July 14, 2011

2 Min Read
SMBs Increasingly Turn to Cloud Storage

By Dan Berthiaume

A new study from AMI Partners suggests U.S. small and midsize businesses will increase their spending on backup and storage in the cloud by 11 percent yearly through 2015, reaching $270 million. Based purely on some educated guesses, MSPmentor thinks the forecast is a bit too conservative.

Pushing beyond basic email backup, the AMI Partners study indicates SMBs are moving to the cloud to enhance existing packaged applications, such as CRM databases. That means MSPs can pick up even more business handling integration, customization and data flow issues that SMBs frankly lack the resources, time and knowhow to manage on their own. Another bonus? AMI Partners says most SMBs prefer private clouds, which must be built individually from the ground up (so to speak).

Mobile SMB Employees Enter the Mix

The study also identifies another key driver for SMBs to put their heads into the storage cloud. The proliferation of mobile employees. For many SMBs, employees who work remotely via mobile device are a perfect opportunity cloud storage services. However, mobile employees also present challenges in terms of securely linking to the corporate IT infrastructure and successfully transmitting and storing the data they collect and generate.

Beyond the immediate benefits of enhanced security and elimination of costly physical infrastructure, hosted cloud storage can also offer other advantages to SMBs. These include paying only for storage space actually used, flexible payment schedule, and generally tighter cost controls. In addition, the theoretically limitless space of a cloud storage platform means an SMB can simply pay for more storage as needed, rather than having to purchase larger on-premise storage solutions.

Larger Market?

Still, we think AMI Partners is underestimating the total size and growth rate for the U.S. SMB cloud storage and backup market. MSPmentor is aware of at least a dozen cloud storage providers that are growing 25 percent or faster per year. And we suspect those one-dozen cloud storage providers already have combined annual revenues that exceed $270 million — with most of the revenues coming from MSPs serving SMB customers.

It’s rare for us to see an IT forecast that sounds too conservative. And in a way — it’s refreshing. Too often, we see research reports that include overly optimistic forecasts, which may be designed to please vendors serving specific markets. In AMI’s case, we’ve seen a lot of solid SMB perspectives over the years.

Additional insights from Joe Panettieri.

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