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The massive technology shift from dial-up to ADSL as the most common form of connectivity among small and medium enterprises is about to be repeated. Except that, this time, the shift will be from ADSL to fibre.
This is one of the major early indications of SME Survey 2018, in partnership with Intuit QuickBooks, which has achieved its target of interviewing 1 400 business decision-makers.

SME Survey is the original and largest representative survey since 2003 to measure the forces shaping SME competitiveness in South Africa. One of the greaat success stories is the manner in which it has tracked the rise and fall of comparative types of Internet connectivity.

According to Arthur Goldstuck, principal researcher for SME Survey and MD of World Wide Worx, the survey has been in a position to track connectivity trends from the arrival of ADSL in this market in 2003, the same year the survey began. As a result, it was ideally placed to track the transition from dial-up to ADSL that occurred among SMEs from 2003 to 2009.

“Because we were able to track adoption rates from the outset, we could demonstrate perfectly the rise of one technology and the decline of the other. We are now at the stage where we are beginning to witness the decline of ADSL, as it is replaced by fibre to the home or office. The interim SME Survey 2018 results therefore present a fascinating story of history repeating itself with regards to technology replacement,” he says.

“ADSL usage peaked at around 70% in 2009 and remained at this high until 2015, when fibre arrived. The latest figures from the survey indicate that ADSL usage has now dropped to 56% among SMEs, while fibre has increased to 23% – this is exciting, because it means that the adoption of fibre is taking place even more rapidly than the adoption of ADSL did 15 years ago.”

Such rapid adoption is being brought about, says Goldstuck, by the rapid rise in availability of fibre across urban areas, coupled with the falling price of the technology. In conjunction with this, the increasing uptake and use of bandwidth-intensive technologies by SMEs has resulted in a perfect storm that is driving this desire for technology replacement.

“The switch from ADSL to fibre is being driven by much the same reasoning as the earlier move from dial-up to ADSL. In effect, when SMEs see a clear value proposition, one which can translate into the phrase ‘no-brainer’, they are more than willing to embrace it rapidly. On the other hand, when it has to be explained or demystified – as seems to have occurred with the concept of the cloud – they tend to stay clear of it for far longer. However, with fibre the value proposition is so obvious that SMEs are clear about how it will improve their business, and so adoption is taking off.”

“This is a huge shift and is extremely exciting for SMEs and accountants in South Africa,” says Wendy Walker, head of marketing at Intuit QuickBooks. “We have witnessed how the use of technology such as the cloud has reshaped and reinvigorated businesses across the globe and we have no doubt will we will see the same impact here. Whether it’s evolutionary or a new disruptive innovation, SMEs are always looking for technology that will help deliver better services and products, and of course, greater returns for their businesses. That’s what we are here to provide.”

Goldstuck explains that, with fibre, the cost to speed relationship is vastly improved, while the quality of the connection is also higher, since fibre doesn’t have the same level of contention – the number of people using the same connection – as ADSL. This means, generally speaking, the speed you buy is the speed you get.

“Another aspect that differentiates fibre fundamentally from ADSL is that any service provider can supply connectivity and services over fibre. This is very different to the South African ADSL market, where there is essentially still only one provider for the technology. This diversity has clearly helped open the market, thanks to the increased competition.”

A key benefit SMEs obtain from switching to fibre, says Goldstuck, is that it enables SMEs to operate online without any of the performance and quality constraints they may have faced before. This means that their communications are significantly improved, enabling them to utilise solutions like video-conferencing and social media platforms to further their business. It also gives them more confidence in using the Internet for transactional purposes, thanks to the quality and speed of the connectivity.

“This quality and speed, coupled with much higher bandwidth caps, is opening these small businesses up to greater levels of collaboration and a range of new business possibilities,” he says. “Ultimately, fibre expands the vision of small business decision makers, while levelling the playing fields with large organisations in terms of access and collaboration.

“Furthermore, once SMEs get to grips with the many possibilities offered by fibre, they will be more confident in aiming for a higher digital level and will more fully embrace cloud platforms and solutions. This, in turn, means they will be well placed to compete more directly with big enterprises.”