SaaS Business Apps Drive SMB Cloud Computing Adoption

SaaS Business Apps Drive SMB Cloud Computing Adoption

Much of cloud computing’s infancy was fueled by software development firms, enterprise tech companies, and large financial institutions. IBM sparked the trend in 2003 with its on-demand computing initiative. By late 2005, Amazon recognized the potential market for IaaS and PaaS solutions and launched its EC2 service less than a year later.

Fast forward five years, and almost every tech startup relies in some way on EC2, Windows Azure, Google Apps Engine, or similar IaaS and PaaS services. But it’s SaaS solutions—and their popularity with SMBs—that have driven cloud computing adoption and innovation.

A recent Gartner report estimated that the IaaS market hit $3.7 billion in 2011 and will grow to $10.5 billion by 2014. In a separate report, Forrester Research predicted the SaaS market will explode from $21 billion in 2011 to $63 billion by 2014. In short, SaaS is already trouncing IaaS in market share—a trend that will continue in the coming years. As much as half of that grow will be in the SMB sector.

For anyone looking to capitalize on SMBs’ growing interest in cloud computing, Techaisle’s recent cloud computing survey offers a trove of helpful information:

  • 46% of SMBs who’ve adopted cloud computing services use only SaaS business apps; 26% use only IaaS; and 26% use both SaaS business apps and IaaS.
  • 69% of SMBs prefer to procure SaaS apps from a single trusted integration specialist or vendor.
  • 40% of SMBs desire more training opportunities
  • 36% of SMBs cite lack of app customization as the primary SaaS drawback
  • 41% of SMBs have experienced cloud service integration challenges
  • 49% of SMBs want faster deployments

As for why SMBs are so eager to embrace SaaS solutions, businesses cite simple installation, minimal configuration, on-demand everywhere availability, and integrated web-based data backup as some of the most desirable features of SaaS products.

By far, the most popular SaaS apps are core business productivity tools. Google Apps and Microsoft Office 365 are two of the best-selling SaaS products in the SMB community. Google claims that a majority of their 4 million Google Apps customers (and 70 million users) are SMBs. Similarly, Microsoft says that it has 100 million Office 365 users worldwide (a majority of which also come from SMBs).

The demand for SaaS products isn’t limited to office, collaboration, and email software. As of 2011, QuickBooks Online had 25 million users, and AMI reports that 570,000 SMBs have adopted cloud-based CRM solutions—a number they expect to triple over the next three years. Salesforce.com is the leader among CRM vendors, but the SaaS CRM field also includes Applicor, NetSuite, and SugarCRM. Other SaaS products popular with SMBs are email list management and marketing, project management, and database development and administration tools.

Moving forward, the next set of winners in the SMB SaaS market will likely be companies that provide apps and services that enhance interoperability and integrate cloud solutions into a single unified framework or control panel. Given the demand for seamless service and app integration, expect initiatives like OpenStack, HP’s converged cloud, and IBM’s SmartCloud to grow in popularity. Also look for Microsoft and Google to increase their presence in the broader SaaS market through Microsoft’s growing portfolio of SMB cloud services and Google’s Google Apps Marketplace.

By Joseph Walker

Follow Us!

CloudTweaks

Established in 2009, CloudTweaks.com is recognized as one of the leading authorities in cloud computing information. Most of the excellent CloudTweaks articles are provided by our own paid writers, with a small percentage provided by guest authors from around the globe, including CEOs, CIOs, Technology bloggers and Cloud enthusiasts. Our goal is to continue to build a growing community offering the best in-depth articles, interviews, event listings, whitepapers, infographics and much more...
Follow Us!

3 Responses to SaaS Business Apps Drive SMB Cloud Computing Adoption

  1. If we take the same line of approach for large enterprises and SMBs in SaaS Business Apps usage, the analysis is strikingly similar. Most large companies have reached a reasonable state of development and their growth pattern, at best, moderate. Its SMBs segment which are the new kids on the block and get all the attention. Even for enterprise applications, most future growth will come from the SME market. The similarity is the infrastructure (computers, networks and enterprise applications), but usage will be very different. In my opinion, for the SME segment, cost-sharing model and low TCO will lead to mass adoption of SaaS Business Apps.

