This session was presented at the LSA’s Tech Adoption Summit in San Francisco on November 6-7, 2018.

1. Let’s Do the Numbers: Why Small Businesses
Are Moving to the Cloud
Charles Laughlin
Tech Adoption Index
Neal Polachek
Board Advisors
Stu Richards
Bredin

2. The SMB Shift to the Cloud and Why It Matters

3. As SaaS Companies Add Marketing Services…

4. ….Local Search Companies Get SaaS-y

5. ….and CRM Companies Get OS Focused

6. The Tech Adoption Index seeks to measure and understand
this fundamental shift in how companies are addressing the
small business market
 measuring how rapidly SMBs are adapting cloud technology
 why they are doing so
 how they are buying software and
 which channels they trust to bring them into the cloud

7. What have we learned?

8. The SMB shift to the cloud is
generational and situational – e.g.
verticals

9. “Are you using smartphone
apps to run your business?”
All SMBs 55%
Ages 18 – 34 65%
Ages 35 – 54 55%
Ages 55 – 64 44%
Ages 65+ 32%
DATA TAI WAVE III (2018)

10. “Are you using smartphone
apps to run your business?”
Retail 65%
Home Services 50%
Personal Services 68%
Automotive 57%
Professional Services
42%
Health & Medical 52%
Dining & Entertainment 54%

11. SMBs are adopting cloud tools to
save time

12. “Please Give Us a Sense of Why You’re
Using Mobile Apps?”
Saves us time 51%
Allows us to work remotely
50%
Saves us money
38%
TAI WAVE III (2018)

13. SMBs are satisfied with the cloud’s
performance

14. “To what degree have these cloud
tools met your expectations ?”
Retail 46% 33%
Home Services 42% 25%
Personal Services 44% 23%
Automotive 36% 36%
Professional Services 41%
12%
Health & Medical 46% 24%
Dining & Entertainment 41% 23%
Slightly or
Much Better
Slightly or
Below

15. “To what degree have these cloud-
based business tools met the
expectations that you had when you
made the purchase?”
As expected 44%
Worse 22%
Better 34%
TAI WAVE III (2018)

16. Of 33% - How Many Are All
in on Cloud CRM?
Retail 52%
Home Services 37%
Personal Services 37%
Automotive 41%
Professional Services
57%
Health & Medical 57%
Dining & Entertainment 52%

17. Of 26% - How Many are All in
on Cloud POS?
Retail 44%
Home Services 35%
Personal Services 38%
Automotive 30%
Professional Services 57%
Health & Medical 41%
Dining & Entertainment 40%

18. Of 31% - How Many are All in on
Cloud Accounting and Invoicing ?
Retail 40%
Home Services 30%
Personal Services 43%
Automotive 21%
Professional Services 48%
Health & Medical 45%
Dining & Entertainment 33%

19. Of 31% - How Many are All in
on Cloud Payroll/HR?
Retail 51%
Home Services 38%
Personal Services 46%
Automotive 31%
Professional Services
49%
Health & Medical 51%
Dining & Entertainment 47%

20. Of 26% - How Many are All in on
Cloud IT & Cloud Communications
? Retail 53%
Home Services 36%
Personal Services 46%
Automotive 35%
Professional Services
42%
Health & Medical 48%
Dining & Entertainment 48%

21. Top SMB Challenges
Retail Acquiring New Customers
Home Services Recruiting Qualified Employees
Personal Services Recruiting Qualified Employees
Automotive Recruiting Qualified Employees
Professional Services Acquiring New Customers
Health & Medical Recruiting Qualified Employees
Dining and Entertainment Recruiting Qualified Employees

22. They want a single source to take
them into the cloud

23. “Thinking about how your company manages human
resources/payroll, finance/operations, supply chain
management, customer relationship management and
marketing services, which of the following statements
represents your view.
Prefer single company 65%
Prefer multiple relationships 26%
Other 9%
TAI WAVE III (2018)

24. SMBs place their trust in “tech first”
brands

25. “If you were to consider purchasing
services outside of the core service offering
of a particular provider, from which would
you be more likely to do so?”
ISP 17%
Cloud tech provider 15%
IT solutions provider 12%
Advertising/marketing services 7%
TAI WAVE III (2018)

