having SMB customers request Mobility Services, with almost 80% of ISV customers topping the list. Not surprisingly, email – the killer app, is the most used and offered service with about 50%, followed by Payment Processing with over a quarter. As we have found in other surveys, the front-office, revenue-related applications of CRM, especially among ISVs, and SFA, especially among SPs and Social Media Marketing, especially among SPs, were all being adopted by almost a quarter of respondents. We expect a rapid uptake in 2013 in the area of Mobile Analytics, which is being embedded into many front office SaaS applications in the form of dashboards and self-configured KPI management with proactive communications, or from the several cloud-based pure-play BI vendors in the market. As mentioned following the recent Citrix announcements, we also believe the market is ripe for adoption of Cloud-based Productivity Suites, which will also drive adoption of mobility among SMBs.
In many areas of Cloud Computing and especially Remote Managed Services, the big inflection point in both adoption and average spending does not happen until the 100-249 employee segment, but not so with Mobility; approximately 60% of the demand comes from the 1-9 and 10-49 employee segments, with the increase in email (across the board) and Social Media Marketing and Mobile Advertising (ISVs, SPs) driving the trend.
There are differences in the approaches, needs and challenges between SMB channel types when offering Mobility Solutions to customers, typically falling into Cost and Complexity, Management and Employee, Network and Device and Security categories. In this example, we see some key differences between the VAR/SI and SP partners related to the provision of Mobility solutions. Poor Network Service is the biggest challenge for VAR/SI partners, followed by Insufficient Network Speeds, Lack of Integration/Compatibility, and Immature Platform Choices. Both were challenged equally by Slow Performance of Mobile Apps and Device Management issues. SPs biggest challenges relative to VAR/Sis included Lack of Applications Availability, followed by Poor Mobile Web browsers, and Network and Device Issues.
As the market matures, these challenges should dissipate with increased mobile responsiveness built into websites and applications, more affordable device and data plan pricing and wider adoption of smart mobile devices. For now, the perennial SMB issue of cost and complexity of new technology balanced against perceived and demonstrated return on investment remains the most important barrier for channels to overcome.
Techaisle Blog
While unveiling a very lucid product and service strategy today, Citrix announced several significant products and alliances that fill gaps in the SMB Cloud Computing marketplace. These include:
- An expanded Me@Work mobile applications suite, with new and improved apps,
- A strategic alliance with Microsoft to distribute Windows and Office365 as Cloud Services through XenDesktop,
- A VDI-embedded and secure Ultrabook Client,
- Next generation Gateway and next generation cross-cloud bridge,
- A certified cloud platform developed in collaboration with Apache CloudStack,
- Improvements to the NetScaler line.
And the most consequential announcement of the day - a wide and deep strategic alliance with Cisco that if well executed, will offer a true 1+1=3 result for both sides and have a major impact in the industry.
As the Cloud matures, Techaisle believes that integration is key and the market will coalesce around virtual versions of the client and server concepts – with communication at the core of the client suite and a collaborative, front office multi-user suite in the middle of the Server environment. With today’s announcements, Citrix moves us closer to this concept.
We will focus on three of the announcements with a point of view on how we consider them to be both strategic and timely, and finish up with huge potential impact of the slew of new alliance announcements.
Part of the achieving the vision is to ensure collaboration is possible across all hardware environments, that application objects can be executed regardless of proprietary operating systems and formats. By supporting all the formats shown here through their Receiver, Citrix already enables apps and data on three billion devices, which is expected to grow to ten billion in the next five years – Like many Korean manufacturers, Citrix is thinking in terms of screens, and knows that consumers are driving adoption of connected screens as part of the lifestyle – my teenage daughter has a MacBook, iPhone, and Satellite TV running all at the same time, each screen running multiple applications. When selecting a workplace, surveys show this generation would rather give up a more lucrative employment opportunity than give up their devices or right to use social media. As Kevin Kelly observed in his visionary work, New Rules of the New Economy, back in 1998:
“Because communication—which in the end is what the digital technology
and media are all about—is not just a sector of the economy. Communication is the economy.”
- Kevin Kelly, New Rules for the New Economy, 1998
We could not agree more, and the ME@Work announcement shows Citrix is taking the long view.
