SMB Cloud InsightsTM

Transcription

1 2015 SMB Cloud InsightsTM JAPAN

2 DEFINITIONS Cloud Services Defined This research focuses on the cloud services that matter most to SMBs: IaaS, web presence and web applications, unified communications, and other general business applications. Infrastructure-as-a-service (IaaS): Cloud servers (previously not researched in our last study of Japan) Dedicated servers Virtual private servers (VPS) Managed hosting Add-on applications and services for hosted infrastructure: Control panels Development platforms LAMP stack Security Server backup Web presence and web applications: Third-party web hosting Domain registration Web applications: Content delivery networks (CDN) Content management systems (CMS) E-commerce Health monitoring Mobile optimization tools Search engine optimization (SEO) Site-building tools SSL Web server backup Web server security Unified communications: Communication and collaboration applications: Web and phone conferencing Instant collaboration Mobile device management (MDM) Business-class services: security and archiving Business voice services: Mobility and hosted phone services such as hosted PBX General business applications: Major software applications accessible online: File sharing Online accounting Online backup and storage Online customer relationship management (CRM) Payroll and HR Support and help desk Virtual desktop (VDI) d1 SMB Defined We define SMBs also known as small and medium enterprises (SMEs) as companies with one to 250 employees. There are around 1.8 million SMBs in Japan today. SMB categories include micro (1-9 employees), small (10-49 employees), and medium ( employees).

3 Overall SMB Cloud Services Market in Japan 339B ($2.9B USD) 2015 Odin SMB Cloud Insights has entered its fifth year of research into the consumption of cloud services by small and medium businesses (SMBs). After interviewing more than 400 IT decision makers at Japanese SMBs, we found many important trends in this market. Globally and locally, SMBs from a variety of sectors are moving business functions into the cloud. Tools and solutions previously reserved for enterprise-level organizations are being implemented in smaller firms as developers create services specifically for the SMB market. Our research is intended to help cloud service providers take advantage of the trends outlined in this report in order to meet the evolving needs of their SMB customers. New to this year s research is an exploration of the SMB s journey of researching, purchasing, and using cloud services. This data will help service providers build successful relationships with their customers. 130B ($1,100M USD) Infrastructure-asa-service 53B 59B 97B ($451M USD) Web presence ($499M USD) Unified communications ($818M USD) Business applications Note: This report uses a JPY-USD exchange rate of This value is calculated using a one-year exponentially weighted rolling average. 2

4 INFRASTRUCTURE-AS-A-SERVICE (IaaS) Japan s infrastructure-as-a-service market has seen significant growth in recent years. Due to capital constraints and an increasing need for flexibility, Japanese SMBs are moving away from in-house to hosted infrastructure. More than half of SMBs with servers use a hosted server, and many of those with in-house servers are looking to move toward a hosted solution in coming years. 54% Total Server Add-ons of SMBs with servers by Industry use a hosted server 46% of SMBs with servers use an in-house server Buying IaaS Top Barriers to Hosted Infrastructure 92% 38% 38% 41% 22% 25% 39% 47% Price Legacy systems and other tech concerns Security or privacy concerns 36% Micro Small Medium 3

5 IaaS Research Methods 46% Online 17% Discuss with a trusted advisor 16% From existing service providers 15% Business industry news Top IaaS Purchase Locations Web hoster Local IT resource (VAR) Pure cloud infrastructure/ service provider Retail computer store Telco or cable co 62% 8% 8% 8% 7% Top Factors in Choosing Service Provider 50% Price 17% Ability to expand or contract quickly 16% Ease of management 10% 7% Existing relationship Security or privacy concerns 4

6 Using IaaS Top Workloads in Production 35% 31% 26% 22% 21% 36% 19% 19% 11% 23% 10% 17% Content management system Database applications Data mining/ analytics Customer relationship management (CRM) Payroll, HR, and benefit management Accounting/ financials Micro/small (1-49 employees) Medium ( employees) Top Hosted Server Add-ons 28% 36% 23% 40% 17% 32% 12% 23% 11% 14% Control panel Security Server backup Development platform LAMP stack

7 Customer Experience Opinion of IaaS Service Provider 44% Neutral 16% Negative 40% Positive Areas for Improvement % 22% 21% 19% 7% Performance (speed, availability) Support experience Usability Security vulnerabilities Self-service administration 36% of SMBs would pay an additional 1,000 per month for high availability Total Server Add-ons by Industry 41% of SMBs would pay an additional 1,000 per month for unlimited storage 6

8 How SMBs are Resolving Issues Escalating with the vendor Exploring alternative options Moving in-house Cancelling the service 47% 33% 10% 9% IaaS Opportunities through % CAGR 487M 130B 706M 161B ($1,100M USD) ($1,364M USD)

