Why the $24 Billion SMB Cloud Market Is So Red Hot

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To raise its market share, Microsoft is making an exchange offer to small and medium businesses (SMBs) to give away their hardware in return for a cloud setup. The Economic Times reports a new three-month program exclusively launched for the India market. There, Microsoft is targeting organizations with fewer than 250 personal computers, offering them Azure credit in exchange for their existing hardware. In return, the organization, needs to commit payment to cover over 30-50 percent of the investment they incur migrating to the cloud.

All this because, globally, the 2013 cloud services market has grown to $62 billion, according to eWeek’s Chris Preimesberger. “SMBs are becoming more sophisticated in their use of IT and also demanding best-of-breed solutions,” Parallels CEO Birger Steen told attendees at a recent cloud computing user conference. And in the United States, the SMB cloud market is now $24 billion, driven by unified communications and other online business applications, and is forecast to grow at a 17 percent CAGR through 2017.

So why should an SMB buy into “the cloud”?

The reality is, cloud computing has lowered SMB operating costs, and reduced barriers, giving companies the opportunity to simultaneously increase efficiencies and revenues. A Microsoft blog post reads, “Technology is no longer a barrier to start-ups and other small enterprises – in the cloud age it has become a facilitator of success.” Cloud-enabled small businesses enjoy lower barriers to getting product or service to market.

Relying on cloud solutions allies users with a strategy that is becoming an absolute imperative for modern SMBs: platformization. Sanjay Govil, founder of Infinite Computer Solutions, shares how platformization allowed him to grow Infinite from a small enterprise to a multi-national team with Fortune 500 clients. “Infinite used industrialized frameworks to create solution platforms, resulting in significant reductions in work effort and costs,” Govil explains.

Upgrading the structure of your professional services can provide benefits to businesses as well as customers. “Our clients at Infinite recieved a competitive edge: platformization allowed us a faster go-to-market offering and an enhanced ability to respond to market dynamics,” Govil continues. “Being a trusted employer and a trusted service provider is essential to successful entrepreneurship, [and] rethinking your platform can increase competitiveness by providing reliable resources to your clients.”

CloudServicesCisco

Further research by Cisco reveals a deeper understanding of who cloud SMB customers are, and what they buy. According to a recent whitepaper, the most important criteria for SMBs in choosing a provider of cloud services are those that align to potential differentiation with network assets, including reliability, quality, security, and technical competency.

cloud-comic3Five ways the cloud makes SMB life easier

“In many ways, the cloud is tailor-made for companies on the smaller side,” Karah Finan writes in a recent Oxford IT Services blog post, where she identifies five reasons SMBs should be married to cloud computing:

  1. Enterprise-grade data support:  With virtual storage, the days of external hard drives, unsaved files, and forgotten USB drives are a thing of the past.
  2. Cost-effective: The cloud can reduce many of the administrative tasks that don’t directly contribute to profitability, and cost valuable SMB time and budget.
  3. Keeps pace with the future: Cloud computing solutions allow SMBs to use efficient digital business and communication, so they can focus on innovation and growth..
  4. Growth by consolidation: The cloud helps simplify environments by consolidating them, according to The Guardian, giving SMBs much more operational flexibility.
  5. Portability and mobile support: Mobile cloud-based apps make it easier for geographically distributed employees to share files and communicate with the main office.

But remember, guys, it’s not all just “magic.”

Main image credit: dilbert.com

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Andre Bourque (SocialMarketingFella) is Editor Emeritus of Technorati.

He covers emerging trends and news in social, mobile, cloud, and related technologies.

Based in San Francisco, he can be contacted via his social channels and at: andrefbourque@gmail.com

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