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Product Marketing Q2 Analysis
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  1. Product Marketing Q2 Analysis In-Depth Product Market Analysis Project: VPS and Business Class Shared

  2. Project Scope and Objectives • Goals • Gather a better understanding of what business problems are being solved by hosting products. • Conduct customer interviews to create use cases that will help determine where or if there is overlap in Verio product offerings. • Map use cases back to Verio products to determine the best product fit and distribution channels. • Capture general hosting trends and market perceptions.

  3. Project Methodology • Internal Interviews • Conduct Internal interviews with product experts to improve the understanding of the internal product perceptions and positioning. • Verio Product Portfolio • Create a product catalogue that includes all Verio hosting plans from Shared to MPS. This catalogue will include key features, pricing and add-ons. • External Market Analysis • Conduct a series of interviews within different categories • Verio and Non-Verio • End Users and Partners • Unix and Windows operating systems • Shared, Virtual and Dedicated servers • Create customer use cases and map them back to Verio products • Conduct web survey about the importance of different features • Verio/Non-Verio, VPS and MPS customers • Review secondary research in relation to hosting trends and perceptions

  4. Executive Summary - Key Insights

  5. Use Cases and Products (End User Perspective) High Managed Private Server Corporate Web 2.0 Today’s Virtual and Managed Windows Hosting (Future Signature II) Business Web 2.0 Corporate Web 1.0 Value of Hosting to the Business Business Web 1.0 This is how our customers use our products today. Pro Amateur Virtual Private Server Today’s Signature (Windows/Unix) Amateur Plain Old Web DIY and Static Hosting Low Technical Complexity of Hosted Environment High

  6. Use Cases and The Competition High Managed Private Server Corporate Web 2.0 Today’s Virtual and Managed Windows Hosting (Future Signature II) Virtual Private Server Business Web 2.0 Corporate Web 1.0 Value of Hosting to the Business Business Web 1.0 Who the competition focuses on selling to. Pro Amateur Amateur Today’s Signature (Windows and Unix) Plain Old Web DIY and Static Hosting Low Technical Complexity of Hosted Environment High

  7. U.S. Shared Web Hosting Forecast, 2007-2012 DEFINITIONS Basic : a bare bones shared Web hosting package with severely limited data transfer and storage allocations. the "budget" or "starter" package with pricing at $10 month or less. USE CASES – PLAIN OLD WEB, AMATEUR and PRO AMATEUR (31.4%) Enhanced: more professional offerings with larger resource allocations, ecommerce add-ons, and some level of customer service/support. Pricing starts in the neighborhood of $20-30/month. USE CASES – BUSINESS WEB 1.0, BUSINESS WEB 2.0 (20.0%) VPS Hosting: USE CASES – BUSINESS WEB 2.0, CORP WEB 1.0, CORP WEB 2.0 (48.6%)

  8. Use Cases and Products (Market Sizing - Revenue)* High 52.4% Managed Private Server Corporate Web 2.0 36.1% Today’s Virtual and Managed Windows Hosting (Future Signature II) Virtual Private Server 23.0% Business Web 2.0 14.2% Corporate Web 1.0 9.2% Value of Hosting to the Business Business Web 1.0 15.9% *Directional information only based on domain registration volumes for competition, with applied price points and Use Case assignment Pro Amateur 11.5% 21.6% Today’s Signature (Windows/Unix) Amateur 10.1% Plain Old Web 2.9% DIY and Static Hosting 2.9% Low Technical Complexity of Hosted Environment High

  9. Use Cases and Products (Verio Product Perspective) High Managed Private Server Corporate Web 2.0 Today’s Virtual and Managed Windows Hosting (Future Signature II) Business Web 2.0 Value of Hosting to the Business Corporate Web 1.0 This is how we “sell” our products today. Business Web 1.0 Virtual Private Server Pro Amateur Today’s Signature (Windows/Unix) Amateur DIY and Static Hosting Plain Old Web Low Technical Complexity of Hosted Environment High

  10. Use Cases and Verio Distribution Channels High OEM Corporate Web 2.0 Partner * Business Web 2.0 Corporate Web 1.0 Value of Hosting to the Business Business Web 1.0 Verio’s partner focus insures the best overall customer coverage. Pro Amateur Amateur Plain Old Web Retail Low Technical Complexity of Hosted Environment High * Partner segment includes – web developers, web designers, ISVs and MSPs. This cannot be easily translated into sub segments because the nature of the business with dictate who they ultimately sell to.

