Accounting for more than 99 percent of all local enterprises, Japanese small and medium businesses (SMBs) account for a substantial share of Japan’s economic output. Traditionally, Japanese SMBs largely operated as suppliers for large enterprises as part of the keiretsu system of integrated supply chain groups. With some exceptions, SMBs tend to focus on the domestic market and export indirectly via the value chains of large multinational enterprises and general trading houses.
by John McMillan, Director, Partner Business Consulting, Parallels
SMBs make up 99% of businesses worldwide, and they are adopting cloud services. According to Parallels SMB Cloud Insights™ research, the most commonly adopted cloud services include: web hosting, security add-ons, and a wide range of SMB-focused SaaS applications. Parallels research predicts that, on average, SMBs will have seven cloud services by end of 2016, growing from four services consumed today.
One service that will enjoy broad SMB adoption is cloud PBX. Cloud PBX services are a classic example of the cloud’s transformational impact on the SMB segment, allowing SMBs to have access to an enterprise-class communications experience without the overhead cost and maintenance of a traditional in-house PBX system. Cloud PBX typically includes mobile integrations, an automated attendant, and web conferencing – all packaged and priced for SMBs.
In the US, up to 50% of SMBs who have an existing in-house PBX system today and up to 30% who have regular land-lines are interested in switching to cloud PBX services. It is easy to see why – cloud PBX services are a good solution for the following key SMB needs:
1) Projecting a professional, enterprise-like image by providing a single phone number for the business, extensions for employees, and simple call routing.
2) Increasing customer intimacy by quickly connecting clients to the right resource using an automated attendant.
3) Increasing worker productivity by extending cloud PBX features to mobile devices, providing anytime, anywhere communications with customers, partners and employees.
In conclusion, cloud PBX services are poised to gain broad adoption in the SMB segment, as more cloud service providers add them to their SaaS portfolios, and SMBs widely recognize the impact that cloud PBX can have on their business and customer experience.
by Emily Kruger, Sr Manager, Market Research, Parallels
Parallels has just finished our 2013 SMB Cloud Insights™ research and have heard from over 6,000 small and medium businesses from 15 countries around the world about their use of cloud services. Here are five of the most interesting trends we are seeing in the SMB cloud market worldwide:
1. Cloud storage is a hot topic in IaaS for SMBs. The majority of small businesses are willing to pay 25% to 50% more for their VPS if it comes with extra storage.
2. When SMBs buy their web applications varies dramatically by SMB size. Over 40% of micro SMB (< 10 employees) bought their web apps with their web hosting and never returned to buy anything else. Medium SMBs (50 employees +) are much more likely to return to their web hoster for additional purchases.
3. Hosted business email took off this past year and was the fastest growing cloud service category in many countries. Perceived security of business class email and better integration with mobile devices are the leading reasons to switch from free to paid email accounts.
4. Hosted PBX is another cloud service that is growing quickly. Automated attendant and call control are the most popular features for SMBs – and ones not omit from a hosted PBX offering.
5. The most popular SaaS applications remain file sharing, instant collaboration and online backup & storage…but there is growing interest in support / help desk apps, online conferencing (phone and web) and online accounting.
Find out much more about the SMB cloud market in Parallels SMB Cloud Insights™ reports. Look for the 2013 research for Europe and Asia-Pacific to be released this Fall at WHD.local events or download all the research at www.parallels.com/smbreport.
by Elliot Curtis, Senior Director, Mass Market Hosting Sector, Parallels
The recent attack by the “Syrian Electronic Army” on media outlets including the New York Times and Huffington Post websites are a renewed reminder of the challenges around internet security. While SMB websites are an unlikely target for organized hacking or distributed-denial-of-service (DDOS) attacks, these highly visible and widely reported security issues raise a wareness and concerns for everyone. Most SMBs are exposed to risks from malicious viruses and hacks, as well as, problems caused by bot-nets or even simple content control.
Awareness of internet security continues to rise, but high-profile incidents like this presents a specific opportunity for Web Hosters and Service Providers to have a discussion with their customers about solutions to protect their Web presence and cloud applications. Parallels products and ecosystem of partners enables a variety of security solutions including; hacking protection, anti-virus, anti-spam, email security, DDOS prevention, backup & disaster recovery. Our SMB Cloud InsightsTM research shows that security solutions are the most popular and the fastest growing add-on to both Web Hosting and VPS core services, so every Web Hoster and Service Provider should have a security bundle as part of both their core offering and their up-sell strategy.
