It's generally accepted that IT is a key driver of business growth in small businesses. However, SMEs are not equally good at identifying and deploying the optimal mix of technologies. This can have important implications: a recent study by Symantec, for example, found that 'top-tier' SMEs typically spend 7 percent less on computing than 'bottom-tier' ones (Symantec's tiers are based on an index of IT confidence). This may reflect the fact that tech-savvy businesses tend to invest in the right technology, avoiding the costly need to 'rip and replace' their mistakes.
A January 2013 survey by the UK's Federation of Small Businesses, The Digital Imperative: small businesses, technology and growth, asked 2,200 members specifically about investment in new technology and its effect on business innovation. The average investment over the previous 12 months was just £3,500, although bigger companies (with 21-50 staff) spent over £10,000 on average. Software, laptops and website improvements headed the investment areas, with mobile computing (smartphones and tablets) and cloud services occupying a mid-table position:
SME sectors that credited their technology investments for business innovation were headed (not surprisingly) by IT, followed by education, real-estate and creative services:
Software and online investments had the highest rating (83%) in terms of driving business innovation among SMEs, with cloud services (76%), e-commerce (74%), servers (72%), tablets (72%) and smartphones (68%) also figuring highly.
So, what does ZDNet reckon that SMEs should be looking at when investing in technology? Here's a selection of products and services worth considering.
Every small business will require email and some sort of office productivity suite, and there are multiple options available. If you're a sole trader and don't want to pay anything, there are free online services from Microsoft (Outlook.com email with unlimited storage, Word, Excel, PowerPoint and OneNote web apps, plus 7GB of SkyDrive storage), Google (Gmail, Drive with Document, Spreadsheet, Presentation, Form and Drawing apps, plus 15GB of storage — which includes the email allocation) and Zoho (Mail with 5GB of storage for up to five mailboxes, Docs with word processor, spreadsheet and presentation tool, plus 1GB of storage). If you prefer to use desktop productivity software rather web-based apps, free options include OpenOffice.org and the LibreOffice spin-off.
Most small businesses will want more functionality than these free products deliver, which brings us to the next level. Microsoft offers its Office 2013 productivity software in Home & Student (£109.99, without Outlook), Office Home & Business (£219.99) or Office Professional (389.99) versions for a single PC, or as an Office 365 subscription for — in the case of the recommended Small Business Premium version (£8.40/user/month or £100.80/user/year) — up to 25 users. Office 365 Small Business Premium gives you eight downloadable desktop applications (Word, Excel, PowerPoint, OneNote, Outlook, Access, Publisher and Lync), access to mobile and web apps, hosted email with 25GB of storage per user and the ability to use your own domain name, 7GB of SkyDrive storage for documents, plus web conferencing, website hosting, security, support and a guaranteed 99.9 percent uptime.
Google's web-based business productivity suite is Google Apps for Business, which for £3.30/user/month (or £33/user/year) gives you 30GB of Gmail and Drive storage, unlimited users, 24/7 customer support and guaranteed 99.9 percent uptime. A 'with Vault' option (£6.60/user/year) adds extra security and data archiving/retrieval features.
Zoho's web-based business offering includes Zoho Mail with either 10GB or 15GB storage per user ($2.50/user/month or $3.50/user/month respectively) and Zoho Docs with either 10 workspaces and 2GB of storage or 50 workspaces and 5GB of storage ($3/user/month or $5/user/month respectively).
Many larger enterprises are effectively locked into a traditional Microsoft combination of in-house Exchange email, SharePoint document management and collaboration, and Office productivity applications. By contrast, small businesses — especially startups and micro businesses — have the legacy-free opportunity to explore alternative models, such as SaaS or renting desktop software via a subscription.
Line of business software
When it comes to the core applications required to run a business — accounting and payroll, business analytics, customer relationship management, human resources, resource planning, supply chain management and so on — there is again plenty of choice, ranging from integrated suites including some or all of these components, to individual desktop or SaaS applications, to packaged collections of SaaS apps from cloud service brokers (CSBs) with added migration, integration and management tooling.
UK-based Sage is a leading provider of accounting and payroll software for SMEs — both on-premise via Sage Instant and Sage 50, and online via Sage One. Sage also does SME-focused CRM software — both on-premise (ACT!, Sage CRM) and hosted (Sage CRM Cloud). Another well-known provider of desktop and online accounting/payroll software is Intuit, with its QuickBooks, QuickBooks Payroll and QuickBooks Online products.
Small businesses may not have the financial or human resources to deploy and curate a full ERP solution such as NetSuite — or even an SME-focused service like SAP Business One. However, there are a multitude of individual products, particularly SaaS offerings, that allow SMEs to mix and match the components they require — if they're prepared to handle the integration issues that arise. You'll find an extensive (if by no means comprehensive) listing of SaaS providers in various business categories in our special report on Cloud: How To Do SaaS Right.
Even this may prove a daunting task for many SMEs, in which case they're likely to turn to third-party cloud service brokerages such as Cloud Direct to ease their path to the cloud.
Another large software company to adopt the subscription model is Adobe with its Creative Cloud (CC), which has now, somewhat controversially, replaced the perpetual-licence Creative Suite (CS). A full subscription for new CC members costs £46.88 a month, with alternative membership plans (some discounted) available for existing CS users, students and teachers, teams and enterprises. There's also a free membership that gives you access to 30-day trials of Adobe's rich portfolio of creative applications, plus 2GB of cloud storage. Most of Adobe's applications still run on the desktop as before; but now, if your subscription runs out, you lose access to the software — and files saved in the CC apps' proprietary format.
If you're an SME with a strong creative requirement, a Creative Cloud subscription may be worth considering, as there are a lot of applications, tools and services included. However, although you can rent an individual desktop application such as Photoshop for £17.58 a month, with limited access to other CC services, there are no sector-specific membership plans apart from the Student & Teacher edition. It's all or next-to-nothing with Creative Cloud.
If you're uncertain about Creative Cloud, but still need image manipulation, vector drawing, video editing and other creative applications, there are plenty of alternatives, many of them free and open-source. Leading examples are Gimp (image editing), Inkscape (illustration) Lightworks (video editing) and KompZer (website creation).