APAC SMB cloud market to hit $19.8B

Small and midsize businesses in Asia-Pacific will spend US$19.8 billion on cloud in 2015, up from US$7.6 billion this year, giving service providers opportunities in virtualization, automation and hosting.

SINGAPORE--The cloud market for small and midsize businesses (SMBs) in the Asia-Pacific region will grow at 38 percent compound annual growth rate (CAGR) to hit US$19.8 billion in 2015, indicating lucrative opportunities for service providers and their channel partners.

This also indicates strong demand by these providers for virtualization, automation and hosting technologies, according to Parallels, which cited findings from a study it conducted. At the Parallels APAC Summit held here Thursday, the virtualization software vendor said Asia-Pacific was its fastest growing region worldwide.

The region's SMB cloud market for this year will be worth US$7.6 billion, according to the survey which was conducted late-June and polled some 2,000 respondents were across Asia-Pacific. This was the first time Parallels conducted a regional study in Asia, in addition to its existing series of country-specific reports which include Australia, Japan, India and China.

India and China, with 3.3 million and 3.5 million SMBs respectively, are expected to be the leading growth markets for cloud services, the company said.

Cloud services in the report were broadly categorized as hosted infrastructure, Web presence, hosted communication and collaboration, and online business applications. Each of these cloud service categories will see a spike in market value between 2012 and 2015.

Over these three years, hosted infrastructure will more than double from US$2.8 billion to US$7 billion, while Web presence services will increase from US$1.7 billion to US$3.5 billion. Hosted communication will grow from US$650 million to US$2.7 billion, and online business applications from US$2.4 billion to US$6.6 billion.

David Dzienciol, regional vice president and general manager of sales for Asia-Pacific at Parallels, explained that the company sells its technology to service and IT providers such as telcos and datacenter operations, which in turn may package and white-label their offerings with other services and applications to channel partners or enterprise customers.

Within Asia, Dzienciol noted, many SMBs rely on "trusted advisors" which include independent consultants and resellers to help them decide and procure cloud services. This presents a key growth factor for cloud providers, he said.

Thus, it is important for these market players to not only be technologically innovative, but also enable the value chain so all participants in the ecosystem can profit from helping SMBs migrate to the cloud, said Dzienciol, during a media briefing at the summit.

Leveraging its ecosystem, he said Parallels' "partner-centric sales strategy" is aimed at helping companies advance in the cloud delivery space and offer new applications--created by independent software vendors (ISVs)--to differentiate themselves.

Dzienciol also said Asia exhibited a "thirst" for cloud services, and when cloud adoption becomes the norm in the future, customer demand will spur the need for more infrastructure and software virtualization offered by service providers.