Singapore SMBs to spend $415M on cloud

Small and midsize businesses in the country will fork out S$520 million (US$415.26 million) on cloud this year, with the bulk of it to be spent on infrastructure-as-a-service and online applications.
Written by Eileen Yu, Senior Contributing Editor

Small and midsize businesses (SMBs) in Singapore will spend S$520 million (US$415.26 million) on cloud this year, putting most of their dollars in infrastructure-as-a-service (IaaS).

These enterprises will set aside S$195 million (US$155.72 million) on IaaS and S$142 million (US$113.4 million) on software-as-a-service, which accounts for the second-largest share of the market, according to Parallels' latest study on SMB cloud adoption in Singapore. Another S$126 million (US$100.62 million) and S$57 million (US$45.52 million) will go toward unified communications and web presence services, respectively, which include e-mail, hosted PBX, and collaboration tools.

The annual survey, which looks at the top four cloud services categories most widely deployed by Singapore SMBs, is the fourth instalment conducted by the virtualization software vendor. It is projecting a 21 percent compound annual growth rate for the local SMB cloud market, hitting S$916 million (US$731.5 million) in 2017. 

Within the IaaS segment, cloud server usage this year will account for 19 percent of the market, Parallels said in the report released Wednesday. It further noted that SMBs in the country were subscribing to several add-on services on their hosted servers, especially in the areas of backup and security

The study revealed that 63 percent of businesses were adopting managed or hosted services, while 45 percent were opting to run their database applications on the cloud. Another 33 percent did likewise for project management. 

Some 85 percent had turned to cloud to run their applications, including the use of cloud-based file sharing, online backup and storage, as well as payroll and human resource. Parallels also noted that SMBs typically would acquire full versions of online business applications after trying out time-limit trial versions.  

About 70 percent of SMBs used cloud to run their websites, with many turning to third-party vendors to design and manage these sites. Most also preferred to pay for hosted e-mail services, instead of settling for free web-based e-mail, to ensure better security and reflect a more professional presence. 

Pavel Ershov, Parallels' Asia-Pacific and Japan vice president of service providers business, said in the report: "The size of the Singapore SMB cloud services market may be smaller than the other mature markets in the region, but the country's SMBs are among the fastest adapters of cloud services — both in usage and sophistication."

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