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SMB Cloud Services and the Changing Role of IT Professionals Who Service Them
Cloud computing is affecting the role of IT professionals who typically manage a business’s technological infrastructure, and depending on who you ask the cloud is either an exciting new development or a serious challenge to job security.
In Parallels SMB Cloud Insights Report, we explore how cloud services have enabled companies large and small to make massive budget cuts and gain efficiency by forgoing expensive equipment and annually-licensed software. “Parallels SMB Cloud Insights research continues to confirm that SMBs are at the forefront of cloud adoption,” says Birger Steen, CEO of Parallels. “This research is part of our commitment to service providers to give them both the expertise and technology they need to address the quickly-growing market for SMB cloud services.”
The rise in cloud services marks a shift in IT responsibilities and Parallels is leading that charge by offering targeted services to for hosters to deliver to SMBs that are either converting to the cloud, switching to the cloud, or expanding the cloud services they already have in place.
In addition to serving SMBs with dedicated IT professionals on staff, Parallels research also identifies the cloud delivery opportunities to serve SMBs with no IT staff as well as SMBs that hire outside IT consultants.
Parallels research shows that 45% of SMBs in the U.S. have no IT staff, leaving “do-it-yourself” owners or senior members of the company to handle purchasing decisions, installation, and maintenance of all IT solutions. For the SMBs that hire outside IT consultants (which 18% of micro SMBs do), Parallels allows the consultants (usually hosting resellers) to offer cloud services to the SMB end customer without having to manage the infrastructure themselves. In both cases, cloud services benefit business and the bottom line.
With cloud services in place, IT professionals can focus on what they are often highly undervalued for in business: strategy and innovation. A successful career in IT may mean having a cloud-focused skillset and being able to think strategically on a big-picture level.
In the move toward IT as a service, IT professionals will be measured less by how many fires they put out on any given day and more by the value and efficiency they add to internal and client-facing business processes. “Instead of managing infrastructure, tending the help desk, and commissioning server instances to be created,” Brandon Butler of Network World writes, “IT workers of tomorrow are more likely to be managing vendor relationships, working across departments and helping clients and workers integrate into the cloud.”
Learn more about this transition in any of our Parallels SMB Cloud Insights Reports, and stay tuned for a 5-part blog series exploring areas such as hosted infrastructure, web presence, hosted communication and collaboration, business applications, and more.
SMB Cloud Services in Emerging Markets Poised for Explosive Growth
Parallels research shows the cloud services market in the developing world is growing over three times as fast as that of the developed world. In our Parallels SMB Cloud Insights Report, we modeled the 2011 global SMB market and estimated it to be $34 billion.
Need more proof? Business Today reports cloud computing will create two million new jobs in India alone by 2015. And here’s a look from ESDS at 24 countries prepared for business in cloud computing. Clearly, these emerging markets are poised for massive expansion.
According to Parallels research, more than 60% of the growth in web hosting will come from emerging markets in the next three years, and the worldwide SaaS market will grow to $20 billion by 2014. While these forecasts are dramatic, cloud adoption could be growing even faster. BSA recently published a study of 24 countries that together account for 80% of the world’s information and communications technology, and it found that cloud computing in developing countries often lags behind because of weak privacy and data protection laws, as well as poor infrastructure.
Moreover, government and legal regulations are holding up cloud services in developing nations like India, where there are few protections in place to prevent Internet intermediaries or service providers from seizing data at will. But these issues are being addressed, meaning there still exists is tremendous potential in emerging markets.
Parallels research shows that less than 40% of SMBs in developing countries have a company website, making new adopters seeking basic web presence a primary opportunity. Micro and small SMBs in these countries have shown a strong willingness to adapt, as 35% plan to add a third-party web hosting plan in the next three years. Service providers can help encourage this move to the cloud by educating SMBs about the features and benefits of cloud services. And many of these same firms will never buy a server as well.
