12 2011 highlights 2011 smb collaboration study

2011 SMB Collaboration and Communications Study Highlights December 2011 Sanjeev Aggarwal Laurie McCabe Brent Leary Arjun Aggarwal11/29/2011 © SMB Group and CRM Essentials 1

SMB Collaboration and Communication Study GoalsThe SMB Group’s 2011 SMBCollaboration and CommunicationStudy examines related trends, Perceptions and attitudesdynamics, opportunities and challenges about collaboration Key triggersamong small and medium businesses, Collaboratio solutions for moving n culture, to anassessing: attitudes and capabilities integrated collaborationo SMB collaboration culture and practices suiteo Current and planned use of collaboration Small and solution and services Company Mediumo Perceived benefits of collaboration solutions demographics Businesses Spending/ and impact collaboration on solutionso Integration of collaboration and collaboration communication solutions with other business applications and processes Use/ planned Use of freeo Impact of social media and mobility on use of collaboration vs. fee-based collaboration collaboration requirements solutions solutionso Shift from standalone collaboration and communication solutions to integrated collaboration suites 11/29/2011 © SMB Group and CRM Essentials 2

SMB Employee Size Company Distribution Small Business Medium Business Respondent Breakdown Respondent Breakdown 50-99 empl., 13% 500-1,000 20-49 empl., 31% empl., 14% 100-249 empl., 41% 1-19 250-499 empl., 73% empl., 28%Sample Size = 568, 1-19 empl.: 413; 20-49 empl.: 80; 50—99 empl: 75 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)? 11/29/2011 © SMB Group and CRM Essentials 3

SMB Top Business Challenges Attracting new customers Reacting quickly to changing market conditions Growing revenue Maintaining profitability Improving cash flow Obtaining financing Attracting & retaining quality employees Improving customer experience and retention Improving employee productivity Effectively managing relationships with suppliers Top challenges Adding resources to meet market demand Streamlining business processes to be more efficient for both SB and MB are to: #1: AttractMedium new customers MB 41% 26% 43% 36% 23% 10% 20% 21% 29% 11% 12% 25%Business #2: Grow revenue #2 #1 #3 #3: Maintain profitability Small SBBusiness 54% 16% 51% 46% 39% 11% 18% 19% 15%5%8% 15% #1 #2 #3 5.) What do you view as the top 3 business challenges for your company in the next 12 months? 11/29/2011 © SMB Group and CRM Essentials 4

SMB Collaboration Culture Employee Size Matters 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. 38% 500-1,000 empl. 29% 31% 32% 250-499 empl. 29% 39% 33% 100-249 empl. 32% 33% 27% 50-99 empl. 23% 49% 21% 20-49 empl. 25% 48% 15% 1-19 empl. 23% 48% Sample Size = 568 Sample Size = 249 8.) Which statement best describes your company’s culture when it comes to collaboration?11/29/2011 © SMB Group and CRM Essentials 5

How Collaboration Culture Affects Corporate Performance Small Business Medium Business Revenue Increase Revenue Flat Revenue Decrease Revenue Increase Revenue Flat Revenue Decrease 44% We recognize and reward individual 63% 28% We recognize and reward individual and team accomplishments equally. 22% 22% and team accomplishments equally. 12% We recognize and reward individual 51% We recognize and reward individual 56%achievement more than collaborative 23% achievement more than collaborative 26% achievements most of the time. 18% achievements most of the time. 15% We recognize and reward employees 57% 75% We recognize and reward employees for collaborative achievements more 25% for collaborative achievements more 13%than individual ones most of the time. than individual ones most of the time. 13% 10% • Businesses that reward team achievements over individual ones are more likely to forecast revenue growth. • The gap widens as company size increases. 11/29/2011 © SMB Group and CRM Essentials 6

Reliance on and Satisfaction with Collaboration Tools Reliance Satisfaction Heavy reliance Moderate reliance Neutral Very Satisfied Satisfied Neutral Little reliance No reliance Dissatisfied Very Dissatisfied 10% 7% 46% 47%Medium Business 29% Medium Business 37% 13% 9% 2% 0% 7% 8% 31% 34% Small Business 36% Small Business 49% 19% 7% 8% 2%11.) How much does your company rely on collaboration tools 12.) Overall, how would you rate your companys satisfactionto collaborate more effectively, accomplish tasks and achieve with collaboration tools to facilitate collaboration and help yourbusiness goals? business succeed? 11/29/2011 SMB Group Confidential 7

