Research suggests maturing SMB cloud strategies

Despite ongoing concerns over security, smaller companies are investing in a wider array of cloud-hosted business applications.
Written by Heather Clancy, Contributor


For small companies, the question of cloud services adoption increasingly is one less of "yes" or "no" and more one of "how many," according to an annual study conducted by cloud enablement technology provider Parallels.

Its latest research, "Profit from the Cloud, 2013," predicts that the overall small and midsize business (SMB) cloud market in the United States will reach $32 billion by the beginning of 2016, representing a 19 percent year-over-year growth rate from $18.9 billion early last year.

For perspective, the overall global market by 2016 is predicted to reach $125 billion.

The Parallels survey reflects the opinions of 600 SMBs interviewed by the technology company during 2013; it is the fourth year the software developer has released data of this nature. For the purposes of this study, Parallels defines a micro SMB as an organization with fewer than 20 employees; a small SMB ranges up to 100 employees. The data also reflects the opinions of midsize companies with 100 to 999 employees.

In mature markets such as the United States, SMBs use an average of five services, ranging from infrastructure as a service (IaaS) in the form of hosted server capacity, hosted communication and collaboration including email and hosted PBX, and business applications.


By 2016, however, that number will reach an average of nine services as SMBs become more comfortable with the cloud concept and small companies that have never invested in on-premise equipment began to invest more heavily in business applications delivered as a service. Parallels labels the latter sort of buyer "cloud leapers."

The business applications category was the biggest cloud adoption success story of the past year among the Parallels survey respondent, growing about 60 percent. "U.S. SMBs currently using cloud services are both shifting more software use to the cloud and upgrading free applications to premium paid accounts," Parallels writes in its analysis of the data.

According to the survey, the top three applications currently are instant collaboration, file sharing and online accounting. By 2016, however, instant collaboration will be pushed back to No. 2 by online backup and storage services; Web conferencing services will also become more prominent, the data suggests.

Some other survey highlights:

  • 30 percent of micro and small SMBs that don't currently have servers are interested in adding hosted ones during the next three years
  • More SMBs are becoming more sophisticated about adding services to their existing IaaS presence; 40 percent of them are now using server backup, security and SQL database options
  • Hosted premium email was the second fastest growing cloud service in the Parallels survey after business applications
  • Among "cloud converters" that are switching from an on-premise approach into the cloud, more than half of the respondents are considering a plan to ditch on-site email servers for a cloud-hosted option
  • Only 10 percent of the micro SMBs and 20 percent of the small SMBs are using hosted PBX services, primarily due to a lack of awareness about their options
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