New Parallels SMB Cloud Insights™ Reveals Continued Steady Adoption of Cloud Services by Australian SMBs, Estimated at A$1.7B in 2014


Infrastructure-as-a-service makes up the largest portion of the market at A$561M

SYDNEY, AUSTRALIA – 21 August 2014 – Parallels, the hosting and cloud services enablement leader, today released the latest updates to Parallels SMB Cloud Insights™, its primary and proprietary research that details the use of cloud services by small and medium businesses (SMBs). Now in its fourth year of annual publication, the research results continue to show the massive SMB cloud opportunity for service providers of all sizes. Aligned with global growth estimated at US$125B by 2016, the report underscores substantial growth in the Australian SMB cloud market at A$1.7B in 2014 from A$1.3B the previous year.
The new report identifies the top four cloud services categories most appealing and widely deployed by SMBs in Australia in 2014: Infrastructure-as-a-service (IaaS), Web Presence and Web Applications, Unified Communications, and Business Applications.

  • Infrastructure-as-a-service: IaaS adoption by Australian SMBs grew 37 percent in 2014, making up the largest portion of the country’s cloud market at A$561M – up from A$343M in 2013.  Key drivers for this growth include:    
    •  Cloud server usage makes up 16 percent of the IaaS market
    • SMBs bought more add-ons for their hosted servers in 2014 than in 2013
    • Increased used of managed services/hosted infrastructure, fueled by the availability of innovative solutions that meet the changing needs of SMBs in Australia
  • Web Presence and Web Applications: The Australian SMB web presence grew 21 percent to A$333M in 2014. The growth came from the following areas:
    • Businesses with fewer than 50 employees adding their first third-party hosted websites or switching from self-hosted websites.
    • Businesses with greater than 50 employees switching from in-house to third-party hosted websites.
    • SMBs are using more web applications than in 2013
    • SMBs are taking advantage of managed web services
  • Unified Communications (UC): Historically the smallest cloud service category across all markets and regions, Unified Communications (previously called Communication and Collaboration) in Australia grew by 50 percent or A$331M in 2014, up from A$220M in 2013. The growth surge in this segment – which includes business class email, hosted PBX, and collaboration applications such as web and phone conferencing (17 percent), instant collaboration (32 percent), and mobile device management (3 percent) – are attributed to the following:   
    • Micro and medium businesses moving from free hosted email or free ISP mail to paid hosted email
    • Increase in usage of collaboration applications particularly by cloud expanders, or those adding users for instant collaboration and web conferencing
  • Business Applications: The Australian Business Applications market grew 23 percent to A$439M in 2014, up from A$335 the previous year. Key growth highlights include:
    • Overall increase in use of online applications from 73 percent to 79 percent, which includes the increasing use by SMBs of cloud-based payroll and HR applications, amongst others
    • Top applications remain consistent over time, including file sharing (62 percent), online accounting (46 percent), and online backup and storage (43 percent). 

“The Parallels SMB Cloud Insights report for the Australian market is a great resource for cloud service providers like ourselves,” said Andrew Goodwin, Director, Datacom Systems. “It provides valuable insight into the direction of the local SMB cloud services market which contributes to the continued development of Datacom’s cloud services portfolio.”

“Australian SMBs continue to prove their increasing sophistication in leveraging IT to scale their respective businesses, no matter which industry they’re in,” said Pavel Ershov, Vice President, Service Providers Business at Parallels Asia Pacific and Japan. “In today’s business environment, the best-of-breed cloud solutions can deliver enterprise-grade capabilities at a fraction of yesterday’s costs. The results are reaffirming for local service providers, as Australian SMBs should continue to embrace the cloud opportunity.”

The report concludes that the SMB cloud services market in Australia will continue its robust growth, which is projected to hit A$2.7B in 2017, with a three-year CAGR of 17 percent. Parallels foresees that each cloud service category offers further growth potential in particular areas – helping service providers and businesses capture a bigger piece of the growing demand for cloud services.

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