Post pandemic SMB/SME Tech Trend
- 40% of SMBs intend to upgrade their connectivity
- 70% of SMBs intend to replace in- person meetings and events with video conferencing
- 83% of SMBs worldwide are looking at cloud-based business applications
- 45% of small businesses are looking at growing their IT budgets
SMBs are the backbone of any economy, today if the SMBs are healthy they contribute a lot of the economy and growth of the country. We spoke to Amol Mitra, VP & GM, WW -SMB, Aruba Networks, who manages Sales, R&D, Product Management, Operations, Business Intelligence, and tried to understand how IT and security is enabling the SMBs and helping the growth.
What’s Happening Around SMBs what is the Trend?
I the pre-pandemic phase, SMBs and SMEs were moving into the area of upgrading their network and their IT budgets were getting constrained. There was a slow shift towards the cloud and enabling their networks through a cloud ecosystem. During pandemic some of their attempts got slowed down but now we are back on the accelerated phase in the SMB space.
“The beauty of “Aruba Instant On” Portfolio is that it is extremely easy to use so that you don’t need any IT person to install, configure and manage the platform.”
Vice President and General Manager, worldwide,
SMB at Aruba Networks
We have seen a lot of changes in the marketplace globally in the space of SMB – not just the way people work today but how the businesses are transacted in the marketplace. Globally SMB business is a very large market in the networking space. As part of the larger portfolio of Hewlett-Packard Enterprise, Aruba is the Intelligent edge business because all of our business focuses around the edge of the network.
The first trend is cloud adoption. A lot of SMEs and SMBs are looking at how they can make their networks more agile and flexible, how they can make the IT infrastructure agile and flexible? So, now about 83% of SMBs worldwide are looking at cloud-based business applications which is quite interesting because they understand that they cannot rip and replace things as technologies evolve. They would rather have a cloud environment where they have the flexibility and agility to take technology as it comes and move at that pace.
The second trend: the video conferencing has taken on a different form through the pandemic. About 70% of SMBs have said that they are replacing in person meetings and events with video conferencing, so the work from home trend has made SMB also relook at their business and how they’re doing business, whether it’s video conferencing, ecommerce, etc.
About 40% of SMBs worldwide want to upgrade their connectivity. That means, they want to enhance or extend the Wi-Fi network because they are reaching into their employees’ homes or they’re reaching into other branch locations. They want to upgrade and make Wi-Fi faster, which for them is driving the business faster. Similarly, 45% of small businesses are looking at growing their IT budgets, which was not the case during the pandemics.
The last trend but very important on is cybersecurity. SMB/SMEs want to enhance the cybersecurity within the new environment. They want to make sure that their networks are secured and the way they communicate is secured.
It is exactly applied to India market. As people have moved out of the metros and their own work spaces, these are the challenges they are going to face and the SMBs need to be agile, secure and flexible to adapt to the new environment. They aught to do it to enable India as a digital economy to move forward.
Whether hybrid is here to stay right
Is hybrid here to stay right? Yes, it is going to stay for a long time. If you see the environment in the US or in Singapore, there are not many MNCs who are mandating their employees to come to work. Everybody is giving the flexibility to their employees to see what makes sense from a productivity perspective – where they want to work from office or at home, does not matter. I do not think that hybrid world is going to change.
A lot of companies have said it is completely voluntary, if you want to come to work or not – not just because of the pandemic but they see the productivity of employees is improving in the flexi work. There are some reports saying that if you give flexibility to the employees to work in their natural environment, their productivity becomes much better. So, I don’t think hybrid is going away any time soon.
At HPE, we are doing the same thing. You have the flexibility to work from wherever you are. For collaboration, communication, and face -to- face engagement, you can come to the work, but in general, if you want to work from home then that is here to stay as well.
What is the market size of SMBs and how do you address this market?
Aruba brackets the organizations which are of less than 1000 employees as SMBs. Worldwide SMB market is around $6.6 billion today with a CAGR of around 5.8% a YoY for next 5 years. As a pandemic slows down, it would be probably 8% CAGR YoY. There are two aspects to the SMB market opportunity. Heart of the SMB market is small businesses (SBs), which is of less than 100 employees. The market size of this business is $2.6 billion today. Their number could be around more than 2.6 million and they are growing at an 8.8% YoY with CAGR of 6.2%. It is a huge market and in some of the countries, SBs are the lifeline.
