Back to the future

Written by Ben White, CEO and founder of Star

Thursday, 07 August 2008

Ben White discusses what SMEs want from technology, both now and in the future.

Just over two weeks ago I was sat in a room with some of the leading lights in IT discussing what SMBs were looking for from technology, both now and in the future.

This is, no doubt, a conversation that lots of technology vendors are currently having as they look for ways to tap into this vast community. The trap most falls into is telling SMBs what they need, rather than listening to what they actually want.

Where our event differed was the fact that around 200 of these businesses had joined us, and there was no danger of not listening to them as they made their feelings very clear.

One of the biggest challenges facing small businesses today is access to finance for growth, so, as the economic slowdown continues, the number one priority is to do more with less. Making the most of existing technology investments and using technology to respond quickly to changing business conditions and to open up new sales opportunities is a priority.

It is no surprise then, that when asked what were their current key drivers when making technology-purchasing decisions almost half (43%) of the attendees prioritised solving real business challenges and enabling them to ‘work smarter’.

Many of the attendees probably expected to hear that there was a revolutionary new technology that would change their business lives almost beyond recognition over the next couple of years.

It’s what they’ve come to expect from the consumer technologies they buy – so why not their businesses? The average tech-savvy SMB has also had to adapt fast to the changing Internet landscape.

Since its mass-market adoption in the mid-1990s the Internet has changed every aspect of business life – from email to creating a basic ‘shop window’ online and, more recently, more mature e-commerce sites and converged data networks for voice, data, and video traffic.

This is reflected in a recent survey, in which two-thirds (66 percent) of small and medium-sized businesses (SMBs) said the Internet was a critical sales tool and 93 percent said it was an integral part of their business growth plans. The question SMBs at the recent event were looking for answers to was ‘what next?’

While new technologies are certainly on the radar, many of the ‘killer’ technologies over the next 18 – 24 months are already with us.

There is a definite trend for SMBs adopting the same tools as their larger counterparts – with 43% identifying virtualisation as a key technology to help ‘crunch-proof’ their business – a technology that would not even have been understood by many small and medium-sized businesses a year ago.

The key is to take proven enterprise technologies, and make them relevant and affordable for SMBs.

As we looked at the road ahead for SMB technology, the revelation for many of the attendees was that innovation is now centred on making existing technology better.

It’s about taking proven products and services and tweaking them to add value, reduce cost, make them easier to implement or integrating them with other vendor’s offerings. There is always the chance that there’ll be a disruptive technology – like Facebook – but it won’t be the driver for SMBs.

Take convergence as an example. 21% of respondents also cited a converged approach to their voice and data as THE recession-beater for their businesses. 17% felt that availability of new broadband-enabled services would have the biggest impact on their ability to safeguard against a potential recession.

Convergence has been around for almost as long as the Internet itself – it just hasn’t been realistic for SMBs until the last 18 months.

Another buzzword in the SMB community has been software-as-a-service (also known as hosted applications or everything-as-a-service) – rather than software and user licences you can pay a per-user licence fee from your ISP or hosting provider and remove the capital cost of the hardware it runs on and the outlay for the programme itself. Because it is hosted it can be accessed from anywhere – making it scaleable, accessible on any PC and cost-effective.

The difference is that all of these new technologies are now more than just pipe dreams for SMBs. Technology, previously the preserve of large enterprises, is being refined, configured with a small and medium-sized business in mind, and offered at a price point that fits with SMB budgets.

Over the next couple of years this process will revolutionise the way that forward thinking small and medium-sized businesses use the Internet to drive their businesses forward. It will turn an information resource into the single biggest business tool in an SMB’s armoury.

In effect, the future will look very much like the early years of Internet innovation. The first corporate Internet technologies – take NetStar, for example - were innovated to address real business challenges.

Later, with the foundation of MessageLabs as the threat of viruses spread from the Internet to emails, new technology was evolved to help businesses protect their corporate networks.

The next few years will see Internet technology vendors return to these core objectives – helping businesses solve real business challenges; working smarter, protecting corporate networks, making communication easier, reducing cost. The focus will be evolution rather than innovation.

Another factor shaping how SMBs are using technology is the removal of traditional barriers to adoption which have previously existed. Security, whilst continually topping the polls as the greatest technology concern, will cease to be the barrier that it has been.

Over the next 18 – 24 months security will come ‘as standard’ for all business hosting and network management solutions. The emergence of the hosted firewall will drive this trend – allowing SMBs to outsource the technology and management of safeguarding their networks to third party experts.

SMBs want to make technology a cornerstone of their business, but need vendors to understand both the technology and business challenges they face. This knowledge must also be reflected in the product and service offerings that vendors bring to the SMB market.

In recent years these companies have been forced to use a combination of scaled-up consumer technologies or cut-down Enterprise systems, with neither delivering a solution with the right combination of functionality or benefits to drive an SMB forward.

The next couple of years present a huge opportunity for both SMBs and technology vendors to work together to deliver on the promise of the early Internet technologies. They must learning the lessons of the past and use them to create the technologies of the future.