Last week, I made my annual pilgrimage to IBM Connect to learn about the latest and greatest developments in the company’s collaboration and talent solutions. Over the years, IBM has transformed its former Lotusphere conference to Connect, grown a portfolio of cloud-based messaging and collaboration solutions, and added talent and workforce management solutions into the mix.
This year’s Connect theme was "Energizing Life’s Work", which plays across IBM’s collaboration and mail solutions, as well as Kenexa, IBM’s talent suite (IBM acquired Kenexa in 2012). Here, I’ll focus on news in the cloud-based collaboration space, which is arguably IBM’s best possible route to the small and medium business (SMB) market.
IBM’s big news in this arena focused on:
IBM said that 2013 was a tipping point for adoption of its Connections for Cloud, touting triple digit growth in new customers and quadruple digit growth in new signings. Although IBM doesn’t release information about the number of active accounts using Connections for Cloud, it claims to have millions of users, and a 50/50 split between large businesses and mid-market accounts. In a breakout session, executives noted that some mid-market customers have replaced Office 365 or Google Apps with IBM Connections for Cloud. They cited IBM’s strong security and governance capabilities, and the fact that the company doesn’t sell ads or mine customer data as key competitive differentiators.
Missing the B2Me connection
Judging from the demos, IBM Connections for Cloud is making headway in terms of creating a more user-friendly and SMB-friendly collaboration experience and developing lightweight, lower priced bundles. In fact, I have spoken with several smaller organizations such as Apex Supply Chain and Colleagues In Care that are very satisfied with IBM’s collaboration solutions (more customer stories can be read here. IBM’s growth metrics are also impressive.
In addition, IBM’s new design thinking philosophy puts the user experience at the center of its development and roadmap planning, indicating IBM’s recognition that consumer-oriented applications have a big influence on user expectations. The vendor’s design thinking philosophy incorporates best practices from popular social apps, brings features such as activity streams, social feedback and network updates to the forefront, and use analytics to flag high-priority items for users. IBM is also putting mobile-inspired design first. For instance, event demos showcased tablet-optimized design principles for Mail Next even when accessed through a traditional web browser.
But IBM remains a distant third to Microsoft and Google in the SMB email and collaboration market. Given the company’s current position, its traditional B2B sales model, and the ongoing consumerization of IT, the odds look slim that IBM can dramatically grow SMB share.
Across the technology spectrum, and especially in the collaboration space, decisions are increasingly being made in a bottom-up instead of top-down manner. User preferences forced a massive corporate shift from BlackBerry to iPhone, and business users are signing up on Dropbox and Google Drive by the millions without IT’s blessing. I’ve dubbed this trend "B2Me". As consumer technology gets friendlier and friendlier, people are increasingly likely to seek the same type of technology access and experience in their business lives as in their personal ones.
Therein lies the rub for IBM. Although it offers a self-service model, including a free trial, onboarding services and credit card purchase options for IBM Connections for Cloud, it lacks any presence in the consumer or prosumer space—a growing onramp for SMB technology adoption. In addition, IBM’s service and support model is geared towards making large corporate accounts happy. Shifting gears to serve far-flung issues and requirements from the masses presents another big hurdle for Big Blue and other enterprise-facing vendors.
Without the ability to create and a support a viral, bottoms-up business model, its hard to see how, no matter how good the solution is, IBM Connections for Cloud can make serious headway in the SMB Market.
Does it really matter whether IBM connects with SMBs?
IBM has an impressive stronghold in the large enterprise collaboration space. In fact, the company has augmented, reshaped and restyled the Lotus portfolio—which was once declared dead—into its now thriving Social Business division.
So why should IBM divert attention and resources to SMBs? Especially as Google, Dropbox and others drive pricing downward, many IBMers likely view this as a profitless tail-chasing game.
However, I believe that if IBM chooses to put SMBs and the B2Me phenomena on the back-burner, it does so at its own peril. IBM needs to grow its SMB market footprint to fuel growth, especially after missing revenue targets during 2013. Furthermore, there’s the pesky fact that small companies grow and large ones go out of business. Consider that 238 of the companies that made the 1999 Fortune 500 list had slipped off the 2009 Fortune 500 rankings. Technology, generational and cultural shifts will only intensify this turnover. IBM needs to get a foothold in fast-growth companies while they are young.
Finally, and perhaps most importantly, IT consumerization is not a passing fad. As evidenced by Apple displacing (crueler people might say killing off) BlackBerry, consumer and B2Me can’t be ignored. Collaboration is the one activity that every person engages in every day, both in business and at home. Perhaps more than any other area, collaboration solutions will be adopted from the bottom up instead of top down. In fact, one of the IBM Connect keynote presenters noted that some employees are willing to pay for rogue collaboration tools out of their own pockets if those solutions make their lives easier. That makes collaboration the natural—and possibly the only—starting point for IBM to get in touch with its inner consumer.
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Published by: electronicdawn Ltd.