1. SMB Cloud Shift
Why and So What?
Charles Laughlin
SMB Cloud Adoption Summit
December 7, 2017

2. What We Have Observed
 SMB market shift from customer acquisition to engagement
 Blurring lines between media and software industries
 The “democratizaiton” of software via the Cloud
 Growing SMB Cloud investment by major companies
 A clear generational component to SMB Cloud adoption

3. Square: Smartphone POS to Platform
Humble origins filling an unmet
SMB need at the very low end

4. Square: POS to Platform

5. Square: Expanding Services
• Payroll
• Invoicing
• Financing
• Marketing/CRM
• Booking/scheduling
• Third party tool/services
integration

6. What We Believe
 The cloud is the next wave in the SMB market
 SMB cloud adoption will accelerate
 All companies selling to SMBs will be in the cloud business
 The SMB sales process will dramatically transform
 Virtually all newly formed SMBs will be cloud adopters
 CRM platforms will lead the way

7. Quantitative Survey of SMBs
 Latest wave: Nov. 29- ongoing - online survey
 ~ 1,000 completions
 ~140 each in retail, home services, personal services, automotive,
professional services, dining, health care
 Measuring adoption of cloud CRM, HR, accounting, POS, supply chain
 Measuring adoption of cloud tools for CRM, POS, HR/payroll,
accounting, advertising & supply chain
 Results preliminary

8. Some Findings
 SMB cloud adoption still in early stages, upside is huge
 Striking contrast between established and new businesses,
young and old respondents
 Tech-centric preferred over media-centric channels
 Convenience, efficiency, functionality driving adoption
 Modest appetite for “all-in-one” packages

9. Why Do SMBs Adopt Cloud Tools?
32%
19%
16%
13%
10%
8%
2%

10. Why Do SMBs Reject Cloud Tools?
47%
21%
17%
8%
5%
2%
Comfortable Isn't broken Working with
established
players
Unaware of
solutions
Other Bad prior
experience

11. Which Channels Do they Trust?
If you were to consider
purchasing services
outside of the core
service offering of a
particular provider, from
which would you be
more likely to do so?
Tech rises above more traditional
business relationships as preferred
channels.
Cloud Tech
Provider
23%
Media
Partner
11%
Business
Bank
12%
Accountant
15%
Wireless
Provider
8%
Internet
Service
Provider
25%
Other
6%

12. Appetite for the All in One Solution
Thinking about how your
company manages
human
resources/payroll,
finance/operations,
supply chain
management, customer
relationship
management and
marketing services,
which of the following
statements represents
your view?
Prefer to
work with
single
provider
51%
Prefer to
work with
individual
specialists
22%
Other/not
sure
27%
Preference for all-in-one solutions is tepid. Is
there a real problem that needs to be solved?

13. Cloud Adoption – CRM
18%
17%
14%
8%
Dining/Entertainment Retail Health Care Home Services
CRM is leading the way in cloud
adoption – reflecting the importance
of customer retention.

14. Adoption of Mobile Apps – In Business 0-5 Yrs.
Are you currently using
any smartphone apps to
run your business?
Yes + W&S = 87%
Younger businesses will not work
with software companies that are
not app centric.
Yes
55%
Wait and see
32%
Nope
13%

15. Adoption of Mobile Apps – In Business 20+ Yrs.
Are you currently using
any smartphone apps to
run your business?
Yes + W&S = 49%
Huge disconnection on app usage
among older and younger
businesses.
Will this shift as older business go
through succession?
Yes
25%
Wait and see
24%
Nope
51%

16. Adoption of Online Booking – In Business 0-5 Yrs.
Are you currently
booking appointments
with your customers
using online scheduling
software?
Yes + W&S = 56%
Again, younger businesses are
raised in the cloud….
Yes
34%
Wait and see
23%
Nope
24%
Doesn't
apply
19%

17. Adoption of Online Booking – In Business 20+ Yrs.
Are you currently
booking appointments
with your customers
using online scheduling
software?
Yes + W&S = 40%
…while older businesses stick with
older processes.
Yes
23%
Wait and see
17%
Nope
38%
Doesn't
apply
22%

18. How Did You Buy? – In Business 0-5 Years
Please indicate where or
how you purchased the
cloud-based solution for
your business.
Direct + Marketplace
= 73%
Online purchasing is often required in
the cloud, but younger businesses are
much more focused on self-purchase
channels than older businesses.
Directly online
56%
Solcited by
sales rep
15%
Persuaded by
intermediary
5%
Online
marketplace
17%
Agency
5%
Other
2%

19. How Did You Buy? – In Business 20+ Years
Please indicate where
or how you purchased
the cloud-based
solution for your
business.
Direct +
Marketplace
= 52%
Older businesses are more
inclined to buy based on
interactions with a sales rep or
agency, or the recommendation
of a colleague of intermediary.
Directly online
43%
Solcited by
sales rep
20%
Persuaded by
intermediary
13%
Online
marketplace
8%
Agency
7%
Other
9%

21. What is the Tech Adoption Index?
2X annual survey – 1,000 SMBs per wave
Growing profile database of SMB SaaS companies
Forecast of the SMB SaaS marketplace
Content w/insights on the SMB SaaS marketplace
Annual event + meetups for learning and networking
Participate vis subscription or sponsorship

22. A Few Big Questions
 Will all-in-one succeed over point solutions?
 Can players now selling leads pivot to selling SaaS?
 What channels drive scale in the challenging SMB market?
 Will success in the SMB market require verticalization?
 Will a few large players end up dominating this space?

23. Thank You
Charles@TheLSA.org