Small and medium-sized enterprises (businesses with less than 250 employees) represent almost 99% of all businesses worldwide, employ 1.5 billion people and in 2012 spent $203 billion on ICT services annually. While the vast majority of the ICT spend is on traditional communications services like mobile voice, fixed-line and broadband, the growth for telcos is in cloud services.
According to forecasts by Analysys Mason, worldwide revenue from SMEs for ICT will jump from $203 billion in 2012 to $226 billion by 2017.
SMEs will spend about $2 billion on cloud services in developed and emerging Asia Pacific. Our forecasts show that the compound annual growth rates (CAGRs) from 2012-2017 for telecom services are 0.12% and 19% for developed and emerging Asia Pacific. But the growth rate for cloud services are 19% and 42%, respectively (see figure on next page). Cloud services will account for 6% of total SME ICT services revenues in developed Asia Pacific, up from 2% in 2012.
In developed Asia Pacific cloud services supplement relatively anemic growth of traditional communication services. In emerging Asia Pacific, cloud services provide telcos with the tools to differentiate their offerings to SME customers.
Remote desktop solutions are becoming increasingly important for SMEs because they support two key trends: remote working and bring-your-own-device (BYOD). Such services help employees that wish to work from home or another location outside the office because they enable them to receive remote IT support by inviting a third party (either in-house or external) to control or view their screen. In addition, employees that wish to use their personal devices for work are able to use these devices to access their work computer, with full access to the files and software that are available to that computer.
The cloud-based remote desktop services market will be worth more than $252 million in Asia Pacific in 2017. Communications service providers and vendors are already forming partnerships to provide these services to their SME customers.
We recently wrote a report profiling Splashtop, a provider of remote desktop management solutions for SMEs and enterprises. Splashtop does not have a direct sales team. To bring its products to SMEs, Splashtop uses numerous partners, such as Taiwan-based technology manufacturer Acer, Japan-based industrial systems supplier Daikin Industries, and mobile device management providers such as Good Technology and MobileIron, which use remote desktop solutions to enhance their own product offerings. These channel partners have established customer bases across a range of verticals and geographies including Asia Pacific, which broadens Splashtop’s reach.
Increasingly, Splashtop is building reseller relationships with operators, which might eventually decide to host the Splashtop solution in their own data centers to increase the simplicity of the offering. There are many examples of operators worldwide that are partnering with technology vendors to offer cloud services to SMEs.
Beyond the cloud
Providing cloud services like remote desktop management, unified communications, storage/back-up, security and mobile device management are not enough. Operators must also provide a series of customer support tools to aid the transition of SMEs from on-premises solutions to cloud solutions. Keep in mind that one of the largest challenges of SMEs is the lack of technology support. Even fairly sophisticated SMEs rarely have enough IT staff to effectively choose, test, implement and manage their IT solutions. As such, operators must provide customer support tools to aid technology transitions for SMEs.
We advise clients to address at least these three requirements when making available cloud services to SMEs.
Education and awareness creation -- Operators must supply carefully created educational and awareness tools that effectively explain the value of cloud services to SMEs. These include detailed comparisons of the total cost of ownership of cloud vs on-premises solutions; marketing descriptions of the business value of the cloud solutions; simple guides on product features; and guides on what to expect during implementation.
Implementation - Operators must have a dedicated SME cloud implementation team. This team will facilitate the implementation process of transitioning an SME from its current on-premises solution to a cloud-based solution. This team must also be adept at training the SME’s IT department on the use of the solution. This team should also be available for the first 30-90 days of the cloud service to answer questions and provide guidance. This personalized service is important because many of the problems experienced by SMEs occur within the first 90 days of adopting a new cloud solution.
Selling ancillary services - Operators must have a dedicated SME cloud team available to contact SMEs when new services are offered. This team can provide extensions to the existing cloud services (e.g., the mobile enablement of a particular cloud solution) or can offer additional core telecom services like dedicated internet access, higher bandwidths of non-dedicated internet access and VPN services.
As operators bundle cloud offerings with traditional communication services, we anticipate seeing more innovative offerings that include customer support services to ease an SME’s transition from on-premises solutions to cloud services.
Steve Hilton is a principal analyst and Patrick Rusby is a research analyst at Analysys Mason