Techaisle Blog

Look back

As is the case in each year’s SMB research, Techaisle SMB survey respondents are asked to detail their plans for acquisition of different types of client devices. Two of the major categories investigated by the surveys are desktop PCs and notebook PCs. To establish a baseline understanding of PC use and demand, Techaisle asks SMB respondents to specify the number of endpoint devices that are currently in use within their companies, and then asks them to specify the quantity that they are planning to buy over the next twelve months. To provide actionable insight to our clients, the question asks separately about desktop PCs, notebook PCs and tablets. While 2016 survey is in the field it is worth looking at the trends of last two years. In 2014, both the US small and midmarket businesses were bullish about new desktop and notebook purchases. But in 2015, the percent of US SMBs planning to buy PCs had dropped by 40% from 2014 for both desktops and notebooks. However, although the average number units of desktops planned to purchase dropped from 2014 to 2015 the average number of notebooks planned to purchase increased substantially from 2014 to 2015.

Many desktop buyers were motivated to replace existing units because they were reaching end-of-life and take advantage of Windows XP upgrade path. Desktops are also more of a planned/budgeted item than other client form factors (notebooks, tablets), meaning that desktop acquisitions are more likely to appear in formal purchase plans than the mobile units, and less likely to be acquired on an ad hoc basis. Notebooks are usually ad hoc purchase items – meaning that they would be underrepresented in research of this sort relative to desktops. Additionally many users upgrade their notebooks over time (to replace damaged units, to get features like touchscreen, to obtain lighter or smaller products, etc.).

However, corporate purchase intentions do not provide a complete perspective on mobile device acquisitions.

Potential Impact of BYOD on US SMB PC Purchases

Figure below presents a perspective on corporate purchase plans and the impact of employee purchases of notebooks. The top two sections of the table, shaded in green, illustrate the proportion of businesses by employee size reporting desktop and/or notebook purchase intentions, and the number of units that they plan to acquire. These figures are used to prepare a “net increase” figure – the average number of new units expected to be deployed by businesses in each employee size category. These two grey sections are followed by a line of percentages, shaded in purple, which shows the ratio of corporate desktop purchases to corporate notebook acquisitions. It shows that microbusinesses with 1-9 employees are much more likely to be buying desktops than notebooks, and that other SMBs are planning to buy 25% to 99% more desktops than notebooks.

The next section of the table, shaded in blue, begins with the BYOD penetration statistics that appear at the bottom of the figure. It then calculates the impact on notebook purchase intentions if this ratio is fully reflected in notebook purchases (the “at 100%” line) and if employees were to buy notebooks at half of the BYOD penetration rate (“at 50%), showing both corporate and employee purchases of these devices. These revised figures are used to calculate the desktop to notebook PC purchase proportions shown in the second set of purple-shaded cells. Here, we see that if employee purchases of notebooks are equivalent to current BYOD penetration levels, new notebook units would be about equal to new desktop purchases in most employee size segments, while a 50% scenario would result in ratios ranging from about 1:1 to 1:6 in all but the smallest employee size category.

Data drawn from the Techaisle SMB mobility survey shows that SMBs will go from a current average of 7 types of mobility applications in use to 14 in about a year. This 100%-ish growth pattern is demonstrated across most employee size segments.

When we overlay business size with Techaisle’s attitudinally-defined segments of “Pre-IT,” “Basic IT,” “Advanced IT” and “Enterprise IT,” some differences in app adoption emerge. Businesses in the “Pre-IT” segment (found only in the small business group) are currently using only 3 types of mobile apps, versus 7 type of mobile apps in use in each of the “Basic IT: Small Business” and “Advanced IT: Small Business” segments.

This same trend is visible across the three attitudinally-defined midmarket segments. “Basic IT” firms in the midmarket segment are using only 4 types of mobile apps, and planning to add 5 more; both figures are below the adoption rates seen in Basic IT in the small business community.

The more sophisticated segments, though, are adopting mobile applications much more rapidly. The Advanced IT: Midmarket group uses an average of 8 different types of mobile applications today, and is planning to add 6 more in in the next one year, figures that tie very closely to Advanced IT users in the small business community. And the Enterprise IT segment found only within midmarket firms is even more aggressive in mobile app deployment; these firms already use mobile applications in an average of 11 types of apps, and are planning to deploy 9 more.

Mobile applications: scope for growth in core apps and in other categories

The Techaisle SMB mobility adoption survey tracks 20 types of mobile applications. Although there is always overlap between different feature sets and application types, its possible – and useful – to group these into four categories:

What is the current state of managed services in the channel?

Techaisle’s SMB global channel partner research shows that in the US 71% are currently offering one or more managed services solutions and another 18% are planning to offer managed services within one year. Techaisle believes that the channel is at the beginning of a migration from generalist to specialist firms that will play out over the next few years. With that in mind, it is fair to ask, how widespread is managed services delivery today?

