Small and medium-sized enterprises represent well over 90 percent of all businesses in Asia, and businesses in Indonesia and India seem to have a particularly healthy appetite for cloud services. On Wednesday, the Asia Cloud Computing Association released a report that is among the first to publish statistics on 14 Asia-Pacific (APAC) markets offering cloud providers important insights to grow business in these countries.
“[T]hese statistics all appear to under represent and underplay both the opportunity and the impact of cloud computing services on the SME landscape across Asia,” the report said. It argues that cloud technology can level the playing field for SMEs in developing economies because it allows business to use the latest technology on a pay-per-use basis making cloud services affordable and scalable as the business grows.
“Cloud computing promises to be the great leveller, bringing enterprise grade tools and capacity within reach of SMEs,” Lim May-Ann, Executive Director of the ACCA said in a statement. “In addition, it will bring next generation infrastructure benefits within reach of emerging economies without the need for crippling capital expenditure.”
Successful providers can draw on three areas of focus. Education and awareness, implementation, and selling other services. There have been many conversations in the industry about working with SMEs to add services and scale as they grow. The best providers give the customer the ability to add on as they go and make the process easy to understand from a cost and technical basis.
Education in developing countries may be even more important since the study found that in Indonesia for example, only three percent of SMEs knew the basics of cloud computing. In more developed countries such as Japan only one-third of business owners understood cloud. Educating customers on the benefits and scalability of cloud may provide the ability to generate new revenue in these markets.
Indonesia and China have the most SMEs but may not be the best place for providers to focus on growth. Cloud services may still be too expensive for them and the infrastructure is not yet stable enough to support reliable cloud services.
Providers may find greater opportunity by focusing on SMEs in more developed countries such as Australia, Hong Kong and Japan where over half of the GDP is generated by them. SMEs in these areas may be better able to afford cloud services. “Thus, the current sales pitch, encouraging the adoption of cloud computing so as to reduce IT costs may well be ignored in much of the developing world,” said the report. “Instead, focusing the capabilities of software and making cloud computing more user-friendly may have stronger results.”
The report discovered that the drivers for cloud adoption and sectors that may be best suited to purchase new services were different in each country. Expansion into new geographies should be examined by cloud providers with an eye towards fit to the industries most ready to adopt and the reasons businesses there are ready for cloud. “While factors like the absolute and economic size of the market, and the contribution that the SME base makes to GDP are important, our research shows that policy and market approach are just as vital,” said John Galligan, Chairman of the Cloud Segments Working Group, and also Regional Director Government Relations, Asia Pacific for Microsoft.
With broadband in these countries being accessed by mobile the report suggest that developing services for mobile first may be a good move. This is consistent with other reports showing mobile payments on the rise in China. Mobile payments overall are growing at 60 percent, indicating an increased used of mobile devices worldwide. By 2020, broadband subscriptions will reach 8.4 billion with many of these coming from China and other APAC regions.