At the highest level, the trend in IT and telecom during the past few years is that technological advances are allowing products and platforms with higher levels of sophistication to be offered to ever-smaller end users.
Advances such as virtualization and carrier Ethernet are enabling powerful tools to be available to people with little knowledge and, in many cases, comparatively little money to pay for what in the past would have been out of their reach.
The growth of cloud services is perhaps the most important of these fundamental changes. It is, in essence, the great leveler between small- and medium-sized businesses (SMBs). What is also true, but perhaps not discussed as often, is that the needs and desires of smaller users are radically different from those of enterprises.
Recent news in the cloud/SMB sector includes Microsoft and NetEnrich working together to help SMBs more fully use the cloud. NetEnrich, according to eWeek, has been named the provider of Azure Backup, Site Recovery and application migration and management services to Microsoft’s group of value-added resellers and cloud solution providers (VARs and CSPs).
HPE and Zynstra recently introduced the HPE Proliant Easy Connect Managed Hybrid converged appliance, which can be remotely administered via the cloud. An HPE executive said that the computer/storage device is aimed at organizations of 25 to 50 employees. It has a starting price of $299.
Tom Stachowiak, the CTO of Birch Communications, says that SMBs are warming up to cloud capabilities after a false start several years ago. He says that while Birch does not see a massive movement, there definitely is a significant uptake among this group. “We’re starting to see more and more accounts,” Stachowiak said.
Momentum is building. The most important realization is that SMBs have very different needs than enterprises. Providers that realize this, and are proactive, are finding a receptive audience.
The key is simplicity, Stachowiak says. Enterprises have experts on staff. Very often, the relationship between the cloud vendor and the customer is one of equals. That usually isn’t the case when the SMB is the customer. It is more a case of vendor-as-consultant. An SMB knows what cloud offers and likes it. It generally isn’t nearly as well versed in the intricacies and nuances of how it all works, however. This contrasts to an enterprise with one person or more on staff whose job it is to know.
Along the same lines, an SMB is more likely to be focused on a single package. They generally want pricing that is simple and straightforward, Stachowiak says. SMBs also like the idea of scaling up and scaling down so seamlessly and having experts keep abreast of security patches for them. The equipment they get in the cloud is more substantial and sophisticated than what they can afford on their own. SMBs’ goal is to pay 100 percent of their attention to the core business.
The progress will not be easy. Indeed, it is not a given that it will occur. Last September, AMI Partners pointed out both how quickly cloud is accelerating in the SMB sector. First, the good news, from the cloud provider perspective:
The shift to the cloud among SMBs is dramatic and accelerating. While spending on on-premise solution will only grow by 1% CAGR by 2019, spending on cloud services will grow by 15.5% and make up nearly a quarter of the total $370 billion SMBs will spend on information and communication technology (ICT). This represents a significant shift in how SMBs plan to allocate their budgets. Only 17% of SMBs currently allocate more than 10% of their IT spend for cloud services. This will grow to 25% in the next 12 months and 38% in the next two to three years.
Not everyone is happy, however. The company’s ICT Cloud Services study showed that 52 percent of small businesses and 46 percent of medium-sized businesses are dissatisfied with their cloud provider. That represents a big increase from 2014. The number of small businesses leaving their cloud provider grew. In 2014, 3 percent of small businesses left in the 12 months previous to when they were asked. The portion grew to 11 percent in 2015. The increase was similar among medium-sized businesses: 5 percent in 2014 and 14 percent in 2015.
SMBs are increasingly large consumers of cloud services. The bottom line is that what they need – and how they want it presented to them – is far different from their much larger cousins.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at firstname.lastname@example.org and via twitter at @DailyMusicBrk.