For more information, watch Parallels CEO Birger Steen’s Q&A from Ask the Experts at Parallels Summit 2012, and download our Parallels SMB Cloud Insights Report.
In the coming weeks, we’ll be sharing on this blog a five-part series with even more insights from Parallels continuous SMB Cloud Insights research exploring areas such as hosted infrastructure, web presence, hosted communication and collaboration, business applications, and more.
Case Study: KT creates new revenue model with cloud services powered by Parallels Automation
This case study is part of series conducted by Parallels that examines how Parallels partners are optimally using our products. For a complete copy, click here [PDF].
Partner Summary
KT is Korea’s largest communication service provider, delivering voice and data, fixed and mobile, and communication and broadcasting services. In 2010, it also formed a new division to deliver colocation and managed hosting services out of KT’s Internet Data Center and to look into cloud computing as a strategic new business for the company.
Business Situation
In recent years, competition from a new breed of internet-based voice providers such as Google Voice and Skype has been putting pressure on traditional voice revenues for telecommunication services providers such as KT.
In response, KT announced in 2010 that cloud computing would be a major new business model for the company and unveiled the “ucloud” brand for its cloud services. The next challenge was to quickly put into place the capability to deliver cloud-based software and infrastructure services to customers in Korea, in particular over 3 million small and medium businesses (SMBs) in the country.
Solution
In September 2011, KT made the decision to adopt Parallels Automation (PA), which would enable it to rapidly deploy cloud services to SMBs efficiently and cost-effectively.
Parallels Automation consists of two core systems – Parallels Operations Automation and Parallels Business Automation. In addition to these core systems, specific PA modules are also deployed depending on the services being offered.
Parallels Operations Automation provides end-to-end automation for cloud services provisioning, server and application management, service plan creation and management, end user self-service, and reseller management. Parallels Business Automation simplifies end user ordering, account management, billing, billing system integration, invoicing, and trouble ticketing.
With Parallels Automation as its service delivery platform, KT can easily extend its service portfolio with offerings such as ucloud backup and ucloud storage.
To address Software-as-a-Service (SaaS) opportunities, the Parallels Automation SaaS module enables KT to automate application deployment, updating, and recurring billing, so that it can quickly and easily offer SMBs a broad choice of open source and licensed commercial SaaS applications.
For example, KT has been appointed the sole syndication partner for Microsoft Office 365 in Korea, and using PA enables the company to rapidly provision and deliver the Office 365 suite of services to its customers and channel partners. With Parallels Automation, KT can also create a customized marketplace of hundreds of SaaS applications from leading independent software vendors, which can then be delivered by its channel and resell partners through their own white-labeled stores.
Benefits
The deployment of the Parallels Automation platform is critical in helping KT achieve its leadership position in the cloud and to strengthen its IaaS and SaaS offerings.
Creates new revenue streams
Parallels Automation enables KT to offer SMBs enterprise-class applications with subscription plans that scale from individuals to thousands of end users. These applications can generate net new customers, as well as increase both average revenue per user (ARPU) and customer retention, as customers rely on KT for additional value added services.
“There are a number of SMB customers in Korea who have been waiting for critical business applications that are easy to subscribe to with no upfront costs. Being small and nimble, they do not want to worry about updates and software maintenance,” said Hyeon Kyu Lee, vice president, Advanced Platform & Software Business Center of KT. “Parallels Automation enables KT to address this critical business need, and takes it a step further by enabling our reseller partners to offer their own independent private label cloud storefronts.”
Reduces time to market
The Parallels SaaS module helps KT bring new applications and cloud services to market quickly. It comes with a go-to-market kit that includes service plan templates and messaging directed at SMBs, plus control panels that simplify support by letting KT delegate control to end users.
“Our customers are looking forward to leveraging products in the cloud from the likes of Microsoft, and our partnership with Parallels enables us to quickly implement a solution that delivers swift provisioning and billing of the Office 365 platform,” said Lee.
