42% of SMEs now use mobile devices

A growing number of small- and medium-sized enterprises (SMEs) are adopting wireless devices to gain a competitive advantage over rivals, according to new surveys from Toronto-based Warrillow & Co. and the Canadian Federation of Independent Business (CFIB). According to the Warrillow research, two out of every five Canadian businesses with fewer than 100 employees use mobile devices. "What we found was that 42% are now mobile," says Zach Vetter, VP of research and analysis at Warrillow. The CFIB research shows an even greater number of SMEs have adopted mobile solutions. The report, Answering the Call: SMEs' Perspectives on Competition in the Canadian Telecommunications Industry, which draws its conclusions from interviews with 4,895 SMEs with up to 500 employees, revealed that wireless telephony services are used by 86% of SMEs and one-quarter of them are using wireless email. The higher percentage of mobile SMEs presented in the CFIB research can be attributed to the inclusion of firms with up to 500 employees in the survey rather than just firms with 100 employees in the Warrrillow survey. These data don't come with historical comparisons. However, Vetter points out that the "Web-centric entrepreneur", defined by Warrillow as an owner who considers an Internet presence to be a vital force driving business results, has jumped from approximately 25% to 50% in the past two years. Vetter says mobile technology has made it easier for SMEs and their entrepreneurial founders, dubbed Freedom Fighters. "The Freedom Fighter starts his or her own business, is tired of corporate life, and wants more self-control and independence," he tells Report on Wireless. "Mobile technologies are making the life of the Freedom Fighter more viable." But wireless alone won't ensure business success. On-demand software for mobile devices will play a large role, according to Vetter. "On-demand software is one of the most important events to have occurred in the past 18 months in terms of enabling the SME market," he says. Vetter points out that applications like Saleforce.com for CRM and Netsuite for financials are helping smaller firms gain competitive edge. These applications are cheap, deliver highly functional productivity tools, and can be accessed over mobile devices. "The challenge for SMBs is to compete with large enterprises in the market," says Vetter. "On-demand gives them access to enterprise solutions at an affordable price." Price is a big part of the appeal of mobile, given dropping network costs and inexpensive on-demand software. These two elements combined give the SME owner, the Freedom Fighter, all the tools necessary to compete with the big players, while reducing overhead and fixed costs. "The pricing models fit well with the cash flow in these small businesses," says Vetter. "It makes a lot more sense for them to implement software on a subscription basis, at a hundred dollars a month, than paying to implement at $5,000." But there is still some caution when it comes to embracing complex applications. The CFIB confirmed that email is the dominant application used by SMEs on mobile devices. According to Warrillow's Vetter, one challenge is for application providers to prove themselves to entrepreneurs. "For more than a phone conversation or email you really need to prove your value proposition," he says. Ironically, it's the adoption of the big players that can add confidence, and contribute more productivity tools, to the SME space. "When it is mission-critical or time-sensitive data there is some caution," says Vetter. "But when you have FedEx allowing package tracking on cell-phones, and RBC and Visa starting pilot programs for payment on your mobile, you'll see SMEs adopting." Having big players jump on board and enable application availability for small business is a definite advantage, but initial roll-outs come at a premium, which may limit uptake. However, Vetter adds that some SMEs may be willing to pay a little more for certain productivity tools if they are specific to a given industry, such as retail. On-demand application delivery over mobile devices also encourages SMEs to compete with a business model more typical of large enterprises, wherein customers can be national or international, but physical sourcing is more localized. An important distinction is that with the on-demand model technology can be sourced from anywhere.

42% of SMEs now use mobile devices

News | March 5, 2008

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