Collaboration Budgets Collaboration Segment Small Business Medium Business (SB)/Year (MB)/Year Traditional Collaboration $1K - $2.5K $25K - $49.9K Social $500 - $1K $10K - $24.9K Collaboration Traditional Communications $1K - $2.5K $25K - $49.9K Integrated Collaboration $5K - $10K $25K - $49.9K Solution Free vs. Fee Based Solutions Over 75% of SBs are Over 60% of MBs are using free traditional using free traditional collaboration tools collaboration tools Sample Size = 41318, 22, 26) What is your companys annual budget for traditional/Social/Communications collaboration solutions for 2011(NOT including salaries of company staff involved)? 11/29/2011 © SMB Group and CRM Essentials 8

Adoption and Plans for Integrated Collaboration Platforms Small Business Top “Must-haves” Currently use an integrated collaboration suite • Traditional: email; calendars, file storage and sharing, contacts Plan to use an integrated collaboration suite in the next 12 Months • Social: social capabilities and integration, instant No plans to use an integrated collaboration suite messaging, online discussion forums • Communications: Web conferencing, Internet phone solutions • Additional functions: integration with business Medium apps/workflows, native support for mobile devices 28% 35% 37% Business MediumBusiness 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 andSmall Business 16% 20% 64% integration, online discussion forums • Communications: Web conferencing, video conferencing • Additional functions: integration with business apps/workflows, native support for mobile devices 11/29/2011 © SMB Group and CRM • Essentials 9

Top 3 Collaboration Platforms Selected by SMBs Vendor Small Business Medium Business Microsoft 54% 52% (BPOS,365,SharePoint) Google Apps for Business 26% 26% IBM (Lotus Live, Lotus 4% 15% Software)11/29/2011 © SMB Group and CRM Essentials 10

Top Reasons to Select a Specific Integrated Collaboration Solution Medium Business Small Business Easier to customize for my business 40% 30% Lower price 39% 52% Faster to deploy 34% 30% Availability of local service and support 30% 21% More positive reviews in social media 29% 22% Stronger reputation and brand 26% 27% Easier to use 24% 9% Available as a "cloud" or SaaS solution 17% 15% Stronger security and encryption 16% 21% Better customer service and stronger service levels 14% 23%Better reviews/ratings in technology and business publications 11% 19% Higher ratings by industry analysts 11% 11% Stronger customer references 9% 19% Other 0% 2% • SB top reasons: lower price, easier to customize, faster to deploy. • MB top reasons: easier to customize, lower price, faster to deploy. 35.) Apart from solution capabilities, what were the top 3 reasons that influenced you to select this solution? 11/29/2011 SMB Group Confidential 11

Top Reasons for No Plans to Use an Integrated Collaboration Platform SB • 65% think theyPeople feel that what are doing works well enough Difficult to determine what we need in an integr. collabr. suite have too few employees to makeDifficult to compare different integr. collabr. offerings Deciding who should be involved in the selection process it worthwhile toHad tried a collaboration suite before, but it didnt work out Lack of time to evaluate and try different solutions adopt anUser resistance to learning something new Difficult to migrate from current solutions integrated suite.Too expensive Too few employees to make it worthwhile • 48% think its tooOther (list) expensive and 40% think that what they’re doing works well enough. MB 39% 20% 8%3% 5% 26% 13% 18% 50% 27% 7% MB • 50% think that an integrated suite is too expensive for SB 40% 18% 7%5%4% 21% 12% 9% 48% 65% 10% their needs. • 39% think that what they’re doing works well enough.45.) What are the top 3 reasons that your company is not using/planning to use an integrated collaboration platform? 11/29/2011 © SMB Group and CRM Essentials 12

Segmentation Highlights Collaboration Culture is a Key Segmentation Variable SB MB• 13% more likely to be • 12% more likely to be forecasting revenue growth forecasting revenue growth than those that reward equally than those that reward equally and 6% more than those that and 19% more than those that reward Individuals more reward Individuals more• 7% more likely to be • 22% more likely to be satisfied with achieving satisfied with achieving business goals than those business goals than those that that reward equally and 10% reward equally and 38% more more than those that reward than those that reward Individuals more Individuals more• 6% more likely to be • 21% more likely to be satisfied with collaboration satisfied with collaboration tools than those that reward tools than those that reward equally and 10% more than equally and 35% more than those that reward Individuals those that reward Individuals more more• 14% more likely to • 20% more likely to adopt/plan adopt/plan to adopt an to adopt an Integrated Integrated collaboration collaboration platform than platformthan those that those that reward equally and reward equally and 6% more 6% more than those that reward than those that reward Individuals more Individuals more • Spend 2-3X more than on• Spend 3-4X more than on collaboration solutions than collaboration solutions than those that reward equally and those that reward equally and 1.5-2X more than those that 2-2.5X more than those that reward Individuals more reward Individuals more 11/29/2011 © SMB Group and CRM Essentials 13

Methodology • 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 messaging11/29/2011 © SMB Group and CRM Essentials 14

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.11/29/2011 © SMB Group and CRM Essentials 15

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12 2011 highlights 2011 smb collaboration study

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