Cloud Services Move From On-Premise To On-Demand

Roughly 750,000 (12 percent) small businesses and 20,000 (24 percent) medium businesses are already using software as a service (SaaS). However, of today's SaaS users, 78 percent of SBs and 31 percent 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 U.S. SMBs looking into SaaS as a potential solution.

Approximately one in five U.S. 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.

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

The data comes from AMI's latest worldwide SMB Cloud Services Practice.

Comment from AMI Senior Associate Yedda Chew: 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. SMBs have their doubts about 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 U.S. 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 U.S. 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 U.S. 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 U.S. SMB users, according to AMI.

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