Global SMB Market: Hosted Infrastructure

 

Part 2 of a 5-part series detailing Parallels SMB Cloud Insights™ research. View part 1 here

 

In part one of our Global SMB Market insights™ series we defined some of the key global SMB market categories and segments. Now, we’d like to look closely at how SMBs around the world are adopting and using each major cloud service, beginning with hosted infrastructure.

 

Hosted infrastructure, also known as infrastructure-as-a-service, includes dedicated servers, virtual private servers (VPS), managed hosting, and utility (or elastic) computing.  As we mentioned in the previous post, whether or not an SMB uses hosted infrastructure depends a lot on where it’s located and the level of economic development and cloud services maturity there. Take a look at Table 1 to get a better idea of what we mean:

 

Developed with Mature Cloud Services


Hosted infrastructure is relatively common in these markets, with about 20% of SMBs already using hosted servers. Encouraging the micro and small SMBs (aka Cloud Converters) that are using in-house servers to switch to hosted servers can lead to even further growth. 

 

Hosted servers don’t require maintenance or technical expertise, which is a huge advantage for SMBs who don’t generally have in-house IT staff, but price is a top factor keeping them from making the leap. Service providers should consider offering lower-priced options to these SMBs, but also on educating them about the true cost of owning an in-house server. Pushing VPS offerings is likely the best route to take with these SMBs, as they deliver all the security and isolation benefits of a dedicated server at a fraction of the cost. 

 

Developed with Maturing Cloud Services


Fewer than 15% of SMBs in these countries use hosted services, so the hosted infrastructure market for this group is definitely still growing. Since many of them are currently using in-house servers to about the same degree as they do hosted services, they make a good target for service providers looking to encourage conversion. 

 

We also identified a significant opportunity among companies that currently don’t use servers at all—the Cloud Leapers. The best targets among these Cloud Leapers are the micro SMBs, approximately 65-70% of which have no servers. 

 

Developing with Emerging Cloud Services


In developing countries less than 10% of SMBs use hosted infrastructure and 75% have no servers at all, which is unsurprising given their limited Internet access. The market should grow as Internet usage does though, with much of the growth driven by Cloud Leapers moving directly to hosted servers. Willingness to adopt hosted infrastructure is high, so as infrastructure improves and bandwidth and connectivity issues fade, usage is poised to increase dramatically.

 

Any questions or thoughts to share on hosted infrastructure in the global SMB market? Check in soon for the next blog segment on our SMB Global Market insights: Web Presence!

 

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.

 

Register now!