A buyer's market [ITP.net (United Arab Emirates)]
(ITP.net (United Arab Emirates) Via Acquire Media NewsEdge) The SMB business apps market particularly in the region has a lot of potential and is highly competitive, but where do the best opportunities lie for channel partners?
If you are in the business of developing and providing apps for the SMB sector in the Middle East, you don't need to be told that it's a buyer's market. Competition is intense and the array of apps is growing at an exponential rate, driven in no small part by increased demand for mobilised solutions and the rise of the BYOD phenomenon.
SMBs need innovative ways to integrate their own platforms, to engage with partners and customers in the cloud, and to fulfil the needs of their employees regardless of location or device. And they are looking to developers and vendors for the answer, putting the ball firmly in the court of nimble, up-to-date resellers who can bring the right layer of expertise to these integrated sales.
Globally, according to analyst IDC, SMBs will be spending almost $700bn a year on IT by 2016. Given the rise of the cloud, it's likely that the bulk of that investment will be in services, tools and apps rather than hardcore infrastructure. Apps, therefore, is the place to be if you want to improve your prospects. But you will need the skills and access to the latest that vendors have to offer if you want to distinguish yourself in a market that is likely to evolve into a free-for-all battle.
"Applications provide flexibility and are naturally attuned to the way in which those working within the SMB sector want to do business," said Michael Mansour, developer platform and technologies lead, Microsoft Gulf. "They provide an excellent way for businesses to connect with customers or clients, as well as to control administrative business functions without being confined to an office environment."
As the range of end-user platforms grows, so does demand. "As smart mobile devices and tablets are becoming full-fledged business tools, businesses feel the need for the applications to be available on these devices," said Ali Hyder, CEO of Focus Softnet. "The demands vary from industry to industry with fast food chains, wholesale distributors and banks leading demand, while other smaller services and retail outlets are not yet generating such strong demand."
At the very least, according to Hyder, SMBs are looking for CRM, BI dashboard and order management apps. And because SMBs are the fastest growing business sector in the region, this should mean rich pickings for the industry.
"Many start-ups and new, innovative businesses have risen in the Middle East in the last few years," said Amol Kadam, creative strategist and user experience (UX) director at digital performance marketing agency RBBi in Dubai.
"All these SMBs are leaner, sharper and smarter. They cite simple installation, reduced software and IT costs, minimal configuration, on-demand everywhere availability, and integrated data backup and disaster recovery as some of the most desirable features of app products. These core driving forces take SMBs automatically towards business apps for automation, efficiency and cost effectiveness.
"The demand for SMB apps isn't limited to office, collaboration and email software. By far the most popular apps are core business productivity tools."
This demand is mainly being driven by software as a service (SaaS) providers, who supply accounting and finance, sales, HR, project management and CRM automation, said Kadam.
And it isn't all about the back office, said Microsoft's Mansour. Because apps work seamlessly with social media channels, they are a natural meeting point for SMBs and consumers.
"Most recently, we launched an app with Wamda, the online platform dedicated to providing 360-degree support to entrepreneurs, which has taken its website mobile through the Windows 8 operating system," said Mansour. "In addition, Nabbesh.com, which supports freelancers in the Middle East and North Africa region, recently launched a Windows 8 app to further extend its network and circle of engagement.
"SMBs want apps that can help them connect to their audience and consumers in an easy and efficient way. We expect this demand to continue to grow with the increased usage of smartphones and interconnectivity of individuals in the Middle East region."
It is easy to see Microsoft as the dominant force in the SMB apps market but in fairness it is also a great enabler for other vendors and developers. Branding is one thing, but as RBBi's Kadam pointed out the key for suppliers is to be simple, relevant and user friendly. There is a lot to play for in accounting and finance, HR and CRM automation.
"Being an SMB ourselves and being in the field of usability and user experience, our observation is that the market is very open," he said. "Although people like Microsoft rule few categories, there are many others where there is no clear leader. The problem comes when local developers and vendors pitch poorly thought-through and unusable apps to SMBs. There is still a huge opportunity for locally brewed, simple, well-designed and quality apps."
