Right now, small- and medium-sized businesses (SMBs) are having a big moment. Though it’s easy to focus on the larger players, SMBs contribute around 70% of global GDP and about the same proportion of total employment around the world1. And as they emerge from the pandemic, they are spending more across a range of technologies. In fact, their outlay IT and digital services between now and 2026 is set to reach $1.7Tr2.
For CSPs this is a huge opportunity. The trouble is, few are taking advantage. With just 5.4% of the global market for SMB IT, there’s significant room for growth. But what’s currently available—exhaustive product catalogs full of technical data, irrelevant features and unnecessary complexity—isn’t what SMBs want.
What SMBs really want
Getting the SMB opportunity right
To meet SMBs' needs, including their interest in new tech, desire for a single vendor and pre-bundled solutions, and access to the right support, CSPs need to shift from their traditional, linear sales models. Instead, they need to build and orchestrate an ecosystem platform that gathers relevant partners and SMBs together.
CSPs need to make changes to their infrastructure and rethink their software choices. They will likely have to move from Operation Support/Business Support legacy systems to Open Digital Architectures (ODAs) that can support multi-tenancy and scalability, especially if they have a global strategy3. The adoption of ODAs will enable CSPs to become both industry orchestrators — powering the next wave of innovation across industries — and marketplace creators for 5G and network-related software and services.
While the marketplace concept is not new to CSPs, past attempts have fallen short. The main reasons? The low value they’ve generated from current marketplaces as well as the difficulty of scaling and creating synergies and satisfying customer experiences. To succeed this time around, a marketplace platform needs:
The way forward
Each CSP will need to consider their local context and market before deciding on their go-to- market strategy. But all telcos will eventually need to bear in mind a few essential requirements for a successful marketplace strategy:
- the ecosystem partners,
- the marketplace catalog,
- the functional architecture that will allow its deployment.
As CSPs consider how to expand their SMB business with new pathways for growth and diversification, a marketplace-driven business model can help—and drive significant revenue and avenues for growth. But CSPs need to move fast. Big tech players are building offerings to address this market, so delaying means losing market share, or being cut out altogether.
1 International Labor Organization
2 Analysys Mason’s SMB Technology Forecaster
3 A TM Forum “The Tech Driven Telco: Unlocking growth beyond connectivity through an open digital architecture”, 2021