Case Study: Leading Australian web hosting provider Net Logistics builds up new revenue streams with Parallels Plesk Panel and Parallels Virtuozzo Containers
This case study is part of series conducted by Parallels that examines how Parallels partners are optimally using our products. For a complete copy, click here [PDF].
Partner Summary
Net Logistics is a leading web hosting service provider in Australia with over 6,000 customers. It offers flexible, easy-to-use and affordable solutions tailored to companies ranging from small businesses to large enterprises.
Net Logistics started out by providing shared hosting services, then organically expanded into reseller hosting and then to Virtual Private Server (VPS) and dedicated server hosting as customers demanded more of such services. Today, 60 per cent of its revenues come from VPS/dedicated servers. Another key segment is the developer and reseller market for white label offerings, which today makes up about 30 per cent of its customer base.
Customer support, both pre-sales and post-sales, is a key focus for Net Logistics, said Joseph Salim, Business Development Manager. The company has about 50 employees, with over 20 involved in back-end support. One of its core value propositions is the fact that it has its “hands on the ground”, providing customers with direct access to technical expertise within the company. This has helped strengthen the company’s reputation for customer support excellence, with high positive ratings in forums such as Whirlpool.
Business Situation
In 2008, the commoditization of shared hosting led to lower profitability for this segment of the business and presented a significant business challenge to Net Logistics. In response to this, the company began looking into opportunities in the reseller hosting market as well as the VPS and dedicated server hosting market where it could differentiate itself with customized managed services. At the same time, the company also sought to increase its average revenue per user (ARPU) by providing scalable solutions to its customer base.
“VPS was identified as a key part of Net Logistics’ strategy to move upstream. As we moved up the hosting value chain, it was also imperative for us to maintain or even enhance our customer support standards, and continue to provide customers with fast resolution of any issues that they may encounter,” said Karthick Rajendran, Managing Director, Net Logistics.
Net Logistics also had to rein in operating costs and to adopt a more environmentally friendly approach to doing business. In particular, it was looking to optimize the use of its infrastructure in order to reduce power consumption, which is a relatively high cost component from both the monetary as well as the environmental perspective.
Solution
To address these business challenges, Net Logistics was looking to deploy a server control panel and automation solution together with a virtualization tool that would enable it to manage its infrastructure and provision upstream services more efficiently. After evaluating several options, it decided to go with Parallels Plesk Panel and Parallels Virtuozzo Containers (PVC).
“We chose Parallels for its depth of experience in delivering solutions finely tuned to the needs of a hosting business model,” said Salim.
While Net Logistics also evaluated virtualization solutions such as Xen and VMware, it decided on PVC because of its seamless integration with Parallels Plesk Panel. This integration would make it easier for Net Logistics to manage and monetize its infrastructure. Said Salim, “One of the best reasons for working with Parallels is the total stack of products that helps us to configure and bundle products. There is one vendor to work with unlike with Xen or VMware. This makes it simpler and easier to do business.”
Parallels Plesk Panel is a sophisticated control panel tool which assists Net Logistics in web hosting account and server management. It includes complete, cost-effective control panel technologies designed for hosting accounts as well as for reseller, VPS and dedicated server platforms. Complementing the deployment of Parallels Plesk Panel is the PVC virtualization software which enables Net Logistics to offer greater support efficiency and implement effective backup solutions in mission-critical environments.
In Parallels, Net Logistics also found a partner with a common approach towards customer service and support. This synergy gave Net Logistics added confidence in going with Parallels Plesk Panel and PVC. “We need to be able to trust the vendor to provide support when needed,” said Salim. “With Parallels, support becomes much easier. We know that we can escalate any issue and have it resolved very quickly.”
Benefits
The deployment of the Parallels Plesk Panel and PVC has enabled Net Logistics to deliver intuitive hosting services to the Australian market efficiently and cost-effectively.
