December 2011

2011 SMB Collaboration and Communications Study

Highlights

Sanjeev AggarwalLaurie McCabe

Brent LearyArjun Aggarwal

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SMB Collaboration and Communication Study Goals

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The SMB Group’s 2011 SMB Collaboration and Communication Study examines related trends, dynamics, opportunities and challenges among small and medium businesses, assessing: o SMB collaboration culture and practiceso Current and planned use of collaboration

solution and serviceso Perceived benefits of collaboration solutionso Integration of collaboration and communication

solutions with other business applications and processes

o Impact of social media and mobility on collaboration requirements

o Shift from standalone collaboration and communication solutions to integrated collaboration suites

© SMB Group and CRM Essentials

SMB Employee Size Company Distribution

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Sample Size = 249, 100-249 empl.: 103; 250-499 empl.: 69; 500—999 empl: 77

2.) How many full-time employees, including yourself, are employed by your company (not including contractors)?

100-249 empl.; 41%

250-499 empl.; 28%

500-1,000 empl.; 31%

1-19 empl.; 73%

20-49 empl.; 14%

50-99 empl.; 13%

Sample Size = 568, 1-19 empl.: 413; 20-49 empl.: 80; 50—99 empl: 75

Small Business Respondent Breakdown

Medium Business Respondent Breakdown

Top challenges for both SB

and MB are to: #1: Attract

new customers#2: Grow revenue

#3: Maintain profitability

5.) What do you view as the top 3 business challenges for your company in the next 12 months?

SMB Top Business Challenges

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SB

MB

54%

41%

16%

26%

51%

43%

46%

36%

39%

23%

11%

10%

18%

20%

19%

21%

15%

29%

5%

11%

8%

12%

15%

25%

Attracting new customers Reacting quickly to changing market conditionsGrowing revenue Maintaining profitabilityImproving cash flow Obtaining financingAttracting & retaining quality employees Improving customer experience and retentionImproving employee productivity Effectively managing relationships with suppliersAdding resources to meet market demand Streamlining business processes to be more efficient

#1

#1

#3

#3#2

#2

Small Business

Medium Business

8.) Which statement best describes your company’s culture when it comes to collaboration?

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SMB Collaboration CultureEmployee Size Matters

Sample Size = 249

1-19 empl.

20-49 empl.

50-99 empl.

100-249 empl.

250-499 empl.

500-1,000 empl.

48%

48%

49%

33%

39%

31%

23%

25%

23%

32%

29%

29%

15%

21%

27%

33%

32%

38%

We recognize and reward employees for collaborative achievements more than individual ones most of the time.We recognize and reward individual achievement more than collaborative achievements most of the time.We recognize and reward individual and team accomplishments equally.

Sample Size = 568

How Collaboration Culture Affects Corporate Performance

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We recognize and reward employees for collabora-tive achievements more than individual ones most

of the time.

We recognize and reward individual achievement more than collaborative achievements most of the

time.

We recognize and reward individual and team accomplishments equally.

13%

18%

22%

25%

23%

28%

57%

51%

44%

Revenue Increase Revenue Flat Revenue Decrease

We recognize and reward employees for collaborative achievements more than individual ones most of the time.

We recognize and reward individual achievement more than collaborative achievements most of the time.

We recognize and reward individual and team accomplishments equally.

10%

15%

12%

13%

26%

22%

75%

56%

63%Revenue Increase Revenue Flat Revenue Decrease

Small Business Medium Business

• Businesses that reward team achievements over individual ones are more likely to forecast revenue growth.

• The gap widens as company size increases.

Small Business

Medium Business

8%

2%

19%

13%

36%

29%

31%

46%

7%

10%

Heavy reliance Moderate reliance Neutral Little relianceNo reliance

Reliance on and Satisfaction with Collaboration Tools

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11.) How much does your company rely on collaboration tools to collaborate more effectively, accomplish tasks and achieve business goals?

12.) Overall, how would you rate your company's satisfaction with collaboration tools to facilitate collaboration and help your business succeed?

Small Business

Medium Business

2%

0%

7%

9%

49%

37%

34%

47%

8%

7%

Very Satisfied Satisfied NeutralDissatisfied Very Dissatisfied

Reliance Satisfaction

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Collaboration Budgets

18, 22, 26) What is your company's annual budget for traditional/Social/Communications collaboration solutions for 2011 (NOT including salaries of company staff involved)?

Sample Size = 413

Collaboration Segment Small Business (SB)/Year

Medium Business (MB)/Year

Traditional Collaboration $1K - $2.5K $25K - $49.9K

Social Collaboration

$500 - $1K $10K - $24.9K

Traditional Communications $1K - $2.5K $25K - $49.9K

Integrated Collaboration Solution

$5K - $10K $25K - $49.9K

Free vs. Fee Based Solutions Over 75% of SBs are using free traditional collaboration tools

Over 60% of MBs are using free traditional collaboration tools

Adoption and Plans for Integrated Collaboration Platforms

Small Business Top “Must-haves”• Traditional: email; calendars, file storage and sharing,

contacts • Social: social capabilities and integration, instant

messaging, online discussion forums • Communications: Web conferencing, Internet phone

solutions • Additional functions: integration with business

apps/workflows, native support for mobile devices

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Medium Business Top “Must-haves”• Traditional apps: email (66%); file storage and

sharing , real-time shareable document collaboration, shared project management, contact management

