— Earlier this month at its big user conference and summit, the Parallels Summit 2012, web hosting software provider Parallels released the results of a study of the hosting market: its Parallels SMB Cloud Insight for the United States, 2012 report.
Parallels invested $2 million on initial research, interviewing 5,200 SMBs in 13 countries, and producing a series of reports that focused on specific geographies, of which the US was only one.
At 28 pages, the report is a lot to digest. But we dug through it to pull some of the highlights, and give you a sense of some of the key conclusions the company drew from its work.
Big Opportunity to Sell Cloud Services to SMBs
– The entire market across all categories of cloud services for 2011 was $15.1 billion
– US market projected to grow by $9.2 billion over the next three years, reaching $24.3 billion in 2014
– SMBs plan to double their purchase of cloud applications over the next three years, which brings a significant opportunity for service providers to sell cloud services to SMB customers.
– Service providers should get familiar with each of these SMB groups and target them with the services they need in order to profit from this market growth
Three Major SMB Groups for Service Providers
Cloud Converters – The have in-house solutions but are either moving or planning to move to hosted services
Cloud Leapers – They are not using an in-house solution and will move straight to the cloud
Cloud Expanders – Use some cloud services but represent an up-sell opportunity to new and expanded cloud services
Know Who the IT Decision Makers Are
– Service providers’ marketing will need to target the right IT decision maker, whether it’s an IT consultant or dedicated IT staff member
Target Each Opportunity with the Right Service
– offer low cost options-VPS and cloud infrastructure
– provide top-notch technical features
– upsell with value-added services, including website design tools, social media, drive profitability through add-on services and not hosting plans
– continue to educate SMBs
Three Sizes of SMBs
Micro (less than 10 employees) – most likely to leap into the cloud so VARs can profit more quickly from SMBs
Small (10 to 50 employees)
Medium (up to 1000 employees) – adopting premium hosted email services, which jumped 110 percent in 2011
Cloud Services that Matter Most to SMBs
Hosted Infrastructure ($5.9 billion) – includes dedicated servers, VPS, managed hosting, and utility or elastic computing
Web Presence Services ($2.7 billion) – includes third-party web hosting, blogging services, domain registration, SSL and e-commerce add-ons, and site-building tools
Hosted Communication & Collaboration ($2.2 billion) – email security, email archiving, and mobility, and hosted phone services, including hosted PBX and voice-over-IP (VoIP).
SaaS ($4.3 billion) – content management, email archiving, file sharing, online accounting, online backup and storage, online CRM, payroll and HR, phone conferencing and web conferencing
Addressing Hosted PBX Market
– the emerging hosted PBX grew 75 percent in 2011, faster than any other SMB cloud service during 2011
– most of this market growth was driven by micro-SMBs seeking enterprise-level features
– hosted PBX will continue to outpace the other cloud services in growth over the want to add to their offerings
Addressing the Non-employer Market
– Parallels estimates the size of the current US SMB market for the cloud non-employer businesses is $1.7 billion
– 47 percent are using some type of online application, either free or paid