REDMOND, Wash. — Jan. 26, 2009 — It is estimated that small and midsize businesses (SMBs) employ 90 percent of the world’s work force. They also account for more than 50 percent of gross domestic product worldwide.
And right now, SMBs are facing unprecedented challenges. Larger companies are entering their customer segments on a global scale. Credit is harder to come by. And cash flows are diminished as local markets struggle; according to a recent Microsoft flash poll, nearly 45 percent of SMBs are reporting “slower payments from clients.”
Michael Risse, vice president of the Worldwide Small and Midmarket Business Group at Microsoft
Because of all this, smaller companies must tighten their belts and look for ways to be more efficient. According to the same poll, 37 percent of SMBs plan to reduce travel; 34 percent want to use technology to help them consume less energy; 32 percent would like to reduce time and expense associated with systems management; and nearly 30 percent are looking to improve their customer experience or management through IT.
Vice President Michael Risse of Microsoft’s Worldwide Small and Midmarket Business Group has seen the software industry evolve over 17 years with the company. Through it all, he says, there has been one constant — there is always an opportunity for companies to get leaner and more efficient through better use of technology.
Risse recently discussed with PressPass the growing concerns of smaller companies, and how technology and the partner ecosystem can help put SMBs in a better position to compete.
PressPass: By now, we’ve all heard about the turbulent economy. What does this mean for smaller companies, and what can they do about it?
Risse: Ultimately, in good days and bad, small businesses have to compete. Today, they are working twice as hard to stay where they are. SMBs have tough decisions to make when it comes to the health and wellness of their businesses, both short- and long-term.
For the short term, many businesses are worried about simply keeping the lights on, where can they squeeze and stretch dollars? Others are already looking to the future: Do they wait until the economy gets better before investing in their businesses? Or do they invest now and try to better differentiate themselves while revenues are down?
We believe that by betting on software, businesses can achieve greater productivity and cost savings, and operate smarter and more strategically, even in times of economic uncertainty. Taking a long-term approach and making the right investments and upgrades in times like these can position a company to take advantage of the next upswing by making an organization more efficient and flexible, and by making its IT infrastructure more reliable.
PressPass: What is Microsoft doing to help SMBs compete?
Risse: We invest about $6.5 billion annually to address the needs of this market. SMBs can benefit from a range of technologies developed specifically for them. When you combine that broad technology portfolio with more than 400,000 local partners worldwide, there are many ways to tailor technology packages that can boost a company’s productivity and add to its bottom line. Numerous pricing options through licensing and Microsoft Financing programs also provide more flexibility and value. So I think the biggest thing we do overall is give SMBs the broadest choice of the right software, on the right timeline, at the right price to best meet their business needs.
PressPass: What is an example of a new technology that shows promise for the SMB market?
Risse: My favorite example is virtualization technology. Today many companies run several servers, and each of those servers may be dedicated to running one application, one function, or one workload. Virtualization enables the consolidation those workloads into one physical server by creating multiple virtual images of an operating system, each running on its own.
By consolidating numerous environments into one physical box, you save power, you save air conditioning, you save IT cost because there’s only one machine to administer, and you save, of course, on the number of boxes you have to buy. This is a great example of how software saves a lot of real-world time and effort and makes the organization as a whole more efficient.
PressPass: What about making individuals more productive?
Risse: One of the key focus areas of business software across the board is maximizing the time spent on work that directly improves the bottom line. Familiar, easy-to-use business productivity software, such as Microsoft Office, is a key component there.
Today we’re building on those capabilities in a number of ways to help people work more effectively and reduce direct costs such as travel expenses and electricity. Videoconferencing and new collaboration tools are making virtual meetings much more like face-to-face interaction and enabling people to share and collaborate more effectively. Companies are also cutting computer energy usage by using online services, and are reducing IT management costs with infrastructure software.
We have many examples where customers are getting big benefits by taking advantage of these capabilities. We recently heard that Microsoft Office Outlook 2007 with Business Contact Manager helped MagicBus.com trim its invoice process from 2.5 hours to 5 minutes. That process is now 30 times faster. The Internet-based tech consulting firm Intellium and its five employees increased productivity by 20 percent and saved $50,000 by deploying virtual meeting software. And these examples keep rolling in.
PressPass: Is that what you mean when you say better technology can make a company more flexible?
Risse: Flexibility is being nimble enough to react to market changes and capitalize on opportunity. Efficiency is a part of that. But there are other ways that technology can adapt to help companies work the way their business demands. For example, business applications are moving more and more to the “cloud,” where they’re accessible over the Web from any location.
Our software-plus-services approach provides customers with flexibility and options in how they manage and access software — whether it’s cloud-based, on-premises or both. Through the Remote Web Workplace, for example, when employees log in remotely, they see their desktop computers. They get access to their internal Web site, and have the ability to check their e-mail over a Web browser through Outlook Web Access.
Today, we can also extend that remote functionality to IT pros. That’s especially helpful during off hours, or when a smaller company outsources its IT administration to a third party who is not always on site. When you log into Remote Web Workplace as a remote administrator or someone who has administrative privileges, additional features pop to the top, allowing the administrator to access the server, take control of people’s desktops for troubleshooting and other critical tasks. So you can actually go in and have very secure and broad control and diagnostic capabilities from a remote location.
PressPass: How else are you working to enable more efficiency for IT support in smaller companies?
Risse: Traditionally, IT pros in the middle market live a very reactive life. They’re replacing keyboards, adding new users to the network, integrating new technologies, thinking about security and patching. Our new Windows Essential Business Server was really designed for IT pros in smaller companies who have these broad responsibilities and need to be effective across a company.
We know through our research that 70 percent of all IT functions are routine, so to the extent we can automate that, we’re giving time back to these very busy people. When you open our command and control console, right on the home page, it shows all the reports you would spend hours digging for on Monday morning. Can people send and receive e-mail? Green check. Is the backup completed? Green check. Can employees access the Internet? Green check. So just with that console, we’re giving IT administrators back a few hours every week.
We’ve got lists of customers telling us how this is making a big impact across their business, because now the IT person can focus on training, on learning, and on creating a more reliable and efficient infrastructure, instead of just putting out fires. For example, Windows Essential Business Server helped Air Botswana reduce server maintenance by 50 percent, which the company estimates will save it as much as it costs to license the product each year.
PressPass: Earlier you mentioned helping to get companies on the Web. How are you enabling that?
Risse: One of the things we found in our research is that small businesses tend to spend a lot more — about seven times their IT spending yearly — on marketing. So we built a feature into Windows Small Business Server where it actually asks you whether you want to set up a domain name.
The hard part of buying a domain name is getting the Web site to connect back to all the important things that power a business — making sure e-mail flows correctly and that when people visit, the Web site actually works. We now have a new feature that moves a domain to the system, and configures it for you. That’s step one.
Step two is called Microsoft Office Live Small Business, which helps create a professional looking Web page, helps with search engine optimization, keywords and ad words and other things to really optimize the Web page. We think this is really going to be a powerful tool for a lot of small businesses that don’t know how to do those things.
PressPass: How can companies get started with these technologies?
Risse: We’ve done some research, and we think about 85 percent of small businesses have a Microsoft partner within five miles. The best way for any business to get started is to have a discussion with those local trusted advisors who really know their business. That’s the conversation that really matters.