Reader Forum: Using cloud to tap into the lucrative SMB market

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Ninety-nine percent of businesses worldwide are small- to medium-sized businesses, so it’s no surprise that this segment represents the fastest growing customer segment for service providers. Research conducted by Coleman Parkes on behalf of Amdocs found that cloud-based services provide a significant opportunity for service providers to tap into the SMB market:
–More than 66% of SMBs consider cloud services to be extremely important to their business.
–Fifty-seven percent of SMBs already use cloud-based services, such as storage and backup (72%), computer networks (48%) and office software (41%).
–Forty-four percent of those who are not already using cloud-based services are considering it.
What is surprising is that while most SMBs (74%) would prefer to get their cloud-based services from their primary communications service provider, less than half (45%) actually do. What’s more, 33% of SMBs don’t even think that their primary service provider offers cloud-based services. Nevertheless, service providers are positioned to capture a significant portion of SMB market share. But why?
Setting up a viable cloud business – focusing on SMB essentials
Whether acting as a cloud service broker or selling cloud-based services directly to SMBs, how well do service providers understand what SMBs want from their cloud vendors? The Coleman Parkes-Amdocs research aimed to get to the bottom of this by surveying more than 1,300 SMB decision-makers from various industries in North America, Europe, Latin America and Asia-Pacific regions. The results of this in-depth study reveal that 67% of SMBs are more likely to select a service provider, or extend their current contract with their primary service provider, if offered cloud-based services. In fact, 34% of the SMBs surveyed believe that being offered cloud-based services would improve their relationship with their primary service provider. Beyond service providers’ evident need to inform potential SMB customers of their offerings in this area, the research also makes clear that service providers need to ensure their cloud-based offerings include:
–A single bill covering all communication services: preferred by 80% of respondents.
–Cloud-based services and traditional communications services bundles: desired by 75% of respondents.
–Tailored offerings: 51% of respondents expressed interest in this option.
“This research validates that there is increasing need and adoption of cloud-based services by small to medium-size businesses,” concluded Ian Parkes, managing director at Coleman Parkes Research. “Our survey made clear that service providers are considered a viable and even preferred source for cloud-based services, representing a big revenue opportunity for service providers who choose to capitalize on this.”
Setting up a viable cloud business
Service providers are finding it challenging to achieve competitive differentiation against independent cloud vendors while keeping costs down. While there’s no “one size fits all” approach to cloud services for service providers, one point should be made: A convergent BSS/OSS systems environment, in combination with enhanced SMB self-service capabilities, can enable service providers to differentiate themselves from independent cloud vendors and empower SMBs with cross-service bundles and discounts that are tailored to their needs. Service providers already have a strong relationship with their SMB customers: now they just need to go the extra mile to make sure those customers know they can turn to their primary service provider for comprehensive, tailored cloud services as well.