26. Learn why the small business shift to the cloud matters to your business
www.techadoptionindex.com
Charles@TheLSA.org

27. November 6, 2018
SMB Tech Purchase Plans

28. INCREASING SALES TO SMBS
28

29. 29
METHODOLOGY
1
2
HOW
WHO
Online survey via the Bredin.com/SMBPulse
600 principals of U.S. companies with ≤500 employees (4% +/- CI)
350 VSB
<20 employees
(97.71% weighting)
150 SB
20-99 employees
(1.96% weighting)
100 MB
100-500 employees
(.33% weighting)
3 WHEN September 12-24, 2018
Company Size

30. In aggregate, SMBs are almost evenly split on tech adoption attitudes
30 n=600
ATTITUDES TOWARDS TECH
33%
42%
25%
We see it as essential to our business
success, and adopt / develop it aggressively
It is important, but we wait until technology
is proven before we adopt it
It is an expense that we try to minimize we
only adopt technology when absolutely
necessary
1/3 of SMBs
see tech
adoption as
essential to
their success
Which of these statements best describes your company’s attitude towards technology?
Early adopters
Mainstream
Late adopters

31. Tech attitude varies by growth outlook, respondent age and headcount
31
19%
45%
36% 37%
43%
21%
45%
40%
15%
58%
36%
6%
Hypergrowth
Fast growth
Slow growth
No growth
n=600
Which of these statements best describes your company’s attitude towards technology?
ATTITUDES TOWARDS TECH: DETAIL
67%
23%
9%
48%
37%
15% 22%
47%
31%
18-34
35-49
50+
Business
Outlook
Respondent
Age
32%
43%
25%
67%
27%
6%
74%
23%
3%
SBs
Company
Size
MBs
VSBs

32. In aggregate, SMBs buy tech to improve company capabilities and data security…
32
ADOPTION DRIVERS
29%
31%
39%
39%
40%
44%
46%
47%
47%
48%
48%
Improve employee satisfaction / productivity
Improve mobile access to applications / data
Take advantage of a growth opportunity
Keep up with changes in customers’ use of technology
Keep up with competitors
Current solution is dated / not working well
Cost savings
Improve reliability
Improve business performance / processes
Improve data security
Improve functionality
n=600
% rated very important
Please rate the importance of each of these possible reasons for purchasing new technology for your business:
Gen X (35-49) are most likely to
be motived by potential growth
opportunities (59%), well ahead
of Millennials (18-34, 42%) and
Boomers (50+, 31%)

33. …but SBs prioritize security, and MBs most value growth opportunities
33
Headcount
VSBs (A) SBs (B) MBs (C)
48% 57% 55%
48% 64% (A) 60% (A)
47% 61% (A) 63% (A)
47% 60% (A) 62% (A)
46% 49% 63% (AB)
44% 53% 58% (A)
39% 57% (A) 55% (A)
39% 56% (A) 57% (A)
39% 55% (A) 64% (A)
31% 53% (A) 62% (A)
28% 49% (A) 59% (A)29%
31%
39%
39%
40%
44%
46%
47%
47%
48%
48%
Improve employee satisfaction / productivity
Improve mobile access to applications / data
Take advantage of a growth opportunity
Keep up with changes in customers’ use of technology
Keep up with competitors
Current solution is dated / not working well
Cost savings
Improve reliability
Improve business performance / processes
Improve data security
Improve functionality
ADOPTION DRIVERS: COMPANY SIZE
Please rate the importance of each of these possible reasons for purchasing
new technology for your business:
n=600
% rated very important
Respondents in manufacturing / construction are the most likely to cite ‘improved
mobile access’ (39%), significantly higher than those in professional services (26)%.

