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Microsoft Report Explores How Web Hosts Can Profit from SMB Cloud Trends

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Microsoft released its global “SMB Cloud Adoption Study 2011″ report last month which explores SMB attitudes toward the adoption of cloud services and what opportunities that offers hosting companies.

The report appears to be closely related to another Microsoft study, released the same week, which predicted there will be a significant increase in paid cloud services over the next five years among SMBs.

Earlier this year, Parallels released its own report on SMB cloud trends titled SMB Cloud Insight for the United States, 2012 report.

These findings demonstrate that SMBs consume software in different ways, signaling a huge opportunity for web hosting companies to add new services targeting the SMB market.

Designed and conducted in conjunction with Edge Strategies, the survey questioned 3,258 SMBs that employ up to 250 employees across 16 countries worldwide to gauge their feelings and attitude towards cloud computing.

The study indicates that in most countries, cloud service adoption is not limited to SMBs that see themselves as fast growers. The  research also showed little difference in adoption rates between SMBs that expect to grow in the next three years (42 percent) and those solely focused on profitability (40 percent).

Thirty-nine percent of SMBs expect to be paying for one or more cloud services within three years, an increase of 34 percent from the current 29 percent. Additionally, the number of cloud services SMBs pay for will nearly double in most countries over the next three years.

The report also demonstrates an increasing opportunity for hosting service providers to profit in the cloud from offering services such as collaboration, data storage and backup, or business-class email.

Some key findings include those SMBs paying for cloud services will be using 3.3 services, up from fewer than two services today, respondents said that past experience with support is a key driver on selecting a service provide, 82 percent of SMBs say buying cloud services from a provider with local presence is critical or important, and SMBs also said that the larger the business, the more likely it is to pay for cloud services.

Within the next three years, 43 percent of workloads will become paid cloud services, but 28 percent will remain on-premises within three years, and 29 percent will be free or bundled with other services.

“Cloud adoption will be gradual, and SMBs will continue to operate in a hybrid model with an increasing blend between off-premises and traditional on-premises infrastructure, for the foreseeable future,” said Marco Limena, vice president of business channels for Worldwide Communications Sector at Microsoft. “As cloud computing becomes more ubiquitous and SMBs’ existing IT becomes outdated, adoption will grow rapidly. Hosting service providers should consider the appropriate sales, delivery and support models to target larger SMB customers that are more likely to pay for cloud services.”

The 2011 study indicates that in most countries, cloud service adoption is not limited to SMBs that see themselves as fast growers. The study showed little difference in adoption rates between SMBs that expect to grow in the next three years (42 percent) and those solely focused on profitability (40 percent).

Growth companies want a scalable environment that can meet their expanding needs, with an affordable, pay-as-you-go pricing model that eliminates the need for over-investment in IT.

SMBs that want to maintain their size, but want to become more profitable are seeking cost-effective, efficient solutions that match their needs for predictability and low overhead cost, which makes a strong case for cloud services to serve these needs.

The study also found that SMBs that are adopting both SaaS and IaaS services are larger, more growth-oriented and more interested in additional services, such as unified communications and remote desktop support.

This provides an opportunity for hosting service providers to offer both SaaS and IaaS in order to acquire and retain high-value customers and maximize revenue per customer.

Talk Back: Are you currently offering cloud services? If not, has this research convinced you that there are many opportunities in selling cloud services? Let us know in the comments.

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