Kathy Gibson is at the Cisco Small Business Summit in Sandton – The opportunity for southern African small businesses to adopt technology as a means for boosting their competitiveness is huge – and resellers are well positioned to grasp this opportunity.
Globally, small business is a $30-billion opportunity, growing at 7%. In southern Africa, this opportunity is $8-billion, growing at 3% – and so far, Cisco and its resellers have grasped just 13% of the opportunity.
This is 27-billion customers available across EMEAR – in southern Africa, this is close to half a million businesses.
“Small businesses make up 55% of the companies in South Africa,” explains Ignacio Castroverde, small business leader for sales at Cisco EMEAR.
To date, Cisco has capture 13% of the market opportunity, with resellers growing at a phenomenal rate of more than 50% per annum.
IDC tells us that digitisation is driving change, but SMEs are embracing it pragmatically. “They are using it to lower opex and grow their business opportunity,”
Adopting and increasing cloud use is another top topic for SMBs, and they are looking to cloud to grow their businesses.
Security is a major issue and the most mentioned investment drivers.
Mobility is a key trend emerging for SMEs, helping them to increase their bottom line.
Customers around the world are changing, says Castroverde.
“They are behaving like consumers: they want to be anonymous, they are emotional, interdependent, considered and mutable.”
A massive 62% of B2B buyer start their buying cycle with a web search; and 73% of people involved in buying decisions are millennials – so they have an expectation of instant gratification.
Cisco offers a solution for small businesses, Castroverde adds. “We have dramatically changed our strategy. Today, it starts with the customer, around what they want and how they behave.”
The company has an SMB-focused portfolio of products and services; it has adopted a marketing driven strategy that centres around its partner network.
“You guys are going to be the centre of what we do,” Castroverde tells resellers. “You are our top priority for next year.”
Cisco has sometimes been seen as hard to work with, and the company has streamline operations to make it easier for partners to work with it.
Castroverde points out that the small business customer want to improve revenue growth, reduce costs and expenses, and improve efficiency and productivity.
This is balanced by an IT focus that aims to upgrade and add new PCs and endpoints; embrace server and network infrastructure; increase storage and improve storage management; improve network security and security management; and ensure proper backup and disaster recover.
To achieve these goals, they are looking to cloud to reduce operation costs and improve productivity.
Mobility is key to improve productivity and enhance collaboration.
Managed services will help to improve security and control costs.
Collaboration is important to increase profitability and business growth.
Security is in the spotlight, to reduce risk and ensure compliance.
Cisco has identified three personas within the target customer segment, Castroverde says.
The first is the business owner, who wants technology purely to grow the business and keep the lights on.
The second is the IT manager concerned with keeping the lights on at the lowest cost.
The most advanced small businesses have IT managers concerned with solutions to help grow the business.
The Cisco portfolio has been designed to meet customer priorities, Castroverde says.
The products are segmented into pillars: network/connect; computer; secure; and collaborate.
Products within these segments are designed to work together and be managed both in the cloud and on-premise, with full analytics available.
Castroverde adds that Cisco has committed to add or tweak products based on customers needs. The initial produce line-up will be announce din the nest couple of weeks.
“We cannot go to customers with 200 000 products, or try to squeeze customers into our portfolio,” he says. “Now we work the other way around: we look at the customers, at what they need, and find products that suit their needs.”
For resellers, Cisco is putting together solution bundles and promotions that make it easier for partners to sell them.
“Marketing is key,” Castroverde says. “First of all, we need t touch those millions of customers and make sure they know we are relevant.”
Cisco is committed to creating awareness and perception in the small business market, doing demand generation, and helping partners with opportunities and bookings.
Overall, Cisco aims to present a unified digital experience that touches all customers. “We need to create a seamless experience across the lifecycle of the customer,” Castroverde says.
“A few years ago that was very fragmented. Our commitment over the next few months is to create a seamless experience across the entire portfolio.
“We aim to become the number one player across EMEAR in the next few years.”
Managed services will be key to the value proposition, Castroverde says.
He adds that the evolving customer requires a new way of engagement, Today, the IT department controls just 25% of the IT budgets, with line of business the new buying centre.
How to engage with these new customers means partners have to change their approach. There are new consumption models aimed at addressing specific business outcome, offering recurring value and new touch points where partners can add value.
Customer experience is key, Castroverde adds.
The most profitable partners in the small business segment all exhibit certain behaviours.
While 16% of partners get revenue from adoption service, successful partners drive this up to 21%.
Line of business accounts for 45% of revenue for successful partners, and 35% for other partners.
Recurring revenue is 39% for successful partners compared to an average of 35%.
The Cisco effect grows from $5.08 for average partners to $6.05 for successful partners.
To help partners on their journey, Cisco is investing in simplified programs to develop expertise and to drive demand. Specialisation will be key; EasyLease will help partners to finance investment; programs help to fast-track and up-sell; and marketing campaigns that will be available in Partner Marketing Central.
“We understand this is easy to say,” Castroverde says. “So we have created a war room that gives partners competitive intelligence on global best practice, winning strategies and specialised assistance.
Cisco’s distributors are key players in implementing all the company’s programmes.
“They are partners’ main point of contact,” Castroverde says.
Distributors will provide customer intelligence, vertical expertise, sales support, marketing and demand generation, financing, software desks, enablement portfolio, and lifecycle practice management.