• Social: instant messaging, social capabilities and integration, online discussion forums

• Communications: Web conferencing, video conferencing

• Additional functions: integration with business apps/workflows, native support for mobile devices

Small Business

Medium Business

16%

28%

20%

35%

64%

37%

Currently use an integrated collaboration suitePlan to use an integrated collaboration suite in the next 12 MonthsNo plans to use an integrated collaboration suite

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Top 3 Collaboration Platforms Selected by SMBs

Vendor Small Business Medium Business

Microsoft (BPOS, 365, SharePoint)

54% 52%

Google Apps for Business 26% 26%

IBM (Lotus Live, Lotus Software)

4% 15%

Top Reasons to Select a Specific Integrated Collaboration Solution

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35.) Apart from solution capabilities, what were the top 3 reasons that influenced you to select this solution?

Other

Stronger customer references

Higher ratings by industry analysts

Better reviews/ratings in technology and business publications

Better customer service and stronger service levels

Stronger security and encryption

Available as a "cloud" or SaaS solution

Easier to use

Stronger reputation and brand

More positive reviews in social media

Availability of local service and support

Faster to deploy

Lower price

Easier to customize for my business

2%

19%

11%

19%

23%

21%

15%

9%

27%

22%

21%

30%

52%

30%

0%

9%

11%

11%

14%

16%

17%

24%

26%

29%

30%

34%

39%

40%

Medium Business Small Business

• SB top reasons: lower price, easier to customize, faster to deploy.• MB top reasons: easier to customize, lower price, faster to deploy.

SB

MB

40%

39%

18%

20%

7%

8%

5%

3%

4%

5%

21%

26%

12%

13%

9%

18%

48%

50%

65%

27%

10%

7%

People feel that what are doing works well enough Difficult to determine what we need in an integr. collabr. suite

Difficult to compare different integr. collabr. offerings Deciding who should be involved in the selection process

Had tried a collaboration suite before, but it didn't work out Lack of time to evaluate and try different solutions

User resistance to learning something new Difficult to migrate from current solutions

Too expensive Too few employees to make it worthwhile

Other (list)

Top Reasons for No Plans to Use an Integrated Collaboration Platform

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45.) What are the top 3 reasons that your company is not using/planning to use an integrated collaboration platform?

MB• 50% think that an

integrated suite is too expensive for their needs.

• 39% think that what they’re doing works well enough.

SB• 65% think they

have too few employees to make it worthwhile to adopt an integrated suite.

• 48% think its too expensive and 40% think that what they’re doing works well enough.

• 12% more likely to be forecasting revenue growth than those that reward equally and 19% more than those that reward Individuals more

• 22% more likely to be satisfied with achieving business goals than those that reward equally and 38% more than those that reward Individuals more

• 21% more likely to be satisfied with collaboration tools than those that reward equally and 35% more than those that reward Individuals more

• 20% more likely to adopt/plan to adopt an Integrated collaboration platform than those that reward equally and 6% more than those that reward Individuals more

• Spend 2-3X more than on collaboration solutions than those that reward equally and 1.5-2X more than those that reward Individuals more

Segmentation HighlightsCollaboration Culture is a Key Segmentation Variable

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• 13% more likely to be forecasting revenue growth than those that reward equally and 6% more than those that reward Individuals more

• 7% more likely to be satisfied with achieving business goals than those that reward equally and 10% more than those that reward Individuals more

• 6% more likely to be satisfied with collaboration tools than those that reward equally and 10% more than those that reward Individuals more

• 14% more likely to adopt/plan to adopt an Integrated collaboration platform than those that reward equally and 6% more than those that reward Individuals more

• Spend 3-4X more than on collaboration solutions than those that reward equally and 2-2.5X more than those that reward Individuals more

SB MB

• Web-based survey• Data collected in July 2011• Sample selection: Random sample of small and medium businesses across

18 different industries and non-profits• 55 questions• 817 respondents/completed interviews covering the four segments:

• Very Small Business (1-19 employees)• Small business (20-99 employees)• Medium business (100-249 employees, 250-499 employees)• Mid-market business (500 to 999 employees)

• SMB survey respondents are decision-makers and influencers for collaboration and related solution decisions in their business

• The survey is intended to provide directional guidance to solution providers as they develop their go-to-market strategies and messaging

Methodology

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Definitions Used For This Study

• Traditional collaboration tools: Company/team oriented collaboration tools such as email, calendar, contact management, document sharing, project management systems, conferencing, etc.

• Social media collaboration tools: Social media oriented collaboration tools such as Twitter, YouTube, social bookmarking, blogging, Facebook, Wikis, etc.

• Integrated collaboration platform: An integrated set of tools that address several collaboration needs. Not every collaboration platform includes the same capabilities, but most provide a blend of traditional and social media collaboration solutions. Some also include productivity solutions (such as word processing, spreadsheets, presentation software) and/or voice/telephony communications solutions. Examples include: Google Apps for Business, Microsoft Office 365, IBM LotusLive, HyperOffice, etc.

• On premise solutions: Your company buys, installs, runs and manages software on your own systems and servers.

• Software-as-a-service (SaaS) or "cloud" solutions: Your company accesses and uses software delivered over the Internet via a browser. Users pay a monthly subscription fee to use these solutions.

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