APAC SMBs raise cloud spend to US$11.4B

Cloud computing investments by small and midsize businesses in 2011 will grow more than twice the rate of traditional ICT, with fastest growth in China, India and Southeast Asia, says new report.
Written by Jamie Yap, Contributor

Small and midsize businesses (SMBs) in the Asia-Pacific region, excluding Japan, will spend US$11.4 billion on cloud computing this year, a new report has revealed, noting that the region will top the world in terms of cloud computing growth in the SMB segment.

In a statement Tuesday, AMI-Partners noted that cloud spending by SMBs will grow at more than twice the rate of traditional ICT uptake. It also highlighted that with Asia continuing to embrace the new opportunities offered by cloud technologies, the region is set to be a strong, sustainable market for ICT vendors.

According to the analyst firm, smaller businesses in China, South Korea and Australia will account for the bulk of the region's SMB cloud investments.

In terms of growth, China and India lead the region, at more than 20 percent year-on-year, followed by the Southeast Asian region, AMI-Partners added.

"With increasingly favorable economic and infrastructural conditions, Asean (Association of Southeast Asian Nations) markets such as Singapore, Malaysia and Indonesia provide strong annual growth potential," said Stefan Haas, Asia-Pacific consulting director at AMI-Partners, in the statement.

Singapore-based Haas continued: "The proliferation of broadband Internet and high-speed mobile networks provides these SMBs with an increasing number of options to access cloud solutions. This allows a completely new segment of SMBs to adopt ICT functionality for the first time especially in tier 2 and tier 3 cities."

Overall, SMBs in Asia are "ready for the cloud" as they have "clearly realized the strategic advantages of transitioning into the cloud", Hass observed.

Midsize businesses, he reported, are taking advantage of cloud technologies to further optimize their IT budgets and overall cost structure, while smaller businesses can for the first time deploy new infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS) capabilities. In the past, that would have required significant upfront and maintenance investments, he said.

According to the analyst, once a company boasts a successful first-use deployment, it is "very likely" to explore broader use of additional cloud infrastructure and application solutions.

Vendors need broad set of partners, ability to explain cloud value
AMI-Partners also noted that unlike traditional ICT technologies, SMBs in the region will purchase a relatively small portion of their planned cloud solutions directly from an ICT vendor.

To capture cloud business, tech providers need to ensure they establish a broad ecosystem of channel and communication partners, advised Hass. "ICT vendors will be most successful if they succeed in establishing an adaptive channel partner network that enables SMBs to align their IT-requirements with their overall growth strategy through an intelligent cloud solution and services portfolio."

Besides high-touch service orientation and local proximity to end-customers, ICT vendors can also differentiate themselves through the ability to articulate the strategic value of cloud computing and provide integrated, value-added service bundles, said Hass.

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