Sanjeev Aggarwal's Blog

October 31, 2012

SAP TechEd 2012: Implications for SMEs and the Partner Ecosystem

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Sanjeev Aggarwal, Partner, SMB Group

During the week of October 15, I attended SAP TechEd 2012 in Las Vegas, along with about 6,500 SAP technology specialists and partners, and a small group of influencers. Although SAP is more widely renowned for its success in the large enterprise market, the small and medium enterprise or SME market (which SMB Group labels the small and medium business or SMB market) is a core part of SAP’s installed base and essential to SAP’s growth strategy. Roughly 80% of SAP’s more than 128,000 current customers are SMEs with less than 1,000 employees. In addition, SAP has more than 12,000 partners worldwide who provide SAP solutions and services to SME customers.

During this year’s TechEd, SAP discussed three areas that underscore SAP’s commitment to the SME market and its fundamental belief that strong growth opportunities lie ahead in this segment.

Taking HANA to the Cloud and to SMEs

  • HANA Cloud was by far the lead theme overall at 2012 TechEd. As Bill McDermott, co-CEO remarked, “HANA lies at the heart of the intellectual renewal going on at SAP.” HANA began life as an in-memory analytics engine, and quickly evolved into a database. Now, as SAP announced at the event, SAP is building the HANA Cloud as a next-generation platform for developers.

    SAP HANA AppServices and SAP HANA DatabaseServices are services that allow developers to create next-generation applications using native SAP HANA, Java and other rapid-development services. The good news is that SAP will now offer for free, developer licenses for SAP NetWeaver Cloud to get more support from the developer community. These shared services will build on SAP’s cloud platform vision by providing building blocks for portals, integration, mobile, analytics, collaboration and commercial services required to expedite building and life-cycle management of applications.

    SAP HANA One, a deployment of SAP HANA on the Amazon Web Services Cloud. HANA One currently supports a relatively small 64GB HANA instance on Amazon’s AWS cloud for $0.99 per hour. This will make it faster and easier and cheaper for developers to build affordable, HANA-enabled apps for SMEs.Although HANA Cloud is still a work in progress, HANA Cloud services and SAP HANA One are first steps to SAP realizing the HANA Cloud development platform vision. Significant work is required to move this from a development/testing proof-of-concept to a production platform where commercial applications can be deployed. SAP needs to develop a strategy to help developers move rapidly to commercial deployment and promotion, as Salesforce.com has done successfully with its Force.com platform and ecosystem.

  • SAP also announced that SAP Business One, version for SAP HANA, has been in limited release mode as of September 18, 2012, with general availability slated for some time next year.

    SAP Business One is SAP’s flagship ERP solution for SMEs with fewer than 100 employees. This HANA-powered version uses the HANA database and allows both the transactional (ERP) and analytical application to be run on the same server, and promises significant performance advantages. Running both ERP transactions and analytics on a single platform speeds access to information for analytics, reporting and search, without slowing down transactional processing.

    While not every SME will need to turbo-charge these functions, some SMEs are challenged with exponential data growth, and managing and extracting the insights they need from it. For instance in the health care industry, companies can integrate patient transactions with insurance company patient utilization records and hospital electronic medical records, to providing a complete real-time view to better manage patient care and costs. By crunching through more data more quickly, these businesses can more readily gain the insights they need to succeed in an increasingly complex and competitive world.
    Meanwhile, SMEs that don’t require the increased speed and power and analytics capabilities that HANA supplies can continue to buy SAP Business One based on Microsoft SQL database, which SAP offers as both an on-premises and cloud based solution.

Enabling Mobility for SMEs

With the acquisition of Sybase and Syclo (which SAP acquired in April’12), SAP is moving to help SMEs develop a mobile application and mobile management strategies. Sybase’s robust, market-proven Sybase Unwired Platform, is now augmented by the Syclo mobile application development platform to enable partners to rapidly develop, configure and deploy mobile apps for SME customers. SAP partners can also help SMEs to add mobile capabilities to their existing business applications, and/or help them develop custom mobile applications to address business requirements. SMB Group research studies indicate that many SMEs are planning to deploy internal mobile solutions in areas such as field service and CRM. In addition, they are planning to provide external mobile apps in areas such as payments, marketing and appointment and reservation scheduling to boost customer engagement and create new revenue opportunities.