34. Millennials prioritize security and keeping current; GenX, improving performance
34
Respondent Age
18-34 (A) 35-49 (B) 50+ (C)
54% 55% (C) 45%
57% (C) 56% (C) 44%
55% (C) 61% (C) 41%
42% 60% (AC) 43%
35% 57% (AC) 44%
57% (C) 48% 41%
54% (C) 51% (C) 34%
48% (C) 53% (C) 33%
42% (C) 59% (AC) 31%
46% (C) 52% (C) 22%
48% (C) 44% (C) 20%29%
31%
39%
39%
40%
44%
46%
47%
47%
48%
48%
Improve employee satisfaction / productivity
Improve mobile access to applications / data
Take advantage of a growth opportunity
Keep up with changes in customers’ use of technology
Keep up with competitors
Current solution is dated / not working well
Cost savings
Improve reliability
Improve business performance / processes
Improve data security
Improve functionality
ADOPTION DRIVERS: RESPONDENT AGE
Please rate the importance of each of these possible reasons for purchasing
new technology for your business:
n=600
% rated very important
Southern SMBs are significantly more likely to say ‘cost savings’ (59%) vs.
those in the West (41%), Midwest (40%), and Northeast (35%)

35. 2018 SMB purchase intent is highest for marketing and salesforce automation software
35
SOFTWARE PURCHASE OUTLOOK
70%
54%
50%
48%
45%
39%
34%
29%
27%
24%
26%
19%
22%
20%
20%
13%
13%
11%
11%
9%
6%
8%
7%
6%
8%
6%
5%
7%
7%
7%
6%
8%
7%
8%
6%
8%
9%
9%
6%
7%
4%
7%
7%
7%
5%
6%
7%
7%
8%
10%
7%
7%
5%
7%
6%
7%
10%
6%
6%
7%
2%
4%
2%
3%
3%
3%
2%
2%
2%
1%
3%
5%
3%
3%
3%
5%
1%
3%
3%
2%
18%
28%
33%
34%
38%
46%
51%
55%
57%
58%
58%
62%
62%
63%
66%
67%
67%
71%
73%
76%
Email
Security software
Accounting / financial management
Storage / file backup
Payments (any kind)
Office productivity suite
Expense management
File sharing
HR / payroll / benefits administration
Social media management
Inventory management
Website analytics
Web / video conferencing
Design / illustration
Production management
Analytics (other than website analytics)
Marketing automation
CRM / sales force automation
Survey administration
Fleet management
Already have Will get by the end of 2018 Will get in 2019 Will get after 2019
Which, if any, of these kinds of software or apps do you currently have, or will you acquire?
Don’t know /
no plans
n=600
Current usage and plans to adopt vary significantly by
business outlook, with no-growth companies being the most
likely to have ‘no plans to acquire’ for every product category.

36. 36
SOFTWARE PURCHASE OUTLOOK: SBS
66%
60%
59%
56%
61%
51%
53%
53%
58%
47%
51%
35%
41%
46%
49%
40%
39%
35%
30%
31%
15%
19%
15%
23%
17%
17%
19%
21%
18%
17%
14%
30%
21%
23%
17%
19%
23%
24%
23%
21%
9%
12%
17%
9%
9%
18%
12%
7%
13%
17%
19%
15%
14%
8%
15%
17%
17%
15%
13%
14%
3%
3%
3%
4%
3%
3%
4%
4%
5%
3%
3%
2%
4%
5%
3%
5%
3%
4%
4%
4%
7%
5%
7%
8%
10%
11%
11%
15%
7%
17%
13%
18%
19%
17%
16%
19%
17%
22%
30%
30%
Email
Security software
Accounting / financial management
Storage / file backup
Payments (any kind)
Office productivity suite
Expense management
File sharing
HR / payroll / benefits administration
Social media management
Inventory management
Website analytics
Web / video conferencing
Design / illustration
Production management
Analytics (other than website analytics)
Marketing automation
CRM / sales force automation
Survey administration
Fleet management
Already have Will get by the end of 2018 Will get in 2019 Will get after 2019
Which, if any, of these kinds of software or apps do you currently have, or will you acquire?
Don’t know /
no plansn=150
Usage and purchase intent is much higher among SBs