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.
Do you want customers to buy online or offline? Parallels experience working with service providers shows a high percentage of small business hosting plan purchases are made on the phone talking to a living, breathing salesperson. Depending on the type of service provider, as few as 10% of direct channel sales by small businesses are via online purchase with up to 70% being made “offline” – via inbound phone calls – and the remainder being outbound campaign sales to existing customers. To be sure, these “offline” purchases are driven by online content. SMBs call after reviewing the service provider website. Research done through our SMB Cloud Insights report series reveals that for SaaS applications, for example, an SMB’s own online research is their number one source of information with more than 60% of SMBs citing it.
If that’s the case, why are so few hosting plan purchases by SMBs made online? Typically it is because of services discoverability issues on the website and the natural tendency for a generally non-technical buyer to need reassurance before pulling the trigger.
But if your goal is to increase the number of purchases your SMB customers make online because you want to spend less on your call center staffing, what can you do? One area to investigate is your buying and checkout experience. The Baymard Institute does an unusual annual study related to customer checkout experience. They take users and watch them go through the checkout processes of 15 different popular e-commerce sites. What they discover from this is general principles around usability-related issues due to poor checkout design and how that increases customer abandon rates.
Their findings are massive but touching on a few high level items might help get you pointed in the right direction.
+ The top reasons for checkout abandonment:
– Extra cost (shipping, tax, fees) 33%
– Forced account creation 23%
– Credit card trust 18%
– Complicated checkout process 18%
You may say that the top two don’t apply to service providers. But the study found it wasn’t so much the charging of extra fees, for example, as it was the confusing way it was presented or explained.
+ A disruptive problem with copywriting: Try to avoid technical jargon – think about who your audience is. That’s an obvious one, right? Here’s one that isn’t so obvious on the copywriting front and it is even more harmful: Not having descriptions for form field labels. In many cases what may seem obvious to you (“Address line 2”) will make no sense to some of your potential customers and in other cases what is obvious makes buyers balk (“Email address”) because they need an explanation of why you need that information (“To communicate with you – we never sell your email address”).
+ A layout problem: Unclear error indications. This is the most harmful issue related to layout. If buyers can’t find the error on the form or don’t understand it there is a very high probability they will abandon the checkout process. This is especially true if they can’t find the error and submit the form again only to have it rejected yet again. In those situations they think the problem is a bug on your site. Ouch.
So while you may always have a high rate of “offline” purchases just because it’s the nature of the beast with this type of customer and product, you might want to take a look at your online checkout experience to see if it’s as buyer-friendly as you need it to be.
Scott Fallon, Senior Director, Partner Marketing
I was recently reviewing the more than 80 case studies and video case studies we have published. It reminded me of a few trends we are seeing.
Time to deployment is clearly important but not a guarantee of success. This industry is at a stage where we know how to launch services and launch them quickly. What is less common is how to grow the customer base. I took a look at some of our more successful partners to see if there was a pattern…there is.
They know their customer. They have an anchor service that gets the customer what they need. They also have the appropriate set of add-on services to go beyond and delight the customer. Here are several examples I pulled from a couple case studies:
“We have implemented almost every Parallels Automation module there is. That proves our confidence in the solution. In the two and a half years since we launched our Parallels Automation platform, we have achieved year-on-year growth of over 200% in cloud services. We expect to exceed that in 2013.”
— Ely Cohen, CTO, Triple C
“In the last 18 months, our business with Limestone Networks has grown by 300%. We serve more customers, and have a bigger server requirement from Limestone. It is a win-win thing.”
— Sham Kamboj, Director of Services, Bagful Solutions
“The ability to evolve Hosted365 quickly, and its appeal to both resellers and other service providers around the world, is driving our growth as a company. And it’s all being made possible by Parallels Automation and the Application Packaging Standard.”
— Marco Houwen, LuxCloud CEO and Founder
Do you have a growth story you want to share?
John Zanni, Vice President, SP Marketing and Alliances, Parallels
Starting a hosting or cloud business is easy. Whether you are a small hoster or web designer, infrastructure provider, managed service provider or telco, it just takes buying the right software to automate those services. Parallels has a whole portfolio for the small to the large business. That does not mean you will be successful.
Service providers fail because they think that putting a catalog up is sufficient. It is not. The most successful providers have an end to end marketing and sales enablement plan to go with the offer. They take into account up-sell and cross-sell scenarios. They have a strong feedback loop so that they can tune their offers.
