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Cloud Storage in the SMB Shows Lots of Room for Growth

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As consumer acceptance of the cloud grows, small businesses are becoming more comfortable about adopting the cloud to handle major facets of their IT operations, particularly when it comes to storing their data. This growing comfort with cloud storage provides VARs and MSPs with major opportunities in the SMB market. The analysts at Clutch, a B2B rating and reviews firm, conducted a recent survey that asked five questions of respondents. The answers they received give us a look at several important factors affecting sales in today’s SMB Cloud market.

 

To Dive In, or Wait?

As cloud provider competition has increased and the technology matured, and (more importantly) as the cost has plummeted, the answer to the question of when to adopt the cloud seems to be “right now.” The majority of SMBs who adopted the cloud have done so within the last few years; nearly a quarter of them within the last 12 months.

The dam appears to have burst. At this point, holding out for better pricing or more ideal technology metrics reaches a point of diminishing returns. The advantages (and sheer necessity) of cloud data storage have surpassed any further cost savings or skeptical hesitation.

 

Why the Cloud?

The fundamental discussion that should be had when considering cloud storage solutions is: “What are the benefits to the organization?” For most businesses surveyed, the primary benefit they received was improved access to data. The ability to easily access data and applications from anywhere, without having to consume IT staff resources to do it, is driving much of the SMB’s cloud adoption.

Businesses—even small ones—are becoming more mobile in their operations, and are relying more and more on staff who can work remotely and on-the-go. The question of whether mobility prompted the cloud or the cloud enabled mobility might be a “chicken-and-egg” debate, but it’s easy to argue that, in this case, you can’t have one without the other.

Interestingly, while improved security and large-file migrations were tied as secondary benefits, the availability of storage and its cost were the least important factors for cloud adoption. In particular, the lack of concern about cost is evidence of the opportunity that now exists, as it shows a major shift in consumer sentiment about what was once a primary obstacle in cloud sales: the expense.

 

Is the Cloud Reliable?

More than a third of organizations surveyed reported no problems with their cloud service providers over the past year. That’s the good news. The bad news is that the primary issue experienced by the remaining two-thirds was downtime, which remains a persistent challenge in the technology world.

While it’s a valid criticism of the cloud, professional cloud storage providers have a strong track record of stable datacenter operations, and multiple layers of built-in redundancy means outages are rare. The reliability of the cloud is on par with any on-premise network, and perhaps more so in many circumstances. In addition, the ability to expand into disaster recovery solutions means that cloud storage possesses many unique qualities that can’t be easily replicated in an on-premise network.

 

Storage Provider or Storage Service?

Control and efficiency are two facets of business operations that often clash with each other. The same is true of cloud storage. Is the attention that must be paid to managing backups worth the trouble, or is a convenient automated service that automatically backs up data a better solution?

For most SMBs, the answer seems to lean heavily in favor of the storage provider solution vs. the automated service approach. This is more evidence of the opportunity that exists for VARs and MSPs to bring comprehensive solutions to their SMB customers, customized to address their desire to control at least some of the process. This may have the added effect of relieving some of the stress associated with making the switch to cloud-based storage (i.e., allowing the data to leave the premises).

 

What is the Spend?

More than half of survey respondents pay $250 or less per month on cloud storage backup. A quarter of them use free services so they pay nothing at all. Free services don’t have the security and capacity to meet the needs of most businesses, however, so those services are likely to become less favored as cloud adoption grows.

Interestingly, a quarter of respondents pay between $250 and $1,000 each month, which is a sweet spot for many service providers building recurring revenue. As cloud adoption continues to gain acceptance and become a business necessity, we can expect to see many free service users shifting to the lower cost tier, and many in the lower cost tier to shift to the middle.

 


 

This survey and its results are eye-opening in terms of what is still out there. If cloud storage is a building-block of your solutions business, then bringing your SMB customers into a cloud storage solution opens up the potential for further sales of security, virtual desktop, disaster recovery, and infrastructure solutions as well.

While selling to the enterprise makes for profitable business, VARs and MSPs are smart to keep an eye on small business moves to the cloud. If nothing else, the Clutch survey adds more evidence to the pile that shows how much opportunity exists in the SMB market.