2015 - Odin Hosting & Cloud Automation Platforms · • Search engine optimization (SEO) •...
Transcript of 2015 - Odin Hosting & Cloud Automation Platforms · • Search engine optimization (SEO) •...
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DEFINITIONS
Cloud Services DefinedThis research focuses on the cloud services that matter most to SMBs: IaaS, web presence and web applications, unified communications, and other general business applications.
Infrastructure-as-a-service (IaaS): • Cloud servers (previously not researched in our last study of Japan)
• Dedicated servers
• Virtual private servers (VPS)
• Managed hosting
• Add-on applications and services for hosted infrastructure:
• Control panels• Development platforms • LAMP stack • Security• Server backup
Web presence and web applications: • Third-party web hosting
• Domain registration
• Web applications:
• Content delivery networks (CDN)• Content management systems (CMS) • E-commerce • Health monitoring• Mobile optimization tools• Search engine optimization (SEO)• Site-building tools• SSL• Web server backup• Web server security
Unified communications: • Communication and collaboration applications:
• Web and phone conferencing• Instant collaboration • Mobile device management (MDM)
• Business-class email services:
• Email security and archiving
• Business voice services:
• Mobility and hosted phone services such as hosted PBX
General business applications:
• Major software applications accessible online:
• File sharing• Online accounting • Online backup and storage • Online customer relationship management (CRM)• Payroll and HR• Support and help desk• Virtual desktop (VDI)
SMB DefinedWe define SMBs – also known as small and medium enterprises (SMEs) – as companies with one to 250 employees. There are around 1.8 million SMBs in Japan today. SMB categories include micro (1-9 employees), small (10-49 employees), and medium (50-250 employees).
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Odin SMB Cloud Insights™ has entered its fifth year of research into the consumption of cloud services by small and medium businesses (SMBs). After interviewing more than 400 IT decision makers at Japanese SMBs, we found many important trends in this market. Globally and locally, SMBs from a variety of sectors are moving business functions into the cloud. Tools and solutions previously reserved for enterprise-level organizations are being implemented in smaller firms as developers create services specifically for the SMB market.
Our research is intended to help cloud service providers take advantage of the trends outlined in this report in order to meet the evolving needs of their SMB customers. New to this year’s research is an exploration of the SMB’s journey of researching, purchasing, and using cloud services. This data will help service providers build successful relationships with their customers.
Note: This report uses a JPY-USD exchange rate of 118.21. This value is calculated using a one-year exponentially weighted rolling average.
Overall SMB Cloud Services Market in Japan
¥339B
($2.9B USD)
2015
Infrastructure-as-a-service
Web presence Unified communications
Business applications
($1,100M USD)
¥130B($451M USD)
¥53B ¥59B ¥97B($499M USD) ($818M USD)
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INFRASTRUCTURE-AS-A-SERVICE (IaaS)
Top Barriers to Hosted Infrastructure
Buying IaaS
Japan’s infrastructure-as-a-service market has seen significant growth in recent years. Due to capital constraints and an increasing need for flexibility, Japanese SMBs are moving away from in-house to hosted infrastructure. More than half of SMBs with servers use a hosted server, and many of those with in-house servers are looking to move toward a hosted solution in coming years.
Total Server Add-ons by Industry54% of SMBs with servers use a hosted server
46% of SMBs with servers use an in-house server
Micro Small
Price Legacy systems and other tech concerns
Security or privacy concerns
36%39%25%41%38%92% 47%22%38%
Medium
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IaaS Research Methods
Top Factors in Choosing Service Provider
Online
Price
Discuss with a trusted advisor
Ability to expand or contract quickly
From existing service providers
Ease of management
Business industry news
Existing relationship
Security or privacy concerns
16%
16%
15%
10%7%
17%
17%
46%
50%
Top IaaS Purchase Locations
Web hoster
Local IT resource (VAR)
Retail computer store
Pure cloud infrastructure/
service provider
Telco or cable co
62%8%
8%8%
7%
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Top Workloads in Production
Using IaaS
Content management
system
Database applications
Data mining/ analytics
Payroll, HR, and benefit
management
35% 31% 26% 21% 19% 11% 10%22% 36% 19% 23% 17%
Customer relationship
management (CRM)
Accounting/ financials
Micro/small (1-49 employees) Medium (50-249 employees)
Top Hosted Server Add-ons
Control panel Security Server backup
28% 36% 23% 17% 12% 11%40% 32% 23% 14%
Development platform
LAMP stack
2015 2018
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Opinion of IaaS Service Provider
Areas for Improvement
Customer Experience
Positive40%
2 3 4 51
Performance (speed,
availability)
Support experience
Security vulnerabilities
Usability Self-service administration
31% 22% 21% 19% 7%
Total Server Add-ons by Industry36% of SMBs would pay an additional ¥1,000 per month for high availability
41% of SMBs would pay an additional ¥1,000 per month for unlimited storage
Neutral44%
Negative16%
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How SMBs are Resolving Issues
Escalating with the vendor
Exploring alternative options
Cancelling the service
Moving in-house
47%33%
10%9%
IaaS Opportunities through 2018
7%CAGR
€487M €706M
2015 2018
¥161B($1,364M USD)
¥130B($1,100M USD)
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Likelihood of Entering the Cloud Market
Cloud leapers (New adoption)
Cloud converters (Switch from in-house)
15% 29%
The Japanese IaaS market will see steady growth in coming years. Firms are finding value in moving to hosted services, but they also have concerns.
