Cloud Computing is Just in Time for SMBs

Small and medium-sized businesses, affectionately known as SMBs and historically relied on to help lead economies out of recessions or worse, are still smarting from the sting of this mother of global recessions. In fact, market research firm International Data Corp., affectionately known as IDC, issued a report this week revising its earlier forecast of a speedier recovery for SMBs.

"The downturn had a devastating impact on SMBs worldwide," said Ray Boggs, vp, Small/Medium Business and Home Office Research at IDC. "Moving forward, small businesses will not follow the past pattern and return to prerecession's spending levels more quickly than midsize firms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years."

Ouch. Did Boggs just say "over the next several years"?

Since the full 25-page IDC report retails for $4,500, most of us will have to be satisfied with the report summary from the IDC press release announcing the report. Here are a few stats:
- SMB IT spending levels will not return to 2008 levels until 2011
- Spending on PCs and peripherals will see the biggest growth.
- Central and Eastern Europe, the Middle East and Africa will see the strongest spending growth.
- Together, North America, Western Europe and Japan account for 70% of worldwide IT spending by SMBs.

"To succeed, technology providers need to develop separate strategies that address the distinct needs of companies in each of these settings," Boggs added.

Almost on cue and on the heels of this report, enterprise IT providers -- who by their own admission have underserved the SMB IT market -- are courting SMBs with renewed urgency and tailor-made IT solutions, including the cloud-based variety.

In fact, cloud computing is strutting its stuff just in time for many SMBs who want to leverage the latest technology has to offer but without the big price tag. "For small businesses, cloud computing hits a particular sweet spot," Ziff Davis Media Networking & Small Business Analyst Samara Lynn reports. "With cloud services, small businesses reap the benefits of not having to deploy physical infrastructure ... a lot of today's small business needs can be fulfilled almost completely with cloud-based offerings."

Take 3Point Communications for example. We fit the small business profile and exploit the advantages of low-cost "anywhere, anytime" cloud-based solutions including: Gmail, Dimdim for live collaborative meetings and shared white boarding, Basecamp for project management, Ning for our corporate Intranet, Yammer as a our private Twitter-like platform and ooVoo for video conferencing.

SMBs are turning to cloud applications like these, and also to new office productivity cloud offerings, like the Business Productivity Online Suite from Microsoft. With BPOS, SMBs get access to email and calendering, file sharing, virtual meeting and messaging tools starting at $10 per user per month.

"There will be a cloud component to every product we offer," said Birger Steen, Microsofts VP for SMB.

SMBs aren't getting all of their IT challenges solved through the cloud. IBM and Microsoft, for example, will continue to offer in house IT solutions for small businesses and branch offices. And a number of SMBs will elect the hybrid approach, running some services online and others in house.

But with the IDC SMB IT spending report as a caution that the global recession still has its talons in the backs of many SMBs, it's a relief to this critical market segment that new IT pricing models that help keep costs down are here and are only going to improve.