The cloud is enabling SMBs to compete on a level with large corporations, which makes them a potential gold-mine for the Channel, says Jakob Olsen, 

Vice-President & Managing Director, EMEA at Acronis IDC Research figures point to worldwide growth in IT spend by small-to-medium businesses (SMBs), with the numbers jumping 4% to $668bn by 2020. The report states that the rise of the ‘third platform’ (big data, cloud, analytics etc) means that SMBs can now compete much more aggressively with larger rivals and is increasing their importance for the IT Channel.

This will come as welcome news to the Channel, which has seen total global IT spend flat-lining, driven in no small part by two key political decisions over the past year – namely, the UK’s vote to leave Europe and the US presidential election. While Gartner is expecting a return to global growth in IT spend for 2017, the prediction for the SMB market is of particular interest as it represents a growing opportunity.

Traditionally, IT suppliers have neglected this market segment, mostly because SMBs don’t have the purchasing power to buy larger IT systems. This meant these businesses were forced to go to service providers that offered enterprise-grade software that could be chopped up and made to work for SMBs.

With the cloud and big data becoming more accepted by businesses from a variety of sectors, IT has become democratised in a way that means that SMBs can now compete with big business from an infrastructure perspective. They can use centralised, cloud-based solutions that perform and operate in the most efficient scalable way – essentially, for a modest budget they can access enterprise-level services. While this centralised underlying infrastructure can still be provided by the large IT players, we are increasingly seeing companies like Microsoft, with Office 365, playing into the SMB market by using infrastructure as a service on top of a hosted IT solution.

Companies like ourselves, that have always had a strong focus on the SMB market, are now seeing that it is much easier for those companies to adopt and operate cloud solutions. In the past – where we’ve had on-premises solutions – businesses had to invest heavily in hardware and services, as well as the associated set up costs. Today, they can get access to fully featured, full functionality cloud-based solutions within around 30 seconds. This gives them the same level of services and software that they would have had in the past from an on-premises solution, but at a fraction of the cost and go to market time.

Over the next few years I believe we will see two major changes happening in this space. Firstly, enterprise-level platforms that have been used to power disruptive technologies, like Uber or Airbnb, will become available to SMBs and individuals to help them become their own companies. This is one of the major trends that you will see more and more in the future where we give the power to individuals that can start from scratch.

Secondly, these technologies will enable SMBs to become super-disruptive. This means that we will see corporations and larger enterprises, especially in the hardware space, or in the physical selling space, slowly losing more and more power. This is because as more businesses move to the cloud those older enterprises will lose their agility and market to sell to. SMBs that have already moved the majority of their services to a cloud-based infrastructure will be ready to scale further and become more enterprise like. 

I believe that over the next five years these changes in strategy will have a major impact and make the SMB market absolutely the one to focus on for any major Channel business out there today.

Jakob Olsen is Vice-President & Managing Director, EMEA at Acronis

Originally posted Channelnomics 14 July 2017

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