Parallels Reveals £660m Cloud Services Market Opportunities in the UK for Small and Medium Businesses (SMBs)

Upwards of 62% of SMBs in the UK plan migration to hosted servers and 10% plan increased spending on hosted applications, illustrating Cloud growth opportunities for service providers

London - October 25, 2011 - Parallels, the hosting and Cloud services enablement leader, today released the key findings of Parallels SMB Cloud Insights™ for the UK, a report that illustrates how service providers can profit by delivering Cloud services to small and medium businesses (SMBs). Parallels estimates that the UK SMB Cloud services market opportunity is £660m and growing, with many small companies reporting plans to increase their switch to hosted servers by 42-62 percent alone. The research will be presented today at WorldHostingDays Local (WHD.local) UK, where industry leaders will gather to discuss current trends in hosting and Cloud services in the UK and across Europe.

Parallels SMB Cloud Insights for the UK addresses the types of Cloud services that hold the most appeal for SMBs and details the best opportunities for service providers to drive growth and revenue in the UK hosting market. Parallels concludes that service providers should focus on delivering profitable, value-added services beyond basic hosting, such as web and social media presence applications, content management and online customer relationship management (CRM) tools. In addition, the report identifies the opportunities to provide Cloud-based operational services such as hosted infrastructure/hosted communications, online backup and storage and hosted e-mail and archiving.

"The migration to Cloud services continues to have a major impact on how small and medium businesses acquire and manage their IT services. The challenge to service providers is to recognise that not all SMBs have the same priorities, so a tailored approach to delivering hosted services will need to be taken into consideration,” said John Zanni, Vice President of Service Provider Marketing and Alliances, Parallels. “Parallels SMB Cloud Insights for the UK provides service providers with the accurate roadmap needed to ensure that they can profit from the £660m growing market opportunity to deliver Cloud services to SMBs.”

Key highlights from the report include:

• Hosted Infrastructure: a key opportunity in the UK SMB Cloud market is the replacement of in-house servers with hosted servers:
  • 20 percent of micro SMBs (companies with 1-9 employees) currently use in-house servers, and of those 42 percent plan to switch from in-house to hosted servers in the next three years
  • 50 percent of small SMBs (companies with 10-49 employees) have in-house servers, and 62 percent of those are planning to switch to hosted servers in the next three years
• Web Presence: opportunities to sell site building, e-commerce and social media management applications, as SMBs still trail larger companies:
  • 28 percent of small SMBs and 31 percent of medium SMBs have e commerce capabilities, while only 15 percent of micro SMBs have these
  • 50 percent of UK SMBs still design their websites in-house
  • Facebook is the second leading form of web presence for SMBs with 28 percent actively using the website, followed by LinkedIn with 24 percent
• Hosted Communication and Collaboration: SMBs report cost being the major factor for switching to hosted/paid-hosted communications services, such as hosted PBX and e-mail:
  • Only 4 percent of small and 11 percent of medium businesses pay for premium hosted e-mail services
  • 12 percent of micro SMBs and 36 percent of small SMBs currently use in-house e mail servers
• Other Hosted Applications (SaaS)
  • While a significant portion of online application use is still free, UK SMBs plan a net increase of at least 10% in spending across several categories of online applications, including online accounting, phone conferencing and file sharing

All Parallels SMB Cloud Insights Reports can be downloaded at http://www.parallels.com/SMBreport2011.

About Parallels
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/uk/spp/, follow us on Twitter at www.twitter.com/ParallelsCloud and Like us on Facebook at www.facebook.com/ParallelsCloud.