Parallels Publishes Latest Asia Pacific SMB Cloud Insights™ Report; Affirms Region’s Cloud Adoption Catching up with the Rest of the World

September 24, 2013

Asia Pacific Cloud Services Market to Reach US$10.9B in 2013; East Asia represents approximately 70 percent of the current market at US$7.8

SINGAPORE – 24 September 2013 – Parallels, a leading hosting and cloud services enablement provider, today released the key findings of Parallels SMB Cloud Insights™ for the Asia Pacific market. The annual market report details the region’s cloud market growth and revenue opportunities, specifically for cloud service providers in the small and medium businesses (SMBs) segment. SMBs in Asia Pacific are catching up with their North American and European counterparts in cloud adoption.

The report estimates the Asia Pacific SMB cloud services market to reach US$10.9 billion in 2013 – a 43.4 percent increase from US$7.6 billion in 2012. Parallels SMB Cloud Insights for the United States indicates that the SMB cloud market in that country is now estimated at US$18.9 billion and is forecast to grow at a 19 percent CAGR through 2015.

“The latest Parallels SMB Cloud Insights research confirms that there is a growing demand for cloud services, especially in the largely untapped Asia Pacific countries,” said John Zanni, vice president, service provider marketing and alliances at Parallels. “We’re committed to our partners in Asia Pacific and elsewhere, in giving them both the expertise and technology they need to address the growing market for SMB cloud services.”

“The survey confirms our strategy and commitment to focusing on meeting the demand for SMB cloud services, as most SMBs plan to increase their purchase of cloud services applications over the next few years,” said Natalie Kong, business solution analyst, PacHosting. “With our partnership with Parallels, we’ve made it easier for SMBs looking for cost-performance benefits and scalability in physical and virtualized server environments – and that has helped us grow our business rapidly.”

“SMB cloud adoption is a global trend, which is not limited to only Singapore or Asia Pacific. Through our partnership with Parallels, we are now in a strong position to provide our SMB customers with the ability to self-service their operational needs effectively and quickly while enhancing the user experience at the same time,” said David Loke, chief executive officer and co-founder of ReadySpace.

Out of the total estimated US$10.9 billion market opportunity for Asia Pacific SMB cloud services, IaaS contributes US$3.7 billion to this opportunity; web presence and web applications contributes US$2.3 billion; hosted communication and collaboration (composed of hosted premium email and hosted PBX) adds US$937 million; and business applications accounts for the remaining US$3.8 million.

The third edition of the Parallels SMB Cloud Insights™ identified the following cloud services and applications categories that were most appealing to Asia Pacific SMBs in 2013:

  • Infrastructure as a Service: For infrastructure as a service, market growth was driven by two main groups – 1) SMBs that currently have no in-house IT solution and are moving (or planning to move) straight to the cloud and, 2) SMBs who currently have in-house solutions but are moving (or planning to move) to hosted services. The hosted infrastructure market in developing countries showed significant growth of more than 50 percent.

  • Web presence and web applications: At a 57 percent market growth rate, the market size for web presence and web applications in developing APAC countries is estimated to be US$274M, with further projected rises over the next three years, expanding to US$1.1 billion. There are additional opportunities for market growth exists in offering value-added tools and services SMBs can use to strengthen their third-party hosted web presence.

  • Hosted communication and collaboration: Although the overall market for these two services – at approximately US$850 million in developed countries and US$122 million in developing countries – is much smaller than the web presence and IaaS market sizes, it is projected as the fastest growing in the next three years, expanding to US$2.4 billion in the developed countries and US$1.3 billion in the developing countries.

    • Hosted premium emails: The hosted email market in APAC is still diminutive - Only 33 percent of SMBs in developed countries, and 15 percent in developing countries. With such low penetration, this market presents ample opportunity to grow.

    • Hosted PBX adoption: As this is a somewhat new service, the market for hosted PBX is very small throughout APAC. The hosted PBX penetration rates were only 6 percent this year, in both developed and developing regions.

  • Business applications: Business applications represent one of the fastest-growing areas of the cloud services market over the next several years, reaching US$3.6 billion and US$2.8 billion in developed countries, and US$2 billion in developing countries respectively. This cloud application category is expected to grow at least 32 percent year-over-year in developed countries, and 255 percent in developing countries by 2016.

The report concludes that Asia Pacific will continue to experience strong growth across all cloud services, as cloud services become more widely adopted among SMBs in the Asia Pacific region. Parallels predicts significant shifts in these market shares over the next three years, with Southeast Asia and South Asia growing rapidly at about five-fold from their current market sizes.

For more information, download the Parallels SMB Cloud Insights™ Reports.

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