In order to address this market, we have created a sub-brand or BU called “Aruba Instant On” within Aruba portfolio. This product line is specifically tailored made for the SB market. From a market opportunity perspective, it is quite big, and India is one of the leading countries to participate in this opportunity.
We have also crated specific programmes for SMB focussed partners called “Partner Ready for Networking”, which intends to give them incentives and rebates and allow them to access our digital assets. For us this is a 100% channel-led business. It is very important for us that their success is our success – especially in this space. Something which we take pride of is that we enable the channel partners through the programme and advise them to take advantage of the opportunity and be profitable.
As a vendor, how are you supporting the SMB customers from a skill availability point of view to manage solutions?
It is a big issue all across. As we look at hiring people within our organisation, it is a challenge today. We are in a manpower scarcity right now. How do we manage that – especially in the small and medium business space? It hurts there more than a large enterprise. In large enterprises you can move people around and try to fill gaps. In an SMB, there is just a few people to start with. So, moving people around is even more challenging.
The beauty of “Aruba Instant On” Portfolio is that it is extremely easy to use so that you don’t need any IT professional to install, configure and manage the platform. Therefore, it has seen so much success in the marketplace.
So, our objective is to allow the SMBs to focus on their own things and leave the other things to us as the experts. From an innovation perspective, we have built our products keeping in mind the challenges of the customers. Most of our product portfolio including wired switches, wireless access points, etc. are managed through a mobile phone over a cloud environment. We have seen that kind of trend early on and ensure that organizations do not have to invest in large IT organisation.
Are your solutions fit for both the environment cloud and on-premise?
As we have hybrid work environment, we have hybrid cloud as well which is also here to stay. The customers who are going to look at on-premise assets are doing it primary for the reasons of security because they’re more comfortable to have the physical assets closer to their organisation than somewhere in the cloud. People now understand that you cannot put everything in the cloud – customer databases, customer profiles, customer information. Sometimes in certain industries require them to be physically located on -prem. Our products are tailored towards that. Specially “Aruba Instant On” portfolio can be managed over cloud or we have a local management option also which is the web GUI. It is going to be the customers’ choice with flexible options of how they want to deploy, manage and configure their network infrastructure.
How do you focus on customer support?
The Aruba SMB business is a 100% channel LED business. The overall Aruba business is about 93% through the channel. Our customers’ first point of contact is the channel partner who goes to the customers for pre-sale to post-sale support of the product. Specially in the Tier -2 or -3 city, it is hard for us to have physical IT presence. As a customer you can be rest assured that you get local support anywhere you are. During the pandemic we probably had remote support but rest of the time, you would have face to face support from our channel partners.
The second point is that we have built this product so that you do not really need a lot of customer support. It comes with a lot of AI inbuilt into it. These products come with self- healing and auto configuration functionality. On top of that we offer limited lifetime warranty.
What is your competitive advantage against other players?
I have kind of mentioned all the pillars to some extent as to how we are different. We have taken ease of use to a very different level. It is all about ‘anybody should be able to install and configure these products’ which most of our competitors do not offer. They need a big guide or need someone to be physically present to do this, which increases IT administration and service costs. We have seen what our competitors have done, and we have taken a different track.
The second is we have taken our enterprise security features and moved it to the SMB space. A lot of our competitors offer truncated feature for the SMBs including the security feature. That is not true, SMBs probably need more security features and other features than enterprises.
Third and most critical one is: we have built the product where there is no hidden cost. This portfolio doesn’t come with any licence fee, or no subscription fee and no feature is chargeable after the sale of the hardware. Our competitors sell the hardware product and then charge extra bucks to enable other services.
Finally, the Aruba Business, which is the networking arm of HPE, has been doing this for the last 20 years. We have a heritage and legacy of being in this business specifically tailored for the networking space and it has been built over years of innovation and years of experience. This we are bringing to the SMB space. We understand this space better than some of our competitors who’ve come up recently in the world.
How are you growing from a footprint standpoint?
We are certainly growing our footprint beyond the traditional metro cities to the smaller cities and also growing the number of the channel partners beyond the metros through the up-country markets. So, we are enhancing our own feet on the street for this market. We are recruiting, enabling and rewarding new channel partners for the up-country market. We have a programme called “Action Partner Club”, which is specially designed for the channel partners in these markets to register with us and help us to enable them with all our necessary assets to go to market.