For example, price is a massive barrier for Japanese SMBs and will continue to be an important factor in future IaaS purchasing decisions. As a result, service providers with competitively priced packages will succeed in this market.
In terms of customer satisfaction, only 40% of SMBs have a positive view of their IaaS provider. While this number is low, SMBs would prefer to escalate their issue(s) with their service provider rather than move to a competitor. SMBs in other markets tend to be more willing to leave their service provider rather than escalate a problem. This means that service providers have the opportunity to answer their customers’ concerns and reduce churn. Overall, the IaaS market will continue to offer value to service providers working to gain SMB customers.
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SMBs with a Company Website
Website Hosting Location
WEB PRESENCE
The web presence market has steadily expanded as firms increase their visibility online. Mobile optimization is becoming more important for SMBs as smartphone usage has skyrocketed in recent years. Additionally, businesses are finding site-building software to be an attractive substitute to costly web professionals. Although this market is relatively mature, there are still strong opportunities within the ¥53B ($451M USD) web presence market.
Micro Small Medium
75%
25% of websites are hosted in-house. Of those SMBs with in-house websites, 18% plan to add a third-party hosted website in three years.
75% of websites are hosted by a third-party.
third-party
92%79%54%
25%in-house
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Buying a Website
Key Factors in Choosing a Web Hoster
Note: (39% of SMBs listed at least two key factors in choosing their web hoster.)
Price Customer experience/
support
Existing relationship
Security Brand recognition
22% 14% 9%24%68%
Service Provider of Web Hosting
Web hoster
Telco
Pure cloud provider
Local IT resource (VAR)
Other
68%17%
5%8%
2%10
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Top Purchase Methods
Website Design
1 2 3 4
Online Face-to-face Over the phone
In a store74% 16% 10% 2%
of websites are designed by a third-party web designer
34%
of websites are designed
in-house
66%
Of in-house used a site builder
29%
Mobile Optimized Website
Only displays properly on a computer38%
Displays on mobile without optimization26%
Mobile optimized36%
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Website Add-ons and Management
Purchase Location of Add-on
Top Website Add-ons
Web hoster: bundles with website
purchase
Directly from the application developer
Third-party provider
Web hoster: returned after website
purchase
45% 62%
25%13%
17%
Note: In total, 62% of add-ons are purchased from the web hoster.
Backup SSL SEO
19% 29% 17% 16% 14% 10%32% 33% 28% 22%
Security and health monitoring
E-commerce capabilities
2015 2018
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Website Management
Customer Experience
In-house92%
Web hoster3%
Opinion of Web Provider
Positive38%
Neutral44%
Negative18%
Web designer5%
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Top Areas for Improvement
How SMBs are Resolving Issues
Performance (speed, availability)
Escalating with the vendor
Security vulnerabilities
Exploring alternative options
Self-service administration
Canceling the service
Support experience
Moving in-house
Usability
43%
49%
23%
35%
6%
7%
22%
7%
5%
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The Japanese web presence market is expected to grow to ¥61B ($529M USD) by 2018 at a CAGR of 4.8%. Drivers within this market will be the increased need for mobile optimization and the growing use of site builders. Web hosters remain the main sellers of websites and website add-ons. However, they are being challenged by telcos and cloud service providers that are edging into the market. Maintaining customer relationships while answering the growing importance of mobile optimization will be key to gaining ground in this competitive marketplace.
Web Presence Opportunities through 2018
4.8%CAGR
¥61B ($529M USD)
¥53B ($451M USD)
2015 2018
Likelihood of Entering the Cloud Market
Cloud leapers (New adoption)
Cloud converters (Switch from in-house)
15% 18%
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UNIFIED COMMUNICATIONS
Hosted solutions for internal and external communications are growing in usage among SMBs. Hosted email is increasingly driven by the need for security while hosted business voice services are driven by cost savings. Although many SMBs currently use traditional landlines and free email services, we expect to see a sizeable number of cloud adopters in coming years.
Note: 14% of SMBs do not use email.