At Focus Softnet, Hyder said resellers have an essential role to play in the market. "They are the ones who get the first-hand information of the market, and if they have tie-ups with various app developers, they can ensure immediate fulfilment of requirements, picking ready-made apps for different market needs," he said.
Microsoft itself looks to resellers to provide a high level of support and knowledge to ensure that customers get the intended experience from the app, and that it is not diluted in any way. They are expected to know the products they are working with inside out, and to be able to provide intelligence and experience within their markets.
"At the end of the day, customers are looking for an app developer that is reliable and creative, and can bring their vision to life," said Mansour. "We do work across a variety of sectors but that doesn't mean there isn't room for competition – which is what keeps a market healthy.
"We work closely within the SMB sector in order to support and encourage talent and innovation wherever possible. The BizSpark program is indicative of this, as it provides Microsoft software and expertise through a platform that encompasses technology, support, visibility and community to promising start-ups and entrepreneurs at no charge.
"This is active for the entire first year of business and can be purchased at a reduced rate following that. Regardless of purchase, the developer will always have access to the community and network build throughout that initial period. Developers have been using BizSpark to create innovative apps for the region."
RBBi's Kadam said the next set of winners in the SMB apps market will be suppliers that provide apps and services that enhance interoperability and integrate cloud solutions into a single, unified framework or control panel.
"Given the demand for seamless service and app integration, expect initiatives like Office 360, Google Docs, OpenStack, HP's converged cloud and IBM's SmartCloud to grow in popularity," Kadam said.
"Fast forward five years and almost every SMB will be relying on cloud services in some way or other. "Most of them will be the SaaS solutions that have driven cloud computing adoption and innovation. Forrester Research predicted globally the SaaS market will explode from $21b in 2011 to $63b by 2014. As much as half of that growth will be in the SMB sector."
The Middle East is insatiable when it comes to mobile device consumption among consumers and businesses. It is impossible to under estimate the impact this is having on demand for apps locally.
"The whole growth and demand for these apps revolves around the word 'mobile'," said Amol Kadam at RBBi, the Dubai-based digital performance marketing agency. "Today's SMBs are more mobile than ever before. Their workforce is always on the move, and its exposure to technology makes its usage patterns anchored to mobile and tablet devices."
Kadam identified the top four mobile drivers as:
- Giving quicker access to people and information in order to make better and quicker decisions
- Working more easily from the field, home and in other locations
- Improving customer services
- Being able to perform specific business functions away from the office
"Mobile usage in the Middle East is significant and this has been a strong driver of the app market within the business community," agreed Microsoft's Mansour. "We have created apps with several local and regional companies who were looking for content that reflected their position in the market here, and were focused on engagement and creating dialogue with customer and user bases.
"Naturally, country by country, we will see apps evolve at differing stages. Where the UAE and Lebanon have high rates of mobile app usage, countries such as Egypt and Jordan are much lower, and there is significant opportunity across the market for app development.
Key App Development Trends
Industry watchers are unanimous that the cloud will be one of the big influences in SMB app development during the coming year. But there will also be a huge opportunity at a local level for developers and resellers to tailor apps to meet specific regional requirements.
Industry-specific apps will help resellers get even closer to their customers, and generate new revenues streams. And user experience will become the key differentiator.
Cloud aside, Michael Mansour, developer platform & technologies lead at Microsoft Gulf, said that the most significant trends in the industry will be mobility, social media and Big Data.
"With over 90 % of organisations expected to invest in mobile apps and devices by the end of 2013, mobility is reshaping the way organisations communicate and share information both internally and externally," he said. "We believe that SMBs and large organisations can significantly reduce communication and information sharing costs through enhance mobility. We also see this as an opportunity to develop innovative apps that will serve this purpose.
"Social networking is evolving to involve not just people, but also appliances and devices. At least 50 % of organisations are expected to use internal social networking apps (like Yammer) in 2013 to enhance internal communications. We believe that this will allow them to become more agile, more efficient and empower employees to connect better.
"And the enhanced used of social media and digital content creation has led to a spike in Big Data creation – a 48 % increase from 2011 to be precise. In order to manage Big Data, SMBs and organisations rely on Business Intelligence tools (like Azure), and approximately 50 % of CIOs foresee BI to be their top priority in 2013."
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