For many small businesses, they do not have the luxury or the budget to employ dedicated IT personnel to manage their equipment. They have to rely on consultants and value added resellers (VARs) or even friends or relatives to help buy and manage their IT needs. The huge technology gains in productivity and efficiency in the last two decades have also indirectly created challenges for small businesses who find it difficult, and costly to keep pace with new technologies.
Cloud computing or Cloud services, subscribing to software and other IT over the Internet, has leveled the playing field for small businesses by giving them access to world class, enterprise quality Cloud services at an affordable price. Small businesses can adopt a pay-as-you-scale model to fit their operational needs. Some of the most critical Cloud applications and services that small businesses are demand are around website hosting and e-mail, to even CRM, telephony, collaboration applications, PC management and security etc.
In fact, small businesses have embraced the Cloud very quickly and according to industry analysts, small businesses worldwide are spending close to $500 billion on IT and much of the spending will be moving onto the Cloud by 2014. Big multinational players, one-person IT consulting shops, hardware vendors, telecoms and Web hosting companies and even tech giants like Google, Amazon and Microsoft are among the large group of Cloud participants eager to capture a share of the lucrative small business opportunity. We see three positive trends emerging for small businesses.
Firstly, small business owners can expect to see service providers delivering a more ‘one-stop’ shop to provide a full range of Cloud services. The more services small businesses acquire from a particular vendor, the lower the churn. It is a win-win situation as the Cloud service providers can lower the cost of customer acquisition while maintaining customer loyalty; and the small businesses can have a solution approach to their IT needs to increase reliability and allow them to focus on their core business.
Secondly, small businesses will continue to see well integrated and easy-to-use suites of Cloud services offerings from providers, as they simply cannot use or afford additional IT personnel to handle difficult-to-manage services like enterprises can.
Lastly, the prices for many Cloud services will continue to drop; as the operational efficiency increases, the cost of delivering the service decreases. This gradual drop in prices is the result of Cloud service providers automating more and more of their backend operations, such as billing options, to enable instantaneous and reliable delivery of simple Cloud services to small businesses. The automation also allows small businesses to self-manage and even scale up for peaks in business, thus further lowering the time to market and cost to deliver Cloud services.
To many business owners, having the peace of mind for their IT needs is a blessing as they will have more resources to be innovative in driving their businesses.
Jan-Jaap Jager is Vice President and General Manager APAC, Parallels.
