A Close Look at How SMBs Are Using Cloud Services
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A Close Look at How SMBs Are Using Cloud Services
A new study examines how small and midsize businesses are using cloud services and the most significant opportunities for service providers in this space. -
Big Spenders
The 2015 U.S. cloud services market for SMBs encompasses more than 7 million SMBs that spend on average $3,323 annually on their cloud services. -
Hosted vs. In-House
32% of SMBs use hosted servers. Top triggers for IaaS include business model changes, and in-house servers did not do enough or had too many challenges. -
Barriers to IaaS
SMBs with in-house servers said price (48%), security and privacy (34%), and legacy systems and other tech concerns (24%) are the top barriers to moving to a hosted solution. -
Buying IaaS
SMBs buy IaaS via Web hosters (47%), local IT sources (VARs) (21%), pure cloud providers (10%) and telco/cable companies (6%). Purchases are conducted online (47%), by phone (22%), via VARs (13%) and through direct sales (10%). -
Selecting a Service Provider
The most important factors in selecting a service provider include price (36%), existing relationship (21%), ease of management (15%) and security (14%). -
More Value Equals Higher Revenue
54% of SMBs would pay an additional $10 per month for unlimited storage, and 47% would pay an additional $10 per month for high availability. -
Web Presence
84% of SMBs have a Website hosted by a third-party. Key factors SMBs consider when selecting a Web hoster include price (62%), customer experience (32%), existing relationship (23%) and security (17%). -
Big Business
Top Website add-ons in 2015 include search engine optimization (SEO) (36%), backup (26%), security (24%), Secure Sockets Layer (SSL) (20%), e-commerce (15%) and content management (13%). -
Business Email and Bundling
65% of SMBs' business email is hosted by a service provider, 23% use a free service and 7% is hosted on an in-house server. What's more, 54% of third-party hosted email is bundled with Website hosting or a hosted server. -
More Opportunities
82% of SMBs don't use hosted business voice services (hosted PBX services). -
Top Barriers
SMBs said the biggest barriers to hosted voice services are price (53%), lack of knowledge (46%), concerns about complexity (17%) and technical concerns (13%). -
Collaboration Apps
In 2015, SMBs are using instant collaboration (39%), Web conferencing (24%) and mobile-device (2%) management. In 2018, use of these apps will grow to 41%, 27% and 6%, respectively. -
Business Apps
The number of SMBs without SaaS dropped from 32% to 28% in the past year. Key factors in selecting business apps include price, features and capabilities, business need and customer experience. -
To Pay or Not to Pay
The most popular cloud app is file sharing (35%), but only 17% of SMBs pay for this service. In comparison, online CRM is used by only 6% of SMBs, but 83% of users pay for it. -
Other Popular Cloud Apps
Other popular cloud apps include payroll and HR (28%), online accounting (28%), and online backup and storage (27%).
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Why Metrics Matter to the Channel Opportunities continue to be abundant for service providers to deliver a range of cloud services to small and midsize businesses (SMBs). The SMB cloud services market is forecast to show a compound annual growth rate (CAGR) of 11.4 percent in the next three years, from $25.2 billion in 2015 to $34.9 billion by 2018, according to a new report from cloud software specialist Odin (formerly Parallels). The report reveals several large market opportunities for cloud services this year, including infrastructure-as-as-service (IaaS), valued at $9.4 billion. Big growth drivers include hosted business apps, software-as-a-service (SaaS) apps (for file sharing, payroll and human resources), and online backup and storage, all forecast to post a CAGR of 23.9 percent in the next three years and reach $12 billion. The study looks at four key areas of cloud services—infrastructure as a service (IaaS), Web presence and Web applications, unified communications and business applications (SaaS). Here are key takeaways from the report that indicate why and how SMBs are using cloud services, and where the most significant opportunities for cloud service providers are—if they can meet SMB requirements.
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