We, at Parallels, believe that it is part of our responsibility to give you the tools you need to be successful. That is why we created PartnerNet. This is the location for our partners to get all the best practices and information needed to be successful.
We will be bringing a taste of PartnerNet to you at Microsoft WPC. Come meet with Birger Steen, our CEO, Mauro Meanti, SVP and GM SP Business and of course, yours truly while we present “Succeeding in the SMB Cloud with Microsoft and Parallels” on Monday, July 8 at 4:30 PM in the Hilton Americas. After that session, you will know what it takes to sell those Microsoft cloud services and more. You can also come to the booth and drop off your business card for a chance to win a Surface!
See you there!
John Zanni, Vice President SP Marketing and Alliances
by John Zanni, Vice President of Service Provider Marketing and Alliances, Parallels
I have been visiting India for more than 10 years and I have seen an amazing transformation in the last years. Today, there are 36 million micro, small and medium enterprises in India. Many face seeming insurmountable challenges of sub-optimal scale of operation, technological obsolescence, supply chain inefficiencies, increasing domestic and global competition, fund shortages, and turbulent and uncertain market scenario.
That’s the bad news. The good news is that today’s new generation of entrepreneurs in India is young, bold and willing to try new ideas. They see an opportunity and take the plunge. They know that as small businesses they have the benefit of being agile and nimble against much larger organizations. They are therefore able to capitalize more quickly on emerging opportunities. They are also more willing to take a few hits at the beginning of the business to win big later.
They understand that being small means they don’t have the luxury of large financial backing to support the various activities of the business. This means they need to be smarter at deciding how best to compete and grow.
One smart proven approach is the use of web presence to create brand awareness and generate business opportunities. They are turning to the cloud to reach out to potential customers locally, nationally and internationally. Creativity and technology are making it possible for these small upstarts to compete against much larger businesses.
The result is phenomenal growth in adoption of ICT particularly those delivered via cloud computing. In the past, the biggest barrier to adoption to cloud services in India was bandwidth but that’s changing very rapidly. Bandwidth is significantly better now, and reliability issues are slowly going away. Cloud adoption will explode and we see the opportunity for cloud services accelerating.
The latest Parallels SMB Cloud Insights™ for India estimates that the Indian SMB cloud services opportunity in 2013 is worth ₹16.9 billion (US$339 million), and expects it to grow 35 percent year-over-year for the next three years, reaching ₹42 billion (US$839 million) by the beginning of 2016. This growth will be driven by new adopters of cloud services and current users adding more applications and functionality to their existing cloud services. They are eager to get online and consume services that will help them reach their customer base, increase their productivity, and improve their IT capabilities and they are willing to PAY for it.
The opportunity is huge. We are seeing it in our business at Parallels.
Service providers who are able to stay on top of this growing demand by SMBs and engage them with the right mix of services and applications will grow and profit in the years to come.
Parallels Plesk Panel 11 has gained strong adoption since its launch 12 months ago. Superior user experience, best in class performance further enhanced with NGINX integration and cloud friendly cloning features make it the preferred choice for service providers looking for a professional grade cloud panel solution. Parallels Plesk Panel 11 is the fastest growing panel product in the company’s history.
Recently Verio, a subsidiary of NTT Communications and a leading provider of innovative online business solutions to SMBs worldwide, became a Parallels Platinum partner. As part of the partnership, Verio gained access to the broad portfolio of Parallels products, research, training and support which allowed the company to deliver greater value to partners and customers.
Verio took advantage of the cloud features of Parallels Plesk Panel 11 and added Parallels Plesk Panel to its cloud offering.
Yesterday Verio announced an impressive 102 percent growth quarter over quarter for Verio Cloud. This service takes full advantage of both the exceptional user experience of the Parallels Plesk Panel as well its cloud features.
Parallels Plesk Panel 11 cloud support includes a panel cloning features that allows Verio to copy the same Parallels Plesk Panel instance to different virtual machines without compromising panel operability due to changing IP addresses and other unique entities. To support Virtual Private Server (VPS) cloning, Parallels Plesk Panel 11 includes tools for preparing images, automatic reconfiguration to new environments (including KVM, XEN, VMware, Hyper-V), and optional automated delivery of a license into a new environment.
The upcoming release of Parallels Plesk Panel 11.5 is now available in feature complete preview and will further improve customer experience. Parallels Plesk Panel 11.5 will be more secure, easier to adopt, easier to upsell, and will provide full control and industry-best usability for website owners, helping service providers like Verio to deliver new value to the cloud users.