1 2012 Market Outlook for Managed Service Providers A guide to monetizing the coming demand for cloud services. By Sheilin Herrick
2 2 CONTENTS Growth in cloud backup adoption Drivers of cloud backup adoption by SMBs....3 How to evolve with clients and IT departments.. 5 Marketing opportunities for managed service providers...7
3 3 Growth in Cloud Backup Adoption A vast segment of small to medium sized businesses and enterprises have moved away from on premise backup and are now benefitting from the reliability of offsite storage and backup available through the cloud. The majority of firms making this transition do not have their own data centers and benefit from the institutional knowledge and core competencies of secure cloud backup providers to serve their data backup and disaster recovery needs. A mere 16% of companies surveyed are using online backup today. However, 69% of companies are evaluating or planning to use online backup in the near future. 1 This suggests that online backup growth has yet to occur en masse. Massive adoption by businesses is underway and will likely peak between 2013 and There is additional evidence to support the idea that massive adoption of cloud backup by businesses is yet to occur and is imminent is the patterns predicted by experts. Industry analysts expect organizations to double their budget allocation to cloud services between 2010 and There is a great deal of room in IT budgets for this increase. In 2010, a mere 1.6% of IT spending was dedicated to cloud services, however, IDC expects that by 2014, this figure will grow to 3%. - While still seeming small, this prediction shows the spending dedicated to 1 (IDC) Adoption and Spending intentions on Public Cloud Backup Services cloud services actually doubling in just four years. Moving backup and disaster recovery to the cloud presents a variety of advantages to organizations. Primarily, it allows a shift in efforts and labor from maintenance to new initiatives. This allows a firm to focus on its core competencies, explore new opportunities, become more competitive, and increase business revenue. Drivers of Cloud Backup Adoption by SMBs Multiple factors have created the perfect storm for cloud backup to grow and become established in the SMB market. These factors have decreased cost, cloud adoption, and simultaneously increased demand. Expansion of internet bandwidth Penetration of broadband internet connections has increased rapidly, particularly among developed nations and businesses, across the world. At the end of 1989, there were 1.1 million internet users worldwide and approximately 86% of them were in the United States. However, in 2010, there were over 2 billion internet users, and it is estimated that by 2015, this will increase to 2.89 billion users. This change represents an anticipated growth rate of a remarkable 29.8%. 2 2
4 4 Decrease of hosted storage costs The cost of computing and internet connectivity has declined rapidly in the last several years. Not only have overall costs decreased, but demand for IT services has grown exponentially,, further decreasing the overall cost of cloud backup. This newfound affordability of cloud backup services is just one barrier to these services that has fallen over the past ten years. Cloud Backup Today believed cloud service security to be superior to their own. 3 Significant increase in the size and value of digital data The adoption of personal computing in recent years has driven individuals to create valuable personal data on a regular basis. However, while individual consumers have engaged in this trend to a certain extent, businesses have done so on a much larger scale. Due to the nature of business, digital data is valued by many stakeholders from the CEO to the accounting department. Additionally, business data is heavily scrutinized and often subject to government regulations, making cloud backup all the more important. Increases in the vulnerability of digital data IDC confirms that massive adoption by the business community is near term: 16% of companies surveyed by IDC are using online backup today 69% are evaluating and/or planning to use it Technical sophistication of the general population According to a recent survey, corporate IT staff now favor the cloud over their own internal systems. Out of those surveryed 50% of IT managers currently using cloud services stated that they believe cloud computer/saas solutions providers can offer better security than my own organization s IT security team can provide. In the same survey, 38% of IT managers not currently using cloud services In the past data loss incidents were limited to freak accidents involving damage to document storage facilities, theft, or other events. However, digital data is now stored in more locations and on more devices than ever before. For businesses that equip their employees with computing devices, commonly a laptop and a mobile phone, they depend on their employees to be mobile and work in many locations. As data becomes more mobile, it also becomes more vulnerable. Because of this it is of great value to businesses to have their data backed up to the cloud and recoverable in the case of a disaster. 3 (IDC) Worldwide Cloud Security Forecast: A Comprehensive Look at the Cloud/Security Ecosystem
