KUALA LUMPUR, Nov 21 — It’s the perennial Malaysian problem: How to get small and medium enterprises (SMEs) — which make up more than 90 per cent of the businesses registered in Malaysia, but contributing only 33 per cent to the nation’s gross domestic product (GDP) — to adopt technology to boost their efficiency, productivity and competitiveness.   

It’s a hard sell, because even if they see the potential returns technology can bring them, many SMEs lack the resources – both financial and skilled human resources — to adopt technology. 

One company believes it can address these pain points.   On Nov 19, Mercado, a division of independent software vendor (ISV) Max Solution, launched its homegrown Mercado cloud-based platform, which offers a suite of business applications built on top of Microsoft Corp’s Office 365.   

The kicker is that Mercado comes with a one-year, one-price (only RM1,500 or US$447) per company value proposition, and includes free training — or as Mercado general manager Poo Ching Loong puts, “continuous hand-holding”.   

“We have made it very intuitive, and very, very simple to use – it’s not rocket science at all. We want to make it very easy to get them online, but we don’t stop there,” he told Digital News Asia (DNA) on the sidelines of the launch event at Mercado’s office in Petaling Jaya.   

“We will give them training every year — in five different locations across Malaysia — and as long as they subscribe, we won’t charge for it,” he added.   

That training comes as part of the Malaysian Government’s Human Resources Development Fund (HRDF). 

It will include not just training on the applications — which SMEs can get on with just three clicks — but also general courses on using various aspects of technology to run their business.   

These HRDF-approved courses will include social networking coaching; how to leverage Office 365 and social media networks such as Facebook; improving productivity with tools such as Microsoft Office and Excel, and more.  

It will also include courses on the latest business and technology issues, such as getting ready for the Goods and Services Tax (GST) that Malaysia will roll out next April, and concepts such as big data; as well as link-ups with industry experts, according to Mercado.   

“The main thing is that at the end of the day, SMEs are not just stuck there – we will build their business together. That’s our key differentiator,” Poo said when asked about what Mercado can bring to the table against the big guns, such as SAP, that it will be competing against.

The applications currently hosted on the platform cover leave management, claims management and inventory, but Mercado is also inviting other ISVs and resellers to build their own applications and services on top of it.

“Mercado is more of a platform, a platform for resellers and other ISVs to make money,” said Poo.

“We’re starting off here in Malaysia, but it’s going to benefit Asean as a whole.

“We would like to become the catalyst for moving SMEs online. We want to get mechanics and beauticians, for example, online – we believe this is a white space, and not only in the Malaysian market,” he added.

That’s a white space that the Malaysian Government has been trying to plug for some time now, but put more onus when it launched the Digital Malaysia programme which aims to transform the nation into a fully-developed digital economy by the year 2020.

An important aspect of Digital Malaysia is increasing the SME contribution to the GDB by one percentage point, and another is to get them to adopt digital technologies to improve their competitiveness.

Multimedia Development Corp (MDeC), the lead agency overseeing the programme, also launched an SME e-commerce rewards programme earlier this year to boost technology adoption and get more 

BUSINESSES ONLINE.

Digital Malaysia itself kicked off in July, 2012 with three main thrusts:

• To move Malaysia from being supply- to demand-focused, or to reallocate resources to more demand-focused activities;
• To shift behaviour from being consumption- to production-centric, or to change consumer mindset so prevalent in technology use so that Malaysian individuals and businesses produce as much as they consume from digital technologies; and
• To evolve from low knowledge-add to high knowledge-add, or increasing the development of local talent in key industries to become innovators and knowledge workers.

Mercado, with its efforts here, is meeting the second and third thrusts of Digital Malaysia. The company in fact intends to apply for Multimedia Super Corridor (MSC Malaysia) status. MSC Malaysia was the precursor to Digital Malaysia, but with the distinct focus to develop the ICT industry in Malaysia, and is also overseen by MDeC.

Regional plans

MSC Malaysia status would be useful for Mercado in terms of the greater visibility, and the assistance that the Malaysian Government would be able to provide, especially when it expands to other counties and markets, Poo said.

The company currently has customers in Indonesia, Singapore and Thailand, “but we want to broaden our footprint in Indonesia,” he added.

It’s not just the 250 million population in the Asean neighbour that has Mercado looking slightly west, but also because Indonesian businesses tend to be more aggressive and open-minded.

“We can have a conversation with a customer in the morning, and by the evening have a prospect already — that’s a prospective new customer within a few hours,” declared Poo.

Support from Ingram-Micro, Microsoft

Mercado certainly got off to a good start with IT distribution and services giant Ingram Micro Malaysia and Microsoft Malaysia jointly launching the platform with the ISV.

The official launch also saw over 50 IT resellers from Ingram Micro’s network signing a Memorandum of Understanding (MoU) to distribute and resell the product nationwide.

Ingram Micro is targeting 500 resellers to come on board in 2015 with a customer base of 10,000 to adopt the Mercado suite of solutions, according to Ingram Micro Malaysia general manager C.Y. Leong.

“We have 4,000 resellers in our network, and we believe that at least 2,000 of them are viable partners for Mercado, but our target is 500 by the end of 2015,” he told a press conference.

Leong described Mercado as a “local application store for SMEs” where they can pick and choose what they need at cost-effective prices.

“The concept will also be expanded to the regional SME market. Malaysia will be the first country to have access to Mercado, after which, we’ll tap the Asean market,” he said.

“All applications will be tablet- and smartphone-enabled, with support for multiple languages – English, Malay, Chinese, Vietnamese, and more,” he added.

Leong said that Ingram Micro has been working with Mercado for some time now, especially on its cloud-enablement programmes, and said that parent company Max Solution has won a Microsoft ‘Country Partner of the Year’ award previously.

Max Solution actually started 13 years ago as a System Integrator (SI) for Microsoft technologies, but two years ago decided to transform into an ISV. 

It has been building the Mercado line of applications for about four years, but only began on the platform concept in June this year, according to Poo.

It was also two years ago that Max Solution decided to set up Mercado as a separate division within the company. It now has five full-time staff, mainly developers, he said.

Up against big guns

Poo believes that being strictly focused on the SME space gives it an edge over the SAPs of the world, but isn’t blind to the fact that these large players are also increasingly looking at the sector.

When asked what Mercado brings to the table that differentiates from the big boys, Poo said, “We’re selling a concept, not applications – a concept in which when SMEs subscribe, we will have ongoing handholding for those that require it; a concept in which they can access a pool of applications, not just one or two.

“All the big guys are selling applications; we’re giving customers a choice of applications – and all of this at the same price. One price, one company per year,” he added.

Poo also believes that piggybacking on Office 365 gives it an edge, saying “Three reasons: Security; disaster recovery (which is something SMEs cannot afford to worry about); and performance.”

But the most important edge Mercado has is that it’s not just applications, and not just a platform. 

“We’re trying to build a community, and we’re inviting ISVs, developers and even university students to build applications on top of Mercado,” he said.

“We want a community of developers and resellers who can make money off Mercado, and so we’re building a Mercado ecosystem,” he added. 

“We haven’t seen any similar concept from the big boys.”  — DNA