The demand for external cloud service is surging across SMBs in Australia and Aotearoa New Zealand. The opportunity for channel organisations to capitalise on demand is high, particularly for those able to deliver cloud strategy development and managed cloud operations services for the segment.
According to IDC research, commissioned by Microsoft, public cloud spending will nearly double – increasing from $12.2 billion in 2022 to $22.4 billion in 2026 in Australia, and $2.6 billion to $5.1 billion in New Zealand in the same period.
This prediction is supported by a recent Forrester study of APAC SMBs, commissioned by rhipe, Crayon's regional channel operation. The study, The Future of Operations: Maximize Value from the Cloud with a Strategic Mindset, surveyed organisations ranging from micro-operations to businesses up to 1,000 employees. The results show that SMBs are looking to the cloud to deliver growth and enhance customer value across all operational domains. However, they need help to bridge internal constraints on budgeted resource and technical skillsets. This is driving an increased intent to engage expertise from within the cloud services channel.
According to the report, the appetite for public cloud is growing amongst SMBs, with 71% of those surveyed pursuing a hybrid, multi-cloud strategy over the next two years. In an exclusive interview with Foundry, Warren Nolan, SVP of Channel and Strategy at Crayon said that on the basis of this, the channel should anticipate SMBs taking a more considered view of spending decisions, both in terms of technology adoptions and partner selection criteria.
How SMBs are becoming strategic with cloud
There are five areas where channel organisations can demonstrate their value to SMB customers quickly with the cloud. By targeting these areas, the partner can become a trusted strategic partner, and use it as a springboard to drive deeper engagements going forward.
- Building for the long term – With minimal internal resources to manage IT environments, SMEs are looking to partners for support across the entire lifecycle, from deployment to management. Partners with cloud managed services capabilities are going to be particularly valued in this regard.
- Strategic guidance – SMEs know the outcomes they are looking for, but not necessarily the technology journey that will get them there. Partners that can engage deeply and provide guidance on upstream and downstream applications and implications to their business will find SMEs particularly receptive to their guidance.
- Cost control – Concerns over the economic environment will mean that SMBs want to consolidate the number of providers and keep a tight lid on costs and expenditure. The SMB is willing to increase investment where it makes sense to, but the ROI of that expenditure needs to be clear (and, ideally, realised quickly), and the spending needs to be both manageable and stable. Cloud is appealing because it shifts costs to OpEx, and partners should look to offer their services through a simplified billing model as well.
- Security – SMBs are very concerned about security. Particularly following the high-profile data breaches in Australia over the last year. Security professionals are scarce and expensive, however, so channel partners that provide security services will be particularly valued.
- Business continuity – Likewise, SMBs are also very concerned about their ability to handle disruption to their operating and IT environments. As investment into the cloud increases, the cost and impact from outages increase in kind, and SMBs will look to their partners to build resiliency into their environments.
By positioning themselves to address the above five concerns, channel organisations will be well-placed to capitalise on the rapid transformation the SME space will undergo in the years ahead.
A guide book to success with SMBs
As The Future of Operations report notes: “Despite increasing cloud adoption rates, SMEs remain behind larger enterprises on their cloud journey. According to Forrester’s Cloud Maturity Assessment, respondents reported their SMBs have scored an average cloud maturity score of 3.61 out of 5, indicating the absence of necessary plans that support people, process, and technology in cloud adoption. SMBs scored highest in ‘process’, followed by ‘technology’, and then ‘people’, where they are least mature in having skilled staff to support cloud implementations.”
With the channel being key to addressing this lack of maturity, partners need to understand the pain points and pressures facing SMBs. The Forrester report will help them to:
- 1)Understand how to position their services as a partner to enable business agility.
- 2)Gain a strategic mindset around cloud operations, and
- 3)Understand the longer-term cloud roadmaps, and how to deliver these end-to-end services to SMBs.
SMEs are loyal customers. Furthermore, as their investments into cloud and technology begin to deliver the ROI, there will be an ongoing opportunity to scale as their business does. It’s in understanding how to deliver results quickly and efficiently that partners will capitalise on the opportunity.