Arun Dharmalingam, Vice President, Partner Led Velocity and Distribution Sales, Cisco India & SAARC
The rising prominence of Small and Medium Enterprises (SMEs) in India is a sign that the sector is a key contributor for the economic growth in the country. Going by statistics, SMEs contribute about 45 per cent of the industrial output, 40 per cent of exports and employ 60 million people (SME Chamber of India). Tier II cities seem to drive India's growth story for SMEs because heightened business activity, increasing job opportunities, rapid urbanization, use of the internet, PCs and smart phones are transforming upcountry markets. This coupled with growing investments is pushing sales for small business product lines.
As they continue to grow and expand, SMEs are increasingly becoming part of a global ecosystem and leveraging technology as a means to achieve scale. Technology investment within the SME sector is also being driven by customers who are increasingly becoming internet savvy and demanding the need to connect with anyone, anything, anytime and anywhere securely, seamlessly and reliably.
Whether they want to add new technology capabilities or just stay ahead of new technology changes, the network is increasingly serving as a platform to drive adoption within the SME sector. New age technologies like collaboration - especially video, data centre and virtualization, cloud and cloud based services are slowly becoming preferred investment options.
However most SMEs find the perceived complexity associated with implementing new technology very daunting. The cost of acquisition takes precedence over the return on the investment. The lack of specialist personnel and a dearth of relevant SME specific solutions add to the reluctance to adopt new technology.
Role of the partner
Most SMEs make the purchase decision for a technology or solution based on the guidance and advice of a trusted channel partner. In spite of numerous high-profile launches or availability of online portals, the average SME prefers to route his purchase through a partner whom he can trust and hold accountable.
Typically small businesses seek solutions that simplify their technology environment, save costs, and allow them to focus on their core business. Given their size and manpower, SMEs look up to partners for technology support and rely on the services of an experienced partner for both initial installation and continued maintenance. All of these can contribute to a recurring revenue opportunity for partners.
On their part, partners need to emphasize the business impact of a solution because they are important buying factors for purchasing technology. They also need to highlight the product roadmaps for legacy solutions because what customers have in place today may not be the right solutions for tomorrow. By acting as trusted advisors, partners can help SMEs understand the need for an updated technology/network.
Partners can elaborate for example, how collaboration helps reduce costs by enabling employees connect across geographic boundaries and increases productivity irrespective of timelines; reach customers in regions they don't have the resources or time to visit in person and compete against larger companies with established travel funds. The benefits of video like reduced travel expenses, greater collaboration, increased communication, and lower staffing costs will enable SMEs adopt the technology more convincingly.
Discussing the necessary security evaluations a small business should take before jumping into the cloud like security of end devices, the connection to the cloud, and cloud services will help SMEs understand about confidentiality, integrity, and availability of data in the cloud. Partners can highlight the predictability of monthly costs (critical for SMEs), along with the benefits of pay-as-you-use which hosted cloud services makes possible.
Beyond the 'trusted advisor' role, partners can help SMEs build capabilities- design, install, and manage advanced technology solutions. Depending on what the customer needs, partners can work with a service provider to offer new solutions and services, or bundle services and solutions together to differentiate their offerings in the market. Offering different types of solutions with different complexity levels, depending on the size/ business needs of the SME organization are beneficial.
To cite an example, as Unified Communications becomes a reality in the small business segment, the collaboration opportunity for partners can include everything from upgrading core networks to supporting the demands placed on them by mobility and video; network optimization, consulting and application integration. This opportunity doubles and in some cases triples when services are taken into account.
With virtualization partners can demonstrate cost savings by proposing a project that helps consolidate several application servers onto a single platform or recommend the reverse -- forestalling network virtualization until more elements of the infrastructure are virtualized. According to IT research firm IDC, cloud computing market in India is expected to grow at a CAGR of 40% by 2014. The technology is going to be driven by cost and performance and will be a hot pitch for the SMEs.
Within cloud computing, partners can act as 'Resellers' and sell cloud ready infrastructure. They can resell a Service Provider's service with their special offerings. As 'Cloud Builders' partners can focus on application layer migration and integration to build out Cloud services. Partners can also serve as 'Cloud Providers' and sell cloud as an OpEx service wrapped with a Service Legal Agreement (SLA). Multiple partners can play in more than one of these roles depending on the capabilities they have.
As SMEs transition to new technology, vendors need to enable their partners by developing channel programs that are based on robust and flexible service portfolios to help customers increase capacity, capability, and profitability. Creating and revamping partner programs to better align them with changing market needs helps partners showcase value and derive profitability.
Providing training which encompass not only the technology, but also the processes and services; and how both can be brought together will help partners better understand SME needs and broaden their approach to selling technology. Recognizing and building on partners' existing capabilities and enabling them to evolve towards a more profitable model will ensure that partners are more relevant to their customers and help partners make the most of the opportunities in education, healthcare, banking, even oil and gas.