Cloud computing will have a massive impact on small and midsize businesses (SMEs) in the next three years. New research by Microsoft suggests that four out of every 10 small businesses expect to be paying for at least one cloud service by 2014, while the number of cloud services paid for will double in this time.
That's according to Microsoft's “SMB Cloud Adoption Study 2011”, which investigates how cloud computing will impact SMEs. The study was carried out across 16 countries, including South Africa.
In South Africa, the clear trend is that larger SMEs are quicker to adopt cloud services. Of the local companies surveyed, fully 88% of those with more than 50 employees expect to be paying for nearly five cloud services within three years.
“Cloud adoption will be gradual, and SMEs will continue to operate in a hybrid model with an increasing blend between off-premises and traditional on-premises infrastructure, for the foreseeable future,” said Mark Reynolds, who heads the small and midsized business and partner division at Microsoft South Africa.
“As SMEs continue to transition to cloud services, hosting service providers, value-added resellers (VARS) and systems integrators will have a major role to play as advisors and providers of IT services in hybrid environments,” said JJ Milner, MD of Microsoft Hosting Partner of the Year, Global Micro.
“As cloud computing becomes more ubiquitous and SMEs' existing IT becomes outdated, adoption will grow rapidly. Hosting service providers should consider the appropriate sales, delivery and support models to target larger SME customers that are more likely to pay for cloud services,” said Reynolds. The findings represent a major opportunity for local hosting service providers to profit from the cloud from offering services such as collaboration, data storage and back-up, or business-class e-mail.
Other key findings include:
* Those SMEs paying for cloud services will be using 3.3 services, up from fewer than two services today.
* Past experience with support from a service provider is a key driver of service provider selection among SMEs. Eighty-two percent of SMEs say buying cloud services from a provider with local presence is critical or important.
* The larger the business, the more likely it is to pay for cloud services. For example, 56% of companies with 51-250 employees will pay for an average of 3.7 services within three years.
* Within three years, 43% of workloads will become paid cloud services, but 28% will remain on-premises, and 29% will be free or bundled with other services.
The 2011 study indicates that in most countries, cloud service adoption is not limited to SMEs that see themselves as fast growers. The study showed little difference in adoption rates between SMEs that expect to grow in the next three years (42%) and those solely focused on profitability (40%).
Growth companies want a scalable environment that can meet their expanding needs, with an affordable, pay-as-you-go pricing model that eliminates the need for over-investment in IT. SMEs that want to maintain their size, but want to become more profitable, seek cost-effective, efficient solutions that match their needs for predictability and low overhead cost. Cloud services can serve both sets of criteria.
The study also looked at adoption of software as a service (SaaS) and infrastructure as a service (IaaS) and found that SMEs that are adopting both SaaS and IaaS services are larger, more growth-oriented and more interested in additional services, such as unified communications and remote desktop support. This provides an opportunity for hosting service providers to offer both SaaS and IaaS to acquire and retain high-value customers and maximise revenue per customer.
SaaS services were defined as business-class e-mail, accounting services, customer relationship management, file sharing, Web conferencing, project management and specialised business applications. IaaS services include file and data storage and backup, and data archiving and recovery.
“Hosting providers have expertise in selling cloud services while VARs and systems integrators have experience selling to SMEs. We're helping to bridge this gap by helping VARs and SIs white-label cloud services and deliver them as if they were their own.”
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