Hosted Communication and Collaboration is the fastest-growing cloud service in Europe and North Africa

By, John Zanni, Vice President Service Provider Marketing and Alliances, Parallels

Parallels just recently released the first research on cloud adoption at small and medium businesses (SMBs) in Europe and Northern Africa (EUNA). We saw a diverse mix of cloud service opportunities in the SMB marketplace, ranging from replacing companies’ in-house IT solutions, to acquiring new adopters who currently have no in-house solution, to upselling current customers to more advanced services.


For the major hosted services—hosted infrastructure, web presence, hosted communication and collaboration, and business applications— Parallels estimates the 2012 EUNA SMB to grow from $12.6B USD in 2012 to $29.4B USD in 2015, representing a year-over-year growth rate of 33%.


Use of hosted communication and collaboration services is still small across all EUNA countries, but it’s the fastest-growing of all cloud-service categories.


Although more than 50% of SMBs in developed countries with mature cloud services are using hosted email, the vast majority are using free options: only 10% to 20% of them are using hosted premium email. In the remaining EUNA countries, fewer than 50% of SMBs are using hosted email of any sort—and, again, only 10% to 20% of them are paying for the premium option. Nonetheless, there is ample opportunity in this market, with our research showing that up to 50% of those currently not using hosted premium email are considering adding the service in the near future.

We suggest two main strategies for expanding the current low usage of hosted premium email:

Encourage adoption among micro and small SMBs using in-house email servers.

Our research found that around 10% to 15% of micro SMBs and more than 20% of small SMBs in developed EUNA countries are using in-house email servers. This is an expensive and complicated solution for small companies, particularly those without dedicated IT staff. And since, depending on the specific country, anywhere from 20% to 50% of SMBs with in-house email servers are either definitely planning to switch to hosted premium email over the next three years or are considering doing so, these SMBs represent a sizable opportunity.


Upsell small and medium SMBs currently using free email

Another opportunity lies in upselling the cloud expanders currently using free email, whether from a hosting service provider, an ISP, or a provider like Google. (We consider SMBs that upgrade from free hosted email to hosted premium email to be cloud expanders, even though their current use of the cloud service is free.) Upselling these SMBs to hosted premium email should be easy—particularly for small and medium SMBs—since they can benefit both from this service’s team collaboration aspects and from a “pay-per-seat” pricing model. These SMBs represent a significant opportunity, as our research shows that over 30% of small and medium SMBs currently using free hosted email are either planning to add hosted premium email in the next three years or considering doing so.


There are already more than a dozen hosting companies from all over the world such as LuxCloud (, Blacknight Solutions (, Irish Domains Ltd. (, Ovaleye (, PacHosting (, ReadySpace ( and Triple Cloud ( that are using Parallels’ products to provide their customers with Open-Xchange´s email and collaboration software as hosted service.

Contact a Parallels or Open-Xchange representative today to understand how this trend can improve your business right now!