Service providers to grab Cloud services opportunity in emerging markets

By Telecom Lead Team: Service providers such as telcos,
MSOs and hosting companies are set to gain mindshare and become an important
route to market (RTM) for small and medium businesses for acquiring cloud

In emerging markets such as China, India, Brazil and
Russia, SMB cloud services spending and investments through service providers
will increase nearly six-fold from $111 million in 2011 to $615 million by
2015. This represents a 4-year annual growth rate of 54 percent, the largest
among all RTMs tracked by AMI and far outpacing the growth in total SaaS
spending over the same period.

Larger telcos and service providers are in the process of
acquiring smaller VARs and local channel partners/resellers. The acquisition of
these partners allows service providers to diversify their product portfolios
and enter the cloud market by providing basic SaaS solutions (such as
accounting, business intelligence/analytics, email and CRM). This is an
important step for many telcos and MSOs, as they believe that their traditional
offerings such as voice, data and video services will begin to enter a phase of
modest growth over the next couple of years.

Cloud services allow service providers the ability to
meet the growing SMB demand and differentiate themselves from other
competitors,” said Rohan Bose, associate for AMI’s Channels Practice.

The other factor for the expected increase in SPs’ share
is their ability to bundle SaaS solutions with broadband and high-speed
Internet connectivity. Other cloud providers such as channel partners can
bundle multiple SaaS applications together, but cost-conscious SMBs are more
likely to purchase bundles containing broadband.

As the demand for cloud services continues to rise, SMBs
in emerging markets will require access to high-speed internet to increase
business efficiency; it is the service providers who are uniquely positioned to
offer such packages.

Many of these SPs offer datacenters and hosting
capabilities to SMBs looking to store infrastructure externally. Similarly, SPs
can offer datacenter hosting to traditional channel partners such as VARs for
the same reason. Other channel partners who require space to host their own
apps often turn to SPs to meet their needs. AMI studies have shown strong
interest by channel partners to partner with SPs for hosting needs and it is up
to the SPs to foster and grow the relationship.

Given the gradual shift in SMB preference, IT vendors
would be wise to take advantage of this lucrative opportunity. Since many
smaller SPs do not yet have the necessary business applications to offer SMBs,
SaaS and other cloud vendors can utilize SPs as a viable option to
go-to-market. By entering into strategic and symbiotic relationships, vendors
can help SPs add further value to their services.

[email protected]