SMBs in Singapore increasingly moving to cloud services

Parallels, the hosting and cloud services enablement company, has updated Parallels SMB Cloud Insights with insights about the Singapore cloud market for small and medium sized businesses (SMBs). The Parallels SMB Cloud Insights 2014 report says that the SMB cloud services market in Singapore will experience robust growth, which is projected to hit S$916 million in 2017, with a three-year CAGR of 21%. 

Source: Parallels. Zanni.

"The Asia Pacific region will in general leapfrog the rest of the world because they started later. As this region grows at an accelerated rate, they can move to cloud much more rapidly. In aggregate, I suspect Asia will grow very fast in the next five years," said John Zanni, Chief Marketing Officer - Service Providers, Parallels. 

The new report examines the top four cloud service categories most widely deployed by SMBs in Singapore in 2014: infrastructure-as-a-service (IaaS), web presence, unified communications, and business applications. 

Aligned with global growth estimated at US$125 billion by 2016, the report details the growth in the Singapore SMB cloud market at S$520 million in 2014, with infrastructure-as-a-service (IaaS) taking the largest share of all the cloud services categories, at S$195 million; web presence at S$57 million; and unified communications (UC) at S$126 million. Business applications account for the remaining S$142 million, and have the second-largest share of the market.

· The infrastructure-as-a-service segment has seen high adoption of managed services/hosted servers with 63% of respondents indicating such adoption, followed by database applications at 45%, and project management at 33%. 

· Web presence: The Singapore SMB web presence accounts for 11% of the total market in 2014, estimated at S$57 million. The report notes the following trends:

- The majority (70%) of SMBs are using websites

- Many businesses are outsourcing the design and management of their websites

- Most SMBs are using web applications

· Unified communications (UC): Previously called 'communication and collaboration', UC accounts for 24% of the market, or S$126 million. This segment includes business class email, hosted PBX, and collaboration applications. Zanni noted that UC growth is due to increased confidence in a de facto cloud service. "Offerings from big providers like Microsoft are becoming more and more full-featured and easy to use," he said.

- Many SMBs opted for paid hosted email over free email primarily due to the improved security offered by the former, with good pricing and professional look-and-feel as other purchase triggers

- Nearly 40% of SMBs are using instant collaboration or other collaboration applications

· Key growth highlights for business applications include the use of online applications at 85%, including SMB use of cloud-based file sharing, online backup and storage, payroll and human resources, amongst others

- Businesses purchasing full versions of business applications after having tried the limited-term trials, which typically allow an application to be used for a predefined time.

“The size of the Singapore SMB cloud services market may be smaller than the other mature markets in the region, but the country’s SMBs are amongst the fastest adapters of cloud services – both in usage and sophistication,” said Pavel Ershov, Vice President, Service Providers Business at Parallels Asia Pacific and Japan. 

“SMBs today have the best of both worlds to help them grow their businesses – cloud services offerings with enterprise-grade capabilities at affordable costs.”

"For SMBs, the message is to keep pushing their value added reseller or service provider to provide best-of-class services so they can focus on growing their businesses," Zanni added.

All SMB Cloud Insights reports are available for download here.

*Parallels defines micro businesses as those with one to nine staff; small businesses as those with ten to 99 staff, and medium sized businesses as those with 100 to 250 staff.