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SMB Technology Spending in 2012

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2012 will be a challenging year on many fronts. First and foremost is the political upheaval that comes from a presidential election and all that surrounds it. The candidates’ political platforms can trickle down and affect the foundation of our economy; small and mid-sized businesses. The recent struggles of the SMB sector in the last few years have left a scar that many business owners and decision makers are working feverishly to heal, and suggesting where they should spend their thinning capital may lead many to wonder if they have any to spare.So do business owners and decision makers decide how they should invest their precious cash? There have been more than a few surveys and experts who have made recommendations, but ultimately it will be the marketplace that determines the correct course of action. Having an inkling of what to watch for does point many in the right direction. One of the people I look to for insight is Laurie McCabe, partner of the SMB Group. The SMB Group is a market research and analytical organization dedicated to the small and mid-sized business community. McCabe has over 20 years of technology experience and is frequently quoted on tech blogs and in other publications. In the SMB Routes to Market Study, McCabe states, “Many SMBs are tightening their tech wallets. More are forecasting flat or decreased IT spending for 2012 compared to 2011.” (McCabe, 2011) Not exactly what SMB IT service providers want to hear, but she does however bring up a good point. Providers give compelling evidence that the projects and/or solutions they are advocating will be profoundly impactful, and this should always be standard operating procedure. With every penny critical to the health of an SMB, one wrong decision could put the entire organization at risk.As the SMB Group research is very detailed, McCabe gives us the highlights which tracks with what most others are saying. Garry Meier of the Ephor Group wrote, “For the foreseeable future, the outlook for the economy is simply not favorable and specifically for the SMB sector that outlook is even further suppressed. Bankruptcy rates for the SMB sector will continue to rise as a result of management and the leaders of small businesses simply not adjusting and altering their business models to reflect the exogenous economic factors that are prevalent.” (Meier, 2011) Meier mentions factors cited by MSNBC pushing us back into a deeper recession including rising costs for basic goods, skyrocketing oil prices, lower investment yields, the soaring federal deficit eliminating any chance of another stimulus, and unemployment keeping consumers from spending and being confident.However, not everyone agrees that the outlook for the SMB space is dire. California tech research firm Computer Economics posted a Research Byte in November 2011 that opened with a hopeful message. “The only silver lining in an otherwise downbeat forecast for IT spending in the coming year is that smaller businesses are showing greater strength than larger organizations, a reversal from the prior year.” (Small Business a Bright Spot in IT Spending Forecast, 2011) Even with this hopeful outlook, there are still indications in the report that some vertical markets, such as financial services and local and state governments are not quite ready to join the rest in freeing up the purse strings. So we get that the outlook isn’t as rosy as the “dot com” era, but even if there isn’t a massive stampede to spend on new technology, there will be capital invested in various areas. Rather than focus on the negative, areas that will provide positive impact include cloud-based services, social media, enhanced collaborative toolsets, mobile applications beyond email, and business intelligence.I know hearing about the cloud is getting really old, but the fact is that the cloud is the new normal, and it’s increasingly being utilized by the SMB community for a variety of reasons. A Microsoft study cited by ITBusiness.ca surveyed over 3,000 SMB entities in 16 countries, and of those respondents 39% of them reported that they expect to pay for one or more cloud services in the next three years. The same question in 2010 yielded only a 29% affirmative response. The website also points to a study from Avenade Inc. and indicated that private cloud deployments have accelerated faster than their larger compatriots in nearly every area including security, virtualization, and storage. This makes sense especially in a climate where concerns about data security make placing critical information in a publicly accessible place nerve-wracking. Not to mention the private cloud provides more flexibility in regard to options and methods. That doesn’t mean that public cloud giants like Microsoft and Google are shrinking away. For the extremely small organization or sole proprietor leveraging these externally maintained and upgraded platforms allows more time for growing the business. The fact is, most SMB organizations don’t or won’t have the staff to maintain and upgrade a complicated IT platform, so leveraging the power of the cloud makes economic and operational sense.Social media is similarly apparent. There’s barely anywhere you can turn these days and not see a reference to social media, and once the news media quotes Twitter feeds in their stories you know the acceptance of social media is complete. It has trickled into every corner of our existence, from the gaggle of pre-teen girls I overheard in a restaurant the other day comparing tweets to trial combatants on Judge Judy pulling out printed Facebook exchanges to support their cases to job fairs on LinkedIn. The surprise is how much these phenomena have penetrated everyday business and marketing plans. McCabe’s SMB Group saw social media use in the SMB space rise to 50% with another 25% looking to adopt some of the tools within the next 12 months. McCabe points to the increasing gap between those entities that embrace the social media strategy to those who haven’t or are unable to articulate a solid strategy and thus just sit on the sidelines.The third point of discussion is collaboration. For years, providers have beaten the drum about the convergence of voice and data, and now the integration of social media into this mix is spawning a whole new suite of products. In the mid-90s, as a young telecom executive, I was cautioned that the old-style business phone system was going to give way to the computer network. Yes, I chuckled under my breath then, any my reaction was buoyed by the very slow adoption of these new ideas along with the performance issues that many of the early VoIP systems suffered. But now in the 21st Century’s second decade, these systems are decidedly outgrowing their TDM counterparts in most organizations. Adding options like presence, document sharing, special call routing, and video to these suites makes them desirable for their tight integration and bevy of options. For the SMB, the complexity of these systems is often precluded by “if it ain’t broke don’t fix it.” SMB organizations can opt for another cloud-based choice, one of the most integrated and robust being the Microsoft Office 365 suite which includes voice, instant messaging, SharePoint, video calling, and cloud storage. Changing the employee mindset is often the toughest battle the decision makers have to face in regard to these technologies.Mobility is another area that is only going to increase. As you can see, many of the previous points are intertwined, and mobile devices and access will only continue to grow. SMB owners and decision makers understand that their employees need flexibility to provide dynamic customer service, support offerings, and marketing plans. Telecommuting is no longer a dirty word and in many cases gives an employer an edge to draw top talent and keep them loyal. In 2012, it’s expected to go way beyond VPN access and getting email on the smart phone. The explosion of the tablet is fueling this adoption. Applications on these mobile devices will continue to rise in the upcoming annum with the SMB Group study pointing to strong growth in apps for mobile payment, time management, and field service. The latter is a natural fit for many service organizations as it enables customer service team(s) to provide rapid response times that differentiates from competition. Many of the apps that are continuing to be developed will target specific markets, opening the door for those software development gurus to take advantage of a growing need!Finally, business intelligence (BI) will see a bump as well. No longer are the main BI tools the ledger book, customer service log, or the Excel spreadsheet used to make critical business decisions. The SMB Group’s findings saw that one in every three SMBs they surveyed expected to leverage a cloud-based BI analytics solution. The use of social media will be a key in finding customer opinions and loyalties. With the massive amount of both public and industry-specific data out there, it will be crucial for SMB entities to crunch the data in a way that makes those choices truly impactful. And yes, mobility will play a role here a well.The trends we saw in 2011 will gain steep adoption 2012. With the economic outlook from the government still iffy, the SMB community will have to rely on their wits, their tools, and their partners to stay viable and jump to the next level of profitability and success. While it wouldn’t be a surprise to see these tools continue to be on the yearly lists through the middle of the decade, the SMB course will be charted by the visionaries who lead them. We’ll reconvene in another 12 months to see how right we were, and with a presidential election in our rear view mirror, how the direction of Washington will affect us for years into the future.


Written by davisjeffery24

July 25, 2013 at 5:28 pm

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