5 5 How to Evolve with Clients and IT Departments Corporate online backup needs vary widely. These variations are dependent on the type of company, size of company, security needs, and the capabilities of the internal IT department. Managed service providers are expected to meet as many of these needs as possible. They can, and will, create opportunity by doing so. Provide backup for laptop fleets Laptops contain massive amounts of personalized data and security information used by employees. They are highly mobile, making them more vulnerable to theft, disaster, and accidental deletion all of which are leading causes of data loss. According to the 2008 Computer Security Institute report, 42% of information loss was due to laptop theft. While the hardware may not be recoverable, the data from laptops can be very easily restored if basic online backups were scheduled regularly, prior to the data loss. Managed service providers can meet laptop fleet protection needs by partnering with an online backup vendor that offers Continuous Data Protection, flexible scheduling, and encrypted data storage. Understand regulatory compliance MSPs can benefit from understanding regulatory compliance issues associated with online backup. Many government regulations require online backup as a part of business IT infrastructure. One such example is HIPAA. IT managers and their organizations may not understand the security and compliance issues associated with moving to cloud services. 48% of organizations that have deployed cloud services do understand the regulatory compliance and security issues associated with online backup. However, this leaves a large group of52% who do not understand such implications. Likewise, organizations planning to backup to the cloud, but have not yet done so, are less likely to understand regulatory compliance issues associated with moving to cloud services. In fact, a recent study revealed that only 38% of IT managers surveyed, believe they grasp the implications. 4 Cloud backup for servers Generally speaking, as small to medium sized businesses grow, they will find their data protection needs changing. Businesses will continually adjust the number, size, and type of servers used by their organization. They may or may not have internal IT staff to maintain these servers. It is likely that they do not have their own data centers to back them up, nor do they have software to make data recovery efforts simple. Providing cloud backup for servers is an important opportunity for MSPs to grow with the client and generate recurring revenue while doing so. Most small to medium sized businesses utilize an MS Exchange server and SQL database for transactional revenue. To get the most out of a partnership with an online backup provider, it is advisable to ensure that the vendor does not place restrictions or requirements on hardware purchases or types of servers that can be backed up within the program. 4 (IDC) Worldwide Cloud Security Forecast: A Comprehensive Look at the Cloud/Security Ecosystem
6 6 Move clients to the cloud by providing a secure online backup solution Managed service providers can capitalize on an organization s desire for substantial security in cloud backup. Businesses want more security features and capabilities from cloud service providers and, in order to offer this to clients, MSPs can partner with a vendor that provides mobile access to cloud backups and has a strong security record. Cloud backup offered by MSPs should have simple recovery features, multi-tiered encryption, and multiple data centers across the globe. Additionally, many organizations view unlimited file archiving, unlimited versioning, and geographic redundancy as must haves when considering an online backup solution. Marketing Opportunities for Managed Service Providers Managed service providers sometimes find marketing to be a difficult and daunting task. However, MSPs can benefit from partnering with SOS Online Backup, who not only offers high quality, secure software, but an arsenal of marketing products and sales tools. As a managed service provider, proper and consistent marketing is valuable in obtaining clients and keeping them. Create an ecommerce website Creating an ecommerce website can be extremely expensive, but there are other inexpensive alternatives such as finding an online backup partner that wraps marketing, sales, and a website into their partnership program. Websites with ecommerce integration can often cost thousands of dollars. Customized website packages should offer complete rebranding, search engine optimization flexibility and marketing templates. marketing When executed properly, marketing can be helpful to clients. By offering helpful information, rather than pushing a quick sale, marketing is a powerful way to remind clients that their trusted and knowledgeable managed service provider is there to help at a moment s notice. Create value in being a MSP Organizations with internal IT managers may have difficulty justifying the use of an outside managed service provider or value added reseller. However, creating value in a managed service offering is possible and is key to optimizing the online backup industry s growth spurt through Creating a disaster recovery plan, easy web access to additional services, mobile access to files, and support ticketing are just a few methods of creating value. The disaster recovery plan Vendors of online backup should provide disaster recovery plan templates for managed service providers to customize and deliver to clients. Often, the disaster recovery plan itself is a product that can be sold to the client. Creating it establishes value, credibility and trust in the managed service provider.