Introduction of new revenue streams
With the deployment of Parallels Plesk Panel, Net Logistics is now able to deliver profitable services easily and offer its customers a quick and easy way to create and manage web sites as well as server resources. It has enabled Net Logistics to grow its VPS business from scratch three years ago, to make up 40 per cent of its customer base today.
“Over the past 12 months, 60 per cent of all new customers have been buying VPS,” said Salim. Parallels has also helped Net Logistics to create greater awareness of its offerings, by providing it with opportunities to participate in events such as the Parallels APAC Summit and the global Parallels Summit.
Enhanced customer support
With Parallels Plesk Panel providing reliable administrative support for wide range of web hosting scenarios, Net Logistics has been able to provide better customer support without having to incur high manpower overhead.
“Parallels Plesk Panel provides a powerful, impressive solution to ease hosting account administration across the full range of shared, reseller, VPS and even dedicated solutions. We are now able to offer our current and prospective customers better management and higher reliability as well as being cost effective and highly profitable,” said Salim.
Reduced costs
Net Logistics has deployed PVC to virtualize its entire infrastructure, including its dedicated servers. This has resulted in an estimated 30 per cent savings in power consumption.
“Power consumption is a significant cost component in our operations. The deployment of PVC to virtualize our infrastructure addresses this by allowing us to make more efficient use of our infrastructure resources, thereby reducing power consumption and enabling us to adopt a more environmentally sustainable approach to doing business,” said Trung Nguyen, Finance Director, Net Logistics.
At the same time, Parallels Plesk Panel comes with an easy-to-use and powerful management tool that reduces the need for Net Logistics to deploy costly manpower to optimize and manage its IT infrastructure, for example, to handle tasks such as patch management.
Summit 2012: Parallels Road Map Track 2
There was a plethora of great content at Summit 2012 this year, and it was impossible to attend it all. Fortunately, we have all of our talks on YouTube! For this series of posts, we have consolidated the talks by tracks at Parallels Summit.
Chart Your Future: Parallels Roadmap – Find out where Parallels innovation is headed for 2012 and beyond.
Parallels Panel Roadmap
Craig Bartholomew, VP, Hosting Control Panels and Shared Hosting, Parallels
Be the first to know what we have planned for the next generation of Parallels Plesk Panel to help your hosting business save money on server costs, reduce labor cost, increase efficiency and sell more servers.
You can download a PDF copy of this presentation here.
Accelerating mobile adoption: Convincing small businesses they need more than a Facebook page
Roy Joseph, President, UNITY Mobile
This session will address the growing need and challenges for SMBs to have an internet presence beyond the browser. This includes a presence on Facebook as well as the ability to deliver a good customer experience across mobile devices. Come find out how SMBs can easily add these capabilities, and how service providers can profit and differentiate offering these services and solutions.
You can download a PDF copy of this presentation here.
The evolution of IT hosting services: What’s next?
Lance Crosby, CEO, SoftLayer Technologies
Understanding how cloud, dedicated and managed web hosting services will evolve and change is crucial to staying competitive. As one of the world’s largest privately owned hosting companies, SoftLayer will speak to industry leading trends which highlight the need for businesses of all sizes to adopt solutions that offer control, security, scalability, and ease-of-management. The presentation will also discuss how SoftLayer is working with Parallels to deliver the next generation of IaaS solutions.
You can download a PDF copy of this presentation here.
Differentiate and grow your hosting business with Parallels Business Automation Standard
Alex Goncharov, Sr. Director, PBAS Product Marketing, Parallels
Join a PBAS expert for insider tips on how to accelerate your business. Alex will also provide a view into how we’ll be enhancing the capabilities of PBAS in the coming years.
You can download a PDF copy of this presentation here.
Opportunities with Google Apps
Jeff Ragusa, SMB Channel Programs Lead, Google
In this session you will learn how to extend your portfolio with Google Apps – Google’s business suite of messaging and productivity applications. Bring these powerful web applications to your clients allowing them to work efficiently from anywhere on any device. By leveraging Google’s channel program you can deepen and strengthen your customer relationships and grow your cloud services practice without disrupting your existing business.