  11. Use Cases – Side by Side

  12. Use Cases – Side by Side

  13. Partner Value Equation (Hypothetical Scenarios) • When just comparing the number of websites that can be hosted on a plan: • Linux VPS Basic to Signature II ($10 SRP) the Partner would receive a minimal cost savings of $2.75 • The Partner begins to see more value if they use Signature II ($60 SRP) seeing cost savings of $16.5 to $22 • The Partner begins to see more value if they use VPS Basic and increase the number of websites beyond the recommended number is a cost savings of $57.75 • *Note the are based on hypothetical website hosting scenarios and will need to be reevaluated after Signature II pricing, resources and plans have been finalized. The VPS’s value to the partner lies in that they can do more than webhosting with the server. • From the interviews we noticed that newer partners lack the technical understanding of the Linux VPS in order to carve the server successfully. • The partner must be willing to take control of learning more about their servers and most Partners don’t want to have do this; this is what they pay Verio to do for them. ** See Appendix for more details on product and pricing comparisons.

  14. Other Key Insights • All customers, even the tech savvy ones, expect the hosting provider to take care of anything associated with the hosted server “that is what we pay the provider for” or else they would do it themselves. They expect that the hosting piece of their business to “just work”. • Hosting is a minimal contributor to partner’s overall revenue. • Customers continue to call their sales rep for technical issues because they view that sales rep as their contact with that provider. • A fair number of customers were using Linux and Windows or Windows and FreeBSD to create a complete solutions; not always clear “Unix vs. Windows”. • A number of customers have learned to get around the limitations of Verio products through custom coding or with direct contact to key Verio resources.

  15. Short Term Product Recommendations Need to factor in Use Case information into upcoming Signature 2 launch. Data suggests that there is still a need for a Shared solution to meet the needs of the Amateur and Pro Amateur segments. Verio should clearly differentiate VPS/MPS products to a different, more technical market and focus Signature and Signature 2 to meet web hosting needs. Data suggests that there is little overlap from the customer perspective from VPS/MPS solutions vs. Signature 2 solutions. Plain Old Web category is best serviced through $4 DIY solution. Verio needs better online processes/tools to serve that customer base with no need for sales/support. We should not offer this plan to partners.

  16. Recommendation - #1 Link Product Marketing research information to improve product positioning and messaging. For example: On the lower end, for the Amateur, limit the type of applications customers have access to install In the middle, the area of overlap Business Web 2.0, improve the messaging and education to steer customer to the appropriate products On the higher end improve the number of easily installable business applications Even technically savvy customers do not understand hosting industry terminology Verio needs improve how we speak to our potential and existing customers by talking to them in “their words”

  17. Recommendation - #2 Increase the number of “Business Oriented” installable applications Create a Verio business application portal similar Go Daddy’s Hosting Connection Increasing integration into SMBs day-to-day business improves their “stickiness” with Verio Market trend is to use pre-packaged solutions to solve business problems and less customization is going on. SMB’s are looking for ways to save money and are limiting the custom developed applications. Even Highly technical companies the hosting provider to preinstall modules into a GUI for “easy” installation and updating. Conduct Q3 Product Marketing analysis – determine application priorities

  18. Recommendation - #3 Use key findings from this project to create a “Business Needs Assessment Wizard” to assist customers and partners to choose a product that best suits their needs. These suggestions are based on the experiences of other customers with similar requirements and are based on typical usage.

  19. #3 - Verio Web Wizard Strategy • Questions in the Wizard help customers identify the best solution from Verio’s product set to solve their business needs. • The Wizard engages the customer and motivates them to contact Verio. Solution Communication Wizard Dedicated Server – May 2009 Verio.com – June 2009 Post Launch – Evaluate effectiveness and benchmark against other wizards to improve future graphic design and wording.

  20. Recommendation - #4 Create attractive migration programs to encourage new and existing customers to move “all” of their hosting business to Verio. Many interviewees have more than one hosting provider. For example, Hostsaurus for e-commerce hosting and Verio for VPS. Verio is missing out on opportunities with our existing customer base by not making an effort to acquire all of their business.

