LSA’s proprietary small-business survey data consistently tells us SMBs would prefer one software provider to handle most or all of their business operations. They choose this over picking and choosing among point solutions for payments, payroll, marketing automation, CRM and so on.

In the new LSA Modern Commerce Monitor™️ (the successor study to the Tech Adoption Index), we asked SMBs if they would prefer to work with a single software provider for most or all of their core business functions. A whopping 79% voted for the all-in-one option over multiple independent solutions.

Yet despite this expressed demand, the one-login, one-bill proposition just hasn’t moved from “sounds like a great idea” to “let’s do this” for most SMBs. When we asked the same respondents if they have actually consolidated their apps into a single source, only 7% said they had done so. That’s a yawning chasm if there ever was one.

There is a clear and compelling case to be made for small-business going the all-in-one route. If a business buys an all-in-one product, it pays one bill that is likely far less than the sum of all of the point solutions it uses. And unlike with multiple solutions, all the data that flows through the all-in-one platform will be integrated. 

Then why the disconnect between demand and adoption? We have a few theories:

Switching Hassle

The all-in-one option is probably a relatively easy ask for an SMB that has not yet adopted any apps for their business. They can start from scratch in an all-in-one environment. Asking a business running 5-10 apps to move off of all of these apps into an all-in-one is a harder sell, even if the SMB wants to bring some order to their app stack, and perhaps save some money in the process. The idea of moving all of their data from several apps into one may just be too daunting.

Vertical Specialization

There is a widely held view that vertically focused solutions have an edge in selling multiple solutions or integrated suites to small businesses. There is some logic to this since each industry has unique business rules and an industry-specific solution is more likely to address these than an everything for everyone package. Companies offering one suite for all SMBs may face this hurdle, while industry-specific solutions have an edge. 

Fear of Backing the Wrong Horse

Finally, there may be a natural wariness among SMBs to put all of their eggs in one basket in case the provider is not stable. This is a big hurdle for smaller and less established SaaS providers. Business owners may also fear they will be dissatisfied with the provider and then face the daunting task of switching.

We will dig deeper into this topic in future posts.