IT and Business Insights for SMB Solution Providers

Converged Infrastructures and Interest in IoT are driving SMBs to Outsource IT to Managed Service Providers

Linksys, the connected home division within newly merged Belkin International and Foxconn Interconnect Technology (FIT) entity, released findings from an IDC InfoBrief, commissioned by Linksys, “Successful Strategies for IT Providers that Serve Small Business Customers”, looking at small businesses (firms with under 300 employees) and the channel partners they use for network resources.

The InfoBrief explores what IT products, solutions, and services key groups of SMB customers are looking for, and how service providers and resellers can be better equipped to do so.

The small business segment is experiencing massive infrastructure upgrades over the next five years. “Wireless network reliability and performance are increasingly important to all small business but many are still using outdated equipment and are seeking to overhaul their infrastructure. their hardware and network management - many with an eye toward IoT demands,” said name, title, Linksys. “Not surprising, demand for cloud, particularly Software as a Service is at the top of the list, although many companies have not eliminated their legacy on-premise equipment.”

“Shifting customer preferences are placing new demands on channel partners, but this is creating enormous opportunities for those that can streamline processes, expand offerings, and provide greater value,” said Shawn Fitzgerald, Research Director, Worldwide Digital Transformation Strategies, IDC. “The hybrid cloud construct raises significant challenges for SMBs and creates the increased demand for IT managed services.”

Sample insights from the IDC InfoBrief include:

  • Channel partners are focusing efforts on businesses under 300 employees and paying special attention to start-up and early-growth stage companies.
    • For network equipment providers and MS/ISPs, very small business (<25 employees) and small business (25-99 employees) make up half their customer base, at 50.6% and 50.8% respectively.
    • Customers in the mid-life stage make-up more than 50% of MSP/ISP business.
  • Equipment and service providers target three different verticals on average and channel partners that build expertise demonstrate more value and drive revenue.
    • Accounting; food services/restaurants; banking/finance; and technology products, services and consulting; and construction ranked as top verticals.
  • Channel partners are expecting about-average revenue growth from a wide range of their products and services, including:
    • Network equipment providers offering cloud-based software as a service (42.2%), Infrastructure or platform as a service (42.1%), and IoT sensors and hardware (40.5) in the top five.
    • MS/ISPs are looking to take on more management responsibilities, offering cloud-based software as a service products (34.1%), in addition to managed IT services (37.6%), and WiFi as a service (34.9%).
  • Channel partners are re-tooling packaging of infrastructure resources for small businesses to better meet growing needs.
    • 90% of equipment providers and 83% of MS/ISPs surveyed plan to expand the types of network service offerings to small businesses.
    • Do-it-yourself and “do-it-for me” both appeal to a third of equipment providers and 40% of service providers.
    • MS/ISPs have a preference for offering a menu of a la carte offerings combined in a single subscription while equipment providers slightly favor a combination of a la carte offerings with some custom subscription elements.
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