You can download a PDF copy of this presentation here.
Compliance: Understanding the legal and regulatory issues
Christian Dawson, COO, ServInt
David Snead, Attorney at Law
Compliance is becoming an even more important issue because governments are increasing the level of regulation related to intellectual property protection, privacy and protecting children. You need to understand the regulatory framework in order to build a secure cloud. This session will present the existing framework of security laws plus pending and anticipated legislation. Attendees will be given a framework to analyze their current compliance with these laws, and insights into whether certain important proposed legislative initiatives are likely to be adopted and what it will mean if they are.
You can download a PDF copy of this presentation here.
Summit 2012: Practice Best Practices Track 2
There was a plethora of great content at Summit 2012 this year, and it was impossible to attend it all. Fortunately, we have all of our talks on YouTube! For this series of posts, we have consolidated the talks by tracks at Parallels Summit.
Practice Best Practices: This track focused Summit Attendees on how to best use Parallels Products to drive business growth, and efficiently provide the Parallels products to customers. Additionally, this track emphasised how to best capitalize on the growing SMB cloud market.
Panel: Building a secure cloud for customers – demystified
Alex Danyluk, Sr. Director SaaS & ISV Alliances, Parallels (moderator)
Panelists:
- • Rick Norman, Director of Professional Services, CoalFire
- • Sean Leach, Vice President, Strategy and Technology, Verisign
- • Brett Matesen, Director of Business Development, Kaspersky
- • Dreas van Donselaar, CTO, SpamExperts
The cloud promise is that all data, applications, and services are accessible from any device over the internet, but this has tremendous security implications at every layer from the network to the servers to the systems and end-point devices. Listen to a panel of experts discuss the trends in keeping the cloud secure, what matters to customers, and what security issues need to be top of mind for you in 2012.
Customer Support: Parallels lessons
Kellie Green, VP, Global Support, Parallels
Support can be a key differentiator in a service provider business. Parallels has made major strides in enhancing its Support capabilities in the last year and this session will provide you with our learnings. Pick up new ideas about optimizing your support experience and hear more about the changes planned in Parallels Support this year.
You can download a PDF copy of this presentation here.
Panel: Best practices for growing a hosting business – being on the right side of the growth curve
Liam Eagle, Editor in Chief, Web Host Industry Review (moderator)
Panelists:
- • Steven Canale, Vice President of Sales, SoftLayer Technologies
- • Joy Nemitz, CMO, Apptix
- • Roy Joseph, President, UNITY Mobile
- • Craig Ball, Director of Sales, Infratel
- • Jon McCarrick, Sr. Product Marketing Manager, Parallels Automation, Parallels
- • Igor Seletskiy, Founder and CEO, CloudLinux
While the hosting industry is experiencing double digit year-over-year growth, leaders in this sector are growing much faster than the industry average. This panel of experts will talk about what is working (and not working) and why.
You’re thinking mobile, but you might not be thinking big enough
Elliot Noss, President and CEO, Tucows
Thinking about how to capitalize on the remarkable growth of mobile this year? Make sure you are thinking big enough. That might require a shift in how you define yourself, from a product focus to a relationship focus. You will likely find that your relationships are your real advantage and that your customers will buy much bigger products from you than you realize.
You can download a PDF copy of this presentation here.
Grow your business: Parallels partner resources
Scott Fallon, Sr. Director, Partner Marketing, Parallels
Leverage the resources Parallels offers to support your operational, marketing and sales efforts. We’ll talk about new and enhanced benefits offered through the Parallels Partner Program, technical support resources, working with Parallels Sales and more. And we’ll take your feedback on what partner benefits and tools you’d like to see added in the coming year.
You can download a PDF copy of this presentation here.