Small business: A cloud-computing opportunity?

There has been much ado about Rackspace's recent "cloud hosting" survey (PDF), in which it finds that small businesses are essentially unaware of services that fit that description.

Specifically, the survey found that more than two-thirds of small businesses (not defined in the survey, unfortunately) have never heard of "cloud hosting."

Several prominent bloggers, the CNET Blog Network's Dave Rosenberg and CloudAve's Krishnan Subramanian among them, have pointed out that the question asked may have courted the response received. To quote Rosenberg:

Not too surprisingly, the majority of SMBs were not aware nor terribly interested in "cloud hosting." I suspect that some of this had to do with the use of the term "cloud hosting" rather than an interest in moving toward hosted applications and infrastructure. I would argue that questions about using "the cloud" versus "cloud hosting" would have come up with a different set of answers.

Good point, but I think that there is more to this story.

To me, what this survey shows is not that small businesses have failed to grasp cloud computing, but that "cloud hosting" providers have done a terrible job of marketing to that segment. In other words, the sex appeal of enterprise sales models and their big individual deal totals has driven most providers to focus on strategizing on how to get the so-called "enterprise" market--which really means Fortune 10,000-scale companies.

I understand why. On paper, those guys have the budget to spend big. However, we also know that a large percentage of the early adopters of cloud services such as Amazon Web Services are small businesses and start-ups. In fact, there is a "barrier to exit" for enterprises wanting to move to the cloud. So why not focus significant investment at courting the former?

What I'd love to see is various cloud providers (at all levels of the stack) creating programs that specifically advertise and market themselves to mom-and-pop services, manufacturing shops, and so on. Targets for volume should be impressive; 100,000 customers should not be a surprising goal.

Software as a service would probably lead the way, but opportunities to get custom Web applications via platform as a service (perhaps through partners) or even information as a service, when it makes sense, should be at least tried in this vast marketplace.

Even with its flaws from a general cloud-computing sense, the Rackspace survey is incredibly valuable. The customers are out there. Figure out how to go and get them.

[gevaperry]

They probably would have received very different responses if they avoided the term "cloud hosting" and just said "a hosting service that allows you to pay based on your usage" or something of that sort.

[bonesbautista]

My barrier to cloud hosting - no single solution exists at a reasonable price.

I'm looking specifically at cloud hosting of future services, and leaning toward an Exchange-type service in part due to Sharepoint-type document sharing. Too many of these cloud service providers do not offer the domain email/fiie hosting/document sharing/calendaring in one place with secure servers based in the country I live in (I'm in the US, but if I lived in any other country I'd want services available in that country).

I'm really tired of trying to crib together a services package with constant uptime. I'm just about ready to give up and just get a co-located box at a local hosted provider with redundant power supplies and network pipes for a monthly fee. The additional cost of setting up my own server is looking like I'll save tens of thousands in therapy costs down the road...

[dhdeans]

You said "providers have done a terrible job of marketing to that segment" -- the same was true with the managed services model overall. But, things change, in time
http://business-technology-roundtable.blogspot.com/2009/02/managed-security-services-growing-among.html

[billsorenson]

One thing that does work is using a company that has enough infrastructure so that downtime is extremely rare. In reality, small businesses have so much downtime with local servers, PCs, etc. that moving the applications to the cloud makes total sense.

We've been doing "cloud computing" via Terminal server desktops for 8 years with our customers rarely having issues. By building and controling the environment, having great redundancy, and providing great service, it works. Doesn't have to be all web apps, that's for sure. And, if you pick the right service, you have someone on the other end of the phone that can help. Gotta love that.

Cloud Computing / Cloud Hosting, etc. are just new terms and marketing spin. It's great to get the visibility of these services and a complete variable IT cost model is wonderful, it's just not all that new...

www.IVDesk.com, it does work.

[andypaynton]

Are we talking about small IT businesses or small businesses in general.
There is a yawning gap in the market for someone to market a package including infrastructure (data connection, virtual pc, storage and server resources), generic SAAS business apps (office tools, email, time management, finance/payroll, stock taking, CAD, website etc) and services (support, training, web-site development ).
Non-IT small business really don't want to think about DR, security or other aspects of systems managemen, they just want to have tools that enable them to concentrate on their business.
Get those businesses as customers when they are small and they will stay with you for ever if the services offered are scalable, application migration is made easy and customer service is good.
Small businesses will grow into medium and large ones without ever having an IT department.
Is anyone offering this?