Why should telecoms providers offer cloud services to SMB customers?

In the 2000’s, fixed-broadband and Wi-Fi were technical enablers of internet-based services for businesses, with salesforce.com pioneering the concept of delivering enterprise applications via a simple website. The development of universal high speed bandwidth has since played a major role in enabling the evolution of today’s small business technology landscape by providing access to a plethora of cloud technology.

The adoption of cloud services has also been accelerated by the rise in smartphone and mobile device technology, allowing businesses to access the ‘office’ at anytime from anywhere. There are clear interdependencies between high-speed internet, mobile devices and cloud services that make up the modern small business IT landscape. These interdependencies place telcos as the obvious partner to small business customers for a complete ICT solution.

Market penetration for cloud services among SMBs is far from reaching its peak, however, research has shown that cloud adoption is rapidly increasing. According to a report by McKinsey, ‘Big Business in Small Business Cloud Services for SMBs’; the SMB market for cloud-based software was worth around $28 billion globally in 2014 and was growing at 20% per pa. That would place today’s market value at over $39 billion.

Small businesses are increasingly realising the opportunity that cloud technology offers, allowing them to scale and grow more quickly. A Deloitte study commissioned by Google in cited the enablement of mobility and flexibility in the workforce as a cloud benefit driver for rapidly growing SMBs. 85% of those surveyed believe that cloud enables their business to scale and grow faster.

This trend towards mobile and flexible working shows no sign of slowing, a recent survey of UK based SME decision makers, conducted by the BT Business and the British Chambers of Commerce (BCC); showed that 91% of companies have at least one member of staff working from home. 19% of businesses said that more than half of their workforce worked away from their main office location.

According to the BCC, these results correlate with an increase in the use of cloud services by SMEs, with around 69% of businesses using cloud-based applications and 53% saying that they are critical to effective remote working. Adam Marshall, executive director of policy and external affairs at BCC asserted that “Cloud and mobile technologies are becoming increasingly important as firms expand into new markets and explore new ways of working.”

So why should telecoms operators consider offering cloud services to their small business customers? To begin with, telcos should look to differentiate through customer experience in order to increase customer stickiness and ARPU. We surveyed 500 SMBs in the UK and US and found that more than half (58%) of SMBs would switch operators for access to a broader range of technology services, and 43% would purchase online hosting or cloud services from telecoms operators. A clear opportunity exists here to provide a more holistic ICT solution to SMB customers.

The above demonstrates that by diversifying their offering to SMBs, telcos can both take advantage of the low hanging fruit that will help them retain their SMB customers and gain market share. Telcos should bundle business cloud applications with business broadband and mobile packages in order to create extra value by removing the hassle of admin for small businesses. In this way they can leverage the convenience of purchasing from one point of contact, and act as a trusted technology services provider to SMBs to capitalise on the growth of the SMB cloud market.

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