37. 37
SOFTWARE PURCHASE OUTLOOK: MBS
64%
51%
50%
62%
57%
52%
49%
57%
54%
52%
45%
48%
52%
42%
50%
39%
47%
50%
36%
38%
23%
24%
33%
23%
24%
29%
30%
28%
28%
24%
27%
32%
29%
37%
33%
35%
25%
29%
27%
35%
8%
19%
9%
12%
10%
8%
11%
9%
11%
11%
11%
12%
12%
8%
6%
12%
13%
10%
17%
12%
2%
5%
6%
3%
5%
6%
5%
2%
4%
4%
6%
3%
3%
3%
5%
7%
4%
3%
7%
3%
3%
1%
2%
0%
4%
5%
5%
4%
3%
9%
11%
5%
4%
10%
6%
7%
11%
8%
13%
12%
Email
Security software
Accounting / financial management
Storage / file backup
Payments (any kind)
Office productivity suite
Expense management
File sharing
HR / payroll / benefits administration
Social media management
Inventory management
Website analytics
Web / video conferencing
Design / illustration
Production management
Analytics (other than website analytics)
Marketing automation
CRM / sales force automation
Survey administration
Fleet management
Already have Will get by the end of 2018 Will get in 2019 Will get after 2019
Which, if any, of these kinds of software or apps do you currently have, or will you acquire?
Don’t know / no plansn=100
…and even higher among MBs

38. 48%
48%
49%
51%
51%
52%
55%
55%
57%
58%
58%
59%
66%
67%
68%
70%
72%
73%
73%
74%
52%
52%
51%
49%
49%
48%
45%
45%
43%
42%
42%
41%
34%
33%
32%
30%
28%
27%
27%
26%
CRM / sales force automation
Storage / file backup
Marketing automation
File sharing
Fleet management
Survey administration
Analytics (other than website analytics)
Production management
Design / illustration
Social media management
Website analytics
Web / video conferencing
Inventory management
Security software
Office productivity suite
Email
Expense management
Payments (any kind)
HR / payroll / benefits administration
Accounting / financial management
Local Cloud
Most SMBs have resident software in 17 of the 20 categories surveyed
38
LOCAL VS. CLOUD-BASED
For each of the applications that you currently have, or will buy in 2018 or 2019, are they, or will they be, a local/resident
application or in the cloud?
Majority use cloud
based for these
applications
n varies

39. In aggregate, SMBs predominantly adopt the cloud for remote access
39
CLOUD ADOPTION DRIVERS
19%
24%
30%
32%
38%
40%
41%
49%
Scalability
Improved collaboration
Improved document management
Ease of administration
Disaster recovery
Security
More cost-effective
Remote / “anywhere anytime” access
(If using, or plan on using, a cloud based app) Why have you adopted / will you adopt cloud-based applications? Select
all that apply.
n=300
SMBs in urban areas are significantly
more likely to cite ‘security’ as a
motivation for using / planning to use
cloud software compared vs. rural
SMBs (46% vs. 28%)

40. SMBs value clear, competitive pricing, followed by industry expertise
40
WHAT SMBS WANT FROM TECH VENDORS
24%
26%
33%
35%
35%
46%
57%
64%
Has many customers
Robust business management tips and
advice, such as articles or videos
Robust tips and advice on getting the most
from their solution, pre- and post-purchase
Online ratings or reviews
Has the most innovative or function-rich
solution
Experience / expertise with companies the
same size as mine
Experience / expertise in my industry
Clear, competitive pricing
How important are each of these attributes when you are assessing a potential technology vendor?
n=600
% rated very important
Millennials (48%) and Gen X (53%) place
significantly more value on ‘online ratings or reviews’
than Boomers (26%)

41. 41
HOW BREDIN CAN HELP
Stu Richards, CEO
stu@bredin.com
• Content strategy
• Creative brief / ed cal
Strategy
• Original content development
• Exclusive SMB focus
Content
• Product / go-to-market strategy / NPS
• Persona / buyer journey
• Original data for standout content and PR
Research
Work with the experts in SMB insight and engagement

