A New Cloud Market: Think Micro-Businesses
If you are a large cloud computing company, you may be forgiven for looking down at small fry, micro-businesses that employ less than 10 people. But you could be making a big mistake. Cloud computing for such micro-businesses is where the revenue is going to be from in the next few years.
With most large companies (or so-called macro-businesses) already moving to the cloud, and this market is already quite mature. But in the US alone, there are nearly 21.7 million – yes 21.7 MILLION – businesses that have just one employee (i.e. just the owner) and there are 4.8 million businesses that have between one to nine employees.
Some people might think that this market represents a small fraction of cloud spend; but those people would be wrong. It is the smaller companies that are faster adopters of the cloud. All of these micro–businesses bring in a revenue of – wait for it – $3.5 TRILLION a year.
Cloud computing allows small and micro-businesses to access advanced computing capabilities at low costs. But with the very large numbers of such businesses, the sums add up. CISCO figures that firms with four employees or less will collectively spend $16 billion on cloud services in 2015. These are very small businesses, and firms with five to nine employees are not included in this figure.
The statistic above shouldn’t be too surprising because small businesses look to cloud computing to get quality computing power at a much lower cost than would be otherwise possible. However (and here lies the opportunity for cloud service providers) small businesses are often very disappointed with the service that is currently being provided to them. Most large cloud service providers give them a standard ‘take it or leave it’ package. There is no personalized support and individual businesses are too small to bargain for better services.
Cloud service providers can attract this lucrative niche business by stressing on data security, offer backup and recovery services, keep costs and overhead low and make their business model as simple and as flexible as possible. One example of this is GMO Cloud’s Multi-Level Security Strategy Small (4–6 TB nodes) can host a large number of small businesses and as the number of tenants increase, more nodes can be added incrementally – thereby allowing even the cloud center to start small and grow with the business.
The key to building a business in this segment is to think of the service you offer as a menu in a cafeteria. The client can pick anything they want from the menu and keep adding services they need.
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About the Guest Author:
Sanjay Srivastava has been active in computing infrastructure and has participated in major projects on cloud computing, networking, VoIP and in creation of applications running over distributed databases. Due to a military background, his focus has always been on stability and availability of infrastructure. Sanjay was the Director of Information Technology in a major enterprise and managed the transition from legacy software to fully networked operations using private cloud infrastructure. He now writes extensively on cloud computing and networking and is about to move to his farm in Central India where he plans to use cloud computing and modern technology to improve the lives of rural folk in India.
