Volume 5, Number 17 -- April 29, 2008

SMB Is Going Global, and Collaboration Plays Big Role

Published: April 29, 2008

by Dan Burger

A global economy brings with it a great opportunity to sell collaboration software, particularly to the small to mid size businesses in the United States. If you don't believe it, just ask the collaboration software folks at IBM. They will help you connect the dots. Last week at the at the U.S. Small Business Administration's National Small Business Week conference in Washington, D.C., Sean Poulley, vice president of IBM online collaboration services, outlined the challenges and opportunities for growth that small and mid size businesses (SMBs) will be facing in the next decade.

"Some of the little known facts about small business are that it drives about 40 percent of the annual GDP (gross domestic product) in the United States," he said. The GDP is the total market value of all final goods and services produced.

Finding plenty of ammo in his statistics armory, Poulley tossed out the following zingers:

  • Thirty percent of the total U.S. export value is produced by small and medium size businesses.
  • Ninety-seven percent of all U.S. exporting companies are SMB. And, off that 97 percent, 75 percent have fewer than 20 employees.
  • Thirty percent of export value comes from SMB and 97 percent of companies doing exports are SMB.

That presents a positive picture of the SMB space and is indicative of the interest IBM has in courting their business.

Poulley backs up his SMB statistics with IBM collaboration survey results that indicate 60 percent of small to mid-sized companies are considering collaboration software or services as a critical success factor in the near future; three out of four mid size businesses are either implementing or planning to implement new collaboration tools in the next 12 to 18 months; and 70 percent of mid size businesses see workforce effectiveness as critical to their growth and their cost-ability objectives. Collaboration software, in this context, includes such things as portals, e-mail, instant messaging, Web conferencing, virtual teamwork, social networking.

Are you connecting the dots along with Poulley yet?

"The technology is getting easier to implement and affordable for businesses of any size," Poulley said in a telephone interview Friday. "There's almost a perfect storm of circumstances that is leading to a higher level of collaboration software demand in the marketplace."

E-mail, phone, and fax are essential tools that have been used and will continue to be used, but IBM is pushing a new wave of collaboration tools that it is certain will add simplify and improve business interactions with customers and partners for all companies, but particularly those doing global business.

"SMB owners should ask themselves: 'Can I access my teams in real-time and work with them as if we were in the same room?' If the answer is 'no,' then it's almost certain your employees are not as productive as they could be," Poulley said in his keynote address at the conference.

He went on to make three predictions to the conference attendees regarding technology and global markets that will become increasingly import to the SMB market. He told me, "These are not very hard predictions to make when you understand the business landscape."

  • Small businesses will gain real time access to work with all their employees, regardless of location, as if they were in the same room.
  • SMBs will use technology to collaborate more easily beyond their four walls and firewalls with outside partners, suppliers and customers. Extended communities will be built on the Web for small businesses that will allow them to function as "secure virtual enterprises" or large companies.
  • Simplified, self-sustaining Web 2.0 technologies will free SMBs' time and money currently spent using and maintaining IT. New tools will put the power and control of IT in the hands of the business owner without the need for specialized skills.

Despite strides collaboration software is making in terms of ease of use and ease of implementation (much of what Poulley talks about is just coming to market for the first time in a package IBM Lotus calls Bluehouse that is in beta), IBM still beats the drum for the software as a service (SaaS) option as being a wise choice for some companies in the SMB.

"There is a great deal of hype about software as a service," Poulley admits. "It really hasn't formed yet. There's a lot of talk about it, but in the grand scheme of things when you contemplate all the money that's spent in the IT industry, SaaS hasn't got going yet.

"But small businesses need to have the choice whether they want staff to develop core competencies in this area or invest in other skills and investments outside of this area." Hiring additional people in sales rather than in IT is one example he provides. "So SaaS may be attractive to a company that thinks this way," he says.


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