Anurag Agrawal is CEO of Techaisle LLC, an industry analyst firm that tracks the future of SMBs and channels. He highlights some recent research findings on SMB IT priorities in this interview with writer Colleen Frye.

ChannelPro-SMB: How are SMBs undergoing an IT transformation?

Agrawal: No longer do SMBs have to have a PC, then a server, then software applications, then line-of-business applications. That was the traditional way of IT, a process that was steady and predictable. Now with cloud, mobility, managed services, and so forth, no longer do SMBs have to go through a predefined process. With cloud, they can have just PCs, or there are servers they can rent, or databases and software solutions that reside in the cloud.

ChannelPro-SMB: At the same time, Techaisle finds that a refresh of PCs and servers is now among SMB priorities?

Agrawal: We do have aging infrastructure. That does not mean SMBs will rip out their entire infrastructure. There is newer technology available, better security, longer battery life, so they are buying newer PCs. It’s similar with servers. Not everybody wants to rent a server, there are not many use cases available, and SMBs still want to see the TCO— which channel partners or vendors haven’t demonstrated clearly—to move to cloud or move critical applications to cloud. They say, “The price of servers has come down; let’s invest.” We’re seeing an uptick in the growth rate of server shipments in SMBs.

ChannelPro-SMB: And business intelligence is among the top five investment solutions planned by SMBs?

Agrawal: They do realize the value of BI, and many of the cloud applications they’ve started to use, whether Salesforce, Intuit, and so on, have some level of BI built in. But their biggest need is to have a complete view of their operations, which means data has to cut across different applications like accounting, sales, inventory, partners. Since they’re using an average of four to five different applications at the small business level, [and] 16 to 25 at the midmarket level, BI has become all the more important. Those businesses that have capabilities of in-house development or strong outsource partners are working with some specific applications, like Business Objects or Cognos, but they have to be customized, and not everyone has the budget to customize. Small businesses are turning to channel partners and asking them [for help with BI].

There are [opportunities for the channel] in two key areas: one is data integration, and the other is BI. BI is not only on the desktop, but on the go as well. You should have a dashboard on your mobile device, whether a smartphone or tablet, and you shouldn’t be required to download anything onto a mobile device because it eats up bandwidth. You should be able to run on the fly off a host server.

ChannelPro-SMB: You expect remote PC managed services to be another growth area?

Agrawal: That goes hand-in-hand with the “work from anywhere” culture. The traditional break-fix model doesn’t work anymore, so it’s increasingly important for these SMBs to have a managed service that can not only remotely monitor PCs, but manage them to understand break-fix before it happens, doing patch management, keeping security files updated. That’s a huge opportunity [for MSPs]. It goes [along] with remote network management. That’s why you also see [a retailer like] Best Buy buying MindShift [an MSP] to address the needs of SMBs.

ChannelPro-SMB: How about the SMB virtualization spend?  

Agrawal: The typical market is for 50 to 1,000 employees, less than that is not worth it at this time. The cost of transitioning to virtualization and maintaining it is pretty high. But what we’ll see happening is VDI [virtual desktop infrastructure] will take off first for SMBs and we see that being offered by Citrix and VMware, and many smaller players have jumped on, [such as] Desktone moving to a [cloud] hosted VDI solution.