Empowering the SME Partner Ecosystem

The partner ecosystem heavily influences SMEs’ business solution purchase decisions. Many of the partners I spoke with at the event provide consulting, implementation services and development for SAP’s SME-focused applications, including Business One, Business by Design, Business All-in-One, Business Objects Edge. Now SAP is helping these partners build skills in HANA and mobility to support new SME requirements.

Partners will play a vital role in helping SMEs customize application, analytics and reporting on the HANA platform or help startups develop new next generation application on SAP HANA Cloud. Likewise, on the mobility front, partners are essential to help SMEs develop a comprehensive mobility strategy that includes mobile access to business application and address the mobile management issues–including devices, access, security and mobile applications –in a unified way.

SAP is sparking renewed interest from and incremental opportunities for the SAP partner ecosystem. HANA Cloud, SAP Business One with analytics powered by HANA, and new mobility solutions will help SAP attract new partners and grow its partner ecosystem. Meanwhile, SAP’s laser focus on the mobility front will help it forge new partnerships with mobile solution developers that want to capitalize on the opportunity to provide mobile solutions via SAP’s Sybase Afaria platform. SAP is also opening up the SAP PartnerEdge program to help attract these new partners with educational tools, resources and training–as well as credentials to validate and certify partner skills for mobility and HANA.

In addition, the current SAP Mentors and partners that I met at TechEd were excited about the new opportunities that this will open up for them. For existing SAP partners, SAP’s new HANA and mobile solutions provides a pathway to incremental opportunities in their existing account, and an entrée to develop business in new ones.

Perspective

SAP is betting that these new technologies and solutions will give it an edge in the SME market. But for many SMEs, this is uncharted territory. SAP will need to make a hefty investment—particularly around HANA—to build awareness and understanding of the value that it brings to the table. Likewise, it must build on TechEd to ensure that it rolls out a steady, effective training program to help partners position, design, build, implement and support SAP solutions in these areas.

That said, as discussed in The Progressive SMB: Customer Stories are Worth 1,000 Analyst Words, SMB Group research indicates a distinct and growing segment of SMEs that we call “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT investments. They see IT as a tool for business transformation, and a way to create market advantage and level the playing field against bigger companies. Furthermore, Progressive SMBs have higher revenues expectations than their peers.

For instance, 50% of the small and 73% of the medium Progressive businesses (who are increasing technology spending) anticipate revenue gains in 2012, compared to just 15% of the small and 8% of medium businesses that plan to decrease IT spending.

The opportunity for SAP lies in growing the Progressive SME segment. After all, its unlikely that SME technology stragglers are going to become SAP customers. To accomplish this, SAP will need to make a significant investment outside of its installed base (as well as within) to educate SMEs about the increasingly dire consequences that technology laggards are likely to face, and the tremendous upside that they can gain by using IT solutions more strategically. Then, SAP must clearly connect the dots to demonstrate how SMEs can apply its new solutions to leapfrog competitors and grow their businesses.

If SAP can alert and educate a broader SME audience, then it can not only help narrow this gap, but also increase the market opportunity for its new solutions.

June 10, 2012

NetSuite SuiteCommerce: Transforming Commerce Solutions and User Experience

 Last week I had the opportunity to attend NetSuite

SuiteWorld 2102 in San Francisco. One of the most notable announcements was the launch of NetSuite’s new SuiteCommerce Commerce-as-a-Service (CaaS) platform for B2B and B2C businesses.

