Small businesses are increasingly becoming important for the world economy and AMI-Partners have been contributing valuable market intelligence and consultation service in the SMB market place.

One of the recent studies of AMI-Partners revealed that small businesses (SBs) –comprising of--1-99 employees represent a significant opportunity for cloud services, particularly Software as a Service (SaaS (News - Alert)). The report also found out that one in five SBs currently not utilizing the potentials of SaaS.

While some of these businesses think their businesses are too small for such applications, significant subsets of these small businesses believe that they do not have the appropriate expertise to make the migration to hosted applications.

The concept of cloud computing was not unknown to the businesses all these years. It is the current availability of the affordable cloud solutions that brought the SMBs’ attention to these services in a big way. According to AMI Partners, small businesses are now ready to move off the sidelines and act.

The AMI research revealed: worldwide SBs have allocated 18 percent of their total software spending for SaaS related software, a figure similar to that of medium businesses (MBs, 100 to 999 employees). While this is a highly encouraging picture, AMI holds that there are still hurdles to overcome in order to reach this critical market.

“Cloud-related Information and Communications Technology (ICT) spending is projected to account for a sizeable portion of total Worldwide SMB ICT spending in 2010. Cloud providers are racing to deliver functional, cost-effective solutions to small businesses worldwide. Small businesses have been laggards in adopting new technologies that fall outside their comfort zone, often looking to larger firms as test cases,” McDonald continues,” Michael McDonald, Senior Associate with AMI-Partners, said.

According to McDonals, the real problem lies in SMBs’ lack of knowledge regarding Cloud. While a significant budget was allocated for acquiring SaaS products, most of the companies lacked coherence between planned and actual spending. Although many small businesses have the capital available to make significant advances in the Cloud, they are not sure as to how a shift to cloud computing is going to benefit the business outcome. 

The research firm suggests that cloud service providers targeting SBs should understand that educating the decision-makers of these companies on the ease and simplicity of migrating to SaaS applications is essential. Also, channel partners should be armed with simple case studies demonstrating these benefits.