  21. Recommendation #5 Improve SMB hosting knowledge and reliance on Verio by creating simplified education center.

  22. #5 – Verio Current Strategy May 2009 Launch of websites.com site Need to determine way to migrate key educational content to verio.com and provide easier way to link education to sales

  23. Appendix

  24. Partner Value Equation

  25. Value Equation to a Partner – (In Their Words) • “We use MWS and VWS. We are experts in Windows plans and know enough about those plans to be successful. The key is – we don’t want to be a Windows Server administrator. I received a quote in the last six months for VPS. The price is appealing now. The VPS type solution is more cost effective, but then we have to manage everything. We don’t want to have to do that. It makes us spend more time in areas outside of expertise. We like that Verio can handle that piece for us. Some customers may have to move there (VPS) eventually, but we think most of our business can be done on a Shared solution.” • “One customer who owned 4 companies we put all 4 companies on one MPS. VPS seems to work the best for us.” • “We started with Virtual hosting and are the most comfortable with that. Signature confused the issue – less control. Found it didn’t make sense we were already managing VPSs 20 to 30 small sites on a VPS costs us less than $2 a plan.” • “You can also host this on your VPS but you will need to know a bit about Linux users, groups and permissions to make it all work. The Signature hides all of this gunk from you.” • They compete via value added services which includes web site development and custom apps. Their hosting services start at $30/month for their customers. Their “sweet spot” for customers is via Unix Shared Hosting. The main purpose for most of my customers is the applications: email, stats, customized apps. IMG themselves have 3 portal sites: a job board (like Monster for Maine), a travel and tourism site (information chamber like website) which is membership based, and an automobile portal for Maine.

  26. Partner Value Equation (Hypothetical Scenario)

  27. Partner Value Equation (Hypothetical Scenario)

  28. Partner Value Equation (Hypothetical Scenario)

  29. Partner Value Equation (Hypothetical Scenario)

  30. Market Perception of Shared vs. VPS

  31. Partner Interview Comments on the Perception of Shared vs Virtual Servers • “The customers we host only need Shared hosting plans. Larger companies they service have their own servers in house.” • “I don’t know what VPS is, hosting is all the same.” • “These terms really don’t mean anything to me. I understand, but it doesn’t matter.” • “ I understand what VPS is in general, but wouldn’t consider it right now. Primarily would look at cost. If VPS was a great offering and value, then I’d look into it. Customers don’t request it & don’t see need for it yet.” • “I think SHARED hosting plans are cheaper. They are also shared accounts on a server. And they are easy to use. VPS is more dedicated (when compared to SHARED). It is also more expensive to use. And it requires more maintenance, and that means too much hosting knowledge for me and the business. That’s not where I want to focus.” • “90% of our customer base gets by fine with a Shared plan. A VPS plan might be needed for the customer that has complex technology needs. It used to be that VPS hosting plans were cost-prohibitive. So we avoided them. Now those plans are more cost-effective. At the same time, some of our customer needs are becoming more complex. The challenge is migration. We don’t want to have to migrate customers, as it means their website is down for a day or more. It is a pain to change from Shared to VPS, but in the past we haven’t known about the need to move to something more sophisticated when the customer relationship started.”

  32. Partner Interview Comments on the Perception of Shared vs Virtual Servers • “I understand both of them. But I don’t really see much of a difference from my perspective. Maybe if I had very large customers, I’d need a VPS. Shared plans work fine from my perspective.” • “Prefer to use VPS with everyone but cost to the client doesn’t always mesh. There are a lot of things that are simpler to do with the Shared hosting. I wish the VPS were as easy to use as the shared hosting (idiot proof). The VPS you have to know what you’re doing.” • “We don’t do too much with shared, VPS seems to be a good fit. We have had servers get down and then we upgraded sites.” • “The word Virtual rarely comes up in a conversation. Only if the customer is sophisticated they will ask more about the resources, multiple sites, understand the technology of disk space and architecture. The majority of customers understand and discuss – traffic to the site, email and ftp users, disk space.”

  33. End User Comments on the Perception of Shared vs Virtual Servers • “I don’t have a clue as to what this is. I don’t even know what kind of plan I have.” • “Shared because meets my needs, but she doesn’t have any predisposed feelings about the other solutions.” • ‘Virtual’ a couple of years ago was sketchy now it is a easier term to accept.” • “I went with a shared plan because it was what was recommended. I didn’t really care as long as it met my needs and my budget. I’ve never heard of virtual servers (VPS).” • “He would be fine with a shared plan if it showed a cost savings. Would need to be at least 20% cost improvement to bring forward to management.” • “They are great for companies with smaller needs. We have such big application needs related to our day-to-day business that we never considered anything other than a dedicated server.” • “No preconceived notions about any of the above. Always liked the idea of dedicated.”