The SuiteCommerce offering is designed for e-tailers, retailers and other companies that sell online and provides these businesses with multi-channel platform which is integrated with NetSuite’s core ERP system. This gives companies a unified front-end to manage their various digital sites and brick-and-mortar stores, connected to their ERP to provide a single system of record for history of customers across channels. According to NetSuite, SuiteCommerce will help businesses to:

  • More easily customize web page content and integrate information into back-end financial systems
  • Tailor eCommerce solutions to the requirements of mobile, machine-to-machine (M2M) and social networking platforms
  • Enhanced social networking solutions through integrations that augment the platform with social functionality such as social ratings, reviews, personalized product recommendations and conversations

NetSuite will offer two SuiteCommerce options:

  • The Mid-market version targets businesses with smaller product catalog of products and services. The Mid-market suite starts at $1,999 per month and is available now.
  • The Enterprise version is aimed at larger companies and is designed to handle a more extensive product catalog of products and services. The Enterprise version at $3,999 per month and will be available in August 2012.

The vendor also announced a roster of SuiteCommerce partners, including Square, Stripe, Acquia, Bazaarvoice, MyBuys, Velaro and Shotfarm that have developed apps that integrate with the platform. In addition, it announced partnerships with the creative agencies that can help companies design their sites to optimize SuiteCommerce capabilities. These partners, agencies and VARs can extend the SuiteCommerce platform using NetSuite’s SuiteCloud development platforms and SuiteApps.

Perspective

The timing of this announcement couldn’t be better.

Technology trends are converging to create a perfect storm in the world of commerce—one that empowers customers and raises the bar for companies to meet new, more demanding customer expectations. Social media empowers customers with information from friends and other unfiltered sources. Mobile devices are
facilitating this trend, making it possible to research and shop for products and services anytime and anywhere. Cloud computing and ecommerce are blurring the boundaries between brick-and-mortar and online commerce stores, creating an imperative for merchants to provide consistency and visibility across channels.

This has created an environment where customers expect more from businesses throughout the commerce cycle. They want anywhere, anytime, any-device access to multiple sources for information gathering, product and service evaluation, selection, purchasing and customer service. As a result, merchants need to anticipate what the customer wants, automate and personalize customer interactions, and enable the customer to do business where, when and how he or she wants.

NetSuite’s introduction of SuiteCommerce is designed to help businesses meet these elevated customer expectations. NetSuite has had an integrated eCommerce offering for years, an almost 2,800 of its customers run their web sites and storefronts on NetSuite. However, SuiteCommerce is intended to go beyond the commerce experience to integrate social, mobile and other customer touch points.

As NetSuite’s CEO Zach Nelson noted in his remarks at the event, “Over the past decade, NetSuite has transformed how our customers operate their businesses internally. Over the next decade, NetSuite will transform how businesses operate with other businesses and with their customers through NetSuite Commerce as a Service.”

In addition, SuiteCommerce strengthens NetSuite’s “one system of record” integrated suite story, which is a good one in the mid-market. SMB Group’s research finds that “integrating different applications” is a significant challenge (Figure 1).

Figure 1: Top Technology Challenges in Medium Businesses


Source: SMB Group 2011 SMB Routes to Market Study

The SuiteCommerce offering also aligns with the direction NetSuite announced at last year’s SuiteWorld event, when it unveiled plans to move up from its SMB lineage (that harkens back to its NetLedger days) to pursue the upper end of midsize business, a two-tier strategy in the large enterprise space, and select industry markets.

SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition. SMBs are using both mobile-friendly web sites and mobile apps to offer functionality to foster this interaction, as shown on Figure 2. Regardless of whether SMBs are employing a mobile-friendly web site, mobile apps, or both, what are the top capabilities that they are providing to external audiences? And what do they plan to add in the next 12 months?

Figure 2 Business Functions Available/Planned Via a Mobile-Friendly Web Site/Mobile App.


Source: SMB Group,
2012 Small and Medium Mobile Business Solutions Study

Mid-market businesses are increasingly enabling mobile apps to access line-of-business functions to conduct business with customers, prospects, partners and suppliers. Mobile support in SuiteCommerce will enable significant new revenue opportunities for NetSuite SuiteCommerce VARs and service providers.

