Independent technology research firm Forrester recently released their “2011 Demand Insights: The SMB Software Market”, highlighting SMB software adoption trends including Software-as-a-Service. Like our own Parallels SMB Cloud Insight™ reports, Forrester also concludes that that SMBs are consuming a wide range of increasingly sophisticated cloud software applications and services – including CRM, BI, and UC/collaboration offerings. Forrester also contends that one of the major drivers of this growth is new software delivery methods, like SaaS.
Yes, when compared to enterprise cloud adoption, Forrester believes that SMBs are “cool” on SaaS, pointing out that 31% of SMBs are prioritizing SaaS adoption in the next year (as compared to 36% of enterprises). However, Forrester’s research also illustrated that nearly 70% of SMBs are interested in SaaS applications. This points to a high level of awareness about SaaS among SMBs, and even more growth potential as the economy recovers, and hundreds of thousands new SMBs are launched in the coming years.
But is a 5% difference statistically significant between enterprise and the entire SMB cloud services market, which Parallels estimates to be at $8.6B (and growing) - just in the U.S. alone? Let’s take a moment to size this opportunity based on the sheer number of small and medium business. In the US, for example, there are 7.6M SMBs, according to the latest government reports. 31% of U.S. SMBs equates to 2.3M SMBs who are placing “high” or “critical” priority on increasing their SaaS use. That’s still an enormous opportunity for service providers. And worldwide, SMBs make up over 90% of all businesses. So it’s hard to ignore the sheer the size of SMB’s impact on the entire SaaS market (even if SMBs are only slightly behind enterprises in “prioritizing” their shift to the cloud).
Those SMBs who have already dipped their toe in the cloud are doing so with some basic, free applications, and many are beginning to outgrow their limited capabilities. In Parallels SMB Cloud Insights™ research, we found that 40-50% of SMBs (from across 11 countries) are still using free versions of SaaS. As SMBs grow, they will increasingly switch to the paid versions of SaaS applications that improve their productivity.
In case you missed any of the 11 global Parallels SMB Cloud Insights™ - each a comprehensive view of the hottest markets for SMB cloud services –we’ve made them available for complimentary download here. Parallels SMB Cloud Insights™ present clear, actionable market intelligence and insight that continues to help service providers drive growth and profit. While each report is quite diverse in its level and evolution path for the adoption of cloud services across 11 hot global markets, this primary research clearly illustrates the world’s SMBs have a growing thirst for cloud-based services.
Use this valuable research to make the decisions you need. I also recommend attending Parallels Summit 2012, February 14-16, 2012 in Orlando for even deeper insight. As a special offer for readers of our blog, register by December 31st using this code G99BBSP, we’ll waive the $299 conference fee.
Vice President, Service Provider Marketing and Alliances