  34. Hosting Trends

  35. Hosting Trends Noticed by our Partners • Increasing requests for Ecommerce and merchant services • Customers are moving towards more sophisticated websites • Need for private SSL certificates • SQL Express is no longer good enough they need a full instance of SQL DB • Partners using Accrisoft feel that as the needs changes Accrisoft changes to meet those needs • Increased awareness and requests for SEO and SEM • Increased requests for CMS • Their customer mix used to be 70% traditional hosting and 30% value add, now they have 40 % traditional hosting with 60 % value add • Using more prebuilt tools and adding depth to websites • More site analytics and analysis of traffic • Beginning to think about blogs, Twitter, and other Web 2.0 options

  36. Accrisoft - Interview Summary • “In the past we liked the power of the VPS but the Accrisoft system has developed and we no longer have the need to install individual applications we just need to install Accrisoft. We no longer need root.”  “VPS servers are still good for those people who need to have control over customizations.” • “The Accrisoft software has matured over time and we no longer have the need or desire to install applications.”   • Accrisoft comes with over 80 modules and they have built some of these modules to overcome the voids in the Verio products. • “We had a need to give hosting away with our 5 module version.  We used to do this on a VPS run 20 – 30 sites; sometimes as many as 300 sites.  Then if there is an issue with that server we get 300 phone calls.  It was also not practical because our application uses all the same resources on that server – the load is the same.”  He did not feel it was fair that a customer paying $50 a month would have the same access to the resources on that server as the customer paying $1000 a month.  (no fair share technology between vhosts on a VPS just between VPS’s on the physical server) • “Signature is an ideal solution we don’t need as much control over as server as we used to.  We also like the Signature control panel better and with the direction Signature is going upstream with more resources this seemed like a good move for us because we won’t have to move the customers.” • They have 16 live websites on Signature and are very happy with how things are working out. • The 5 free modules work fine on small Signature and then when their customer needs more modules they charge for those modules and upgrade to a larger Signature account. • Challenges of changing from using VPS to Signature: • Signature deals with PHP and MySQL different than VPS so some configuration changes were needed • They had access to Verio development to assist in getting things working • They also had a meeting with Verio and had 8 things that needed to be accomplished for the transition to work.  Some were Accrisoft’s items and others were Verio’s • They use C-Archive to tweak a few things and unpack the install of Accrisoft on the Signature servers after the new Signature server is ordered.  (Mark did not know the details but is happy to have me speak to Phil Zarpho if needed.) • They would love to integrate Accrisoft more with the Signature control panel so that applications such as blogging could be surfaced via Accrisoft modules to Verio customers.  “I would love to see a check box in Signature to offer the 5 modules for free and then we could charge for other modules.” • They offer all the tools for solution providers to bill customers, collect $, (ABT used to be called RBT) they actually built their own Basecamp and other back office tools.

  37. Partner Insights on Product Selection

  38. How our Partner’s Determine Which Product to Sell to Their Customers • “Resources” • “I determine what plans are best based on the components that they need on their site. Again, most are for web presence only, also because I have Windows platform only, this limits what I offer. I use Window Premium Plan for those that need more applications.” • “It is easy • 1. Platform Windows or Linux • 2. Price - *All customers are price sensitive • 3. Volume of traffic • 4. Business objective of site today and in the future.” • “I pretty much just sell hosting plans. The customer decides what they need.”

  39. How our Partner’s Determine Which Product to sell to Their Customers • When making a decision on what platform to put a customer on, he has three decision criteria: • 1. Will the site see a high level of traffic? • 2. Is the site high profile or for a celebrity? • 3. Are there high integrity/ security requirements? • If the answer to any of these is yes, the site goes to a dedicated solution or maybe VPS.” • “ We go through exercise with clients to understand the exact requirements and place them on the correct plans. Then we will do sizing and other types of things as needed.”