7 7 Mobile access to files Mobile access to files is necessary and reassures the client that their files are securely backed up and readily recoverable. A managed service provider should be able to act quickly by recovering a client s files from his mobile phone. Support ticketing Managed service providers must make themselves available and ready to assist in an emergency. In non-emergency situations, especially for high volume businesses, a support ticketing system is an ideal complement to an online backup provider s program, and can be added into the MSP s ecommerce website. Summary Managed service providers are poised to capitalize on a business environment incentivized by market forces and government regulation to move to cloud backup. This opportunity can be expertly monetized in 2012 by partnering with the proper online backup partner. This partner must offer quality SaaS products, secure data centers, marketing and sales assistance, and general business management tools. This high value partnership will help the MSP create and maintain its value to clients. To learn more about the SOS Online Backup Partner Program, visit us online.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) È Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended
CLOUD COMPUTING: IS YOUR COMPANY WEIGHING BOTH BENEFITS & RISKS? Toby Merrill CLOUD COMPUTING: IS YOUR COMPANY WEIGHING BOTH BENEFITS & RISKS? Toby Merrill Toby Merrill, Thomas Kang April 2014 Cloud computing
Google Apps as an Alternative to Microsoft Office in a Multinational Company The GAPS Project Thesis presented in order to obtain the Bachelor s degree HES by: Luc BOURQUIN Supervisor: Thierry CEILLIER,
Convergence of Social, Mobile and Cloud: 7 Steps to Ensure Success June, 2013 Contents Executive Overview...4 Business Innovation & Transformation...5 Roadmap for Social, Mobile and Cloud Solutions...7
Workplace mobility and the small business Explore the global growth of personal communications devices in the workplace 2 1. Background The following white paper examines the findings of the latest Citrix-commissioned
www.pwc.com PwC Advisory Oracle practice 2012 How to drive innovation and business growth Leveraging emerging technology for sustainable growth 1 Heart of the matter Top growth driver today is innovation
white paper Public or Private Cloud: The Choice is Yours Current Cloudy Situation Facing Businesses There is no debate that most businesses are adopting cloud services at a rapid pace. In fact, a recent
SAP Statement of Direction Business Intelligence Solutions Business Intelligence Solutions from SAP: Statement of Direction Table of Contents 3 Quick Facts 4 Driving Business Innovation Through Radical
Introduction.... 1 Emerging Trends and Technologies... 3 The Changing Landscape... 4 The Impact of New Technologies... 8 Cloud... 9 Mobile... 10 Social Media... 13 Big Data... 16 Technology Challenges...
Odin 2015 SMB Cloud InsightsTM THE NETHERLANDS DEFINITIONS SMBs Defined We define SMBs also known as small and medium enterprises (SMEs) as companies with one to 250 employees. There are around 650,000
BUSINESS PHONE SOLUTION Buyers Guide 10 Questions Every Business Should Ask Introduction BOLD OPTIONS AND NEW POSSIBILITIES Today s business owners have extensive options for selecting a business phone
fs viewpoint www.pwc.com/fsi 02 15 19 21 27 31 Point of view A deeper dive Competitive intelligence A framework for response How PwC can help Appendix Where have you been all my life? How the financial
EXECUTIVE REPORT 4 Critical Steps Financial Firms Must Take for IT Uptime, Security, and Connectivity When Millions of Dollars of Financial Transactions are On the Line, Downtime is Not an Option The many
White paper The future of Service Desks - vision Service Desks require strategic consideration and innovation to raise user productivity and to support business goals. Fujitsu has the experience and feedback
Connecting to the Cloud: Business advantage from Cloud Services A Vodafone White Paper. As people become increasingly IT literate, mobile access to the web accelerates and Unified Communications solutions
White Paper May 2006 Applying Electronic Records Management in the Document Management Environment: An Integrated Approach Written by: Bud Porter-Roth Porter-Roth Associates Table of Contents Introduction
The Pennsylvania State University IT Assessment Executive Summary Final Summary of Recommendations June 16, 2011 Goldstein & Associates, LLC Contents Section Page Introduction 3 Summary Recommendations
Index. Executive Summary. Cost Drivers in the Total Cost of Ownership Analysis 4. Capital expenses 4. Design and deployment costs 4.3 Ongoing infrastructure costs 5.4 Ongoing operations and support costs
Identity and access management as a driver for business growth February 2013 Identity and access management (IAM) systems are today used by the majority of European enterprises. Many of these are still
Ahead of the Curve LESSONS ON TECHNOLOGY AND GROWTH from Small-BuSineSS leaders The Boston Consulting Group (BCG) is a global management consulting firm and the world s leading advisor on business strategy.
The Critical Security Controls for Effective Cyber Defense Version 5.0 1 Introduction... 3 CSC 1: Inventory of Authorized and Unauthorized Devices... 8 CSC 2: Inventory of Authorized and Unauthorized Software...
THE JOURNEY TOWARD CASH LITE Addressing Poverty, Saving Money and Increasing Transparency by Accelerating the Shift to Electronic Payments Commissioned by BFA acknowledges the helpful comments received
PREPARED STATEMENT OF ROBERT M. GROVES DIRECTOR U.S. CENSUS BUREAU Census: Planning Ahead for 2020 Before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and
: Ensuring End-to-End Service Quality and Performance in a Multi-Vendor Environment A Executive Summary Creating Business-Class VoIP Traditional voice services have always been reliable, available, and
CHAPTER 19 Part 7: Application Development BUILDING E-COMMERCE APPLICATIONS AND INFRASTRUCTURE Content Helping Customers Navigate the Web Site and Increase Sales at Campmor 19.1 Major E-Commerce Applications
A REPORT BY HARVARD BUSINESS REVIEW ANALYTIC SERVICES How the Cloud Looks from the Top: Achieving Competitive Advantage In the Age of Cloud Computing Sponsored by Length of Time Using Cloud Computing Figure