An image from a past year's version of the Parallels SMB Cloud Insights report
At the Parallels Summit 2013 this week in Las Vegas, hosting and cloud platform software company Parallels released the results of the latest in its SMB Cloud Insights reports, outlining the demands and buying behavior of small and medium sized businesses, which it calls the fastest growing segment of the cloud services market.
Published this year for the third time, the SMB Cloud Insights report says SMBs continue to be the fastest growing market for cloud services, projecting compounded annual growth of 28 percent and a market that will reach $95 billion by 2015. The report calls the SMB market “the optimal target market for service providers of all sizes.”
Previewed in print this week for attendees of the Parallels Summit in Las Vegas, the reports will be available for download from the company’s website following the event, says Parallels.
While the “SMB” distinction is pretty universally understood, companies making projections around “cloud services” tend to have to come up with a definition for that. Parallels defines “cloud services” pretty broadly, describing four buckets and including a lot of services that pre-date the popularization of the term “cloud”: infrastructure as a service; web presence and web applications (which includes traditional web hosting); hosted communications and collaboration (which includes hosted email); and business applications (which generally refers to software delivered as a service).
The SMB Cloud Insights research is an ongoing project at Parallels that tracks SMBs globally, and breaks out reports on specific geographies as the year goes on. The results released Tuesday included market-specific data for the US and Central and South America. In 2012, says the data released Tuesday, the cloud services market grew to $45 billion with the entry of 6 million new SMBs to the cloud market. The US currently makes up the bulk of that market, with $18.9 billion in 2012. The report projects the US market will grow at 19 percent CAGR, slower than the worldwide 28 percent rate. Growth in the US was driven largely by SaaS adoption, says Parallels. The report projects that the smaller Brazilian market will grow at 33 percent year over year for the next three years, reaching $2.6 billion by the end of 2015. Mexico grew by 30 percent in 2012 and is expected to grow at 45 percent over the next three years.
While the market projections imply certain opportunities for Parallels’ service provider partners, the company says it has begun to use techniques – including a Kano analysis and a conjoint analysis – to create more prescriptive conclusions that will offer service providers more specific and practical strategic advice for building cloud services solutions and bundles that will suit small businesses. Parallels says it plans to release more detailed results in that vein later this year.
“Parallels SMB Cloud Insights research is core to our commitment to help service providers make both strategic and tactical decisions about the rapidly growing market for SMB cloud services,” says Birger Steen, CEO of Parallels, quoted in the release. “We are pleased with the responses we are receiving from our service provider partners and will continue making a substantial investment in our expertise and knowledge initiatives.”
In the currently-released study, Parallels says the results identify storage as a “strong upsell opportunity for infrastructure-as-a-service providers,” with 50 percent of SMBs indicating they’re willing to pay more for additional storage. It also identifies website building tools as a way for service providers to differentiate their offerings, with 22 percent of US SMBs saying they use such a tool now and 30 percent saying they plan to by 2015.
Storage and website building tools are both examples of components of the Parallels platform. But that’s more a matter of Parallels designing its solutions around what it perceives as the needs of the SMB market than an explicit effort to pitch specific Parallels products in the context of the report.
Talk back: Does the SMB market make up an important part of your customer base? Do you look to research like the Parallels SMB Cloud Insights report to inform your decisions around product development? Does Parallels producing content like this make the company more attractive as a platform partner? Let us know in the comments.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
