SMBs and the channel - Canadian update - where's the innovation?

This morning I attended a breakfast session hosted by IT World Canada, and it was a good update on the state of the channel, especially for serving the SMB market. They served it up as a debate, with speakers from two channels, and facilitated by the venerable Paolo Del Nibletto from IT World Canada - with a specific focus on the publication, CDN - Canadian Dealer News. Joining Paolo was Joe Ussia of Infinite IT Solutions, and Christopher Woodill of Navantis.

For SMB, the channel is where the business really happens, and where vendors put their trust in their partners to effectively deploy their solutions. As we heard, SMBs are cautious, both in terms of adopting technology and spending. Paolo shared some data showing that 50% of Canadian SMBs will have have flat IT budgets in 2012, and 22% will actually drop. Not surprisingly, he shared data showing that the biggest concerns among channels are - the state of the economy (healthier than the U.S., but not great), margins, and sales growth. Totally makes sense, right?

Of greater concern to Paolo - and I fully agree - is how little importance the channels are placing on innovation and R&D - these scored much lower on the priority list in the research he shared. This is pretty typical for Canada, and while SMBs generally don't flock to cutting-edge technology, the channel players risk becoming commodities if they're all pushing the same stock solutions.

Note to self and Paolo - next time, show some research regarding what SMB priorities are. I wouldn't be surprised to see innovation and R&D higher up on their list - and if so, there really would be a disconnect between channels and SMBs. Paolo - I'm ready to do the research when you are!

So, with all this uncertainty out there, it's no surprise that uptake on hosted or cloud offerings is slow. As the speakers noted, SMBs still like a sense of IT ownership and control, but they do value what VARs and integrators bring to make multi-mode - and multi-vendor - solutions work. It's a tricky balance in that SMBs aren't spending a lot on Capex for premise-based systems, plus they're also cautious about the cloud.

Perhaps the strongest takeway from this was the path SMBs seem to be on with cloud. They seem happy and comfortable buying point solutions such as Salesforce or CRM that run in the cloud - but this just results in a mish-mash of applications with no integration, which of course, is where the channels earns its keep. As such, the channels concede we'll be in a hybrid market for some time - premise isn't going away that quickly, and cloud adoption will be gradual for communications applications.

Nothing ground-breaking here, but certainly a healthy reality check on what Canadian SMBs are doing, and how the channels are responding. Kudos to Paolo and his team, and I look forward to the next event.

Paolo leading the discussion with Joe Ussia and Christopher Woodill