The IT transformation currently occurring in the market thanks to cloud computing and the wide adoption of shared IT infrastructure seems like it’s predominantly affecting the large enterprise sector.
But while this big business IT revolution is going on, there is a flow-on effect to the mid-sized market which is also tackling unprecedented data growth whilst struggling to assess the benefits of a move to cloud computing. The challenge for MSEs is in understanding how best to optimise their IT environments for both efficiency and scale so they can be comfortable in the knowledge they’ve made the right decisions for their business in the longer term.
For the most part, the IT vendor community in Australia tends to focus on the big end of town with multinational organisations dominating the landscape. When you then consider that 73 percent[1] of the Australian economy is based on small businesses it seems unsurprising that mid-sized enterprises which fall between these two market segments often seem to be forgotten. This means many MSEs are reaching the limits of technology designed for small business with the resulting reliability and management headaches, or they’re paying too much to use specialist enterprise IT solutions.
Enterprise solutions aren’t well suited to mid-sized enterprises, because of their inherently high costs and inefficiencies, plus the fact that IT employees in MSEs are usually generalists. They need to know how all the company’s systems work and how to fix them if they break and they simply don’t have the time to gain the specialist expertise needed to get the most out of these solutions.
Many of the traditional solutions offered by technology vendors to mid-sized enterprises never really met their specific needs effectively. In an effort to win business in these budget-conscious organisations, vendors sometimes offer commodity-based solutions with low upfront costs, without fully informing the customer of the features (or lack thereof).
In the midst of this gloom, unlike many other areas of the marketplace that are facing budget constraints, mid-sized business budgets in general are still reasonably healthy, though not infinite. Over the last few years, many MSEs have successfully focused on cost containment. For example, a large percentage has already taken the virtualisation path. MSEs have seen great savings from these efforts, but most are now seeing that they’ve saved about as much as they can from consolidating and virtualising their compute infrastructure while at the same time they are seeing a steady increase in their spending on data storage.
As the focus moves towards optimising data storage costs, mid-sized businesses are looking for ways to reproduce the cost savings gained through virtualising their compute capacity, optimise their environments and gain competitive advantage. By demanding solutions that solve important and difficult challenges without undue complexity, and are powerful and scalable enough for the future, MSEs can gain great return on investment and get more from their suppliers.
The test for mid-sized companies is to make smart decisions on technology that are genuinely efficient, provide simplicity and offer scalability to meet growth requirements. MSEs need a technology foundation that will maintain pace with growing business demands and allow the company to do more with fewer resources.
So, what’s the lesson?
Mid-sized businesses are poised to continue growth and dominate in the market. The things they need to look out for in the technology arena are:
- solutions that can scale with business needs – up and down – to protect their initial IT investment
- simple technologies that can be managed by IT generalists, yet still provide good cost of ownership and advanced enterprise-level capabilities
- partner businesses who can help them make smart decisions about the longer-term IT strategy, so it aligns properly with business objectives.
– John Martin is Principal Technologist, NetApp A/NZ
[1] Reckon 2010 Annual SMB Business Survey