9 Likelihood of Entering the Cloud Market 15% 29% Cloud leapers (New adoption) Cloud converters (Switch from in-house) The Japanese IaaS market will see steady growth in coming years. Firms are finding value in moving to hosted services, but they also have concerns. For example, price is a massive barrier for Japanese SMBs and will continue to be an important factor in future IaaS purchasing decisions. As a result, service providers with competitively priced packages will succeed in this market. In terms of customer satisfaction, only 40% of SMBs have a positive view of their IaaS provider. While this number is low, SMBs would prefer to escalate their issue(s) with their service provider rather than move to a competitor. SMBs in other markets tend to be more willing to leave their service provider rather than escalate a problem. This means that service providers have the opportunity to answer their customers concerns and reduce churn. Overall, the IaaS market will continue to offer value to service providers working to gain SMB customers. 8

10 WEB PRESENCE The web presence market has steadily expanded as firms increase their visibility online. Mobile optimization is becoming more important for SMBs as smartphone usage has skyrocketed in recent years. Additionally, businesses are finding site-building software to be an attractive substitute to costly web professionals. Although this market is relatively mature, there are still strong opportunities within the 53B ($451M USD) web presence market. SMBs with a Company Website 54% 79% 92% Micro Small Medium Website Hosting Location 25% in-house 25% of websites are hosted in-house. Of those SMBs with in-house websites, 18% plan to add a third-party hosted website in three years. 75% third-party 75% of websites are hosted by a third-party. 9

11 Buying a Website Key Factors in Choosing a Web Hoster 68% Price 24% Customer experience/ support 22% 14% 9% Existing relationship Security Brand recognition Note: (39% of SMBs listed at least two key factors in choosing their web hoster.) Service Provider of Web Hosting Web hoster Telco Local IT resource (VAR) Pure cloud provider Other 68% 17% 8% 5% 2% 10

12 Top Purchase Methods % 16% 10% 2% Online Face-to-face Over the phone In a store Website Design 66% of websites are designed in-house 29% Of in-house used a site builder 34% of websites are designed by a thirdparty web designer Mobile Optimized Website 36% Mobile optimized 26% 38% Displays on mobile without optimization Only displays properly on a computer 11

13 Website Add-ons and Management Purchase Location of Add-on Web hoster: bundles with website purchase Web hoster: returned after website purchase Directly from the application developer Third-party provider 45% 17% 25% 13% 62% Note: In total, 62% of add-ons are purchased from the web hoster. Top Website Add-ons 19% 29% 17% 32% 16% 33% 14% 28% 10% 22% Backup SSL SEO Security and health monitoring E-commerce capabilities

14 Website Management 5% Web designer 3% Web hoster 92% In-house Customer Experience Opinion of Web Provider 44% Neutral 18% Negative 38% Positive 13

15 Top Areas for Improvement Performance (speed, availability) Security vulnerabilities Support experience Self-service administration Usability 43% 23% 22% 6% 5% How SMBs are Resolving Issues Escalating with the vendor Exploring alternative options Moving in-house Canceling the service 49% 35% 7% 7% 14

16 Web Presence Opportunities through % CAGR 53B ($451M USD) 61B ($529M USD) Likelihood of Entering the Cloud Market 15% 18% Cloud leapers (New adoption) Cloud converters (Switch from in-house) The Japanese web presence market is expected to grow to 61B ($529M USD) by 2018 at a CAGR of 4.8%. Drivers within this market will be the increased need for mobile optimization and the growing use of site builders. Web hosters remain the main sellers of websites and website add-ons. However, they are being challenged by telcos and cloud service providers that are edging into the market. Maintaining customer relationships while answering the growing importance of mobile optimization will be key to gaining ground in this competitive marketplace. 15

17 UNIFIED COMMUNICATIONS Hosted solutions for internal and external communications are growing in usage among SMBs. Hosted is increasingly driven by the need for security while hosted business voice services are driven by cost savings. Although many SMBs currently use traditional landlines and free services, we expect to see a sizeable number of cloud adopters in coming years. 48% 34% Hosted by a service provider Free service 4% Hosted on an in-house server Note: 14% of SMBs do not use . Top Purchase Triggers for Premium Hosted 1 Increased need for security 2 3 Good price point Need for professional look and feel 16

18 Opinion of Service Provider 26% Negative 44% Neutral 30% Positive 54% of third-party hosted is bundled with website hosting or a hosted server Total Server Add-ons by Industry Top Areas for Improvement Performance (speed, availability) Security vulnerabilities Support experience Usability 40% 33% 22% 19% 17

19 How SMBs are Resolving Issues Escalating with the vendor Exploring alternative options Cancelling the service Moving in-house 39% 27% 17% 8% Hosted Business Voice Services 14% Hosted of SMBs have hosted business voice services of SMBs have in-house business voice services 16% In-house 70% Do not have of SMBs do not have business voice services Main Barriers to Hosted Business Voice Services 42% 30% 16% 12% Price Lack of knowledge about hosted business voice services Technical concerns Security and privacy concerns 18

