Thanks to the COVID-19 pandemic, we are all using more technology than before, both in our work and private lives. This trend continues as businesses have realised the myriad benefits it can bring, from cost savings to more efficient processes and better collaboration. As a result, organisations are now taking the way they harness technology to another level.
Driven by a desire to keep improving, small and medium-sized businesses (SMBs) continue spending on technology solutions despite the difficult economic situation. In their quest to boost productivity and achieve the best business outcomes, we see SMBs invest in various tools – from software to hardware and cloud solutions.
Since COVID, budgets have not been as ringfenced as they were before. Investments in IT and technology are coming from across all business functions, and the budget is no longer owned by the IT department alone. Technology has found its way into all areas of a business, which is reflected in the current buying.
Tools that can move the needle
At the pandemic’s start, everyone focused on video conferencing and collaboration tools to enable working from home. Teams, Zoom and Slack, have changed how we work; however, three years on, they are no longer the trend that stands out. Having experienced these new ways of working together, organisations are now looking to transform other business areas, unlocking unique benefits by adopting technology to support their finance, banking or human resources processes.
The solutions that make a difference don’t have to be complex, but one thing they have in common is that they often include a degree of automation. As a result, there are opportunities across almost every business area: SMBs can easily automate labour-intensive and repetitive tasks such as diary management, documentation and other administrative tasks.
The application that moves the needle can be as simple as a tool that automates the reconciliation of expenses, for example, or a tool like Culture Amp which gives insights into the levels of happiness and morale amongst the remote workforce.
At the other end of the spectrum, fully-fledged enterprise resource planning (ERP) solutions such as SAP Business One that can flex and mould around individual business needs are now of interest to SMBs, increasingly replacing accounting platforms such as Sage.
Technology and consulting go hand in hand
Along with their investment in new technologies, SMBs are spending more on consulting fees as they look to managed service providers (MSPs) to help them implement and customise new solutions. Nearly a third of small to mid-sized businesses already outsource all or some of their IT, according to Jay McBain, Chief Analyst at Canalys. Instead, they tap into expert support for their digital transformation initiatives – finding ways to do more with less and be more agile.
Partly driven by the pandemic, cloud infrastructure-as-a-service and software-as-a-service have been growing at 30-40% every quarter. Canalys has noted that in the mid-sized market, there is almost a dollar-for-dollar match for consulting and management fees spent versus spending on technology.
And, with workforces getting used to collaborating in the cloud and rising user expectations, businesses are seeking MSP advice on how to utilise their existing tools better. A large percentage of the available features in any software solution tend to go unused, so maximising the capabilities of existing solutions can bring real improvements to day-to-day work processes.
Organisations also strive to do more with their information, such as the wealth of data stored on shared drives and in cloud applications. Documentation is becoming more critical – tracking where data is kept and how it is used. In line with that, we see increased spending on documentation technology from both MSPs and SMBs.
Security remains a priority
Cyber resilience is another area that sees growing investment. Businesses are more acutely aware of the risks. As a result, cybersecurity is booming, with 77 billion US dollars forecast to be spent on security in the SMB market globally in 2023, according to Analysys Mason. In a world where a large part of the workforce is still remote, at least some of the time, and everything is digital, the security stakes are high: The downtime and reputational damage from a breach can be business crippling for a small company.
The annual State of Ransomware Report published by Kaseya earlier this year confirms how worried businesses are. More than half of the nearly 3,000 SMBs surveyed admitted that a successful phishing attack or, worse, a ransomware attack would seriously wound their organisation – with some saying that it could deal a fatal blow. Four in 10 respondents said their organisation is increasing their cybersecurity spending.
In addition, one in four outsource their security to an MSP and one in six to a managed security service provider (MSSP). And in the latest 2023 MSP Benchmark Report by Kaseya, MSP technicians agreed that enhanced security services – including two-factor authentication, dark web monitoring, penetration testing and security awareness training – have recorded the most growth in the last 12 months.
MSPs are preparing for growth
MSPs are in a strong position to weather the current economic situation. Many are investing more in marketing as they see the opportunity to help their SMB clients survive through technology. Over half of them are in hire mode, according to Canalys. In addition, they, too, are harnessing technology to boost productivity and free up time, automating basic day-to-day tasks such as onboarding new clients or dealing with recurring helpdesk tickets. In Kaseya’s MSP Benchmark Report, almost 90 per cent of surveyed MSPs agreed that automation is crucial to their success.
On top of that, MSPs focus on integrating their core tools to improve efficiency, service delivery and cost management. Integrated tools let them streamline daily operations, allowing a consistent service delivery to clients. After all, the speed and accuracy with which an MSP resolves a customer query is a crucial differentiator in a crowded market.
Finally, sustainability is becoming an important consideration. Organisations mandate that their suppliers work sustainably, from enterprises to small businesses. Alongside security and compliance, MSPs must demonstrate their sustainability credentials to win some contracts. Suppliers must prove that they don’t just have green policies in place but that they are taking real climate action. Some businesses partner with organisations such as Ecologi to offset their carbon footprint.
Throughout the pandemic, the MSP industry has consistently seen growth, fuelled by the needs of its small and medium-sized customers. Applying technology solutions where they make a difference will help both the SMB community and their MSP partners strengthen their business from within and be prepared for any further challenges.
By Greg Jones, Vice President of Business Development EMEA, Kaseya.