To be a good fit for small and medium businesses (SMBs), information technology solutions should provide the owner better visibility into his business, better information for decision-making, and help him stay on top of his business, anytime, anywhere.
Thus begins ‘Partha’ S. Parthasarathy, Chairman and CEO of Chennai-based Nu Street Technologies (http://bit.ly/F4TNuStreet) when asked what the top attributes that IT solutions must have so as to be a good fit SMBs. “Such solutions should be highly targeted to specific customer domains, not complex solutions that boil the ocean,” he adds, during a recent interaction with Business Line.
A few other ‘shoulds’ that Partha lists in this context are as follows:
* The solution should be implementable in stages, with quick time-to-value at every stage; should need minimal implementation effort and time, and minimal training for use.
* It should involve low upfront investments, and be pay-as-you-go; applications should be accessible on devices that he is already using, say a laptop, iPad, or BlackBerry.
* The application should be secure – with no worries about data getting lost, or virus attack.
* Technology changes should not necessitate an overhaul of software and hardware.
* And the IT solution should have the ability to interact with his enterprise customer’s complex systems when required.
My conversation with Partha continues over the email…
Excerpts from the interview.
Historically, where have been the gaps in SMBs’ IT adoption, and why?
Frankly, I don’t think we can even start talking about gaps when there is virtually no IT adoption as of today among the SMB segment. And how could there be when there are hardly any solutions which actually work for them available in the market?
An SMB owner today is very technology savvy. He is the biggest consumer of the latest mobile gadgets such as BlackBerry and iPhone, because they allow him the freedom of attending to his work and business from anywhere in the world. But when it comes to business solutions that will give him the same freedom, there is a huge vacuum.
Most technology companies have made it their business to sell to enterprise customers. They talk ‘SMB’ only after they have saturated the enterprise market and need another market to show the same level of growth. Their investment focus is on re-bundling and re-pricing the existing products for the SMBs. Obviously, the SMB owner runs miles away since he knows fully well that this approach will soon become a “white elephant” and a millstone around his neck.
A typical SMB owner is already challenged on multiple fronts; he needs to get the next model of machinery installed and running, he needs to hire skilled staff, he needs to manage customers and suppliers, he needs to manage cash flow, and he needs to handle the Government agencies, all in a day’s work.
In this environment, he is going to adopt technology only if it can be done with least disruption to his existing life and if it is going to make his life easier. He needs a technology partner who feels his pain, and is willing to give him a solution which will enable him to do more in a day without having to put rest of his days and nights in on-boarding the solution!
He needs the equivalent of a BlackBerry that he can switch on, spend a couple of hours learning its usage, and he is ready to go. Unfortunately, so far, established enterprise vendors have only “talked” SMB and not “acted” upon the market.
What are the expectations of SMB entrepreneurs from IT solutions? How different are they from what large enterprises look at?
Some part of this I have already covered while discussing what I see as the big mismatch between what is available and what is expected, leading to almost nil IT adoption in the SMB segment.
Very specifically, let us start by putting ourselves in the SMB entrepreneur’s shoes. His core business is not IT. Neither is it as broad-based as “manufacturing” or “services” – it is typically much more specific. Such as, delivering yarn to his customer if he is a spinning mill, or manufacturing the right quality forged part for his OEM customer if he is a forging unit.
So, he is bothered about doing this well and not really about buying the latest ‘gadget’ or latest software. And what are his challenges in doing this? In the last decade the world has changed around him. Suddenly, the economy is growing at 8.8 per cent from 4 per cent earlier – so he can sense that he is in the cusp of a huge growth opportunity right here.
But he also sees competitors from across the world at his doorstep talking to his customers. He is also faced with many more challenges than his father or uncle had when they started the business. The new generation wants challenging work and increasing benefits. The new machines and today’s customers require more sophisticated handling.
As he grapples with all these challenges, he looks to IT to help him get a quick handle on the key parameters of his business so that he can take the right decisions based on facts and not “gut.” He wants to know that if he decides to double his capacity, he has systems and processes in place to deliver the same quality and service that his customers expect from him, without having to recruit twice the manpower or overwork himself and his team twice over.
He needs IT to become his personal productivity tool for it is his time and energy that is his biggest constraint for growth. He needs IT that will work for him in a seamless fashion; he should not have to depend on a coterie of expensive IT staff or multiple consultants.
He needs solutions which will not demand significant upfront investments in time and money; for, he wants to be able to try the solution out and be sure that it would work for him. He needs solutions that will make him look and work smart, without it necessarily becoming a huge multi-year project. He wants to know that he does not have to break his head about when to upgrade and what to get next.
