SMB Cloud Spending To Approach $100 Billion By 20141:54 PM EST Thu. Aug. 12, 2010
SMB spending on cloud computing will approach $100 billion by 2014, according to recent research released by AMI Partners.
Early results from AMI's World Wide Cloud Services Study show that SMBs are swiftly adopting cloud services as a cost-reduction strategy and to enable greater agility. Total cloud-related information and communications technology spending among SMBs globally surpassed $52 billion in 2009, representing just 6 percent of total worldwide SMB ICT spending. But AMI predicts that that will nearly double over a five-year period.
"By 2014, we expect this to exceed $95 billion, or about 11 percent of total worldwide SMB ICT spending – indicative of a compound annual growth rate of 13 percent," Deepinder Sahni, AMI’s senior vice president for global sizing and segmentation said in a statement.
The bulk of SMB cloud spend so far has been on CRM, payroll, accounting and financial and Web conferencing applications, and over the next 12 months SMBs will invest in cloud-based CRM, business intelligence and Web and video conferencing solutions. There is also growing SMB interest in cloud-based productivity suites and bundling value-added components like security, storage and wireless broadband access, AMI indicated. Meanwhile, AMI found that remote managed IT services, SaaS and Web and video conferencing are the highest growth components within the cloud, with a 20 percent compound annual growth rate expected for each.
"The SMB ICT landscape will get a makeover during the next five to seven years, as new entrants and new services claim a piece of the total ICT spending pie," Sahni continued. "In several instances we are seeing SMBs adding new ICT capabilities (and expanding the total spending pie) because the cloud makes them more affordable and easy to deploy, especially CRM."
The AMI research dovetails a recent report released by IT management software maker Spiceworks that also shows that SMBs are gobbling up cloud computing at a quickened pace.
Spiceworks found that cloud services adoption increased during the first half of 2010, with 14 percent of SMBs reporting that they use cloud computing services with another 10 percent expecting to deploy cloud services. Additionally, Spiceworks found that 38 percent of SMBs with fewer than 20 employees currently use or plan to use cloud computing solutions within the next six months. Meanwhile, 7 percent of organizations with 20 to 99 employees and 22 percent of organizations with more than 100 employees said they plan to use cloud services over the same time period.
"Small companies with little existing infrastructure and outsourced IT are moving most quickly to the cloud, whereas larger SMBs are taking more measured steps due to considerable investments in onsite technology," Jay Hallberg, Spiceworks co-founder, said in a statement.