Beyond Now, a fast-growing ecosystem orchestration and digital platform provider, launched global research that illuminates a ‘new’ kind of small medium business (SMB) market, one that has vast, untapped potential for communications services providers (CSPs) to accelerate their growth in the B2B sector. Despite impending recession, SMBs are not afraid to invest in technology as they understand it’s a key factor in improving business resilience.
The report, CSPs: it’s time to reacquaint yourselves with today’s SMBs, found that 85% of SMBs recognize the importance of technology to the success of their businesses, with 51% ranking technology as very-to-crucially important. However, SMBs need help from CSPs to realize those improvements. 68% of SMBs want a single platform for technology solutions. And for CSPs that can get it right, SMBs represent a $1.42 trillion (Analysys Mason) global market opportunity.
While SMBs are cost conscious, they currently invest 8% of their annual revenues in technology products and services. And despite economic uncertainty, those investments will increase. In the next year, half of SMBs will increase their technology spend by an average of 6%. In the next two years, 59% will increase investments by an average of 7.5%. And in five years, 64% expect to boost technology investment by an average of 9%.
The research found that SMBs are more sophisticated adopters of technology than many give them credit for. They are digitally-minded and their business priorities are closely aligned with what technology can help them achieve. In the next 12 months, 70% of SMBs believe that technology can help them achieve efficiency improvements and further digitalize their businesses, with some also exploring business growth, customer experience improvements, and easing issues caused by a lack of time and human resources.
Notably, SMBs recognize the business impact of a range of bleeding edge technologies. It’s expected that they would perceive IT security and cloud technology as delivering significant value. But what is surprising is that SMBs recognize the potential value in more nascent technologies including blockchain (72%), AI/ML (71%), Edge (70%) and even robotics (56%). Additionally, they are already thinking about 5G use cases. 73% perceive value from the technology and expect CSPs to help them realize the potential of 5G beyond standard connectivity offerings.
However, SMBs report administrative headaches with having to manage multiple technology providers to meet their needs. 62% said there are gaps in off-the-shelf technology products in helping them to meet their business priorities. 64% want technology providers to work together to build joint solutions that help them achieve their goals. Critically for CSPs, 65% of SMBs would prefer to buy all their ICT from one source, and they would pay a premium for this. 33% would be willing to pay between one and five percent more, and 45% would pay between five and 10% more.
The research findings are accompanied by a playbook outlining how CSPs can develop successful SMB lines of business. The steps outlined in the playbook highlight what CSPs need to do to meet the clear expectations of SMBs and deliver a viable business model for themselves. It demonstrates demand for digital sales channels and an appetite for the industry to collaborate on the co-creation of solutions that meet vertical industry requirements. Importantly, findings from the research were similar across all respondent industries: hospitality and leisure, professional services, agriculture, manufacturing, education, healthcare, retail, and technology, media and entertainment. SMBs, regardless of industry and sector, have common pain points that they need technology to address and CSPs cannot not ignore.
“It’s fascinating that at a time when the industry is so focused on enabling digital transformation for large enterprises, that many SMBs are already digitally transformed businesses. There is a rich vein of revenue available to CSPs if they can get their SMB value proposition right. That means building solutions around SMB needs, finding repeatable patterns and embracing digital channels that are key for developing viable business models. This involves creating a digital marketplace that can deliver the scale and automation necessary for CSPs to work with partners on delivering technology solutions that meet the diverse requirements of the SMB sector,” said Angus Ward, CEO, Beyond Now.
“Against the backdrop of an economic downturn, SMBs want to achieve business resilience through technology, and CSPs should be the ones to step up and help them. But SMBs are in a hurry and, traditionally, CSPs have not done enough to get to know their SMB customers. The result is that the clock is ticking for CSPs to become the SMB ICT provider of choice. It’s a lucrative segment, and CSPs that don’t act fast enough risk losing out to other players lining up to take on that same role,” Ward concluded.