By David Dzienciol, Vice President and GM, Parallels Asia Pacific
2013 will be a challenging year for Australian businesses on the back of a slow US economy and Europe still struggling to find its way from political and economic uncertainties. With Australian exports impacted by a strong local currency, businesses must double their efforts to look for ways to enhance business operations, including the use of cost-effective tools to raise revenue and lower operating cost.
It is these gloomy market conditions that will further accelerate adoption of cloud computing, including hosting services, as a proven solution to helping companies expand their market reach, drive deeper customer engagements, and drive costs down.
Parallels SMB Cloud Insights™ for Australia is driving home the imperative to “profit from the cloud.” Our report on the state of cloud computing adoption in Australia shows how the market there has evolved in the past year and highlights the most important opportunities for growth over the next few years.
Despite the continued progress in educating local businesses about the inherent benefits of cloud computing, Australian small and medium businesses (SMBs) continue to trail the rest of the developed world in their use of cloud services, despite the expanding array of services and applications that continue to be rolled out in response to the unique needs of local businesses.
As of summer 2013, Parallels estimates the Australian SMB market at about $1.2B AUD. Demand for cloud-based business applications will outpace all other sectors growing at 63 percent to reach $430M AUD. The second biggest market, IaaS, will show the weakest growth at 16 percent albeit contributing $343M AUD. The other cloud-services sectors: web presence and web applications will contribute $275M AUD, while hosted communication and collaboration (consisting of hosted premium email and hosted PBX) will add $134M AUD.
Australian cloud service-providers must continue to market the transformational business benefits of cloud computing but make it clear that benefits like increased efficiency and flexibility are more important and critical to the long-term prospects of SMBs as is the short-term ‘cost-out’ to be gained the use of cloud-based services.
Respondents to the survey are clearly maturing in their understanding of the technology as they recognize the benefits will far outweigh the growing pains they experience in migrating to the cloud. This strategic view of the cloud’s capability comes from a greater focus being placed on the business and operational process redesign and business model improvements as key enablers.
The survey also highlights the rising confidence in the security of cloud providers. As government and industry regulators mature in their understanding of the impact of cloud computing, SMBs can expect to see inevitable complexities around compliance. They are also approaching the tax structure of cloud deployments more strategically, rather than an afterthought to implementation with many finding that tax planning can make a significant difference in the company’s tax position, positively impacting the business case for cloud.
Many of today’s cloud-service providers were at one point SMBs themselves. This experience should serve them well reminding them about a winning characteristic of SMBs – agility. Those who are able to stay on top of SMBs’ changing cloud needs and reach these SMBs with the right mix of services and applications will grow and profit in the years to come.