  40. Applications In Use and Market Trends

  41. Applications Being Used to Solve Business Problems • Cold Fusion • Moodle • Quick Base • Accrisoft Freedom • CMS • Drupal, Joomla • Monitoring • Montastic, Zenoss, Nagios • Magenta • Other Open Source • Web Dav, Cal Dav • Microsoft • Share Point, Expressions • Work Force Management and HR • Kronos • Forums • Snitz • Email • Sendmail, G-mail, Exchange, Zimbra • Email Campaigns • Emma, Mailman • Ecommerce • Zen Cart, Miva, osCommerce, Authorize.net • Wikis • MoinMoin, Media Wiki • Blogs • Word Press • Other Plug-ins or Modules • Bid calculator, Online quotes, Inventory searches, Distance learning software, Customer developed applications for billing, automotive searches, real estate and memberships, Product catalogs, File Sharing, Java scripts for promotions, Reservation system, Online brochure, Appointments, Isapi rewrite filter, pdf and zip file renderer

  42. Application Usage – Market Trends • “Business applications are moving to the web. The rise of Web-enabled applications – such as email, CRM and financial applications – offers new ways for small businesses to access key applications that are stored, managed and maintained in remote locations. As a result, “where” applications reside – internally or externally – is becoming increasingly irrelevant to the users who need access to information resources.” Biz Tech Reports 2007 SMB Executive Survey • “SMBs as well as Enterprise companies will delay custom development projects and reduce costs by making due with off-the-shelf applications.”Ray Boggs IDC VP, Small/Medium Business and Home Office Research March 2009 • “One of the most striking indicators of the rapid adoption of Web applications by consumers came during the 2007 U.S. tax season, when more Americans used the online version of Intuit’s popular TurboTax software than used the traditional packaged version.”The Big Switch by Nicolas Carr

  43. Application Usage – Market Trends • GODADDY Streamlines Application Installation Process for Hosting Connection • GoDaddy’s Hosting Connection is an online marketplace where customers can access and install popular open source applications – such as photo albums, blogs, message boards and wikis – on their websites. The service is free for customers to use. In previous research, we were a bit skeptical about the offering because it seemed too big a step up for non-technical types. However, GoDaddy has simplified the installation down to a point-and-click process, making it usable for almost anyone. No configuration or coding is required. GoDaddy discloses 1,000 installations a day and is trying to create more traffic and participation by encouraging users to rate and comment on applications. While progress is modest, the premise behind this product is solid. Hosters need to do everything they can to make customer websites as functional and feature-rich as possible. Equipping customers with such capabilities will help hosters compete against services like Ning, which provide a platform that has many of these features and functionality already built in. Tier 1 Research Mass-Market Hosting – Spring 2009 • Hosted APPS 2010-2011 • SMBs moving all their applications online; online collaboration is the norm. Tier 1 Research Mass-Market Hosting – Spring 2009

  44. Secondary Research

  45. Secondary Research – Questions to Consider Do business technology needs evolve over time so that if they start out on a Shared solution they will eventually need to move up to a VPS? • Article discussing the reasons for the recent VPS growth • Date: January 2009 • Source: Tophosts.com • Title: VPS Hosting Reviewed • URL: http://www.tophosts.com/articles/008162.html • “Virtual dedicated servers will continue to grow as more businesses upgrade from inflexible and lower performance shared hosting and start to use hosted infrastructure for their applications. While virtual servers have many names these days - VPS, VDS, Grid, and Cloud - it’s really the flexible and on-demand nature of virtual dedicated servers that are fueling growth.” • Reasons that were repeated on numerous blogs: • More server space • Need better technology • Bandwidth • Better resources/RAM • Multihosting • Requirement for more control of hosting plan • Security • Email archiving • Message Mirroring

  46. Secondary Research – Questions to Consider What is the market/customer perception of Shared Hosting solutions vs. VPS/MPS solutions? The Web Hosting Dir.com • Dedicated ServerMore ReliableWhole Hardware is dedicated to You No Expansion need for the long term 70-100 domains • VPSNot as Reliable (As domains increase Reliability may take a fall)Still sharing with up to 10 Customers. This service is good for hosting a more limited number of domains.To Expand becomes very expensiveMore scalable than a dedicated server20-30 domains • BLOG on Web Hosting Dir • Q: What is the difference between Shared and VPS? Isn't a vps supposed to be more reliable, however, if the server hangs, doesn't the vps serer hangs with it as well? • A: The difference between shared and VPS is with VPS, you have access like your own server. You have ability to restart services and your apache server if necessary. You also can host multiple domains, and be your own reseller, install applications in the server. Shared plan is limited to manage your own account. • A: A VPS is basically a managed server except the server resources are distributed between multiple people. On a VPS you will have full root access to run server level tasks. A shared plan is just a way to host a basic website.

