As we approach the end of 2011, it is time for the annual look at the crystal ball for the coming year. I’ve learned that being a prognosticator is a lot like being a weather person – if you sound convincing that is really all people expect. J The sun will come up tomorrow, so there are certain things we know for sure. As I ponder what lies ahead, here are seven key areas I believe will be important for you to pay close attention to in the new year.
A lot of my look forward is based on my gut. The older I get the more I depend on instincts and experience to provide direction. To that end, my gut says the economy is fragile and not something you should depend on next year. There is a lot of uncertainty and as I travel across the globe visiting with partners large and small. There are some signs that small businesses in particular are very nervous about what will happen in the days ahead. Uncertainty is never a good thing by itself. So guard your cash and run your company with some strategy and intention. I believe next year will be tough, which may temper some of these areas I see as opportunities. With the election cycle upon us, all bets are off as to what will happen.
I also rely on the hundreds of resellers and solution providers I interact with on a daily basis to get some understanding of the marketplace. Through HTG, VTN and other affinity organizations, I am blessed tosee the world through the eyes of many serving the IT market. As we ramp up our consulting team at Heartland Technology Consultants, we are beginning to get deep insight into the impact of different technology areas and business requirements from small business clients. The view is fresh and deep, and these areas continue to come to the surface.
So here are the seven key areas I believe will matter in the next 12-18 months. They are worth exactly what you paid for them…..that is the beauty of being a blogger! But these come from a combination of my gut and my observation of what is happening all over the SMB market. Ponder them carefully – I believe companies that deal with these effectively will be the ones that win in 2012.
1. Consumerization of IT
The first key area that is already running rampant is around the way business IT has become mixed with personal IT. As pricing has decreased, and more folks purchase personal devices they want to bring to work, we are addressing a very different environment. Mobility is not just a buzzword any more. There are many mobile client devices that are being carried into the workplace and that will continue to increase. Being able to connect them to the corporate network will be a requirement, and not just for email, but with seamless integration so the ability to access data is simple and it is available anywhere on any device. It is Bill Gates mantra of a few years ago – any device, anytime, anywhere. Apple actually is the one who has figured it out and made it simple with their services like iCloud. But if you want to be relevant in the coming years – mobility and access are key and they are driven by the consumerization of IT. As the lines get blurred between work and home – it is critical we have that skillset in our tool bag.
2. Client experience
Tied very closely to the first area is our need to become obsessed with the client experience. More and more it is not about what the IT manager wants, but the experience that the CEO and network users demand. To achieve this change in focus, we have to learn to listen well. The first answer can’t be “no” like it was for years when an end user asked for things to be done a bit outside the norm. Going forward we have to really have a laser focus on helping our users have a great experience. They are now getting that with their personal technology use and won’t continue to put up with less experience in the workplace. I believe this will become a real differentiator between VARs in the next year. Those that listen and are willing to say yes and find secure ways to provide a great client experience will win. That means we have to support new devices in new ways. More to learn but definitely what the market is quickly demanding.
This will continue to grow as a focus – particularly as it relates to disaster recovery. It is still to be proven that VDI for desktops really makes sense, especially in the SMB, but connected to the first two areas it just may. We need to be learning more and more about the virtualization technology stack as it will become more mainstream in many ways in the next few years. It is particularly important when people become more cost focused, and the economy may drive this sooner than later. The cost of IT support is still a major thing for many SMB clients, and anything that will help control costs and create a productive environment will likely be on the table.
4. Recurring revenue
There is no question that MRR has become the focus for many. It has helped many a VAR survive difficult times the last few years. There will be more effort put into creating hardware as a service offerings as people want to move CAP EX to OP EX for tax reasons. There will also be an increased focus on bundling more services into the offering to include traditional MSP and now cloud offerings all as one bundle. Lots to learn from the wireless/cable industry in how to effectively bundle and create a single payment stream. I think it becomes far more mainstream in the year ahead as VARs get ready for economic uncertainty.
There are still many small businesses that are using obsolete or low feature phone systems in their business. As the mobility craze continues, small companies want more integration of voice into their workplace and mobile devices. That will provide a lot of opportunity in the next year. Hosted voice is beginning to become reliable and cost effective, and is a lower cost way for entry. I see many VARs moving into this space without any understanding of the skills or service requirements. Voice is a very different business, but if you make the right investments and partner with the right vendors, it can be a great addition and way to get into a new client environment.
To say there is a lot of activity around merger and acquisitions would be an understatement. It is occurring at an increasing rate, with a lot of drivers currently making that a reality. In some cases it is about consolidation, some is from financial stress, some from owners who are not willing to make the transition to the cloud. The age of the ownership of SMB IT companies continues to creep upward and a lot of those folks are just getting tired. So the drivers are many, and right now there seems to be a significant amount of money available from investors in the marketplace. Rollups will continue to be tried, and it will be a very active year in this area. That can change things in a local market overnight, so you can’t ignore it. There also will likely be some real opportunities to acquire in your neck of the woods this year, so take a look at that.
There will be a return to focus around security in the SMB. This will come from a few different angles, but together they will drive a renewed look for many small businesses. First is the reality that a whole lot of firewall refresh needs to take place. There are millions of devices still in place that are really past end of life. In many cases, the boxes are sitting there without any subscription updates in place and are just a false sense of security – they really are not doing a thing. That is a goldmine of opportunity for VARs to re-engage with clients and have a security discussion again. For many years it has been enterprise that has been the target of hackers and bad guys. That is not the case any longer. SMB’s are now targets since they are often easier to attack and break into. That will give the opportunity to have discussions around the new Advanced Persistent Threat types of security suites. Time to take a look at your client base and visit each and every one with a fresh look at their security platform. Throwing mobility into the mix just makes it that much more important. In many ways, it is the wild west all over again with security and we need to be proactive.
So that’s how I see the world for IT in 2012. No real big surprises – and actually quite a lot of connection between the seven areas. The driver to much of this is the end user and their experience. The balance of power is moving away from the centralized IT manager to putting power in the hands of the user and their device. That opens a lot of opportunities, as well as real and serious threats, that both lead to good news in serving the SMB market. To win requires investment in new skills, both sales and technical, and mostly a new attitude that recognizes that client experience is number one. We have to listen carefully and provide the experience that people are now becoming accustomed to receiving in the consumer space. It is a change for us in IT, but a good one that will provide a great source of income for those who get it right!
Merry Christmas and a very prosperous New Year!