Quick Take

The large number of customers and partners in attendance at SuiteWorld 2012 seemed excited about SuiteCommerce and NetSuite’s direction to help transform from the core internally-focused business application into an integrated, commerce-aware business platform. I talked to several NetSuite VARs at the event, most of them were very excited about the comprehensive easy-to-use solution multi-channel commerce solution.

NetSuite’s ability to get both developer and creative partners for the SuiteCommerce launch bodes well, as these are the applications and services that will bridge the last mile for many customers.

SuiteCommerce currently offers good mobile capabilities to mid-market businesses. However, SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition. NetSuite should look at developing some core mobile apps that integrate with SuiteSommerce, these apps can me customized by the VARs and offered to mid-market business providing significant competitive advantage to the SuiteCommerce platform.

There has been a significant rise in demand for social networking capabilities in mid-market businesses. On the social side NetSuite has already enabled the platform for social networking. Several of the social solutions partners help complete the solution to provide a comprehensive social solution.

One question that remains unanswered, however (although asked by analyst Brian Sommer and explored in NetSuite SuiteWorld Part 1: The Big Points | ZDNet), is how NetSuite will help companies crunch through, manage and make sense the massive amounts of new, external and transactional data that they will be bringing in. While big data, HANA, Hadoop and in memory databases are still fuzzy concepts for many, major players (IBM, Oracle, SAP, etc.) will get better at articulating what it means–and their solutions. And as NetSuite turns further upmarket, the pressure will build for it to have a solid and well-crafted big data strategy.

March 30, 2011

Is there a Method to Social Media Madness?



Co-authored by: Sanjeev Aggarwal and Laurie McCabe, SMB Group, and Brent Leary, CRM Essentials  SMB adoption of social media for sales, marketing, product development and customer service is on the rise – but how are SMBs tracking, analyzing and measuring the success of their social media endeavors?

In our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers about their use and plans for social media for sales, marketing, customer service and support, product development, HR and other business functions.

Featured Study Highlights

To put social media adoption in context, we asked several questions to better understand how SMBs accomplish their business objectives though different channels and mechanisms, including, “How does your currently track, analyze and measure the success of the company’s social media efforts?”

In the medium business segment, 52% of respondents indicate that they currently use social media. Among these respondents, about 19% say they use it in and “ad hoc, informal” way, while 33% indicate they use it in a “structured, strategic” manner. When we take a deeper look at how medium businesses using social media track, analyze and measure success of social media efforts, we see that companies that take a strategic approach are more likely to incorporate a greater number and more actionable metrics to measure social media effectiveness than their informal, ad hoc counterparts (Figure 1).

  • For strategic users, actionable, customer-centric metrics such as referrals (14%), click-through rates (12%), and inbound links (11%) top the list. These are followed by social media measurements such as number of followers and friends (9%), and sentiment analysis (9%), along with anecdotal feedback (9%).

  •  Companies that use social media in an ad hoc manner are more likely to rate “softer” measurements, such as anecdotal favorable feedback (6%) and buzz from social media (4%) as top tracking criteria and yardsticks for success.

Not surprisingly, SMBs that take a structured, strategic approach–and use more actionable metrics–are also more satisfied with the results of their social media efforts than those engaging in an ad hoc manner.

This underscores the need for better integration of social media with traditional sales, marketing, and service/support solutions–along with better tools to track and measure results.
Figure 1: Medium Business: Comparison of Strategic and Ad Hoc Users Criteria to Track and Measure Social Media Implementation
 
 
 
 

 


Quick Take

For SMBs to truly evolve into “social businesses,” they need to be able to easily track, measure and tweak the results of their social media investments across a wide range of business activities, from marketing through customer service and product development.

Although the social media drumbeat is loud, SMBs’ enthusiasm will be curbed if they can’t figure out what impact their social media initiatives are having. Whether on their own or via partner solutions, vendors will need to give SMBs the tools they need to integrate and evaluate social media efforts into their larger business strategy and framework.

Because social media engagement does not occur in a vacuum, businesses will want to measure social media efforts in context of broader sales, marketing and customer service or other initiatives. Although collaboration, CRM, marketing automation and other vendors are integrating social media into their existing solutions, few provide the analytics required to track and measure the effectiveness of social media and its different channels in an actionable and streamlined manner.

