Part 4 of a 5-part series detailing Parallels SMB Cloud Insights research

Welcome to Part 4 of our overview of findings from our Parallels SMB Cloud Insights report. So far in this series, we’ve discussed the different segments of the SMB cloud services market and how they relate to hosted infrastructure and web presence. 

In the area of hosted communication and collaboration, the opportunities for hosted email penetration are the same for SMBs working with either mature or maturing cloud service markets in developed countries. Therefore, in this post we’ll look at all developed countries as a single group. We’ll also focus our research on two areas: premium business email, including security, archiving, and mobility features; and hosted PBX.

Worldwide, the SMB market for both these services is small, with less than 10% of SMBs currently paying for premium hosted email and less than 5% using hosted PBX services (see Table 3 below).

Hosted Email

About 50% of SMBs in countries with mature cloud services use hosted email (see Table 3), and less than 10% of those in mature and maturing cloud service environments pay for it (except in the US, where over 15% do). Though this may seem like a challenge, current low usage of paid hosted email actually offers two major growth opportunities for service providers.

The first is in encouraging adoption among micro and small SMBs currently using in-house email servers. Our research found that around 10% of micro SMBs and more than 20% of small SMBs in developed countries use in-house email servers. This is an expensive and complicated solution for small companies, particularly those without dedicated IT staff. And since some 25 to 40% of SMBs with in-house email servers are either definitely planning to or at least considering switching to premium hosted email in the next three years, these SMBs represent a sizable opportunity for service providers.

The second opportunity lies in upselling small and medium SMBs that are currently using free email. Free is hard to compete with, but free only gets business so far. In fact, 20 to 50% of small and medium SMBs using free email are either planning to or considering adding premium hosted email in the next three years. The trick to upselling to these businesses is demonstrating the benefits of hosted email, like its team collaboration aspects and its “pay-per-seat” pricing model.

For the markets with emerging cloud services, less than 20% of SMBs are even using email at all, and only 5% are paying for it. These companies can benefit from the same features as SMBs in developed countries, so the best opportunity here is to upsell small and medium SMBs using free email through a hosting service, ISP, or other free provider. 

Hosted PBX

Hosted PBX is a fairly new service in all geographies, which means the SMB market for this service looks similar in both developed and developing countries. Our research found that, except in the U.S., less than 5% of SMBs in any country have a hosted PBX system (see Table 3). For U.S. companies, it’s still a meager 10%. Nevertheless, we expect other countries to catch up to the U.S. rate quickly.

The easiest targets for service providers looking to step into the hosted PBX market are SMBs that currently use in-house PBX systems (about 10 to 20% of micro SMBs and more than 30% of small SMBs). Selling points include the less complicated, more flexible options hosted PBX offer. 

Service providers will also have to address the three big stumbling blocks to hosted PBX adoption for SMBs: price, security and privacy issues, and technical know-how. We believe the trick to working around this is two-fold: offer small bundles in order to keep prices lower, and actively educate SMBs about security and technical aspects. Hosted and in-house PBX systems have similar technical features and are equally secure, yet many SMBs mistakenly think otherwise. 

SMBs also often indicate that it’s important to them that their service provider has a local presence. It’s crucial for service providers with a local presence push this advantage, by emphasizing their expertise in local language voice offerings, for example. 

In our last series entry, we’ll discuss opportunities in Business Applications, and wrap up the findings in our Parallels SMB Cloud Insights report. 

Part 4 of a 5-part series detailing Parallels SMB Cloud Insights research

Welcome to Part 4 of our overview of findings from our Parallels SMB Cloud Insights report. So far in this series, we’ve discussed the different segments of the SMB cloud services market and how they relate to hosted infrastructure and web presence. 

In the area of hosted communication and collaboration, the opportunities for hosted email penetration are the same for SMBs working with either mature or maturing cloud service markets in developed countries. Therefore, in this post we’ll look at all developed countries as a single group. We’ll also focus our research on two areas: premium business email, including security, archiving, and mobility features; and hosted PBX.

Worldwide, the SMB market for both these services is small, with less than 10% of SMBs currently paying for premium hosted email and less than 5% using hosted PBX services (see Table 3 below).

Hosted Email

About 50% of SMBs in countries with mature cloud services use hosted email (see Table 3), and less than 10% of those in mature and maturing cloud service environments pay for it (except in the US, where over 15% do). Though this may seem like a challenge, current low usage of paid hosted email actually offers two major growth opportunities for service providers.

The first is in encouraging adoption among micro and small SMBs currently using in-house email servers. Our research found that around 10% of micro SMBs and more than 20% of small SMBs in developed countries use in-house email servers. This is an expensive and complicated solution for small companies, particularly those without dedicated IT staff. And since some 25 to 40% of SMBs with in-house email servers are either definitely planning to or at least considering switching to premium hosted email in the next three years, these SMBs represent a sizable opportunity for service providers.

The second opportunity lies in upselling small and medium SMBs that are currently using free email. Free is hard to compete with, but free only gets business so far. In fact, 20 to 50% of small and medium SMBs using free email are either planning to or considering adding premium hosted email in the next three years. The trick to upselling to these businesses is demonstrating the benefits of hosted email, like its team collaboration aspects and its “pay-per-seat” pricing model.

For the markets with emerging cloud services, less than 20% of SMBs are even using email at all, and only 5% are paying for it. These companies can benefit from the same features as SMBs in developed countries, so the best opportunity here is to upsell small and medium SMBs using free email through a hosting service, ISP, or other free provider. 

