ChannelTrends- The Cloud Reality for SMB

Among the top “buzz” words in the IT community are “cloud” and “SMB,” which is seen as no coincidence by those in the IT channel. These two terms are closely tied and both highlight key areas of opportunity for solution providers. Time has demonstrated how cloud benefits extend to businesses of every size, in every industry, but the model has been especially beneficial to small and mid-sized companies.


SMB organizations often find themselves battling much larger competitors, businesses that typically have access to a greater number of financial and infrastructure resources. That disparity allows enterprise companies to invest in a variety of new technologies that help improve their efficiency and scale their operations. While the sheer size and geographic reach of these large organizations often makes change slow more difficult, they normally have the means and internal teams to make it happen.


So how can SMB organizations gain access to similar solutions that help them keep pace, or surpass the business innovation that their larger competitors are implementing? Of course, that’s where the cloud and solution providers come in. When small businesses need to make improvements in their processes and systems, they repeatedly engage channel companies to lead the way. Whether the solution requires a new CRM or accounting system, or implementing a VoIP or mobility solution, VARs and MSPs are best able to meet the specific needs of the SMB—and the cloud is becoming their preferred delivery system.


Explosive Growth

Virtualized applications remain top business opportunities for solution providers, and industry projections show that will likely continue over the next few years—especially for small and mid-sized business clients. One recent study, Spiceworks’ Voice of IT: State of SMB IT for the second half 2011, emphasizes the importance of the cloud on with this business segment, including the prediction that its adoption will double every six months. This survey of 1,200 small and mid-sized businesses illustrates that almost half of the IT professionals in SMB companies have adopted at least one virtual application. That number almost doubles the results from Spiceworks’ April 2011 survey, which was approximately twice the finding of the company’s October 2011 assessment.


With that level of interest and adoption by SMB organizations, solution providers who aren’t offering cloud services may want to reconsider their position. To remain competitive, small businesses need the scalability and low capital requirements that these solutions offer. In general, cloud services are more flexible than traditional software applications, offering SMB organizations a smaller monthly expense for a higher-quality service. The pay-as-you-go model allows business owners to obtain the seats they need at that point in time, rather than hedging a capital investment on future growth projections. Solution providers who are capable of helping them with a cloud conversion are doing well, especially when they capture additional project and managed services contract with the relationship. Managing the account is key, being the IT resource for whatever services SMB organizations need, including implementation and network upgrades. .

The availability of new technology delivery systems is changing the way many businesses think. In-house IT is no longer seen as a necessity and mid-size businesses are coming to the same realization as their smaller rivals: they save money by outsourcing. The management teams are not only looking at direct cloud service providers, but they are more open to engaging with VARs and MSPs.


Mobility is another advantage of the cloud, with workers able to access crucial business systems regardless of where they are, or what time of day it is. While enterprise competitors have used these methods for years to connect remote offices and home users, advances in web-based technologies now allow SMB organizations to enjoy the same capabilities. Solution providers who offer these types of cloud services can get their “foot-in-the-door” at new client sites, creating the opportunity for a number of future projects and services. As these businesses outsource more and more of their IT support, it’s critical to establish a relationship as early in that process as possible. Initial projects such as email


Cloud Channel Options on the Rise

The increase in SMB adoption is also spurring new opportunities for solution providers, as vendor and distribution partners develop programs to support these types of services. The trend continued this week, with announcements from Cisco and HP highlighting the opportunities for VARs and MSPs. These manufacturers (as well as many others) understand the critical role their channel plays in the delivery of not only traditional hardware and software, but the cloud services that SMB organizations want.


As reported this week in Channel Insider, Cisco is building a considerable cloud strategy through internal advances and outside acquisitions, including the purchase of cloud portal software maker newScale earlier this year. Company executives have acknowledged the need for virtual computing capabilities and are developing a number of initiatives to support their channel partners in this space.

HP has similar designs on the cloud for its partners, recently introducing a number of new cloud- and data center-based offerings. The Data Center Network (DCNC) solution and the CloudSystem services will be joint offerings with Alcatel-Lucent, enabling solution providers to evolve data center infrastructure and develop virtual environments.

Along with the developments in the channel vendor community, distributors continue to refine their cloud enablement tools as well. SYNNEX was recently in the news with the introduction of its new CLOUDSolv Cloud Services Automation Platform, an application lifecycle system that allows solution providers to manage their portfolio of cloud services.

Virtually every channel distributor is getting involved to some extent in virtual technologies, from programs and initiatives to educational forums. One of the latest cloud blogs, CloudTalk, contains a wealth of cloud-related information for solution providers, including trends and stories from the channel. Hosted by Ingram Micro and written by former Business Solutions magazine editor Gennifer Biggs, the new forum addresses a number of issues in the SMB community and how they can be solved by solution providers offering cloud services.

With all of these great resources available to help VARs and MSPs offer virtual applications to SMB organizations, expect to see adoption in the channel exceed that of the industry—at least for those who are engaged.

Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and industry alliances director with Autotask. Contact Brian at [email protected].