The Future of SMBs in the Cloud

SMBs have some specific needs for operating their business.  On the application side, these areas include messaging, file servers, productivity applications, security, accounting/ecommerce, CRM, time tracking, web presence, as well as a variety of vertical applications.  Apart from applications, 50% of Information Technology and Communication (ITC) dollars are spent on telecom services - voice and data communications (phone, conferencing, PBX).  What is important is where SMBs are willing to house these functions is changing.

Here is a discussion with Jack Zubarev, President, Parallels Service Provider Division

Q:  Where do you see opportunities with specific needs of SMBs today and in the near future?

A: First, let’s look at the opportunity.  SMBs represent more than 90% of all businesses. SMBs also employ more people and create more new jobs than large enterprises. Overall, IT spending among SMBs is also larger than enterprises.  SMBs are also the fastest adopters of cloud services.

 SMBs have some specific needs for operating their business.  On the application side, these areas include messaging, file servers, productivity applications, security, accounting/ecommerce, CRM, time tracking, web presence, as well as a variety of vertical applications.  Apart from applications, 50% of Information Technology and Communication (ITC) dollars are spent on telecom services - voice and data communications (phone, conferencing, PBX).  What is important is where SMBs are willing to house these functions is changing.

 Today we still see SMB’s procuring IT, applications, and services from a variety of traditional channel including Telcos, hardware providers, software vendors, VARs/SIs, distributors, etc.  In the future, as the cloud market matures and the IT market converges to the cloud, SMBs will purchase services and applications mostly from cloud services providers.

Q: What kind of strategies should cloud service providers deploy to deliver the needs of SMBs?

A:  Most important is definitely to align the offerings with the needs of SMBs. Service providers should also take note of how traditional suppliers have worked with SMBs in the past. While the delivery paradigm is changing, the SMBs ITC needs have largely stayed the same over last 10 years and the sale will often be more consultative (although no-touch sales are clearly increasing and will likely continue to increase).

Service providers need to capitalize on their advantage of being able to offer a wide array of services.   The real goal for a service provider is not the initial sale. Certainly, having a broad service offering will attract a broader audience.  However, it is the second, third and fourth service that a provider sells that really creates a profitable and long-term customer.  Ask your customers what they need and then offer it – I do think that a lot of the providers should start evaluating their success not just by the number of customers or servers but by share of overall SMB IT budget they capture.

Q: What is Parallels doing to help service providers capture the SMB market?

A: In our last Q&A, we discussed several things that Parallels is working on.  In this newsletter, I would like to draw your attention specifically to one area that is of particular importance to the needs SMBs. Parallels Panel SMB Edition with integrated Marketplace which will allow you to specifically address the needs of SMBs in the areas of e-commerce, automated backups, security, spam protection, CRM with email marketing, and customer knowledgebases (and this list will be expanded in the future).  These are exactly the types of services that were discussed above as critical services that provider can and should provide to their SMB customers.