Hosted on an in-house server
Free serviceHosted by a service provider
48% 34% 4%
Top Purchase Triggers for Premium Hosted Email
2 31
Increased need for security
Good price point
Need for professional look and feel
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Opinion of Email Service Provider
Positive30%
Negative26%
Neutral44%
Total Server Add-ons by Industry54% of third-party hosted email is bundled with website hosting or a hosted server
Top Areas for Improvement
Performance (speed, availability)
Security vulnerabilities
Usability
Support experience
40%33%22%19%
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How SMBs are Resolving Issues
Escalating with the vendor
Exploring alternative options
Cancelling the service
Moving in-house
39%27%
8%17%
Hosted Business Voice Services
Main Barriers to Hosted Business Voice Services
16%
14%
70% of SMBs do not have business voice services
of SMBs have in-house business voice services
of SMBs have hosted business voice services
Security and privacy concerns
Lack of knowledge about hosted business
voice services
Technical concerns
Price
16%42% 12%30%
Hosted
In-house
Do not have
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Top Purchase Triggers for Hosted Business Voice Service
Top Features that Improve Productivity
Top Features that Improve Customer Satisfaction
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2
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1
Good price point
Single number reach
Automated attendant
30%Business has
explosive growth
Smartphone client
Integration with employee’s mobile devices
25%Major
change to business
20%
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Opinion of Hosted Business Voice Services Provider
Neutral55%
Positive32%
Negative13%
Top Areas for Improvement
Performance (speed, availability)
Security vulnerabilities
Usability
Support experience
38%25%20%12%
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How SMBs are Resolving Issues
Collaboration Applications
Escalating with the vendor
Exploring alternative options
Moving in-house
Cancelling the service
48%34%15%3%
Web conferencing Instant collaboration
Mobile device management
5% 12% 9% 3%16% 10%
2015 2018
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Cloud leapers(New adoptions)
Cloud converters(Switch from in-house)
Likelihood of Entering the Cloud Market
8%19% 30%7%
Email Hosted PBX
Unified Communications Opportunities through 2018
8%CAGR
€487M €706M
2015 2018
¥74B($623M USD)
¥59B($499M USD)
The unified communications category will grow to ¥74B ($623M USD) by 2018. As noted earlier, price is a major barrier for cloud services. However, we expect many SMBs to purchase these services when presented with an affordable offering. Growth in the hosted email category will come significantly from SMBs without an email system while hosted business voice services will see growth from SMBs with traditional landlines. With an 8% CAGR and a strong interest by SMBs, service providers will derive significant value from the unified communications market in coming years.
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BUSINESS APPLICATIONS
The business applications market is currently the second-largest category within the Japanese cloud market. Firms are deriving value from the flexibility and low overhead cost of hosted applications. Certain trends – particularly research methods – are different depending on firm size. Smaller firms rely heavily on online searching while larger firms are more likely to look toward trusted advisors and their existing service providers.
Business Application Research Methods
Most Important Factors in Choosing Business Applications
Micro Small
Online research
Local IT resource
Industry news
Existing service provider
Trusted advisor
25%16%23%
15%
19%
9%
26%
12%
50%
5%
29%24%
12%
29%
6%
Medium
Price Features and capabilities
Business need
Customer experience
48% 31% 12% 9%
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Trial Software
64% Purchased without a free trial
Purchasing
Bundling
Bundling
With bundle21
Hosted server
Broadband
88%Separate from bundle
12%With bundle
36% Purchased with a free trial
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Top Business Applications through 2018
2015 2018
Business Application Opportunity through 2018
20%CAGR
¥166B ($1,402M USD)
¥97B ($818M USD)
2015 2018
File sharing
Online backup
Payroll and HR
Online accounting
VDI Support and help
desk
Online CRM
8%9% 3%4%6%8%16%17%21% 11%14%21%26%29%
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Overall Cloud Services Opportunity through 2018
Business applications is slated to become the largest category over the next three years. This is a result of an increasingly crowded marketplace with high-quality offerings. SMBs are taking advantage of this trend since capital constraints make large in-house software purchases impossible. Service providers have the potential to grow their customer base but they must also offer best-in-breed services and transparent pricing. Overall, this expanding market will introduce SMBs to the many advantages of cloud services.
IaaS Web presence Unified communications
Business applications
¥161B
¥130B¥61B
¥74B
¥59B
¥97B
¥166B
¥53B
20182015
7% CAGR
5% CAGR8% CAGR
20% CAGR
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11%CAGR
($2.9B USD)
¥339B
2015
($3.9B USD)
2018
¥462B
The Japanese cloud market will grow at a CAGR of 11% over the next three years. Business applications and communications tools will be the key drivers of this growth. Throughout this research, we have found that Japanese SMBs are extremely price-conscious and also place significant value on business relationships. Service providers who offer competitively priced products coupled with quality customer service will be in the best position to take advantage of the continued growth within this market.
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Learn MoreOdin is committed to helping our partners understand the best opportunities in the SMB cloud market.
This report covers only a portion of the extensive data included in Odin SMB Cloud Insights™ research. Please contact [email protected] with questions.
About OdinOdin provides software that powers the cloud ecosystem, from small and local hosters to some of the world’s largest telecommunications providers. By partnering with Odin, service providers gain access to industry expertise, a catalog of the most in – demand cloud applications, and the most comprehensive selection of software including web server management, server virtualization, provisioning, and billing automation. With offices in 15 countries, Odin supports more than 10,000 service providers in delivering applications and cloud services to more than 10 million SMBs. For more information, visit www.odin.com, follow us on Twitter, or like us on Facebook.
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No part of this publication may be reproduced, photocopied, stored on a retrieval system, or transmitted without the express written consent of Parallels.
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