June 5, 2012
Research details SMB cloud buying behaviour, and forecasts the Japanese market will grow to ¥131B ($1.6 billion) during 2012 and reaching ¥200B ($2.5 billion) in 2015
TOKYO, JAPAN — 5 June 2012 — Parallels, the hosting and Cloud services enablement leader, today released the key findings of its annual Parallels SMB Cloud Insights™ for Japan. The report identifies cloud service opportunities among Japanese small and medium businesses (SMBs), which Parallels estimates will grow to ¥131B ($1.6 billion) during 2012. The new findings now encompass four specific categories of cloud services, including hosted infrastructure, web presence services, hosted communication and collaboration, and online business applications.
"An Increasing number of SMBs in Japan are rushing to leverage the value of the cloud to gain enterprise-level, more affordable computing power, applications, and services,” said John Zanni, vice president of service provider marketing and alliances of Parallels. “Parallels SMB Cloud Insights™ for Japan offers practical insights and identifies targeted opportunities that will help service providers drive growth in the Japan SMB cloud market in 2012 and beyond.”
Parallels forecasts the Japanese SMB cloud services market will grow by ¥69B ($847 million) over the next three years, reaching ¥200B ($2.5 billion) in 2015. Given this impressive growth rate, service providers who become familiar with the various SMB audiences in Japan and target them with the services they need will have ample opportunity to profit from the cloud, as Japanese SMBs continue to catch up with the rest of the developed world in their use of cloud services.
Parallels SMB Cloud Insights is an example of the company’s expertise that service providers can rely on to grow and Profit from the Cloud™. More than 9,000 service providers successfully rely on Parallels and its expertise, ecosystem and cloud and hosting enablement software to profitably deliver applications and cloud services to more than 10 million small and medium businesses (SMBs) in 130 countries. Parallels has software designed to meet the needs of any service provider or hoster regardless of their market entry point. From Parallels Plesk® Panel, the industry’s most widely deployed hosting automation and server control panel, to Parallels Automation, deployed by the world’s largest telecom operators, hosters and providers of vertical solutions, Parallels has the right solution to help service providers deploy new services faster, reduce their operational costs, and increase average revenue per user.
Additional key research findings in Parallels SMB Cloud Insights™ for Japan include:
- Adoption of hosted infrastructure services among SMBs in Japan is now nearly on par as those in mature cloud markets like the US. Hosted server has grown nearly 25 percent since 2011, to a value of ¥40B ($499 million).
- The server adoption trend is especially marked among small SMBs (those with 10-49 employees), where overall server penetration grew by 23 percent, and purchasers were four times more likely to go to the cloud than to buy in-house infrastructure.
- As in 2011, price continues to remains the most important criterion for SMBs purchasing hosted infrastructure. Educating SMBs on the true cost of owning an in-house server, while also offering them lower-priced infrastructure options, will help encourage adoption.
- Parallels research forecasts continued growth in hosted infrastructure across all size segments of Japanese SMBs, with compound annual growth rate (CAGR) of at least 10 percent through 2014, becoming a ¥50B ($670 million) market by the end of that year.
- Service providers can generate higher revenues by offering add-on services that will make hosted servers more secure and increase their value to SMBs. Top three most popular add-on services are security, SQL databases and control panels.
Hosted Communication and Collaboration
- By early 2012, 53 percent of Japanese SMBs had a website, and 47 percent of those were using a service provider to host it. This trend will continues, as Japanese SMB spending on web presence services will reach ¥36B ($446M) by end of 2012.
- Japanese SMBs’ overall spending on web presence service is mainly driven by new entrants to the market, but it also included some conversion from in-house web servers to third-party web hosting. In addition, upselling existing web presence customers with web applications continues to be an important source of market growth.
- Parallels expects the current growth rate in web presence services to stay steady over the next several years, especially as businesses in the micro SMB segment add websites. For the next three years, the overall Japanese SMB market will grow 12 percent year-over-year, reaching ¥50B ($621M) in 2015.
- Parallels believes that web hosting could become a loss leader, used to drive sales in other areas of cloud services. New areas of opportunity will come from offering web application add-ons that SMBs are increasingly demanding. These include security and health monitoring, search engine optimization and website backup.
Business Applications (also known as software-as-a-service or SaaS)
- Parallels expanded its research to include tracking of hosted premium business e-mail and hosted PBX. Currently, just 6 percent of SMBs pay for premium e-mail and only 2 percent purchase hosted PBX. Parallels expect these two cloud services to be among the highest growth areas.
- When selecting a hosted premium business e-mail service Japanese SMBs look for technical features, pre-sales support, as well as comprehensive information of the provider’s website. Price is not in the top five criteria for selection.
- To be successful in the hosted PBX market, Parallels suggest service providers to focus on educating SMBs about hosted PBX, offer small bundles and keep prices low, and recognize SMB purchase triggers.
- Business applications represent the single largest category of current SMB cloud spending at ¥51B ($639M).
- The current top business applications for Japanese SMBs are file sharing, payroll and HR applications, phone conferencing, and online backup and storage.
- Parallels calculates that by 2015, Japanese SMBs will spend ¥86B ($1.07B) on business applications, with file sharing, web conferencing, online backup and storage, and instant collaboration among the fastest growing applications.
- To mitigate risks and increase profitability, Parallels recommends that service providers offer the right applications to each SMB size segment. Also consider offering bundled cloud services as Japanese SMBs favor this approach.
To download 2012 Parallels SMB Cloud Insights™ Reports click here http://www.parallels.com/smbreport.
Parallels is a worldwide leader in hosting and Cloud service enablement and desktop virtualization. Founded in 1999, Parallels is a fast-growing company with more than 800 employees in North America, Europe, and Asia. For more information, please visit www.parallels.com, follow us on Twitter at www.twitter.com/ParallelsCloud and Like Us on Facebook at www.facebook.com/ParallelsCloud.