Ask Steve: What Technologies Sell in a Down Economy?
Over the past several months people have been asking me about market share or penetration numbers for this-or-that technology. Being an analyst, I guess those types of questions come with the territory. Second, SMBs are asking how they can save money. This month Ask Steve will tackle both types of questions by presenting some of our rich, market data for technology solutions that make “dollars and sense” in a rough economy.
Q: What on-demand solutions are selling?
— Tom from Tampa, Fla.
A: Managed and hosted services seem to be getting a welcome second glance by SMBs in this recession. Not surprisingly, SMBs are shedding IT employees, cutting costs and limiting all capital dollar outlays. As such, some managed solutions make sense, but which ones?
According to Yankee Group data, medium businesses (100 to 499 employees) are more strongly involved in the evaluation process of software as a service (SaaS) right now. E-mail/messaging applications, security/disaster recovery and ERP solutions lead the pack (see graphic, “SMBs Evaluating Hosted Services”). Cost savings are the top issue for SMBs and hosted solutions can often do the trick.
Yankee Group recently completed a piece of research showing an 83 percent cost savings during the first year of cloud-based e-mail/messaging platforms over premises-based solutions. Medium-sized businesses would be foolish not to explore this option, given its two-month payback period and upfront investment of less than $6,000.
Q: What percent of employees have cellular business plans?
— Carla from Seattle
A: Carla, corporate-liable wireless is growing at SMBs. In the past, SMB employees would use their personal-liable cellular phones or PDAs and expense back the charges to their employer. This creates all sorts of accounting headaches for SMBs — not the least of which is an inability to audit properly. From the employee’s point of view, features and functionality differ greatly by handset and carrier. Some employees will have corporate e-mail functionality on their mobile devices, others won’t. Some will have mobile Web browsing, others won’t.
According to Yankee Group forecasts, corporate-liable wireless is expected to grow 6 percent per year over the next three years from 41 million subscribers to 48 million subscribers. In addition, we have found that businesses can garner a 47 percent cost savings in the first year of switching from a hybrid liability model (i.e., some employees on individual-liable and some on corporate-liable plans) to a full corporate-liable plan. This equates to a six-month payback period with startup and implementation costs less than $15,000. Over a three-year period the total cost savings are 51 percent.
We’ll see wireless carriers offering corporate-liable wireless broadband plans in the not-so-distant future. Imagine keeping a bunch of USB wireless broadband sticks in the office and giving them to employees when they travel. Employees get the benefits of anywhere access and their company avoids those pesky Wi-Fi charges at hotels and airports.
SaaS solutions and corporate-liable wireless are gaining traction in this rough economy. In addition, both of these solutions help SMB productivity while making employees more available for customers, team-mates and suppliers. Bad economy or good, they are worth checking out.
Steve Hilton is the vice president of Yankee Group’s Enterprise Research Group with an expertise in converged solutions for SMBs. Hilton manages a team of analysts delivering consulting, research and programs to help vendors and service providers better serve SMBs, midmarket enterprises and large enterprises globally. Visit Yankee Group online at www.yankeegroup.com.
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