20 Top Purchase Triggers for Hosted Business Voice Service 30% Good price point 25% Business has explosive growth 20% Major change to business Top Features that Improve Productivity 1 2 Single number reach Smartphone client Top Features that Improve Customer Satisfaction 1 Automated attendant 2 Integration with employee s mobile devices 19

21 Opinion of Hosted Business Voice Services Provider 13% Negative 32% Positive 55% Neutral Top Areas for Improvement Performance (speed, availability) Security vulnerabilities Support experience Usability 38% 25% 20% 12% 20

22 How SMBs are Resolving Issues Escalating with the vendor Exploring alternative options Cancelling the service Moving in-house 48% 34% 15% 3% Collaboration Applications 5% 12% 9% 16% 3% 10% Web conferencing Instant collaboration Mobile device management

23 Likelihood of Entering the Cloud Market 19% 7% 8% 30% Cloud leapers (New adoptions) Cloud converters (Switch from in-house) Hosted PBX Unified Communications Opportunities through M 59B 706M 74B ($499M USD) ($623M USD) % CAGR The unified communications category will grow to 74B ($623M USD) by As noted earlier, price is a major barrier for cloud services. However, we expect many SMBs to purchase these services when presented with an affordable offering. Growth in the hosted category will come significantly from SMBs without an system while hosted business voice services will see growth from SMBs with traditional landlines. With an 8% CAGR and a strong interest by SMBs, service providers will derive significant value from the unified communications market in coming years. 22

24 BUSINESS APPLICATIONS The business applications market is currently the second-largest category within the Japanese cloud market. Firms are deriving value from the flexibility and low overhead cost of hosted applications. Certain trends particularly research methods are different depending on firm size. Smaller firms rely heavily on online searching while larger firms are more likely to look toward trusted advisors and their existing service providers. Business Application Research Methods 50% 29% 26% Online research 19% 24% 23% Industry news 16% 29% 25% Trusted advisor 5% 6% 12% Local IT resource 9% 12% 15% Existing service provider Micro Small Medium Most Important Factors in Choosing Business Applications 48% 31% 12% 9% Price Features and capabilities Business need Customer experience 23

25 Trial Software 36% Purchased with a free trial 64% Purchased without a free trial Purchasing Bundling 12% With bundle 88% Separate from bundle Bundling 1 2 With bundle Hosted server Broadband 24

26 Top Business Applications through % 29% 17% 26% 16% 21% 8% 14% 6% 11% File sharing Online backup Payroll and HR Online accounting VDI 4% Support and help desk 9% 3% 8% Online CRM Business Application Opportunity through % CAGR 97B ($818M USD) 166B ($1,402M USD)

27 Business applications is slated to become the largest category over the next three years. This is a result of an increasingly crowded marketplace with high-quality offerings. SMBs are taking advantage of this trend since capital constraints make large in-house software purchases impossible. Service providers have the potential to grow their customer base but they must also offer best-in-breed services and transparent pricing. Overall, this expanding market will introduce SMBs to the many advantages of cloud services. Overall Cloud Services Opportunity through B 166B 7% CAGR 20% CAGR 74B 130B 61B 5% CAGR 8% CAGR 97B 53B 59B IaaS Web presence Unified communications Business applications

28 The Japanese cloud market will grow at a CAGR of 11% over the next three years. Business applications and communications tools will be the key drivers of this growth. Throughout this research, we have found that Japanese SMBs are extremely price-conscious and also place significant value on business relationships. Service providers who offer competitively priced products coupled with quality customer service will be in the best position to take advantage of the continued growth within this market. 462B 339B ($3.9B USD) 2018 ($2.9B USD) % CAGR 27

29 Learn More Odin is committed to helping our partners understand the best opportunities in the SMB cloud market. This report covers only a portion of the extensive data included in Odin SMB Cloud Insights research. Please contact SMB@odin.com with questions. About Odin Odin provides software that powers the cloud ecosystem, from small and local hosters to some of the world s largest telecommunications providers. By partnering with Odin, service providers gain access to industry expertise, a catalog of the most in demand cloud applications, and the most comprehensive selection of software including web server management, server virtualization, provisioning, and billing automation. With offices in 15 countries, Odin supports more than 10,000 service providers in delivering applications and cloud services to more than 10 million SMBs. For more information, visit follow us on Twitter, or like us on Facebook Parallels IP Holdings GmbH. All rights reserved. Odin and the Odin logo are trademarks of Parallels IP Holdings GmbH. No part of this publication may be reproduced, photocopied, stored on a retrieval system, or transmitted without the express written consent of Parallels. 28

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