Hosted PBX

Hosted PBX is a fairly new service in all geographies, which means the SMB market for this service looks similar in both developed and developing countries. Our research found that, except in the U.S., less than 5% of SMBs in any country have a hosted PBX system (see Table 3). For U.S. companies, it’s still a meager 10%. Nevertheless, we expect other countries to catch up to the U.S. rate quickly.

The easiest targets for service providers looking to step into the hosted PBX market are SMBs that currently use in-house PBX systems (about 10 to 20% of micro SMBs and more than 30% of small SMBs). Selling points include the less complicated, more flexible options hosted PBX offer. 

Service providers will also have to address the three big stumbling blocks to hosted PBX adoption for SMBs: price, security and privacy issues, and technical know-how. We believe the trick to working around this is two-fold: offer small bundles in order to keep prices lower, and actively educate SMBs about security and technical aspects. Hosted and in-house PBX systems have similar technical features and are equally secure, yet many SMBs mistakenly think otherwise. 

SMBs also often indicate that it’s important to them that their service provider has a local presence. It’s crucial for service providers with a local presence push this advantage, by emphasizing their expertise in local language voice offerings, for example. 

In our last series entry, we’ll discuss opportunities in Business Applications, and wrap up the findings in our Parallels SMB Cloud Insights report. 

GoGrid, a cloud infrastructure company, on Thursday announced that Brilig relies on hybrid infrastructure in the cloud from GoGrid for its Big Data architecture. A cooperative data marketplace for online display advertising, Brilig offers ad space in more than 7,500 consumer segments. Since turning to GoGrid, Brilig has decreased its infrastructure costs and increased the performance of its Big Data solution.
“Brilig wouldn’t exist without the distributed data architectures associated with Big Data,” says Paul Cimino, the company’s CEO. “Big Data represents a profound change in the usefulness of the huge amounts of data we generate. The cloud is just as important. By running our solution using GoGrid’s hybrid cloud infrastructure, we’re able to process more than 300 million requests per day without tying up our capital in database or server hardware.”

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The specifics of Dell’s major cloud expansion have been revealed, with their infrastructure as a service (IaaS) enterprise cloud to arrive in Europe by August 31.

The platform is currently undergoing a trial in the US and Canada, with Dell Cloud aligning to VMWare’s vCloud Datacenter Service for the platform.

As reported by CloudTech last year, the service will help provide hosted infrastructure and data platforms, alongside managing and securing data, and will be available in both public and hybrid cloud systems.

Dell claims that their public cloud will be completely secure, citing the active monitoring from SecureWorks, data encryption services from TrendMicro and “multiple layers” of security in Dell centres.

The Texas-based company is adding their considerable weight to the IaaS platform after many big companies are trying to influence the expansion.

Oracle was the latest company to announce a public cloud offering just last week.

Ricky …

Any software licensing scheme that counts the number of processors, servers, or virtual instances is fundamentally Cloud-unfriendly. In the pre-Cloud days, servers were expensive and difficult to install and configure, so we operated in the context of scarcity: add a server, pay a lot of money. The Cloud changes this equation to one of abundance: instances are cheap, plentiful, and easy to configure, so nothing we put on a particular instance should cost us very much or have much importance in and of itself.
ZapThink likes nothing better than to poke a stick at a hornets’ nest, and our last ZapFlash did not disappoint. We discussed how private Clouds weakened the enterprise value proposition for Cloud Computing, eliciting consternation far and wide, not from enterprises implementing such Clouds, but from consultants and vendors in the business of building and outfitting them. To which we say: well, duh! Cloud Computing is a paradigm shift precisely because we won’t need to hire pricey consultants or buy a lot of gear to use them!

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SoftLayer, a provider of global, Internet-scale cloud infrastructure, has unveiled its new SoftLayer Private Clouds solution that provisions and configures full private cloud deployments on demand. These scalable, secure and high-performance deployments leverage the company’s automated architecture, worldwide data center locations and private network, and customer-controlled infrastructure management system.
“For some time our customers have used our portfolio of dedicated servers, network resources, and virtualization options to build their own private clouds. Now, with SoftLayer Private Clouds, instead of starting at square one, you begin with a pre-configured cloud ready for whatever you want to do with it,” said Duke Skarda, Chief Technology Officer for SoftLayer. “We’ve built our Private Clouds solution out of our experience creating and managing our own cloud, and our unique capabilities in automating sophisticated deployments. At the push of a button you have a dedicated cloud at your command, with full access and control over every aspect, and the ability to scale infinitely, on demand.”

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Amazon Web Services LLC (AWS), an Amazon.com Company (NASDAQ: AMZN), on Thursday announced expanded free support for all AWS customers, reduced pricing on premium support plans and multiple new features to help customers better interact with and improve their use of AWS, including chat functionality and proactive alerts when opportunities exist to save money, improve system performance, or close security gaps. AWS Support is a fast-response support channel that is staffed around the clock with experienced and technical support engineers. For more information on the pricing and the new options, visit http://aws.amazon.com/premiumsupport/.
As part of Thursday’s announcement of the new support features, the broad selection of support offerings offered by AWS have been renamed to better align with the customer’s need or use case. All plans include support for an unlimited number of cases, are available worldwide, have no long term contracts, and can be cancelled at any time.

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