Part 3 of a 5-part series detailing Parallels SMB Cloud Insights research
In this Global SMB Market series we’ve been discussing our Parallels SMB Cloud Insights to help service providers target the rapidly-growing cloud services market for small and medium businesses. In our last post we talked about global growth opportunities in hosted infrastructure. This week we’ll discuss the opportunities for web presence with these companies.
As with hosted infrastructure, the opportunities in the web presence sector depend on the market segment to which a country belongs. However, compared to hosted infrastructure, there is already a strong penetration rate for all three market segments identified in our report (see Table 2, below), which can mean an easier job for service providers.
A Developed Web Presence
Developed countries with mature cloud services already have a well-developed web presence, with about 50% of companies having a service provider and 70% having a website. But even with these web-savvy companies, or Cloud Expanders, there is opportunity.
First, self-hosting a website is an expensive and technically complex solution for SMBs, yet the 15 to 20% of micro and small companies in this segment are currently doing just that. Service providers can educate these SMBs about the advantages of third-party web hosting and encourage them to switch to a hosted service. Second, service providers can offer tools such as website design, social media, and e-commerce capabilities, all elements that can be overwhelming and otherwise expensive for smaller businesses.
Maturing into Cloud Services
For companies in developed countries with maturing cloud services the opportunities are a little different. Our research found that only 50% of the SMBs in this group have a website, compared to 70% in the previous segment. But even with this dramatic drop in penetration, there is an opportunity to switch companies that are currently self-hosting – so-called Cloud Converters – to more affordable, easier to manage third-party web hosting as well as upsell services.
In addition, the 50% of SMBs in this segment that don’t currently have a website actually show a high willingness to adopt a hosted web presence, with over 30% of them considering adding third-party web hosting plans in the next three years, so now is the perfect time for service providers to get in on the ground floor.
Emerging into the Cloud
The web presence market among SMBs in developing countries with emerging cloud services has ample room for growth. Currently, less than 40% of SMBs in these countries have a company website, making these Cloud Leapers the primary opportunity in this market. Not only are they the largest group with no website, but they also show a strong willingness to adopt: about 35% of them plan to add a third-party web hosting plan in the upcoming three years.
Among all SMBs, whether they have a website or not, social media pages are the top forms of web presence. Although current penetration rates are still low, service providers should keep social media integration tools in mind, especially as Internet usage in all segments grows and leads to higher penetration rates.
In the next installment we’ll discuss options for Hosted Communication and Collaboration for SMBs.
Want to know more? Parallels has updated and enriched its wildly popular research on SMBs and their move to the cloud. We’ll present our findings in a webinar on May 30th. In this webinar, we will share the results of our latest US SMB research, including how SMBs are adopting cloud services, how much is being spent on each type of service, and how service providers should market to SMBs to benefit from the upcoming growth in this booming market.