Cloud enablement

Cloud-Hungry SMBs Still Require Savvy Sale

Small to mid-sized businesses are eager to buy cloud services to upgrade their IT services at lower cost, but reaching them may require more effort by service providers, says cloud technology provider Parallels Inc.

As part of its effort to encourage service providers, including many smaller companies, to get into cloud services, Parallels has been conducting its own market research, surveying SMBs in the U.S. and 13 other markets globally, to determine if and how they buy cloud services.

The good news in the latest Parallels Insights research report is that the worldwide SMB cloud market is is expanding at a 26 percent compound annual growth rate and will reach $68 billion by 2014. Some of the most voracious cloud users will be the smallest businesses -- those with less than 20 employees -- which are three times more likely to purchase cloud services than their larger counterparts, says John Zanni, Parallels VP of service provider marketing and alliances.

The more complicated news is that in order to reach that audience effectively, service providers need to target their sales efforts to its specific needs, Zanni says.

This research may seem self-serving, but it echoes what other, more objective parties are saying. For example, at Light Reading's recent Carrier Cloud Forum, Stefan Bewley, director of Altman Vilandrie & Company , said SMBs have been the fastest to deploy cloud services -- and the fastest to be disenchanted with what they deliver. (See 5 Takeaways From Carrier Cloud Forum.)

Zanni believes that cloud services providers need better understanding of why SMBs buy cloud and what they are seeking. According to the Parallels Insights report, that varies with the size and type of business. Parallels' advice on how to reach SMBs effectively:

  • Know what kind of IT user the SMB is. Some SMBs want to convert their existing IT apps, but many others don't have on-site IT at present and want to leapfrog that stage and move right to the cloud to find apps that can improve productivity. Still others are using some hosted or cloud services and are looking to expand that activity. Each of the three types requires different handling.

  • Know the existing IT staff level of the customers. SMB owners are often their own IT decision-makers, but some companies do have dedicated IT staff or are using IT consultants. The key selling points for cloud will be different depending on the decision maker.

  • SMBs represent prime targets for up-selling. SMBs are looking to increase their Web presence. Offering them tools that help them develop Web sites or improve existing Web sites, plus take advantage of social media networks such as Facebook is a prime opportunity

Parallels is also issuing new reports for the Brazil and Mexico markets, and has 12 other regional cloud profiles. The reports can be downloaded here beginning Feb. 17.

— Carol Wilson, Chief Editor, Events, Light Reading

adrianajones 12/5/2012 | 5:41:32 PM
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