The ME@Work mobile app suite includes several productivity and collaborative applications, including the #1 web-conferencing solution, GoToMeeting. We found it interesting that Citrix is simultaneously introducing some competitive products in conjunction with the partnership; an email client – most important component of the collaborative desktop – as well as strong offers in file sharing, personal collaboration, and web conferencing. It is a bold move; for those of us who have been watching the industry for a while, we remember when there was a triumvirate – Windows, Intel and Novell - and then there was NT with OS-embedded LAN capabilities - and then there were two. And then Netscape came out swinging with a better web browser that seriously pressured Microsoft - and then there was Windows-embedded Explorer - and then there was one.
But Microsoft gets a lot out of these announcements, especially if execution can follow strategy. Microsoft revenue is over 25 times that of Citrix, but they can use the excitement brought by a fast-growing, deeply technical, and cloud-focused next-generation partner. Especially in the SMB space - the 100-249 & 500-999 segments of the mid-market are a real sweet spot for this partnership.
By partnering with Microsoft to bring Windows, Office365 and the SkyDrive to market, Citrix benefits from the practically ubiquitous Windows installed base and opportunity for widespread adoption of Office365, (which we expect to have a banner year in 2013). And access to the most mature global software distribution ecosystem in the world. Microsoft gains an ally that provides substantial support and momentum against Google Apps, a catalyst to move away from packaged software, additional credibility in collaboration, and adds 10,000 channel partners at the same time.
The Ultrabook client is a strategic offer because it supports the tide of BYOD and it is another route to market for XenDesktop VDI. It also aligns Citrix with Intel and the major OEMs who are looking for returns on large investments in the Ultrabook line.
While the Microsoft news is a big deal, the even larger news was a strategic alliance with Cisco that involves major commitments of joint R&D, integration of product lines and joint manufacturing in the future. Key Points:
Citrix and Cisco announced broad cooperation in three major areas: Mobile WorkStyles, Cloud Orchestration and Cloud Networking.
Mobile WorkStyles
The big idea here is any data on any device (the billions of screens mentioned above) to support the growing BYOD wave, and leveraging joint strengths to deliver a unified secure environment for applications, data, voice and collaboration. Cisco contributes Jabber and substantial collaboration expertise gained from the Webex acquisition, Virtual Experience Infrastructure (VXI) technology, and MediaNet Technology. For Mobile WorkStyles, Citrix brings a new and improved CloudGateway and Receiver, a new and improved ShareFile service and XenApp & XenDesktop. The alliance aims to bring a richer experience with seamless security and a leveraged support infrastructure than covers the entire stack 24x7 on a global basis.
From a business perspective, Citrix can ride on the back of the 800 pound gorilla straight into the Enterprise, leveraging the industrial-strength performance of Cisco’s premium product lines at a reduced price point. As with Microsoft, Citrix is aligning itself with an old-guard industry titan, in this case, one whose revenue is 16 times that of Citrix. And as with Microsoft, the deal looks like a win for both sides. Our opinion is that it could help revitalize Cisco, whose foray in to software based business created some great products in Webex, but the model was different enough to shake them up. We continue to write on the rise of the digital channel at the expense of a traditional HW VAR Channel. When Cisco acquired Webex they entered a software-based, inbound sales, price sensitive, online-marketed, sold and delivered, six-week sales cycle, user-configured business model that was almost the antithesis of what they were best at: premium quality enterprise hardware-based solutions that are differentiated by making the value of the whole network exceed the sum of its’ parts - sold by an enterprise sales force and delivered by top shelf VARs and SIs. Especially within SMBs, the right combination of price and SLA to solve business, not technical problems, are overriding criteria when buying, and traditional hands-on VARs might not even be called - cut out by online marketing and inbound sales teams. In hardware, it is more about scale economies, quality engineering and brand management - software is all about market share and developing accelerating returns and an ecosystem of fellow travelers.
Cloud Orchestration
The second key area of cooperation is in what is being called Cloud Orchestration, where the objective is to manage the traditional data center functions of computing, network, storage, security, and management, delivered across physical, virtual and cloud environments using Unified Computing, Unified Management and Unified Fabric. This is clearly Cisco’s home territory and they bring expertise and technology including Unified Computing System (UCS), Open Network Environment (ONE) and the Nexus Series of switch technologies to bear on these challenges. Citrix contributes the newest CloudPlatform, a new open source CloudStack and the XenServer to this effort. Using Cloud Orchestration, the alliance aims to deploy Public, Private and Hybrid Cloud environments with unified management that reduces complexity and improves agility, something SMB customers will be happy to see. Embracing Open Source is also a good move for Citrix to increase the footprint.
