The SMB age to move up the value chain

Summary:For the past 10 years since I began covering the local tech scene, I've observed that pundits, analysts and vendors normally look into their crystal ball around this time of the year, aiming to predict what's going to happen in the tech landscape in the coming year.This year is no different, as I've received various prediction pieces in the last two months issued by notable industry analysts as well as multinational vendors.

For the past 10 years since I began covering the local tech scene, I've observed that pundits, analysts and vendors normally look into their crystal ball around this time of the year, aiming to predict what's going to happen in the tech landscape in the coming year.

This year is no different, as I've received various prediction pieces in the last two months issued by notable industry analysts as well as multinational vendors. As I shift through many of these writings, a few themes seem to overlap with one another, many of which are expected to make some impact this year.

About a year ago, the predictions I wrote about also centered on the growth of mobile broadband and the continuation of enterprises looking to adopt virtualization and cloud computing.

This year, these trends continue to advance, making its way more onto the centerstage. It's easy to understand why mobile broadband continues to be the darling of the tech industry.

At a recent briefing, Frost & Sullivan noted that the mobile broadband penetration in Malaysia in 2010 stood at 117 percent. Driven by the convenience and the promise of on-demand mobility and the proliferation of consumer devices such as smartphones and tablet computers, the industry analyst estimates mobile broadband penetration is expected to reach 140 percent by 2014.

Aside from the mobility factor, last year also saw a plethora of campaigns and promotions. Competition between players was at its height and packages were all designed to draw more consumers in with various mobile broadband deals.

The year also saw the addition of the latest WiMax--YTL Communications' YES--operator to join the already-crowded field of cellular players, as well as P1 4G, the first WiMax operator to come onto the local market.

The year also saw the introduction of Telekom Malaysia's high-speed broadband (HSBB), the nation's attempt to catapult its broadband subscribers into the age of fiber optics, as well as competition from a lesser known TIME dotCom, a company more dedicated to wiring up corporations with fiber.

No doubt, all these incentives have spurred broadband adoption in Malaysia but a closer analysis of this will reveal that gearing up the nation with broadband connectivity must be seen as only a first step of many to come.

This is because the overarching benefits of broadband lie not in basic connectivity but really in what broadband is able to do for enterprises, and by extension, for consumers too. This is where the concept and the implementation of cloud computing should dovetail with the nation's increased broadband takeup.

Research firm IDC believes that interest in software-as-a-service (SaaS), which is the most basic component of cloud services, will gain momentum in Malaysia and that there will be a growing demand for SaaS offerings in enterprises.

It adds that traditional IT players will have to review their business models, resources and expertise to include SaaS services as part of their portfolio. These services will include reselling, customization, integration, training and configuration.

In this respect, it's heartening to note that a local dot.com survivor, Skali Group, has recently made its foray into SaaS services catered to local small and midsize businesses (SMBs).

But the promise of cloud computing will only be fulfilled when the technology is adopted by those who would truly stand to gain from it--SMBs. Representing more than 90 percent of businesses in the country, SMBs stand to gain most as they seek to order IT services using a utility model instead of buying their own servers, networking and storage.

But the truth is that while some SMBs have made some headway in adopting technology, much of these efforts are only confined to basic offerings and that many local SMBs are still grappling with how to appropriate the use of technology in their business life.

This is largely due to the fact that SMBs do not see the value of technology holistically but instead view it in bits and pieces. The natural consequence of this fragmented worldview is that they can't derive the "big picture" view of what technology can do for them.

To address these issues holistically, all stakeholders must play their part. Vendors and services providers must make technology simple enough for SMBs to appreciate, value and implement.

They must not oversell technology with hype such that SMBs get lost in the technological jargon and concepts to the point that SMBs lose their main reason for which technology should applied--that of improving productivity while lowering costs.

Vendors and service providers must play the role of the educator and create awareness as to how ICT can help SMBs. They must make technology simple by bundling their services at affordable prices and offer the after-sales support to SMBs as if they were serving bigger enterprises.

SMBs, on the other hand, would need to look at how their business needs can be enhanced by the use of technology. They must break away from the mindset that ICT is a lost investment and evaluate their investment from a total cost of ownership point of view rather than through a piecemeal approach.

At the end of the day, ICT is merely an enabler, a means to an end, and enterprises that realize this sooner, rather than later, will stand to gain the most.

Topics: Mobility, Broadband, Cloud, Malaysia, Networking, SMBs, Tech Industry, Telcos

About

An engineer by training, Edwin first cut his teeth as a cellular radio frequency optimization engineer in one of Malaysia's largest telcos. After more than five years, he hung up his radio engineering boots to try his hand at technology reporting at The Star, Malaysia's leading English daily, where he won several awards for Best Online Te... Full Bio

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