The Small to Medium-sized Business (SMB) community tends to stand precariously between being seen as the imminent saviour of all economic activity and the target for all the slings and arrows of outrageous fortune which that economy can throw at it. This is why, as a group, they make such an attractive target as users of Cloud -based services.
Few, if any, of them will be the source of major service provision contracts, but as there are so many of them there is ample opportunity for the re-use across large swathes of them of technology developed for specific purposes. They also tend to be fast responding to servicing their needs once they are identified and the appropriate level of `pain’ has been reached, all of which makes them increasingly attractive targets for applications software businesses with Cloud -based offerings (ISVs), hosted service providers, and a Cloud -savvy derivative of the traditional Value Added Reseller (VAR) and Systems Integrator (SI) communities of old.
A recent chat with John Zanni, Vice President for Service Provider Marketing and Alliances at Parallels, homed in on this market and the potential the SMB sector now holds for these technology and business solutions providers, especially working as a collective with the common interest of engineering a reliable, cost-effective, working solution for the users.
Parallels has been researching the SMB sector in some detail since before it went big on promoting a SMB focus to its hosting services management environment at its annual Summit last February. The numbers the research has shown demonstrate the scale of the potential, as Zanni pointed out.
The company has looked specifically at the UK market, and shown that there is plenty of opportunity available for the channel. At present, just 17% of SMBs in the UK report using hosted servers, with a total of 540,000 hosted servers in use. This produces a current market for hosted services of some £660m.
Comparing UK and US statistics shows some divergence which suggests that, while UK-based SMBs are by no means turning their heads from Cloud delivery options, their collective take up of the technology is less enthusiastic. For example, there is a slightly bigger penetration of US SMBs using hosted infrastructure – 18% versus 17% in the UK. The spend on hosting infrastructure per user is much higher in the US, however - £3,095 versus £1,179.
This spending pattern is found in other areas SMB Cloud investment, even where UK-based SMBs make more use of technology. For example, in the area of web presence, the penetration is 71% in UK SMBs, and only 64% in the USA. The latter group, however, spend £1,450 on it per company, compared to £370 for UK SMBs.
According to Zanni, Parallels has over 300 ISVs signed up to the Application Packaging Standard (APS) it is promoting. APS is designed to allow applications to be packaged up with a complete environment required for loading onto a new host service, making selecting applications a `point and click’ operation for SMBs.
This can also be used by VARs and SIs as a means of loading their tailored implementation of ISV applications and their own IP onto hosting services. In addition, it also makes it possible to port applications and data between service providers without change.
Zanni has recently been using Outsourcery as a worked example of how this approach works. The company is a UK-based specialist in building packages of Cloud -based business services, such as unified communications and services in collaboration, time management and marketing and relationship management. In this role it fulfils the role of the VAR/SI, while the main role of ISV is taken by Microsoft with such applications as Lync, SharePoint, Exchange Server, Windows Server, and the Dynamics CRM suite.
The host can be either Microsoft’s public Cloud offerings or Outsourcery’s own O-Cloud , with Parallels providing the management tools for service configuration and provisioning, data protection, and service monitoring. With the applications packaged up using APS they can then be loaded on to the hosting service that best balances their service requirement against a budget limit, with that balance extending to the level of management services selected.
With this architecture customers get to select the applications they need, tailored where necessary to their specific requirements.
For the SMB the advantage is that they can sign up for a service provided by a specialist VAR or Systems Integrator that has the skillset to meet their specific business requirements. That specialist can then be supported by a resource infrastructure that not only includes the compute resources required, but also a common platform on which services can be built and delivered, common service and management tools, together the support required, and a set of core applications builders.