In short, he seeks solutions to make himself, and thereby his business, more efficient. IT solutions have to enable this for him without requiring too much of his time and effort. He wants simple, elegant but powerful solutions that pull out the key data sets for him from his daily operations, transform them into ‘actionable’ information and put them in front of him on his iPad, tablet or BlackBerry.
In contrast, an enterprise customer comes staffed with a professional IT team. The CIO and his team are smart enough to be on the other side, building solutions themselves, and therefore have the capability to evaluate solutions both technically and financially. They also come with huge legacy issues – different solutions implemented at different points of time in different geographies. They are looking to work with technology suppliers who will support them around the globe, who will integrate with the old and who will give them a peek of the new without disrupting the old.
Above all, any enterprise CIO wants to buy the technology which will not cost him his job – he wants to buy tried and tested “brands.” For, if things go wrong it is the user’s fault – the user did not know how to use technology! Here the technology is not expected to mould itself to the user’s needs – it is the other way around. A far cry from what we see in the SMB space where the SMB user needs the technology to mould itself to fit his way of working.
In some ways, the SMB users’ needs are more complex, as they need solutions where technology is not “seen,” while the enterprise customer is perfectly at ease with building perhaps his own solution using the latest technology and tools available in the market.
To ISVs working with SMBs, what are the technology options currently available, and how are they beneficial to SMBs?
Until the arrival of the ‘cloud,’ the only option available to ISVs (independent software vendors) was to build applications using a stack of hardware, operating system and middleware, and databases from one or more technology vendors – be they Microsoft, IBM, Oracle, etc., or a stack of Open System Software (e.g. Linux, MySQL, and so on).
Hitherto, whatever be the choice of stack, the ISV had one of three choices in terms of application deployment:
1) The application would be delivered on-premise of the customer, wherein the customer needs to invest upfront in all the hardware, networking, and all the software and database licences, and of course the ISV’s application software licence too.
2) The application could be “hosted” wherein it is similar to option 1 except that a hosting, or “managed-service-provider” would invest in a specific instance (one-per-customer) of infrastructure, software and management, and the application, on behalf of the customer, and the customer would pay the hosting provider over time, similar to an equipment “lease.” This is the ‘managed services’ or the ASP model.
3) The application is provided on a SaaS (software as a service) model. Here, the ISV builds the application as a “multi-tenanted” application, and hosts one instance of the application on a backend infrastructure of hardware, system software stack, databases etc., and offers it to the end-customer on a pay-as-you-use model. In this case, it is the ISV’s responsibility to invest in and pay for all the upfront investments in hardware and software stacks and licences, in building a scalable and highly available infrastructure to cater to a vast number of end-user customers. The ISV ends up bearing the brunt of the upfront investments, and this model becomes extremely capital-intensive for the SaaS ISV, and hence limits the number of such players (e.g. SalesForce, NetSuite, etc.).
With the arrival of ‘cloud’ offerings from reputed technology companies such as Microsoft (Windows Azure, and SQL Azure) the entire playing field and business model is about to undergo a revolution. Hereon, a technology company like Microsoft invests in, and provides the ISV the entire stack as a service, in a pay-as-you-use business model. This includes the entire infrastructure (IaaS), the entire software platform (PaaS), and even applications and tools (SaaS).
A cloud ISV, such as my company, can now focus on building the applications for its customers, and not worry about the backend infrastructures and platforms, and importantly, all the associated investments towards those.
SMBs will now be able to get the advantage of this entire approach by being able to get a plethora of applications targeted specifically to them, and at very affordable, pay-as-you-go terms, in a true utility business model.
Are there takeaways for large enterprises from the SMB IT approach?
SMB IT approach turns a whole set of assumptions in the technology world as we know today on its head. It says that it is possible to have tailor-made software solutions that suit your specific need without having to pay an arm and a leg; without having to commit yourself to proprietary technology and platforms which then make you a prisoner of their agenda; it proves that the software world has changed so radically that we do not have to depend on large behemoths to build the small solutions that every user needs to do his job better.
Over the last decade, many things have changed: coding has become commoditised with the advent of off-shoring; extensive collaboration across geographical boundaries has become possible thanks to software engineering and communication technologies; and best of all, the ‘cloud’ infrastructure is today robust and available.
It has been a long wait but perhaps a very worthwhile wait for SMBs, as they have the option today of choosing solutions built with the latest technologies, working off of a wireless device, with the backend sitting on a robust cloud infrastructure managed by the Microsofts of the world. Solutions which are up and running without requiring consultants, system integrators and so forth. Solutions where the ROIs (returns on investment) are not a mirage.
It is a wonderful opportunity for once, for the SMBs to set the trend by embracing the new approach and challenging the enterprise customer to follow suit. Enterprises can actually take a leaf out of the SMB book and proclaim that they will not buy IT for the sake of IT, but for what it will do for them today, and now.
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