“What’s the last piece of technology to parallel the impact that analytics is having inside lower-middle-market businesses?” This is one of a number of questions we recently posed to Ed Abrams, IBM vice president of marketing for midmarket businesses. His all-confident reply: “I’d say it almost parallels their first website.” While you may not be surprised that Abrams is bullish on analytics, his thoughts highlight more than product offerings (e.g., IBM’s recently released Power7 Systems), but also an age of change for lower-middle-market businesses. Here’s how IBM’s man in the middle answered our questions.
MME: When we think of the types of technology-driven phenomena that are reshaping lower-middle-market businesses, cloud applications, mobile devices, and data analytics all come to mind. What else should be on this list? Or how would you characterize our list?
Abrams: Well, let me start with your last item first. When it comes to data analytics, what is driving the need is the growth that we see in mobile and social and cloud computing, so all of those capabilities are throwing a ton of unstructured data at midsize businesses, and the growth in these areas is astronomical. Mobile is doubling in size, whether you look at research from our SMB group, which shows that mobile application usage and device
usage is going up 50 percent, or at Gartner’s recent survey that shows that 26 percent of small- and medium-business employees are bringing their own devices to the marketplace. And then there’s the explosion in social, where our own research has shown that social media usage among small and medium businesses or midsize businesses is up to 53 percent and that 23 percent of midmarket companies view social as a way to reduce their marketing costs and are shifting where they invest. Meanwhile, the cloud marketplace for the middle market is going to hit almost $70 billion by 2014. So we’re seeing all these different pieces, but what do they mean for midsize businesses? How do you really make sense of all the information that is going to come from all these different areas? This is why this idea of big data and big data analytics is so critical and why we’re so focused on helping midsize businesses to really figure this element out.
MME: In the lower middle market, it would seem to me that IBM would need something of an elite class of VARs that are capable of helping businesses to leverage analytics in innovative and not just template solutions. What’s the approach here?
Abrams: Well, you’re absolutely right, and that’s why we’ve built the network of partners we have. We’re not just partnering with plain old VARs or resellers. Our partners are really providing that higher-value expertise or are providing that capability to take technology and make it something that works for a midsize business. The way we and our partners look at the midmarket space is that middle-market company IT departments have 15 or fewer IT people on staff. They are not looking to build large IT departments. They’re looking to focus on the business they first got in business to do, and so the role that our partners have to play — and this is where we give them not only technology, but also education, expertise, capability, and access to IBM — is to become that trusted advisor. Or to become that IT department and do the heavy lifting and not just deliver a box to the loading dock.
MME: It begins with businesses identifying data patterns — but what happens next?
Abrams: There are clearly patterns in data, and that’s where IBM — in light of us working with 300,000 middle-market customers around the world — is able to look at what those patterns are for middle-market customers. And take that information and build it into the solutions we deliver for middle-market customers so that they can leverage it. This is where a small produce company out in California can have us help them manage inventory and how they deliver cantaloupes and honeydew melons to distributors based on patterns around heat indexes or around the size of the crews that are out picking. This is the type of information that is now being embedded in solutions as we make them accessible to middle-market customers.
MME: For those businesses struggling to look beyond 90 days into the future, are they asking for a big data solution? Are forecasting and big data solutions becoming aligned?
Abrams: It’s probably less about time frames and more about when there is an appetite for new insights and new ways to look at their business. So it’s not about better 60-, 90-, 120-day planning, but what we hear is “Can you and your partners help me find new ways of looking at my marketplace?” And a great example of this is a online retailer out of the UK called Labels Sneak. They’re a menswear retailer, and they wanted to be able to look at all the trending that was going on in social media and find out how they could tie that in with what they are putting on sale, what they price, or what they promote. By working with us and CSI to look at that data and look at new ways of analyzing the business, they have been generating triple-digit revenue growth for the last 6 to 9 months since this solution has been deployed. Another example is Gracious Home, which sells luxury home goods in the New York area. They have about 300 employees, and by working with one of our partners, they were able to glean insights out of their data from their social media interactions and mobile interactions with customers that showed where and how customer demand was changing so that they could better manage inventory, better coordinate what was going to be sold when, and better understand what to discount and what to premium price based on how things are trending. This information was really locked inside their organization, and what they did was discover how to bring it out and use it in the marketplace.
MME: How is IBM using social media to communicate as well as listen?
Abrams: This is actually one of my favorite topics and something I can go on for far too long about, but I’ll keep it brief. Social media has become the primary manner through which we talk with midsize businesses and listen and learn. What we have found is that midsize businesses are really looking for insight and looking for information from a variety of different sources. They’re using social to seek out that information, so for us it’s all about engaging in the conversation that these lower-middle-market businesses are having today and having us show up in that conversation either through our social channels or through our business partners and how they engage in the social environment or through our influencers and experts who communicate middle-market messages into social channels. And we really see this as the primary way in which we are going to interact with customers. We recognize that our job is to show up where and when they want to have the conversation, and while that takes place in many different places and in many different industries and areas, the beauty of social media is that it creates that content to deliver on the wants and need of the marketplace.