Maximizing the Value of Cloud for Small-Medium Enterprises – Existing Cloud Offerings Geared towards the SME


Current Sourcing Model

IT organizations of Small-Medium Enterprises (SMEs) use a variety of providers to support their diverse business needs:

  • Among the biggest SME service providers are telecommunications companies. They typically offer everything that is related to landline and wireless, but also Internet and TV-related products.
  • Hardware manufacturers provide IT assets ranging from laptops to servers and from network routers to peripherals such as printers, scanners, and the like.
  • Software vendors provide everything from front-office software (i.e., CRM applications) to back-office software (i.e., BI applications).
  • Some service providers are responsible for and manage a certain part of the technology; i.e., from operating the SME’s IT infrastructure to the service desk and/or from end-user workplace services to managed print.
  • Some system integrators are responsible for and manage entire transition and/or transformation projects, ranging from front-office to back-office solutions.
  • There are software development companies that provide SMEs with specific solutions that are built from scratch and are tailored to the individual SME’s specific business needs.

While this list is not complete, it clearly demonstrates that SMEs are likely to obtain products, services and solutions from a variety of providers.

Putting this into the context of SMEs considering adopting Cloud services, one of the inhibitors for SMEs to rely on Cloud services is trust and confidence in Cloud service providers and related offerings. With all these different providers, to whom should SMEs turn when it comes to sourcing Cloud services?

Sourcing from Cloud Service Providers

The fact is that the Cloud services market is crowded and has many players. SMEs will find Cloud service offerings from almost all of the above listed types of providers. To make things even more complicated, “one size doesn’t fit all” is true in this context as SMEs will be challenged to find the one single Cloud offering that can meet all of their IT needs.

So what does this mean? SMEs adopting Cloud services have to run a hybrid sourcing model. To illustrate this a little bit more, SMEs should be prepared to run some of their IT stack in-house while other IT capabilities are being provisioned from various service providers. In essence, the IT organizations of SMEs become an IT service broker, sourcing services from internal and from external service providers. Figure 5 provides a visual depiction of Cloud sourcing strategies.

Cloud Sourcing Strategies

Example Cloud Services Geared for SMEs

As stated earlier, the Cloud services market is crowded. The upside of this is that SMEs can select Cloud services from countless providers and from a huge variety of Cloud offerings. The downside is that it makes it difficult for IT organizations of SMEs to find the viable Cloud provider that specifically meets their needs.

To get some structure into this decision area, IT organizations of SMEs should classify their needs into established Cloud services categories: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), and Communication as a Service (CaaS). Although this list is not complete, it represents the most common Cloud services that are available today. In principle, every aspect of an SME’s IT needs may want to be consumed as a service and the IT and telecommunications industries are working diligently at putting these “Everything as a Service” offerings into the market.

Infrastructure as a Service (IaaS) Offerings

IaaS definitely is the least disruptive Cloud service that an SME can adopt. It is at the very bottom of the IT stack and serves as an enabler for the Cloud services above such as PaaS or SaaS. Cloud providers in the IaaS space compete on their performance, their pricing, and their SLAs. Some example Cloud services that IaaS providers offer that are relevant to SMEs are:

  • Compute: This Cloud service offers CPU cycles, memory, storage, network, and, depending on the Cloud provider, management for those layers.
  • Backup and Recovery: Many IT organizations of SMEs don’t have the staff and/or physical space required to operate an off-site data center but still have the requirement (for compliance purposes or simply because they want to stay in business after a disaster) to recover critical services and related data in the event of a loss at their primary location. Backup and recovery Cloud services address exactly this requirement by offering an on-demand and pay-per-use infrastructure.
  • Web Hosting: A Cloud service that offers the traditional web hosting but with Cloud characteristics such as being on-demand, pay-per-use, and highly scalable.
  • Storage as a Service (StaaS): StaaS is generally seen as a good alternative for a small or mid-sized business that lacks the capital budget and/or technical personnel to implement and maintain their own storage infrastructure. StaaS is also being promoted as a way for businesses to mitigate risks in disaster recovery, provide long-term retention for records, and enhance both business continuity and availability.

Platform as a Service (PaaS) Offerings

PaaS is interesting for SMEs who want to develop applications but don’t want to invest heavily in development environments (i.e., hardware, operating system, development software) and don’t want to operate it from in-house. In general, PaaS can provide services for the entire lifecycle of applications, from design to retirement.

  • General-purpose: Many PaaS offerings are geared towards the development of web applications. Besides providing the development environment for web applications, PaaS offers the platform for mobile applications development.
  • Testing: IT organizations of SMEs can take advantage of the many PaaS offerings in the testing space. These Cloud services allow for testing software; i.e., web applications or mobile applications. This use-case is a perfect Cloud candidate as a testing phase is something which has a temporary nature and any extra investment in infrastructure for testing may become redundant after the testing has been completed.
  • Database Integration: Some of the PaaS Cloud providers offer services around integrating applications with back-end databases. This can range from doing the configuration and setup of the application to database connection to providing the actual integrators.

Software as a Service (SaaS) Offerings

SaaS appears to provide the most value to SMEs. Why? Because SaaS supports the “plug and go” concept where IT organizations of SMEs source applications from public Cloud service providers and make them available to their consumers. This is the scenario where IT organizations of SMEs literally become IT service brokers. The list of SaaS offerings is endless. So are the providers. On the other hand, this scenario is the most disruptive for IT organizations to adopt unless the SME business is in start-up mode and has no existing software stack and data. Otherwise, IT organizations need to find a way of migrating existing data from the in-house applications onto the public SaaS environment. Many Cloud providers offer migration services to overcome this exact hurdle. To list a few common SaaS offerings:

  • ERP Solutions: SMEs typically haven’t had an opportunity to adopt ERP solutions (as opposed to LEs) due to the massive cost of implementing them. This has changed thanks to the introduction of Cloud-based ERP solutions. SMEs now have a real chance to enjoy the benefits of integrated business management systems at low cost.
  • CRM, BI, and Content Management Solutions: CRM Cloud solutions have been available on the market for more than a decade. It is probably safe to say that the CRM SaaS offering was the spark that ignited the rest of the IT industry to produce Cloud-based solutions. Today, SMEs can subscribe to CRM, BI, and content management solutions that have been proven and in the market for quite some time.
  • Messaging and Collaboration: Often these Cloud offerings are adopted first, as migrating them to Cloud is less disruptive to the SME’s business.
  • IT Service Management (ITSM): IT organizations of SMEs have an opportunity to completely rely on the ITSM software stack that is provided by the SaaS Cloud service provider. This is also interesting when IT organizations source from different providers. This integration level from a service management perspective is important as IT organizations need to successfully manage all the different aspects of their IT, from planning to building to running their entire IT stack.

And many more …

Communication as a Service (CaaS) Offerings

CaaS allows SMEs to take advantage of communication services like VoIP (Voice over IP) or UC (Unified Communications), and in cases where SMEs are Communications Service Providers (CSPs), CaaS provides a platform for not only service consumption but enables them to better bundle and resale services to meet company-specific market demands. As with all Cloud services, this means there is no need for the SMEs to make hardware investments. Instead, the Cloud provider takes care of the infrastructure, from hardware to software to managing the solution.

In essence SMEs have a wide range of Cloud services at their disposal. It is important for IT organizations of SMEs to do their homework first and go through the applications and workload analysis. This analysis helps IT organizations to build a business case for adopting Cloud services. Moreover, it provides clarity as to what types of Cloud services are targeted and what deployment model best suits the requirements.