Microsoft Report Shows 34 Percent Increase in Number of SMBs Willing to Pay for Cloud Services

Microsoft (News - Alert) Corp. has released the "SMB Cloud Adoption Study 2011," which studies how cloud computing will impact small and midsize businesses (SMBs) over the next three years. The report, conducted in conjunction with Edge Strategies Inc., shows that 39 percent of SMBs expect to pay for one or more cloud services within the next three years, representing a 34 percent increase from the current 29 percent.

The study also finds that the number of cloud services SMBs pay for will almost double in most countries during the next three years. This represents an increasing opportunity for managed service providers (MSPs) to benefit from the cloud by offering services like collaboration, data storage and backup and business-class email. The SMBs paying for cloud services are expected to use an average of 3.3 services, up from less than two services now.

"Cloud adoption will be gradual, and SMBs will continue to operate in a hybrid model with an increasing blend between off-premises and traditional on-premises infrastructure, for the foreseeable future," said Marco Limena, vice president of business channels, worldwide communications sector at Microsoft. "As cloud computing becomes more ubiquitous and SMBs' existing IT becomes outdated, adoption will grow rapidly. Hosting service providers should consider the appropriate sales, delivery and support models to target larger SMB customers that are more likely to pay for cloud services."

One of the key drivers of service provider selection among SMBs is past support experience, according to the study. Buying cloud services from a provider with local presence is critical for 82 percent of SMBs. The study also shows that the larger a business is, the more likely it is to pay for cloud services. Out of companies with 51-250 employees, 56 percent will pay for an average of 3.7 services within the next three years. In that same timeframe, 43 percent of workloads will become paid cloud services, while 28 percent will remain on premises and an additional 29 percent will be free or bundled with other services.

"As SMBs continue to transition to cloud services, hosting service providers, VARs and systems integrators (SIs) will have a major role to play as advisors and providers of IT services in hybrid environments," said Andy Burton, CEO of Fasthosts (News - Alert) Internet Ltd. "Hosting providers have expertise in selling cloud services while VARs and SIs have experience selling to SMBs. Fasthosts is helping to bridge this gap by helping VARs and SIs white-label cloud services and deliver them as if they were their own."

Additional findings of the study show that in most countries, cloud service adoption is not limited to SMBs that view themselves as fast growers. There was little difference in adoption rates between those SMBs that expect to grow in the next three years and those focusing solely on profitability. The research also shows that growth companies want a scalable environment that can meet expanding needs, as well as an affordable, pay-as-you-go pricing model to eliminate the need for over-investment in IT. SMBs want to maintain their size while becoming more profitable, and are looking for cost-effective, efficient solutions.