Cloud Networking
The third leg of the alliance is centered on the Citrix NetScaler Cloud Networking Platform. Here the objective is to adopt NetScaler as the go-to technology and jointly develop the next generation through the alliance. This will be accomplished by offering NetScaler as a strategic component within the Cisco Cloud Network Services Architecture, with seamless integration at the product level in areas including Security and WAN optimization. The order of implementation is that Cisco will adopt, sell and market the NetScaler, it will be manufactured according to a certified Cisco Design specification followed by a joint road-map for product interoperability, development and go-to-market strategy over the long term.
Through these announcements, Citrix has taken several steps to advance Cloud-based services and fill gaps in the market; they have introduced a new channel for Windows and Office365, brought to market their own collaborative suite, and a VDI-embedded client to further the VDI and BYO trends in the SMB space. Other technology announcements were also significant but for reasons of brevity we have not covered them in detail. One thing is for sure - no one can accuse Citrix of being timid. Of course, when snuggling up with the big guys the way they are, Citrix themselves said it best in the announcement: "POs are better than PR". It all falls on execution at this point.
Taken from a 2009 White Paper, this image shows the new competencies required from partners to make the transition from traditional reseller to Cloud Aggregator or Cloud Reseller. What Techaisle described was the opportunity to become either an aggregator, by becoming the equivalent of a “first tier” distributor (positioned between the vendor and resellers who then sell to end-users), or as a Cloud Reseller, selling directly to end users.
Competencies required for the aggregator include the ability to aggregate services and integrate them across services, either data across applications or building solutions between infrastructure, communications and application services. In addition, core competencies were/are needed in the areas of service provisioning and datacenter management. Then an Aggregator needs to be able manage reseller relationships with structured sales and marketing programs, implementation and post-implementation support for the channel, and tier 2 customer support for end users. Given these demanding requirements and the price pressure, it is not surprising that larger organizations like Dell have been the companies to aggressively pursue this strategy and taking advantage of an existing hardware and storage business to offer a full solution stack to resellers and Enterprise customers. As we have written on several occasions, the SMB channel is being squeezed by several trends including the rise of the Digital Channel, Self-Service Applications, Remote Management Dashboards, Plug-and-Play Horizontal Applications, and others. These make the aggregator approach difficult and susceptible to commoditization, more so given the additional challenges of recruiting, managing and supporting an additional tier of resellers. As a result, there has been a lot of confusion around how to make money as an aggregator, and the assumption that a solution has to include all layers in the stack: Computing, System Software, Storage, Network and Application. Even considering wholesale remote infrastructure availability, channels are confused about which layer to start with, how to choose the vendors, where to recruit staff, how much investment, how to migrate existing customers and many other questions have prevented many channel partners from making the move.
The other option for SMB channels is to move existing and new customers to cloud-based services, which still requires embracing new technologies, and figuring out how to add value through specialization, integration, customization and/or all-in-one provisioning, maintenance and support. With that as background, we can move into the topic in the headline: What the SMB channel needs from Cloud-based Service vendors. The partners here represent VARs/SIs, ISVs and SPs, and are more typical of the Reseller category rather than the Aggregator.
In a recent survey of SMB Channel Partners who offer Cloud-based Services, the most important need from Cloud Vendors was for an SLA that guarantees availability. SLAs were cited as most important by Service Providers and VARs/Sis with 61% and 59% respectively, which brought overall average to the top of the list at 53% of all partners surveyed. This is consistent with what we have heard directly from SMBs, who are using the SLAs as a proxy for the brand of underlying infrastructure and system software of the applications. The effect of this is strongest on hardware vendors, whose equipment is becoming increasingly commoditized by plug-and-play infrastructure and exacerbated by a digital channel that uses self-service interfaces and management dashboards instead of on site visits. In a similar vein, the next requirement also comes directly from SMB customers, who want access to 24x7 support services. As SMBs move to SaaS and Remote Services, outsourcing infrastructure and applications exposes them to more risk and loss of control, increasing the need for the security of a 24 hour Support Desk to reduce the perceived risk of “offsite everything”. These first two needs line up with SMB purchasing criteria, ironically two of the other most important factors are Price and Data Security. That they are not passed on as needs to the vendors probably suggests that these are largely under control – users also typically rated high levels of satisfaction in these areas.
Most of the remaining issues relate to two categories: Product Related and Partner Program Related.
Product Needs included better methods of integration, a broader catalog of applications and single sign on across applications.
