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Big Changes in SMB Market Coming in Next 24 Months

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January 28, 2011

Big Changes in SMB Market Coming in Next 24 Months

By Gary Kim, Contributing Editor

"The next 24 months are critical for anybody interested in cloud-based services for small and medium businesses," said Matt Bramson, Inphonex chief marketing officer. Perhaps the obvious trends are the move from TDM to VoIP; ubiquitous broadband; and a shift to the cloud for delivering applications.

The less well-understood trends are that customers are different, said Bramson. "Service providers are different and sales are going to be different."

"Over the last couple years, customers have grown to expect to be part of the solution," said Bramson. "They expect to buy their own high quality bandwidth, but they also expect to do some work."

In other words, though "service providers" traditionally have preferred to deal just with the "connectivity to the premises," it's different now. Users are more capable with technology. "Most of us have gotten technology in the mail, and have installed it," said Bramson. People also increasingly are comfortable configuring their own solutions and are used to getting support from user communities. 

The upshot is that service providers can make some different assumptions about customers. Connectivity isn't that big an issue anymore. Conversations with customers now involve more than "what can I do for you in terms of connectivity?"

"We now talk about business problems," said Bramson. "What will have to change is demarcation point, as well.” Historically, service providers have not wanted to operate on the other side of the demarcation. They didn't want the truck rolls and the support burdens. That was why other businesses, such as the value-added reseller and interconnect business, arose. Those sorts of companies specialize in managing, supporting and fixing things that might break on the other side of the demarcation.

But cloud computing could represent a major breakthrough for sales organizations that sell to the small and medium business. Why haven't sales organizations wanted to represent and sell any number of business products? Typically because they require levels of technical support and knowledge that are prohibitive in the SMB customer segment. 

To the extent that potential customers become accustomed to cloud-based products, the context and scope of opportunity changes. 

"In the past, custom, complex, customizable was bad," said Bramson. "You wanted to sell packaged and uniform solutions. Cloud-based products can change the equation. "Now, with cloud services, sometimes you like niches," said Bramson. Complicated solutions are sticky. 

So note the change: in the past, sales personnel sold a service (bandwidth products, for example) that enables a solution. The actual solutions the customer wanted rode on top of the pipe. In principle, cloud services can assume just a few things. The sales agent can assume the customer has broadband, or can supply it. Beyond that, the sales agent can assume the customer has PCs and other related devices, and that those devices have Internet access using a standard browser.

In that case, a sales agent faces a situation where the "set up" and "configuration" issues related to the customer's internal network are not limiting factors. Since most cloud services will assume use of a standard browser and broadband, most of the traditional barriers to selling moderately-complex products tend to "go away."

A properly-architected cloud service can be activated using a browser, and will be used in the same way. In other words, where it might once have required manual installation of hardware and software at the user premises to deliver a software solution, it now is a matter of the customer using the pre-existing broadband and browsers. 

Will there be support issues? Yes. But in many cases, "first line" support can be handled by FAQs, online chat, discussion forums and so forth. Second line support will be provided directly provided by the application provider. 

That's a huge change. Where in the past the sales agent might have needed technical expertise, and would have been called upon for much first line support, that now can, in many cases, be provided by the online mechanisms. 

In other words, many products that in the past would have been too complex for a typical sales agent to represent, now become as practical as the existing products. In fact, one might argue that many business products, ranging from backup and security to personnel applications, payroll, taxation, customer relationship management, inventory and so forth can be part of the product suite any particular sales agent can represent.

That is a huge change, as it allows sales personnel in one "silo," such as small business voice and data, to take on additional products that address a much-broader range of SMB problems. 

"For 20 years, the dialogue with customers was "saving money," said Bramson. Now, it is possible to have a dialog of much-broader scope. So "business problems and solutions" is where the conversation can be had.

The big change, Bramson argued, is that, over the next 24 months, sales agents in the SMB space have to master these changes. Customers can get their own bandwidth. What they can't do is pick the right cloud-based solutions. 

Cloud-based solutions and software increasingly will make possible a sales agent's ability to represent a broader range of solutions to a wider-range of business problems. The big issues are which products make sense for any particular agency, in any customer segment. What seems inevitable is that those products will include much more than voice and data access. 

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf

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