Figure below, taken from Techaisle’s US SMB Managed Services Channel Study illustrates the proportion of channel partners that currently offer managed services to SMBs. Unsurprisingly, 100% of MSPs report that they do so. What might be more surprising is the extent to which channel members with other core business models provide managed services to their SMB clients. Roughly two-thirds of VARs and SPs, and 80% of SIs, offer managed services to SMB customers. IT consultants are less likely to do so, but here, too, one-third of firms are already using managed services delivery to support SMB clients.

Above data demonstrates that there has been and continues to be substantial take-up in managed services as a business delivery model outside of MSPs. This will help to build SMB customer awareness of the benefits of the approach and comfort with managed services as a delivery model. It will also have a positive impact on the channel generally, as experience with managed services helps build channel familiarity with recurring revenue models which will be important in other important channel business areas, such as cloud.

Comfort level with – and profitability of – managed services

Clearly, SMB channel members of many types are investing in developing managed services capabilities. This trend begs the question, to what extent are these firms benefitting from these investments?

This is a two part blog article. The first part, published earlier, reviewed the predictions we made for 2015 and the second part, below, focuses on outlook for 2016 and for the longer term (2017 - 2020).

Top 10 Predictions for Year 2016

1. 2016 will see even more intense emphasis on “CIA-Plus”
IT Suppliers will begin to align their offerings with Cloud, IoT, and/or Analytics; products that do not address end-user needs in these areas will be positioned as infrastructure and integration services needed to capitalize on these technologies. This trend, like hybrid IT, will continue into 2017. In 2016, Cloud and Analytics will remain among the top five IT priorities of SMBs and midmarket businesses. IoT will inch its way up into the priority list, though adoption will remain limited.

2. Rise of IoT will be constrained by a lack of real-world examples
From a buy-side perspective, the rise of IoT will need to be fueled by real-world examples showing the benefits of automating tasks and processes within IT and in other sectors. Within the SMB community, we expect sporadic implementation and a lack of concerted effort towards creation of IoT strategy, even though IT suppliers will continue to push forward their solutions hoping to remain top-of-mind in order to claim leadership in this emerging space. Each IT supplier will create its own solution set causing decision and adoption inertia, despite the wave of innovation that we expect to see emerge from the smaller & more agile IoT providers that are able to more easily align IT expertise with real life solutions. Experienced consultants and system integrators in particular will hold sway in matching SMB adopters with suppliers.

3. IoT supplier success will be determined by ecosystem management
On the sell side, the rise of IoT will be accompanied by an intense wave of interest in ecosystem management. It is difficult to buy or sell a “box of IoT”, though providers will claim to provide complete solutions. Parenthetically, this constraint is not limited to IoT. While it is possible to sell a “box of cloud” under the right circumstances, only AWS really manages to do so. And while one can sell a “box of analytics”, the boxes themselves come in a lot of different shapes and sizes. To meet SMB and enterprise buy-side demand for IoT, sellers will assemble coalitions that provide the many products and services that comprise an IoT solution. This will make alliance management a key success factor in the marketplace. The last time alliances determined market leadership; SAP became the global standard in ERP. Niche value added reseller may find a new source of success in IoT.

4. Business transformation will continue to elude analytics users
Analytics users will find that they are not achieving the expected benefits, prompting divergent responses. Some SMBs will find that analytics has not been transformative, and will blame the technology; others will look to move past descriptive and diagnostic views, piloting predictive or prescriptive initiatives. One of these responses is clearly more sensible than the other, but that does not mean it will be universal, at least in 2016. Focus on visualization will increase (mine is better than yours), on how the technology can solve business issues and challenges for SMBs and midmarket customers. Simplified implementation of customer and social analytics will be key drivers of adoption.

5. “Hybrid” will be used more often in conjunction with “IT” than “cloud”
User organizations will accept the notion that their focus on cloud needs to evolve into a focus on hybrid IT, as firms realize that their platforms and management scope must encompass on and off-premise systems. Truthfully, there is still a lot of work to do in cloud adoption. But the nature of the discussion has changed from “what and how do we move to the cloud?” to “what do we do to build an integrated, manageable infrastructure?” In 2016, there will likely no longer be an infrastructure debate about use of cloud, but there will be an important emerging discussion around managing hybrid IT.

6. Collaboration will drive “silo” to the realm of four-letter words
Anywhere, anytime also means any type of collaboration. SMB & midmarket businesses will look for unified shared workspaces that allow employees to enter into the workspace from any entry point to work together, collaborate and interact. Collaboration solutions cannot be deployed on stand-alone platforms – they need to be viewed as a framework for integrating multiple capabilities, native to multiple applications.