March 22, 2011

Social Business: Why Having a Plan Matters


Co-authored by: Laurie McCabe and Sanjeev Aggarwal, SMB Group, and Brent Leary, CRM Essentials

 

Good plans shape good decisions. That’s why good planning helps to make elusive dreams come true.
Lester R. Bittel, The Nine Master Keys of Management

This seems to be especially true when it comes to getting business value out of social media. We recently wrapped up fielding for our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” in which we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers regarding their use, plans and perceptions about social media.

Although SMB interest and adoption of social media to assist with a variety of business functions—from generating leads to product development—is sky-rocketing, the question remains of how and where SMBs are actually deriving business value remains. Our study took an in-depth look at the specific activities and functions that SMBs are using social media for.

While Sanjeev Aggarwal, partner Brent Leary of CRM Essentials and I are just beginning to immerse ourselves in this very rich gold mine of data, one thing is clear:  SMBs that use social media in a “strategic and structured way” to interact with customers and prospects are much more likely to be deriving benefit from their social media investments than those who are using social media in an “ad hoc, informal” way.

Today, SMBs are most likely to be actively using social media to help with marketing and sales functions–including generating more web site traffic, generating more leads, connecting with people who aren’t yet customers, improving market awareness for their brand, reputation enhancement and creating more/better interaction with customers.

As shown on Figure 1, survey results show that those that have a more formal and structured strategy are more likely to be satisfied or very satisfied with the outcomes than those that are using social media in an informal, ad hoc way. For instance, among small businesses:

  • 39% of respondents using social media are very satisfied/satisfied with the results of using social media to “create more/better interaction with customers/prospects,” as opposed 24% of those using it an ad hoc manner.
  • 37% of structured users are very satisfied/satisfied with using social media to generate more web site traffic, compared to just 14% of ad hoc users.
  • 37% of structured users are very satisfied/satisfied with using social media to improve market awareness for the company, in contrast to 16% of ad hoc users.

Figure 1: Comparison of Small Business Satisfaction with Social Media for Business Activities: Structured vs. Ad Hoc Users

 

While we have about 30 other questions and a seemingly endless array of cross-tabs to mull over in terms of the study, one thing is already crystal clear: To get the most business value from your social media investment, you need to pause and plan—in addition to playing with—social media activities.

For more information about this study, click here.


January 7, 2011

SMBs Open a New Front Door with Mobile Web Sites

Ten years ago, SMBs were just beginning to understand the need for and value of building web sites and storefronts. Today, SMBs are at a similar point when it comes to building mobile web sites and enabling mobile transactions. Why is this important? 4.8 billion users browse the web via a mobile device compared to 1.7 billion users who browse the web via other means, such as a laptop of PC (source: ITU, October 2010).


SMB Adoption and Plans for Mobile Web Sites

Figure 1 – Plans for Mobile Website


Our recently published SMB Group market study, “2010 Small and Medium Business Mobile Solutions Study,” reveals that SMBs understand the importance of mobile friendly websites and plan to invest in a mobile web presence in order to help fuel their growth. In the very small businesses (1-19 employees) segment, only 11% have some mobile web presence, while in companies with more than 500 employees, 44% have created a mobile-friendly site.

With interest and adoption of smartphones, tablets and mobile applications exploding, both small and medium business have very aggressive plans to ramp up activity and functionality on the mobile web site front. These businesses view mobile web sites as a key mechanism to attracting new customers, improving customer service and retention, and growing revenues.

From an industry perspective, financial services/banking and professional services firms are taking the lead in deploying mobile web sites today. Going forward, retail, non-governmental organizations (NGOs) and education have very aggressive plans to establish a mobile web presence within the next 12 months. Many startups are choosing to start by developing their web presence through a mobile design paradigm first, from which they can then create a traditional web site.

What Information and Transactions are SMBs Offering and Planning for on Their Mobile Web Sites?