  2. If we take the same line of approach for large enterprises and SMBs in SaaS Business Apps usage, the analysis is strikingly similar. Most large companies have reached a reasonable state of development and their growth pattern, at best, moderate. Its SMBs segment which are the new kids on the block and get all the attention. Even for enterprise applications, most future growth will come from the SME market. The similarity is the infrastructure (computers, networks and enterprise applications), but usage will be very different. In my opinion, for the SME segment, cost-sharing model and low TCO will lead to mass adoption of SaaS Business Apps.

  3. @parekhmittal Thats why #IPSaaS technology makes the most amount of sense. 1 vendor instead of 3 means only 1 number to call for support.

Comics

At CloudTweaks, we're plugged into the cloud, the internet of things and all that the web has to offer. From wearable technology, to mobile computing, cloud computing and big data, CloudTweaks is your source for updates and news on the most innovative technology.

Popular

Top Viral Impact

Cloud Infographic: Most Used Cloud Apps

Cloud Infographic: Most Used Cloud Apps

Cloud app and analytics company, Netskope released its quarterly Cloud Report. The new report reveals that enterprise employees are using an average of 397 different cloud apps (most of which are unsanctioned), when IT estimated they have 40-50 — that’s a tenfold underestimation. Below is an infographic provided courtesy of the group at Netskope which goes into further detail.…

Five Signs The Internet of Things Is About To Explode

Five Signs The Internet of Things Is About To Explode

The Internet of Things Is About To Explode By 2020, Gartner estimates that the Internet of Things (IoT) will generate incremental revenue exceeding $300 billion worldwide. It’s an astoundingly large figure given that the sector barely existed three years ago. We are now rapidly evolving toward a world in which just about everything will become…

Cloud Infographic – Monetizing Internet Of Things

Cloud Infographic – Monetizing Internet Of Things

Cloud Infographic – Monetizing Internet Of Things There are many interesting ways in which companies are looking to connect devices to the cloud. From the vehicles to kitchen appliances the internet of things is already a $1.9 trillion dollar market based on research estimates from IDC. Included is a fascinating infographic provided by AriaSystems which shows us some…

Big Data Analytics Adoption

Big Data Analytics Adoption

Big Data Analytics Adoption Big Data is an emerging phenomenon. Nowadays, many organizations have adopted information technology (IT) and information systems (IS) in business to handle huge amounts of data and gain better insights into their business. Many scholars believe that Business Intelligence (BI), solutions with Analytics capabilities, offer benefits to companies to achieve competitive…

Featured Sponsors

Watching You Shop: Stores And Mannequins “Read” Their Customers And Respond

Watching You Shop: Stores And Mannequins “Read” Their Customers And Respond

Watching You Shop The mannequin in the store window stares blankly ahead as shoppers look at the clothes it is dressed in and contemplate a purchase. One shopper makes some comments. “It’s nice. I wonder if they have my size.” Another takes a few steps inside the store to see where these particular clothes might…

Sponsors

Can You Run Your Business Entirely From A Mobile Device?

Can You Run Your Business Entirely From A Mobile Device?

Can You Run Your Business Entirely From A Mobile Device? You know the feeling. It’s 8:00 a.m. Your bus is stuck in traffic, so you pull out your phone and start answering work emails. While you may rely on your mobile device’s apps for everything from an alarm clock to a fitness tracker to a…

Placement Opportunities - Find Out!

Established in 2009, CloudTweaks is recognized as one of the leading influencers in cloud computing, big data and internet of things (IoT) information. Our goal is to continue to build our growing information portal, by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

You can help continue to support our community by social sharing, sponsoring, partnering or contributing to this great educational resource.

Contact

CloudTweaks Media
Phone: 1 (212) 763-0021

Join Our Newsletter