Backup Demand Drives Cloud Storage Growth

Small and medium sized businesses in the US are increasingly opting for backup and storage solutions in the cloud, thanks to the proliferation of hackers, natural disasters and unstable market conditions.

Pressure to reduce costs, improve flexibility and maintain privacy of sensitive data also lures SMBs to invest in cloud storage.

Furthermore, for mobile SMB employees, cloud storage is an attractive tool for backing-up and storing data while on the go. Nearly a third (31 percent) of the 1 million US SMBs using hosted storage have mobile employees.

Cloud Storage Growth

According to AMI-Partners’ recent report US SMB Cloud Playbook, the market for hosted storage will increase by 11 percent yearly compound annual growth rate (CAGR) through 2015, to $270 million (£168m). “Many US SMBs are moving to the cloud to enhance existing packaged applications, such as CRM databases. Cloud storage provides these companies with the latest storage technology realizing a significant reduction in IT overhead due to decreased investment in physical storage devices on their premises,” said Nichelle Grannum, survey research analyst at AMI.

Company data is constantly changing and growing in volume, thus moving storage to the cloud gives companies greater storage capacity and flexibility at a lower cost. With the influx of smartphones and tablets, cloud storage will become increasingly more critical in providing an easily accessible, yet secure place to backup and retrieve company data. For cloud storage, US SMBs prefer private servers as opposed to public or hybrid ones.

“Hosted storage also allows companies to subscribe based on their storage capacity requirements and desired backup schedule, coupled with the benefit of a flexible payment schedule,” said Grannum. “Since companies need only to pay for the storage they actually use, hosting costs can be tightly controlled. Responsibility for storage maintenance tasks, such as backup, data replication, and storage software updates are entrusted to the service provider, allowing SMBs to focus on their core business.”

Practical Advice

AMI’s 2011 US SMB Cloud Playbook – Strategic and Tactical GTM Planning Guide provides a tactical framework for architecting cloud-based services offerings to meet the growing demand for cloud services “bundles” and a perspective on cloud-related dynamics shaping up in the SMB space.

The report includes information on cloud-related needs among four types of SMB segments, including behavioural and usage characteristics, future adoption plans, cloud and ICT spending, market opportunity, price sensitivity, service bundling preferences and demand uplift, vendor value propositions and offers/bundles and purchase channel mix and capabilities.