Small and medium-sized businesses (SMBs) represent a lucrative untapped market for telecom operators and are more progressive tech adopters than many give them credit for, according to Angus Ward, CEO of orchestration and digital platform provider Beyond Now.

While the World Economic Forum (WEF) recently found SMBs lag in technological adoption, research from Beyond Now suggests just the opposite.

Ward explained that many SMBs suffered financial hits during the pandemic, but they also went through a significant period of digital transformation, using digital sales channels to ride out economic turbulence.

“Unlike larger enterprises that are still struggling with digital transformation, SMBs are already running as digital businesses," Ward told SDxCentral. "Our research found that 85% of SMBs recognize the importance of technology relating to the success of their businesses." But telecom operators have not been taking advantage of this shift.

WEF’s report aligned with Beyond Now’s when it came to two major findings: smaller businesses were more resilient to COVID-19 disruptions than large firms across all sectors; and, technology is a major factor enabling small enterprise resilience.

“For these reasons, [communication service providers] must build digital marketplaces that can help SMBs embrace new technologies such as 5G, [artificial intelligence], edge, or IoT through solutions that address their business needs,” Ward explained.

Coinciding with Ward’s stance, a recent Allot survey found small businesses are increasingly turning to telcos for security measures as well.

WEF “rightly highlighted that their reluctance is driven by a lack of resources," Ward continued. "We also referenced this in our report.” Managing multiple technology providers becomes a “management headache” for SMBs, limiting newer adoptions “as they do not have the internal skills or resources to implement them properly and achieve the desired outcomes" necessary for growth.

But “where the WEF report alluded that SMBs are reluctant to adopt technology, our research showed that SMBs are actually more sophisticated adopters of technology than many give them credit for,” Ward added. “Critically, what sets SMBs apart is that they already make the connection between technology, business resiliency, and growth,” he continued, referencing a small business survey conducted by Verizon.

That survey found 61% of SMBs have implemented digital tools to change processes and improve customer experiences and that they continuously look to operate more efficiently, scale their businesses, and differentiate themselves from competitors.

Both WEF and Beyond Now also aligned on the importance of SMBs future proofing their network requirements. “[SMBs] need to become better prepared to tackle sudden economic and political shocks, building the resilience needed to navigate an uncertain future,” WEF stated. Ward believes this is where telecommunication operators can make a big difference.

Despite a majority of smaller businesses seeing technology as key to their growth, service providers haven’t taken the time to understand these digital-native SMBs, Ward stated.

Telecom operators "don’t understand their business priorities, nor do they focus on developing technology solutions to address their vertical industry contexts," he explained. "SMBs have typically been perceived more like consumers, and offers tend to orientate around devices and connectivity. That may have been appropriate in the past, but this is no longer the case."

While telcos are set on larger enterprise contracts for 5G, cloud, and edge services, the SMB market is just as lucrative, Ward beckoned, citing a forecast from Analysys Mason estimating the IT spending of SMBs will increase from $600 billion in 2022, to $1.4 trillion in 2027.

The report also noted that small and medium-sized businesses' IT spending will grow by 6.2% and 6.5%, respectively, year over year in 2023.

“This is where CSPs can capitalize on their expertise and experience," Ward explained. "Fifty-one percent of SMBs rank technology as very-to-crucially important” in Beyond Now’s report, "and almost three-quarters of SMBs recognize the potential value of more nascent technologies including blockchain, AI, [machine learning], and edge. They’ve even started to think about the potential use cases for 5G.”

Yet this process will not be as simple as bundling connectivity with cloud and security services, Ward says. To aid SMBs with lacking IT resources, telecommunication operators will need to “adopt a new model and curate a single marketplace that serves all of their technology needs from one platform."