Growing Numbers of Small and Medium Sized Business Cloud Adopters Are Rethinking Their Decision

New York, New York, September 15, 2015 (Newswire.com) - – As cloud is moving into the next wave of adoption, AMI’s study reveals that a growing number of small and mid-sized businesses (SMBs) are becoming disenchanted with their cloud service providers and some are even re-adopting on-premise solutions. 

The shift to the cloud among SMBs is dramatic and accelerating. While spending on on-premise solution will only grow by 1% CAGR by 2019, spending on cloud services will grow by 15.5% and make up nearly a quarter of the total $370 billion SMBs will spend on information and communication technology (ICT).  This represents a significant shift in how SMBs plan to allocate their budgets.  Only 17% of SMBs currently allocate more than 10% of their IT spend for cloud services.  This will grow to 25% in the next 12 months and 38% in the next two to three years.

"The reason for the rise in cancellations is because cloud solution providers are not successfully aligning their offerings with the needs of small and medium businesses."

Andy Bose

However, while cloud adoption is accelerating, some SMBs are not satisfied that they are getting what they are paying for and they are making changes.  According to AMI’s most recent ICT Cloud Services study, 52% of small businesses and 46% of medium businesses are less than satisfied with their cloud solution providers.  This is a significant shift from 2014 when only 30% of small businesses and 32% of medium businesses reported they were less than satisfied.

This increasing dissatisfaction is translating into lost business for cloud solution providers.  While in 2014 only 3% of small businesses and 5% of medium businesses canceled their cloud services contracts in the previous 12 months these numbers jumped significantly in 2015.  In the past year 11% of small businesses and 14% of medium businesses have canceled these types of services.  Furthermore, half of those that canceled cloud services replaced them with on-premise solutions.  If this trend continues it poses a significant risk to cloud solution providers (CSPs) in terms of lost revenue.

 “The reason for the rise in cancellations is because cloud solution providers are not successfully aligning their offerings with the needs of small and medium businesses,” said Andy Bose, CEO at AMI. When purchasing new IT products and services, 79% of small and medium businesses feel very strongly that new solutions must align with their business strategy and goals.  They are also thinking about the long term and are prioritizing scalability, flexibility and solutions that will grow with their businesses.  These factors are causing them to seek cloud solutions in record numbers.  However, given the emphasis on having solutions that align with their goals, to win and keep SMBs’ business cloud solution providers must prove they understand and can meet the specific needs of these customers.

Related Study

AMI’s SMB ICT and Cloud Services Tracker Practice quantifies the opportunity for ICT vendors and providers in the SMB segment.  This service covers a wide scope of IT and telecommunications adoption by SMBs.  Key topics include: current and planned adoption of key ICT solutions, factors driving deployment, price points, size and revenue potential of the market, customer attitudes and purchase behaviors, and channel selection.  Detailed analyses address the following:

• What technologies are SMBs using in their business? What technologies are perceived to be the most important to SMBs?
   
• Where are pockets of highest growth opportunity? How has the economy impacted SMBs?  What IT solutions are considered “strategic” by SMBs?​ 
   
• What are the business pain points and priorities?How can vendors and service providers find the “high-value” targets for their ICT solutions?
   
• How do they reach key business decision makers within these SMBs, craft ideal messaging, etc.?
   
• ​What is the total SMB market opportunity for hosted/cloud-based products and services and how fast is this growing? 
   
• What hosted solutions are experiencing the greatest growth?
   
• What is driving cloud adoption? 
   
• ​How interested are different types of SMBs in various cloud bundles? 
   
• How does this interest differ among business applications and hosted infrastructure? 
   
• ​Where do SMBs prefer to purchase technology solutions? ​ 
   
• What are the country- and segment-specific nuances?

For more information about this study, AMI-Partners, or our global SMB research, call 212 944 5100, e-mail [email protected] or visit www.ami-partners.com.

 About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, internet, telecommunications and business services strategy, venture capital, and actionable market intelligence—with a strong focus on global small and medium businesses (SMBs), extending into large enterprises and home-based businesses. AMI-Partners’ mission is to empower clients for success with the highest quality data, business strategy perspectives and go-to-market solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, internet, telecommunications and business services companies. The firm is well known for its IT and internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

Media Contacts:

Quoted Analyst:   Andy Bose. Phone: (212) 944 5100.                                           Email: [email protected]

Media Relations:  In US (New York): Nancy Carty. Phone: (212) 944 5100 ext 581. Email: [email protected]

In Singapore: Jackilyn Almazan. Phone: (65) 6521 3787 ext 3788. Email: [email protected]

In India (Kolkata): Jyoti Singh. Phone: (91) 33 4003 3093 ext 223 Email: [email protected]

 In India (Bangalore): Rati Ghose. Phone: (91) 80 4148 2661 ext 35.  Email: [email protected]

 In India (Mumbai): Neha Jalan Goenka. Phone: (91) 99300 20420. Email: [email protected]