Partner Program Issues included better notification of upgrades, changes and downtime – providing onsite training, having a policy concerning data migration to competitive products, and ability to offer discounts for paying annual fees upfront.
Vendors and Cloud-Services Aggregators should keep these needs in mind to develop the best Cloud Partner Programs, and SMB Resellers should use these vendor capabilities to select the right Vendor/Aggregator to work with as they migrate customers from a traditional offers to Cloud-based solutions.
"As a general rule, the most successful man in life is the man who has the best information."
- Benjamin Disraeli (1804 - 1881), British Prime Minister
We are in a transformational time for Mobility and Mobile Business Intelligence, with lots of innovation happening in both hardware and software. Factors such as declining data plan prices, improved broadband availability, software investment, and widespread access to Smart Phone applications will continue to drive market acceptance as barriers to adoption fall away.
Taking a channel partner view of the market, this chart shows what SMB Channel Partners (50%+ Revenue from SMBs) are hearing from their customers: overall 60% report that customers are asking for Mobile Solutions, including ~80% of ISVs, 54% of VAR/Sis and 47% of Service Providers.
One of the trends in BI overall is a large increase in embedded BI functionality into software applications. This arose through the enterprise-level dashboards and reporting capabilities that SMBs saw with Salesforce.com functionality and quickly become must-have features for serious software applications, especially those delivered as a Service (SaaS). On premise and SaaS versions have been updated through development of new internal code or OEM arrangements and open source code from players like Pentaho and Jaspersoft.
Enabling BI mobility is accomplished by moving existing functionality to a mobile environment, using the new technologies on top of the old, which is more complicated than starting from scratch in many cases. The larger companies such as Oracle, IBM and SAP are approaching this through acquisition of smaller companies and integrating them into existing products. But in a classic build vs. buy fashion, smaller companies offering SaaS BI services have been building new offers from the ground up, directly employing the newest technologies like HTML5, iOS and Android for delivery to Apple devices, smartphones and the burgeoning number of tablets in the market. Smaller providers in many cases have gained a timing advantage; using native technology brings existing mobile functionality to bear on the problem; instead of simple links to server data, the presentation of the information can immediately be rich and interactive using screen manipulation, i.e., pinch and squeeze or geo-location awareness, as part of the data exploration and visualization experience.
Other features of “true” mobility integrated with “true” BI include the ability to interact with data objects on the screen, such as search, filters, check-boxes, drill-down and drill-through to the record level and other interactive functionality. Of course, then being able to use the built-in device communications capabilities is also important once the information has been isolated – SMS, email and forms should be available for manipulation and dissemination of the information.
Many use case scenarios present themselves from the low end retail – such as immediate revenue and profit reporting from the new generation of card swipers into QuickBooks or MS Dynamics and received on a smartphone, to a mid-market electronic component manufacturer checking inventory turns in the Singapore distribution center using SAP Business Objects or IBM Cognos 10 through a Samsung Galaxy Note Tablet.
Among the pure-play SaaS Mobile BI firms to have emerged in the last few years is Exxova, based out of Atlanta, which we chose as our Cloud Vendor Pick of the Week. We chose Exxova because they have a unique value proposition: although they use some of the most powerful back end analytics technology – SAP, Business Objects, Oracle, etc., they have managed to simplify this technology and allow administration of database structure and reporting by literally dragging and dropping fields in a web-based interface, creating new groups and calculations, and having the results delivered immediately through mobile devices running iOS and Android as described earlier. Having separated the reporting layer from the analytical engine allows them to provide deep BI capabilities to end users without the additional cost of licenses for all the back end tools, while at the same time allowing Flash and Flex to be delivered in original format to the Apple environment.
We interviewed their President Mark Hillam, a BI industry veteran and former Business Objects executive for this post. In response to how Exxova reduces complexity for the users and administrators of Mobile BI, Mr. Hillam replied:
“Every report, dashboard, and analytic is rendered with perfect fidelity to the original source. All of this is accomplished without any modification or changes to the Enterprise BI platform or the existing content. Even full report editing is capable from the mobile platforms.”
Exxova offers a strong example of true Mobile BI functionality which is relatively easy to administer and use at a good price point. There are others in the market such as SAP, Microstrategy, Oracle and IBM, who also have strong mobile solutions. For the SMB marketplace there will always be a balance between cost, complexity and functionality to be taken into account before long term commitments are made, Exxova seems to fit this space well. For more information, see it in action below.