  47. Secondary Research – Questions to Consider What is the market/customer perception of Shared Hosting solutions vs. VPS/MPS solutions? • Security Risks of using Shared Hosting • Source: Webonizer • Summary: Article discussing the risks that are associated with using Shared Hosting • URL: http://www.webonizer.com/articles/39/security-risks-of-using-shared-hosting.html • Important Info: • 1. The problems with using a shared host are that they open security holes that are realistically impossible to completely abolish, especially if each domain has the ability to run scripts (program files written in languages such as PHP, PERL, ASP, etc) or has shell access. • 2. While it is possible for software developers to create some safeguards, there is no failsafe protection for your files and data on a shared host. • 3. The most secure environment for your website is a dedicated server (or a shared host that you own and whose domains are all under your control).

  48. Secondary Research – General Trends • Internet Security: ecommerce Growth Drives SMB Security Concerns • Source: Ca.com • Date: 2008 • Important Information: • Small and midsize businesses (SMBs) are more reliant on the Internet than expected • While many SMBs rely on the Internet in some way, over half actively use the Internet to transact their day-today business. Those who rely heavily on the Internet expect to significantly increase their usage within the next two years. A total of 608 IT and business professionals participated in the survey. • “Communication, image, and practicality are significant factors driving the growing SMB use of the Internet.” • “A resounding 91% have a worldwide website. While the midsized businesses polled were more likely to have a website (94%).” • “84% of small businesses also have and actively use their own websites.” • “It seems a new trend is emerging and SMBs are increasingly taking advantage of the opportunity to sell online…” • “SMBs also look to the Internet to improve customer and employee communications. For example, 38% percent employ extranets to communicate with partners, suppliers, and customers, and 72% already use intranets to facilitate communications with employees.”

  49. Secondary Research – General Trends • CRM Trends for 2009 Include Social Networking • Source: Web Host Directory • Date: January 2, 2009 • Important Info: • 1. "During this economic downturn, customers tell us they need bulletproof financial arguments to get funding for their projects," William Band, Forrester vice president and principal analyst, said in the report. • 2. Customers are getting harder to win and keep, Forrester said, and the solution is improved customer experience. "Good customer experience is highly correlated to customer loyalty," Forrester said. To improve the customer experience, enterprises will integrate CRM functionalities better with their back end enterprise resource planning (ERP) and supply chain management (SCM) systems, Forrester said. They will focus more on agile and usable solutions tapping these back end systems to support customer-facing applications. • 3. Another way to improve customer experience will be to incorporate social networking capabilities in CRM applications, and Forrester predicts that enterprises will begin doing this in 2009. This will be the expansion of a trend kicked off by Salesforce.com (NYSE: CRM) when it implemented social networking features, in Force.com for Facebook recently. • 4. Enterprises will look at trends like service-oriented architecture (SOA) and software as a service (SaaS) to bolster negotiations with vendors on pricing and licensing in 2009, while key vendors such as SAP (NYSE: SAP), Oracle (NASDAQ: ORCL) and Microsoft (NASDAQ: MSFT) will be pressuring them to upgrade, Forrester predicts.

  50. Secondary Research – General Trends • Tech Fights Effects of Frail Economy • Source: Philstar.com • Date: January 12, 2009 • Important Information: • With the global economy in crisis, even the new technologies could feel the crunch. A new IDC report finds more concern about the economy among SMB’s worldwide than interest in the most potentially innovative new technology. The study covered SMB owners from different regions to assess their current level of interest in or concern about future economic growth and business conditions, as well as four technologies (“green technology, SaaS, virtualization and online business resources) that could be considered “cutting-edge” for SMBs • “While there are differences across regions, SMBs in general are currently apathetic when it comes to new and emerging technologies, but are showing a great deal of concern when the discussion turns to economic issues.” • “Despite the economic down turn, higher demand for outsourcing combined with increasing externalization of custom application developments will drive IT services spending upwards by five percent this year.”