The most common types of information that SMBs with mobile web sites provide today include business contact information, available from 79% of SMBs’ mobile web sites; product and service information, offered on 71% of these sites; operating hours, listed by 65%; location applications, available from 60%.

SMB use of mobile web sites for transactions is more nascent, but is picking up steam. Today, 28% of SMBs with mobile web sites offer customers capabilities to schedule appointments or make reservations; 10% use mobile advertisements; and 8% mobile coupons. SMBs that don’t currently offer these capabilities have very aggressive plans to ramp up these services in 2011–up to 53% for certain functions.

High-growth and market leading SMB companies already have a mobile web-presence or are planning one in the next 12 months. In addition to this, depending on the industry, these SMBs are also very aggressively looking at enabling mobile transactions on their mobile websites. With upwards of 29 million smartphone users and 3 to 4 million tablet users, SMBs see the urgency of having a mobile web presence.

More information and a Table of Contents is available for this study click here: 2010 Small and Medium Business Mobile Solutions Study.

July 29, 2010

Technology Solution and Services Purchasing Cycle Decision Markers in Small Businesses

Small companies will tend to have a less formal purchasing process than their larger counterparts Typically only one or two people will have purchasing authority—usually the company officers in small businesses with the guidance of the IT person, if there is one.

How a company purchases or acquires technology products and services is affected by company size. The size of an SMB and the type of IT organization that they have influences and reflects the technology choices the SMB make. Typically, a small business (defined as a company with 1-99 employees) will have either no IT resources at all or one full-time IT resource.

The technology solutions and services purchase cycle typically involves 4 stages: Identify Need, Evaluate Solution, Select Solution, and Final Purchase Decision. The persons involved in each of these four stages of the process are different as is their level of involvement at each stage, which is usually dictated by the size of the small business, technology sophistication and sometimes the age of the primary decision maker (usually the owner or CEO) in these companies. Figure 1 provides details of all those involved in these technology solution and services purchase decisions at small business in North America.

Figure 1: Personnel Involved in Technology Solution Purchase Process at Small
Businesses (1-99 employees)

Source: SMB Group, 2010

  • Identify Need. In more than 75 percent of the cases, the owner of the business is the person involved in identifying need for technology solutions and services support from a end-user employee or senior business manager (non IT). This is usually based on the business pain points the small business is experiencing and how the use of these technology solutions will help address them. Only 21 percent of the cases involve in-house IT personnel in identifying need for technology solutions and services.
  • Evaluate Solutions. The role of line-of-business managers and end-users becomes more important in evaluating different solution alternatives, often they are involved with doing a free trial of these solution more frequently online but also sometime by downloading applications. The in-house IT person assists with the technical requirements for the evaluation and the owner is also usually involved in about 60 percent of the evaluations. Small business technology environments are straightforward but in some cases may require some advanced features; small businesses are rarely leading-edge technology adopters. In a small percentage of cases small businesses solicit the help of industry colleagues and/or external VARs and consultants in these more advanced and complex evaluations. The results of these evaluations helps small businesses reduce the number of evaluated solutions to a “short list” driven by predefined criteria.
  • Select Solutions. This step is completed by the owner/CEO and the In-house IT person based on the evaluation of various solutions. The factors involved in the selection process are price, ease-of-use, higher quality and stronger brand. As companies grow, the focus shifts from price and ease-of-use to quality and stronger brand as reviews from analysts and social media become more important.
  • Final Purchase Decision. In almost all small businesses, the owner or CEO of the business makes the final purchase decision, with the line of business executive or the in-house IT executive contributing in a limited role.

The insights included in the blog are from a comprehensive SMB study on SMB Routes to Market for Technology Solutions“. The SMB Group’s 2010 Routes to SMB Market Study helps Technology software solutions vendors and services providers identify routes (channels) to the SMB market for their products and services based on how they go about making purchase decisions. Study results and analysis will help them make well-informed marketing, product development, media and channel decisions to successfully reach, influence and market to North American SMBs with one to 1000 employees.

 

 

 

 

 


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