As
cloud computing continues to gain acceptance in emerging markets, service
providers—such as telcos, multiple system operators and hosters—are well-positioned
to gain mindshare and become an important route to market (RTM) for small to
medium-size businesses acquiring cloud solutions, according to a report from IT
research firm AMI-Partners.
The
company's recently released 2011 Route-to-Market Opportunity Model shows that
in emerging markets, such as China, India, Brazil and Russia, SMB cloud services
spending and investments through service providers will increase nearly sixfold
from $111 million in 2011 to $615 million by 2015. This represents a four-year
annual growth rate of 54 percent—the largest among all RTMs tracked by AMI and
far outpacing the growth in total software-as-a-service (SaaS) spending over
the same period.
"Service
providers in emerging markets will gain considerable market share in the cloud
services space, due to several key factors," said Rohan Bose, associate
for AMI's channels practice. "The first is due to mergers and acquisition
activity within the channel landscape. Larger telcos and service providers are
in the process of acquiring smaller VARs and local channel partners/resellers."
Bose said the acquisition of these partners allows service providers to
diversify their product portfolios and enter the cloud market by providing
basic SaaS solutions (such as accounting, business intelligence/analytics,
email and CRM).
"This
is an important step for many telcos and MSOs, as they believe that their traditional
offerings such as voice, data and video services will begin to enter a phase of
modest growth over the next couple of years," he said. "Cloud
services allow service providers the ability to meet the growing SMB demand and
differentiate themselves from other competitors."
The
second factor for the expected increase in service providers' share is their
ability to bundle SaaS solutions with broadband and high-speed Internet
connectivity. Other cloud providers such as channel partners can bundle multiple
SaaS applications together, but cost-conscious SMBs are more likely to purchase
bundles containing broadband. Bose explained that as the demand for cloud
services continues to rise, SMBs in emerging markets will require access to
high-speed Internet to increase business efficiency, and it is the service
providers who are uniquely positioned to offer such packages.
Finally,
many of these service providers offer data centers and hosting capabilities to
SMBs looking to store infrastructure externally. Similarly, they can offer data
center hosting to traditional channel partners such as VARs for the same
reason. Other channel partners who require space to host their own apps often
turn to service providers to meet their needs. AMI studies have shown strong
interest by channel partners to partner with service providers for hosting
needs, but it is up to the service providers to foster and grow the
relationship.
"Given
the gradual shift in SMB preference, IT vendors would be wise to take advantage
of this lucrative opportunity," the report concluded. "Since many
smaller service providers do not yet have the necessary business applications
to offer SMBs, SaaS and other cloud vendors can utilize them as a viable option
to go-to-market. By entering into strategic and symbiotic relationships,
vendors can help service providers add further value to their services."
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