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Cloud Services: From On-Premise to On-Demand

New York, NY, August 26, 2010 — /Business Wire/ — According to AMI’s latest worldwide SMB Cloud Services Practice, there are roughly 750,000 (12%) small businesses and 20,000 (24%) medium businesses already using software as a service (SaaS). However, looking at today’s SaaS users, 78% of SBs and 31% of MBs are leveraging a SaaS plus on-premise mix (or hybrid model), while approximately only a third of SaaS users are using an actual pure-SaaS product.

With an anticipated growth of up to $95 billion in global SMB cloud-related spending by 2014, it isn’t a surprise to see over half of US SMBs looking into SaaS as a potential solution. Approximately one in five US SMBs plan to use SaaS. However, AMI believes that SMBs are easing into the concept of local plus cloud-based computing rather than leapfrogging into a pure-play platform.

“Though cloud computing is seen as the next IT platform, the consideration of SaaS amongst SMBs as the next favorable cost-saving model is expedited by the macro situation we are in today,” says AMI Senior Associate Yedda Chew.

Almost two years since the downturn began; we still see 77% of US small businesses (1-99 employees) and 84% of US medium businesses (100+ employees) very concerned with current market conditions. This marks a 31% and 81% year-over-year increase, respectively.

“In addition to this,” noted Ms. Chew, “SMBs have their doubts, particularly around the security of a 3rd party hosting confidential numbers. But companies like Microsoft and IBM who provide a convergence of on-premise and SaaS are clearing these concerns for interested SMBs who are trying to maximize the combination of cloud and on-premise issues.”

AMI believes the following applications will accelerate need for on demand/cloud among SMBs from SaaS plus on-premise vendors:

* Email/messaging: Approximately, 134k of non-SaaS US SMB users plan to adopt this application, allowing companies like Microsoft, who not only provide hosted solutions like exchange online in its BPOS bundle, but also its ubiquitous ‘exchange on premise’, to live in co-existence. This flexibility provides visibility to SMBs. And eventually with the realization of the TCO of on-premise many have the potential to migrate from Windows and .NET-based applications to the cloud.
* Online storage and backup (archiving): Approximately, 129k non-SaaS US SMB users plan to adopt this solution, allowing companies like Seagate/i365 a local- and cloud-based disaster recovery backup for SMBs.
* Document management and collaboration solutions: Over 125k US SMBs are looking in this direction for a collaborative tool, to companies like Microsoft with its product Sharepoint, or Yousendit as a solution.

Now as the budgeting season is just around the corner for most SMBs, economic headwinds are once again forcing businesses to revaluate a scalable strategy using IT. This said, companies such as Microsoft, SAP AG, and IBM, have a leg up with mixed local and cloud-integrated solutions.

“These companies are enjoying the SaaS tailwind, and it will be these companies with their hybrid model, which have a better chance of breaking down the barriers of the potential 5.7M non-SaaS US SMB users,” Ms. Chew says.

Upcoming Study
SMB preferences for cloud-based application bundles, their price sensitivity and purchase channel preferences are further explored in AMI’s upcoming Worldwide SMB Cloud Services Study. This study provides comprehensive coverage of: platforms and devices; IT infrastructure services; business productivity applications; business management/line-of-business applications; and unified communications. Research will be available later in 2010.

For more information about AMI-Partners, our Global SMB Cloud Services, or our other global SMB research, please call 212 944 5100, e-mail ask_ami@ami-partners.com or visit www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

Contacts:
AMI-Partners
Quoted Analyst
Yedda Chew, 212-944-5100 ext 529, ychew@ami-partners.com
or
Media Relations
In US (New York): Nancy Carty, 212-944-5100 ext 581, ncarty@ami-partners.com
In EU (London): Claudia Jachtmann, (44) 208 987 2756, cjachtmann@ami-partners.com
In Singapore: Matthew Foo, (65) 6220 5535 ext 101, mfoo@ami-partners.com
In India (New Delhi): Kuljeet Abrol, (91) 97 1774 1919, ksinghabrol@ami-partners.com
In India (Kolkata): Jyoti Singh, (91) 33 4003 3093 ext 223, jsingh@ami-partners.com
In India (Bangalore): Rati Ghose, (91) 80 4148 2661 ext 36, rghose@ami-partners.com
In China (Shanghai): Venu Reddy, (86) 21 6390 6298, vreddy@ami-partners.com

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