State of the SMB cloud market

Clouds

Yesterday, Parallels released its SMB Cloud Insights report. And according to the company’s forecast, the global SMB cloud services market is growing at a compound annual growth rate (CAGR) of 26 percent and is on track to reach $68 billion by 2014.

So, small- and medium-sized businesses are taking to the cloud in increasing numbers, which makes sense. After all, why sink money into your own servers, software licenses, IT personnel, and so forth if you can just pay a subscription to have a company run it for you?

And more efficiently to boot!

That’s the thinking that’s come to define a class of SMB owner whose hardware investment fits comfortably on a desktop, or in some cases, a laptop bag. They’re called “cloud leapers,” and Parallel’s report defines them thusly:

This category consists of SMBs that currently are not using an in-house IT solution (that is, they have no servers, no web server, and no PBX system) and are likely to move straight to the cloud, “leapfrogging” the typical intermediate step of purchasing in-house IT. …This category also includes new SMBs that choose cloud services over traditional in-house IT as they are starting their business.

Describes a lot of startups nowadays, right? Amazon AWS for cloud storage and Web services, Basecamp for collaboration, Google for email, calendaring and docs… Standard operating procedure for young companies with big plans but no data centers of their own.

Opportunity’s knocking, but only if you’ve got the goods

For cloud services providers, it’s a big opportunity. But it’s not without its pitfalls.

SMBs are no less demanding than big companies. It’s understandable. Few can afford a string of bad quarters, let alone survive them — the last thing they need is to fight their technology.

Oh, and watch your pricing. John Zanni’s, Parallel’s vice president of Service Provider Marketing and Alliances told me, “SMBs really want easy access to enterprise-level functionality with a low cost to entry.”

Sounds about right.

Image credit: Flickr user karindalziel – CC

by Pedro Hernandez on February 16, 2012 · 0 comments

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