It’s time for CSPs to get reacquainted with today’s tech-savvy SMBs (Reader Forum)

Small-medium businesses (SMBs) are far more sophisticated adopters of technology than many give them credit for. Representing 99% of the businesses on the planet, catering to their technology needs should be a core focus area for Communications Service Providers (CSPs) looking to expand their portfolios to address revenues from technology solutions. Almost all SMBs have experienced “digital transformation” in some form, a moniker that broadly captures their increased reliance on connectedness, cloud-based platforms and emerging technologies that will help them tackle business growth, efficiency improvements, customer experience and insufficient talent and resources. Yet, why do CSPs continue to overlook the opportunity?

Simply put, CSPs haven’t taken the time to reacquaint themselves with today’s digital-native SMBs. They don’t understand their business priorities, nor do they focus on developing technology solutions to address their vertical industry contexts. CSPs sights are set on large enterprise contracts for 5G, Cloud and Edge, but the SMB market is just as lucrative. Analysys Mason go as far as to estimate the global market value of SMB technology solutions spend at roughly $1.42 trillion per annum. 

In two reports published at the end of last year, Beyond Now illuminated a new kind of SMB market and developed a playbook for thriving SMB-CSP relationships. The research revealed that SMBs are already running as digital businesses where large enterprises are in fact lagging behind. The key takeaway from the research is that despite impending recession, SMBs globally and in North America are not afraid to invest in technology as they understand it’s a key factor in improving business resilience. But SMBs will need help in realizing the business improvements they hope to achieve from their technology adoption. And while CSPs are in a prime position to offer that support and capture a significant opportunity, they too need guidance, the right platforms, partnerships, and digital channels to act quickly where competition will be fierce.

SMBs won’t be uprooted by the economic storm 

The research revealed that 85% of SMBs globally recognize the importance of technology to the success of their businesses, with 44% of those in North America ranking technology as very-to-crucially important. Even against a backdrop of economic uncertainty they plan to increase investment in technology over the next five years.

And while SMBs are cost conscious, they put a premium on technology solutions that support the longevity and growth of their businesses. Currently SMBs invest 8% of their annual revenues in technology products and services. And those investments will increase. In the next year, nearly half (45%) of SMBs in North America will increase their technology spend by an average of 6%. In the next two years, 53% will increase investments by an average of 8%. And in five years, 60% expect to boost technology investment by an average of 9%.  

The important point here is that SMBs already make the connection between technology, business resiliency, and growth. With the right solutions relevant to their industry and business challenges, they know that they won’t be uprooted by economic turbulence. This is significant for CSPs’ strategies as the risk is minimal in engaging this market. In fact, findings from Verizon’s Small Business survey align with this conclusion. It found that SMBs continue to look for ways to operate more efficiently, grow and scale their businesses, and differentiate themselves from competitors. And 61% of SMBs have implemented digital tools to change processes and improve customer experiences.

Fundamentally SMBs have changed and it’s time for CSPs to do the same. The opportunity is there, but it will involve CSPs becoming the dedicated support that SMBs need. SMBs still face several challenges when adopting technologies to achieve that sought after business resilience. And CSPs need to act fast to improve that situation and start generating new SMB revenues immediately.

One platform to rule them all 

With SMBs looking to embrace technology to succeed, it’s critical that CSPs understand their challenges if they are going to build technology solutions to solve them. Notably, SMBs in North America report administrative headaches with having to manage multiple technology providers to meet their needs. Sixty percent said there are gaps in off-the-shelf technology products in helping them to meet their business priorities.

These repackaged offerings don’t cut it for tech savvy SMBs. And multiple disconnected technology suppliers are difficult to manage. As their sophistication increases it’s also likely that SMBs will have to take on more ICT provider relationships, thus intensifying the issue. SMBs also lack the internal skills, knowledge and time to change this. Sixty percent want technology providers to work together to build joint solutions that help them achieve their goals. Critically for CSPs, 65% of SMBs globally would prefer to buy all their ICT from one source, and they would pay a premium for this. Thirty-three percent would be willing to pay between one and five percent more, and 45% would pay between five and 10% more.

For CSPs that become that single platform provider, there is an enormous market opportunity to eliminate the challenges of managing multiple technology suppliers. A single platform would give SMBs the ability to focus on their business priorities. And regardless of geography or industry surveyed these findings were the same. What that means is that CSPs can become orchestrators of these technology ecosystems and bring together specialist partners to develop solutions specific to an SMB’s vertical industry needs. 

A rising tide lifts all ships

With CSPs facing flatlining revenues and looking to technology solutions to solve that problem, SMBs represent a very real opportunity. CSPs are in an ideal position to become that single platform provider that SMBs desire, but it will require deeper change to CSPs’ value propositions and business models. What’s interesting is that 36% of SMBs globally prefer online/digital channels for purchasing technology solutions. This makes the case for CSPs to invest time in building a solutions-based digital marketplace. 

Digital marketplaces are an elegant solution that can solve two of the significant challenges when tapping into SMBs. First, that SMBs want technology solutions that tackle their specific business problems and that can be delivered via collaboration with multiple technology providers through a single, dedicated platform. And second, that CSPs don’t have the breadth of capabilities to solve those challenges alone, but they have the orchestration capabilities, relationships and market access that most technology providers do not. 

CSPs need to act with urgency to develop these marketplaces, nurturing strong partnerships through ecosystems to stimulate growth for SMBs, themselves and their technology partners. It involves a model of co-creation, co-innovation and collaboration, but also one of co-growth. Through this deep organizational change, CSPs can truly strengthen their position and share in the success with their ecosystem cohort. As the saying goes, a rising tide lifts all ships.