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In this paper, Frost & Sullivan examines the needs of the SMB market with regards to cloud computing, as well as the various go-to-market models that best meet the needs of this segment. Finally, we look at four providers that are serving the SMB market with cloud services—focusing on how they are approaching this segment, and what methods are producing the best results.

Introduction

As cloud computing gains traction in the marketplace, businesses of all sizes are drawn to the lower, consumption-based pricing and enterprise-class functionality the cloud can offer. It’s no wonder that the popularity of cloud computing continues to grow: in the cloud, you pay for exactly what you use —there are no capital expenses; and the fast and easy ability to scale the environment allows businesses to pay for just what they need in any given month. Services are also flexible; they can be deployed on virtual or physical infrastructure, in a private or shared configuration.

In particular, small and mid-sized businesses (SMBs) can benefit from the capabilities that the cloud offers.2 Gone are the days when technology was too costly to be procured by SMBs; the cloud offers a price structure that makes it more realistic for these businesses to purchase and maintain enterprise-class technology services.
But SMBs are faced with a wide variety of choices when making a decision to implement cloud. Deciding what services within the cloud stack are necessary to meet company goals, and then deciding the type of environment (public, private, or hybrid) that best suits their needs can be daunting. As such, the way in which providers market cloud services to their prospects and customers can be as important as the services themselves. If the options are so numerous or the configurations so confusing that a business cannot understand them, the business will be less likely to take action. This is especially true for SMBs, which often employ a very small IT staff, if any at all, and often require outside assistance to deploy cloud strategies and solutions. But many cloud providers are “SMB-neutral,” in that they neither focus on nor ignore the SMB space. As such, there are significant opportunities for providers that can tailor cloud offers that help smaller companies to compete with their larger counterparts.

In this paper, Frost & Sullivan examines the needs of the SMB market with regards to cloud computing, as well as the various go-to-market models that best meet the needs of this segment. Finally, we look at four providers that are serving the SMB market with cloud services—focusing on how they are approaching this segment, and what methods are producing the best results.

Cloud Adoption Among SMBs

The cloud can be an unwieldy place, and determining both strategy and tactics for deployment can be daunting for even the savviest of IT departments. In 2013, percent of small businesses and percent of mid-sized businesses reported that they didn’t have the know-how within their own organization to create and deploy a successful cloud strategy, according to the 2013 Frost & Sullivan Cloud User Survey.3 Additionally, percent of small businesses and percent of mid-sized businesses report that they have difficulty in adopting a cloud strategy because there are so many choices and deployment models available in the cloud.

But cloud computing offers a multitude of services available on-demand that can help SMBs compete with their larger counterparts. In fact, the vast array of services available in the cloud can become overwhelming, and determining the best application or service to meet each SMB’s specific need can be difficult. Even more challenging can be compiling a suite of services to serve all the needs of a business, while also scoping an appropriate environment to deploy them within. To help them assess all of the cloud-based choices available, most businesses turn to a trusted, external advisor. In 2013, Frost & Sullivan found that less than percent of SMBs will attempt to implement a cloud strategy on their own.

With a majority of SMBs looking for outside assistance with their cloud strategies and deployments, providers that can understand and leverage the needs of this segment have the potential to gain market share in the growing cloud sector.

SaaS Popularity Among SMBs

Among the services in the cloud stack, SaaS is often the largest draw for SMB customers, because of their need for applications that help power their business. Many of the smallest SMBs are less likely to be concerned with the infrastructure on which services are deployed, or platforms that enable them. If a cloud-based service meets the business’s needs and is available, affordable, and secure, then the end goal for an SMB company has been fulfilled.
Providers report that SMBs typically seek a complete solution that meets a specific business need. In this sense, their behavior is similar to consumers, who are most likely to select SaaS applications based solely on functionality. Furthermore, SMBs are less likely than their larger counterparts to seek out cloud infrastructure and platform services, which require greater technical and administrative oversight.

Table Of Contents

Cloudy Skies: Balancing Self-Service and Expert Consulting for SMB Customers
Introduction
Cloud Adoption Among SMBs
Going to Market: Cloudy Skies for SMBs
Transcending Boundaries: CSPs Bring Cloud to SMBs
Frost and Sullivan - The Last Word
About Frost and Sullivan

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