42. 45%
55%
Female
Male
Professional Services 28%
Computer Software/Internet 6%
Computer Services/Consulting 4%
Financial Services/Accounting/Bookkeeping 4%
Medical 4%
Advertising/Consulting/Design/Marketing Services 3%
Architect/Engineering 3%
Banking/Insurance/Mortgage 2%
Publishing/Printing/Media 2%
Legal 1%
Retail/Wholesale 28%
Retail 13%
Real Estate 5%
Wholesale 4%
Food/Beverage/Restaurants 3%
Entertainment/Recreation 2%
Travel/Hotel/Hospitality 2%
Manufacturing 29%
Construction/Mining/Contracting/Electrical/Landscape/Plumbing/etc 16%
Manufacturing/Transportation and Warehousing 7%
Automotive 2%
Computer Hardware/Electronic Equipment 2%
Energy/Utilities 1%
Telecommunications 1%
Pharmaceutical/Medical Devices/Biotechnology 0%
Other 16%
Personal Services 12%
Education/Training 4%
Title
47%
33%
21%
50+
35-49
18-34
Age
Gender
58%
25%
17%
1 to 19
Employees
20 to 99
Employees
100 to 500
Employees
Company Size
CHARACTERISTICS
42
100%
Principal (e.g.,
owner, founder,
partner, CEO,
president, etc.)
Industry
n=600

43. 15%
28%
30%
26%
Less than 4 years
4 to 9 years
10 to 19 years
20 or more years
50%
15%
21%
15%
Less than $500k
$500k to $999k
$1M to $4.9M
$5M+
3%
3%
23%
25%
37%
9%
Down more than 10%
Down by less than 10%
Same as 2017
Up by less than 10%
Up 10% to 100%
Up by more than 100%
Years in Business
Geography
2018 Revenue Growth
2017 Revenue
Northeast
21%
South
38%
West
19%
Midwest
22%
CHARACTERISTICS
43
16%
44%
41%
Population Density
n=600

44. DIY v DIFM: What Do SMBs Want?

45. The LSA/Tech Adoption Index partnered with Mono
Solutions to answer a fundamental question about how
SMBs purchase SaaS solutions
“Do they want to manage their digital presence?
Or do they want help from a service provider?”

46. So We Asked Them…
Do it yourself (DIY) vs. Do-it-for/with-me (DIFM/DIWM)
What do they DIY today?
Why do they DIY?
What would prompt them to upgrade to DIFM services?
Which factors influence their choices?

47. WHO WE SURVEYED
Reponses from nearly 500 U.S. SMBs
489 completed responses
Firmographics:
Age of business
Business size
Category
Age of decision-maker

48. What do they DIY today?

49. What do they DIY today?
NOT SURPRISING
Domains
INTERESTING
Social media advertising
MILLENIALS PREFER DIY
Only 18% of young business owners
said they hadn’t tried purchasing
direct, compared to 26% overall
46% had tried purchasing social media
advertising, compared to 29% overall

50. Why do they DIY?

51. Why they DIY?
NOT SURPRISING
Free/less expensive
INTERESTING
Prefer not to deal with
salespeople
DON’T SPEAK TO ME
Common notion among newer
businesses and younger decision
makers that they don’t want to
talk with sales people
Highlights earlier point that
there is a need for simple, fast
and easy-to-use offerings

52. What Would Prompt an Upgrade to DIFM?

53. NOT SURPRISING
ROI matters
INTERESTING
Time savings not a key
motivator in this case
IT’S ABOUT BUSINESS VALUE
SMBs are more focused on
business value when upgrading
to managed services – they
upgrade when the outgrow DIY
solutions.
What Prompts an Upgrade to DIFM?

54. THE NEW SMB BUYER
THE DIY SMB BUYER
Younger/newer businesses
DIY option must be fast, efficient,
and transparent
Concerned with cost, but will switch
to DIWM/DIFM, if they can see
business value/ROI
THE DIWM/DIFM SMB BUYER
Typically larger
Chosen for mission
critical/customized solutions
Publishers/agencies need to focus on
delivering a better customer service
experience for DIWM/DIFM

55. DOWNLOAD THE WHITE PAPER
https://thelsa.org/lsa/new-small-business-saas-customer.aspx

56. Learn why the small business shift to the cloud matters to your business
www.techadoptionindex.com
Charles@TheLSA.org