The SMB segment has been a hard nut for the IT vendor to crack. Numerous, needy and heterogeneous, the small to mid-sized business community has posed special challenge to the efficient marketing of ICT goods and services. The traditional vendor approach has been creation of byzantine channel programs that rely on partners with unique knowledge of local needs and developed local customer relationships to reach out to the smaller business owner. A line of attack requiring constant care and feeding, this approach was revolutionized by cloud delivery which promised direct and equivalent access to computing resources to businesses of all sizes – or was it? Interestingly, the refinement of products and services for the SMB has proved an ongoing exercise in the cloud era, as HP programming demonstrates. Indeed, within the SMB segment a specific community has emerged that is both enabling and benefiting from the development of cloud technologies.
In Montreal to address attendees at the recent International Startup Festival, Margaret Dawson, VP, product marketing and cloud evangelist for HP’s Cloud Services, outlined for InsightaaS.com trends in public cloud adoption and the needs of this slice of the SMB community. According to Dawson, the enthusiasm exhibited at the event by the “thriving Montreal tech start-up community” was especially energizing and has prompted internal consideration of a new, targeted cloud program initiative. Event participants proved especially interested in cloud: in discussions with the “startup ecosystem to try and understand how they are looking to go to market or collaborate,” Dawson found that “cloud kept coming up” as did questions around its technology foundations – despite her keynote focus on broader start-up success factors.
“I went back and I started thinking, ‘okay, we need to do something for startups… We always talk about public cloud or IaaS being great for developers, and there’s PaaS for other workloads, but I really think there’s a huge opportunity here. Startups are so sensitive to agility, time-to-market and cost, and are in such a different place in terms of needing to get things moving that they’re not at that next level where they can even begin to think about a private cloud. It’s all about how can I do this, and get my idea out there before someone else does.” In her view, there is “huge synergy” in startups leveraging public infrastructure that is secure and scalable and cost competitive – “this is just perfect for this group,” she added.
Over the next several weeks, Dawson intends with her team at HP to hammer out a program that meets the specific needs of the startup community. “It’s a very different model,” she noted, with different requirements. HP currently offers a freemium public cloud package that allows test and development for a three month period, which is used primarily by developers associated with larger companies that can more easily transition to a paid model. The startup community, on the other hand, “is ripe for a partnership” with HP, which Dawson claimed, also has a heritage of innovation that will drive interest in making scalable cloud infrastructure available to the startup at a cost that is manageable. Described by Dawson as a “win-win,” this alignment with startups is an astute tactic on HP’s part: composed of a high proportion of tech or web-based businesses that in many instances do not consider implementation of on-premise infrastructure, the startup represents a good prospect for a technology supplier looking to drive adoption of its public cloud offering.
So what has HP identified as unique startup cloud requirements? According Dawson, businesses across the size continuum have reasons in common to look to cloud: “at the highest level, matching the need for business agility with IT agility is a key forcing factor for cloud no matter what the size of the company.” For smaller companies, potential cost savings are an important driver of cloud deployment, though as Dawson explained, the cost equation of cloud has changed over time. As it has emerged over the past five or so years, cloud has proved more complex to implement and the straightforward CAPEX to OPEX migration discussion has had to incorporate cloud costs including implementation, security, app development, etc. weighed against potential benefits such as agility. “Cost criteria [for cloud],” she argued, “change vastly as you go from the smallest company to the largest enterprise.” Other considerations, she noted, such as reliability and uptime, or security and privacy mandates, often command greater attention in larger organizations where IT budgets may be better equipped to handle private cloud implementations (though these may also have need for burst into public cloud resources). For the developer and startup communities, Dawson believes public offerings are a more appropriate and popular option, hence the new program initiative will focus on the common need for agility, with provision made for the unique cost support criteria of this small business segment.
In this new equation, cloud complexity and the need for services around them become an interesting proposition. If the startup community is cloud-driven, the accounts are small and numerous. According to Dawson, HP’s ability to provide products and services across all end user IT requirements means that cloud delivery and the services around them “can be brought together and you can mix and match what works.” In terms of the small company, though, Dawson believes that high touch services may not be a critical issue (and hence manageable from a vendor perspective): “in talking to a lot of these startups, it’s clear that they know exactly what they need. It’s more about literally giving them the IT infrastructure to play and build their applications, games or websites in a way that it’s not going to cost them a fortune – to help them quickly build something to show so that they can go out and get funding or initial customers.”
Summarizing, Dawson explained, “The first thing that we’re looking to do is to try and find a way to allow startups to get started in a very cost-effective way with enough capacity to suit their needs. And next, we will figure out how to scale both that capacity and cost so that the solution remains cost-effective as they move.” Look for more detail on the new HP program coming soon.