SMBs and the Global Economy

SMBs account for $257 billion of the IT opportunity in 2011, or 59 percent of the total market, according to the IBM study. They are responsible for nearly 65 percent of the global gross domestic product (GDP), representing more than 90 percent of all businesses and employing more than 90 percent of the world’s workforce, according to the Organization for Economic Cooperation.

SMBs have been the engines driving economic growth for some time now, according to IBM. They produce more patents and more innovations per employee than large firms. As the global economy continues to recover, SMBs are best positioned for success, IBM said. SMBs are increasingly contributing to the strength of the global economy. In 2010, such businesses participated in nearly half of IBM’s 2010 Smarter Planet references. Midmarket companies accounted for nearly 25 percent of the Smarter Planet references, IBM said.

IBM has 480,000 SMB clients globally, working with them in such areas as cloud, analytics, security, collaboration and mobile, and designing technologies specifically for this segment. IBM has invested $100 million in co-marketing programs for customers in its Business Partners and Small and Midsize programs. The company has focused some of its efforts at social business sites such as LinkedIn, Twitter and Facebook to reach SMBs. IBM is helping SMBs leverage new social channels to gain insights into their customers and grow their businesses. It has more than 120,000 Business Partners and more than 6,000 IBM employees dedicated to working with the channel.

IBM offers help to qualified SMBs through a $1 billion financing program, enabling the companies to take advantage of technologies such as analytics and cloud.

IBM has a worldwide network of 40 IBM Innovation Centers in 33 countries, including Brazil, Vietnam, Philippines and South Africa. In 2010, IBM Innovation Centers offered SMBs and business partners workshops, seminars and consultations to help build their skills and develop solutions on open standards and IBM technologies. The centers offer training and access to such emerging technologies as cloud computing, mobile computing, business analytics and industry-focused solutions.

IBM’s MidMarket CIO study revealed that top technology priorities at high-growth midsize organizations in both emerging and mature markets are business analytics, cloud, mobility and collaboration. Analytics is the top technology priority for 83 percent of CIOs at SMBs, while half of the CIOs interviewed say they are looking to invest in cloud over the next five years-a 50 percent growth since 2009. Collaboration and social networking is a priority for 50 percent of SMB CIOs surveyed, while 72 percent are looking to adopt mobility solutions.

IBM has a wide range of SMB customers that touch on a variety of industries, from a New England-based pizza chain trying to gain better insights into what customers want on their pizza to a 110-employee nonprofit organization that wants to improve its research in personalized medicine with its small IT budget and IT staff. IBM also is helping a cooperative of farmers keep pace with changing food safety regulations and track sources of food contamination, while enabling a regional convenience store chain to increase collaboration with its remote employees.

Papa Gino’s, a midsize pizza chain in New England, is using IBM analytics software to get insight into consumer buying patterns, which in turn is helping it improve ways of serving its customers. The company collects massive amounts of retail and operational data on a daily basis from numerous franchise stores, and is collaborating with IBM Business Partner QueBIT to implement IBM analytics software. The result: Papa Gino’s has improved visibility into its online customer loyalty campaign, which has seen a 50 percent increase in participation.

The Coriell Institute for Medical Research, the largest biobank of living human cells, is using IBM technology to personalize medicine. Coriell wanted to better protect millions of genetic samples while also increasing its ability to manage the volume of data generated to examine the causes of diseases. IBM and partner Mainline helped Coriell better manage the millions of biological samples and associated data through the use of IBM’s monitoring software. Now Coriell researchers are instantly alerted to respond before any mechanical failure occurs, and the use of an IBM storage system has reduced Coriell’s storage costs by 30 percent.

Cherry Central, a cooperative of hundreds of growers of fruits and vegetables, is using IBM analytics technology for greater visibility of food items as they travel from the farms to supermarket shelves. Cherry Central is working with IBM and partner N2N Global, using the analytics software to track data from the time fruit is harvested to when it is displayed in a grocery store. Using analytics technology, the food producer and marketer has improved productivity by 50 percent.

Russell is using IBM cloud collaboration technology to better integrate and share data across its 24 convenience stores in the western United States and Hawaii. With the help of IBM Business Partner Alacrinet Consulting Services, Russell’s licensee stores can now access and share information regardless of their location, and they have instant access to cloud-based social networking and collaboration tools, including file storing and sharing, email, instant messaging and activity management.

Andy Monshaw, IBM general manager for the midmarket business, said, “SMBs are the engines for new ideas for our economy and for economic growth. Curiosity and new thinking are what sets them apart.” IBM and the Women’s Enterprise Development Center this year hosted the “Big Business meets Small Business” speed mentoring event, where IBM awarded WEDC with a $10,000 Catalyst grant to further support women entrepreneurs through educational workshops and training.