Taking to the Cloud
Rajesh Shetty,VP, Cisco India & SAARC
From a time when the prospect of geographic expansion was a daunting one for small businesses it is possible today to use the Internet and conduct business globally, inexpensively and easily, often without setting foot on foreign soil. Social media, blogs, new collaboration tools, videoconferencing are changing the rules of the game enabling small businesses (SMB) to enter new markets. Latest technology, driven by location-aware mobile device and low cost apps, is helping drive sales.
Technologies like cloud computing for example ensure that no one knows it is an SMB and help to deploy, operate and consume technology with greater agility and improved economics. This is a welcome relief to SMBs who view technology as a distraction from their core business because those who end up making the decisions typically have other primary job responsibilities or tend to be less IT–sophisticated.
Deloitte predicts that by 2020, 15% of on-premise spending will be replaced by clouds. The worldwide revenue from public IT cloud services is forecast to reach $55.5 billion in 2014, according to IDC, while the cloud computing market in India is expected to grow at a CAGR of 40%.
Cloud computing provides SMBs access to applications and services that they otherwise find unaffordable. Due to its flexibility and pay-as-you-go cost structure which is simple, scalable, affordable, convenient and customizable, cloud computing is commercially viable for many SMBs. It helps SMBs reduce costs, both Capex and Opex with regards to IT resources, power and energy since the infrastructure is owned, managed and maintained by the service provider.
In order to benefit from the technology SMBs need to look at cloud options that will give them the greatest payoff and evaluate the interfaces where they can interact with customers. By evolving partnerships and strategies to credibly deliver on what customers are asking for, SMBs can gain success.SMB awareness of cloud services has increased over time and resulted in abuyer audience that is more discerning and demanding, when it comes to evaluating cloud offers and providers.
SMB spend on cloud is set to increase and there seems to be high, pent-up demand for software as a service (SaaS) and managed infrastructure services (IaaS).While most SMBs currently stick to security, managed email, web hosting, and various desktop productivity apps., more-advanced options such as conferencing and collaboration, managed VoIP, storage, and hosted business apps are on the table as part of planned and continued investments.
Partners are a critical conduit of information and support for SMBs looking to deploy cloud computing during the initial installation and ongoing maintenance thereafter. This translates into a recurring revenue model for partners.As they adopt cloud computing, SMBs seek partners with competency in architecting, building and selling cloud-based solutions. Partners can primarily build cloud infrastructures (Builders), provide cloud services (Providers) and resell cloud services (Services Resellers). Majority of the partners will develop a core competency in one or more of the above and build ancillary capabilities around them.
Partners can also embrace multiple business models and go-to-market strategies for cloud. Partners with system integration capabilities have the added opportunity of evolving to a more sophisticated/hybrid role that will combine all these models into a single offering.
With cloud, customers increasingly ask partners to provide technology as a service rather than install the solution on their own premises. This is an opportunity for partners to evolve their business models and expand their "IT as a service" business offerings.In terms of revenue, partners have greater opportunity to sell longer term agreements loaded with a richer suite of professional services. This translates to a more profitable, stickier relationship with the customer.
By creating compelling cloud services offerings, and driving innovation in partner programs, vendor organizations can help partners leverage their existing investments to build cloud business practices, validate capabilities necessary for cloud offerings and monetize professional and annuity services. They can also provide guidance on the infrastructure architecture to set up a cloud environment and on new pricing and possible go-to-market models.
SMBs are continuing to aggressively adopt a host of cloud services and exploring future adoption. Service providers (SPs) are well placed to take advantage of this opportunity.SPs are preferred suppliers among SMBs, who seek trusted partners to guide them and help address their key barriers to adoption (security and reliability).
Services 'tailored for' SMBs is the single biggest driver of provider choice. SMBs look for cloud-based and managed infrastructure solutions—not standalone, technology-led offers—for everyday tasks. SMBs gravitate to integrated solutions that let them accomplish everyday tasks more efficiently and effectively, without investing time and skills to manage the technology aspects of their business.
As SMBs migrate to new IT models such as hosted and managed services and cloud technology, SPs need to scale their people, processes, and tools to serve more customers. Controlling costs is vital and in a competitive environment, providers need to focus on accelerating their time to market.
Partnering with a networking vendor can help SPs control costs and gain the business agility. A shared risk model lets providers replace up-front costs with a pay-as-you-grow model, keep pace with innovation, deliver enhanced value to customers and create new revenue opportunities.
Service providers need to think strategically about partnerships to introduce integrated solution bundles that have high business relevancy for SMBs and reflect an understanding of SMB needs and challenges. They must provide low total cost of ownership for SMBs and credibly guide SMBs as they embark on cloud investments.
SPs cannot simply address the SMB space as a single segment. Targeting is key to success and requires an in-depth understanding of the SMB market and the specific needs and concerns of customers. In the long run this helps move quickly in the market, evolve partnerships and acquisition strategies to credibly deliver on what SMBs ask for.