In the first breakout afternoon session in the business track at Parallels Summit 2013 on Tuesday, Parallels senior manager of marketing operations and insights Emily Kruger gave an overview of SMB cloud adoption trends, and what the trends mean for web hosts.
The SMB Cloud Insight 2012 report, released on Monday, digs into why SMBs buy cloud services, and offers perspective for service providers on how to attractively bundle cloud offerings.
Parallels breaks down SMBs into three different segments in terms of size: micro is under 10 employees, small is 10-49, and a medium size business has between 50 and 250 employees. The categories are further broken down by IT audience (no IT staff, IT consultants, dedicated IT staff) and opportunity (cloud converter, cloud leaper or cloud expander). Kruger says size is the most important predictor of consumer behavior.
In 2012, six million SMBs entered the cloud for the first time, and most did so through business app adoption. According to Kruger, business apps showed strong growth in mature markets, while web presence and web applications are the largest opportunity in developing markets.
Mature markets are starting to slow down in adopting traditional hosted services like web hosting, Kruger says. Still, half of all servers used by US SMBs are now hosted, a trend that Kruger says is driven by the micro SMB segment.
Interestingly, the search term ‘free web hosting’ was surpassed this year by the search term ‘free website builders.’ This shows that small business are searching for websites, not web hosting. It is certainly something for web hosts marketing to small businesses to keep in mind.
Freemium is a strong model for selling web apps, and 75 percent of SMBs say that security is the biggest reason to upgrade to paid apps. Half of SMBs are trying out web applications for free before buying it. Three quarters of SMBs bought their current web apps bundled with their website at check out, which Kruger says emphasizes the importance of offering a range of bundles.
Parallels research shows that SMBs are looking for bundles for an integrated experience, and 30 percent of global SMBs would like to purchase cloud services in bundles.
Collaboration, file sharing and online backup and storage are popular web apps for SMBs, according to Parallels. In November, Parallels released its UK SMB Cloud Insights report which found that the cloud opportunity for service providers lies in customers “expanding their current level of use” by adding new services or applications to their existing cloud services.
Finally, Kruger introduced Kano analysis, a quality measurement tool on customer requirements, customer satisfaction and segment. It will add further depth to SMB Cloud Insights, identify bundling opportunities, and advise a cloud marketing strategy for service providers.
The Kano analysis shows that for IaaS, storage has a good upsell potential at the right price, over 50 percent of SMBs said they were willing to pay more for increased storage. High performance, OS choice, and control panel can be added to bundles to “sweeten the offering”, according to Kruger.
For web hosting, SMBs must have control panel, backup, domain name and security, and a strong analytics offering has a strong upsell potential. Blogging tools, mobile optimization, social media integrations, site building tools and ecommerce are offerings to build buzz and differentiate from competition.
Talk back: How have you successfully bundled your cloud services to ensure your SMB customers needs are met? Do you notice any other trends in terms of SMB consumer behavior when it comes to cloud services? Let us know in a comment.