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The SMB Cloud Needs Standards to Mature

In the latest Parallels SMB Cloud Insights™ report, the worldwide market for public cloud services in 2012 grew to US$45 billion as at least six million SMBs entered the cloud market for the first time last year. The global market will continue to grow at 28 percent CAGR through 2015 to a forecasted US$95 billion. However there is still a significant barrier to SMB growth that needs to be urgently addressed: lack of standards.

Says Forrester analyst James Staten, "There is no compelling reason to comply; not enough enterprise users have established cloud computing initiatives." Many enterprises are happy to support specific cloud standards that match their own IT strategies. The result is the proliferation of emerging "standards" that may not necessarily be fully interoperable with others.
This large number of emerging cloud standards suffer from two main problems for SMBs:  first, they're all firmly aligned with the enterprise and enterprise-scale problems; second, the implementations are mostly incomplete and difficult to deploy.  

So what would work for SMBs?

To understand what is actually applicable to SMBs, we first have to understand how an SMB purchases and uses technology. A typical SMB does not have any specialized IT staff and is entirely reliant on its web hosting provider, a local value added reseller (VAR), or a specialized cloud provider (or some combination of the three) to gain access and take advantage of technology and public cloud services.

How did we get to this state? Many web hosters still offer only three or four basic web presence services.  Many VARs do not offer any cloud services, and specialized cloud providers tend to offer only one service like customer relationship management. So while SMBs say they would like to move their software and IT to the cloud by 2015, in a lot of cases, time-consuming and expensive custom integration coupled with the sheer number of available applications are holding back these SMB-focused service providers from meeting market demands.  

Often, what these service providers offer as an "app marketplace" has complementary services that are not integrated, and are difficult to upsell and cross-sell with effective configuration and activation. Many of these services have their own security protocols, making it difficult for the end user to log onto numerous services at a time. In short, they are dull and undefined, whereas SMBs expect, and moreover require an easy, seamless experience.

This is why standards for the SMB cloud are so important. The Apple IOS is a good example of a de facto standard that created a market where there was none, and which accelerated the development of mobile apps and enabled that community to flourish by setting standards and strict rules on how a developer got published and paid. In the same way, the SMB cloud needs a standard to aggregate, integrate and deliver unique services so that the ecosystem can start building rich and diverse service offerings.           

If the SMB cloud market is to reach its potential, a standard is needed, and service providers are beginning to address this opportunity with the Application Packaging Standard (APS). APS was designed to make it easy for software vendors to package their offerings for the cloud, and for service providers to offer a wider variety of cloud solutions while maintaining a high level of service. The next generation of this standard, APS 2.0, will address many of the problems still plaguing the industry today by using pluggable secure single sign-on, service bus architecture, and HTML 5 and RESTful APIs for customizable dynamic UI and workflow.

Developers and service providers can now offer integrated suites of best-of-breed cloud applications in a highly scaled manner. APS-enabled cloud services give SMBs access to a wider range of cloud services, enabling them to take advantage of the same scalability and cost advantages that private cloud deployments provide to large enterprises. The cloud-based services model is clearly the way IT resources will be accessed in the future, and APS 2.0 and the service providers leveraging this standard will be the key to delivering the cloud to the SMB.
Looking for directions?                                       

SMBs are no different from large enterprises in that they have to turn to industry bodies to find guidance. The Asia Cloud Computing Association brings together the region’s experts on cloud computing to drive forward the adoption of best practices and promote the development of standards.   And Parallels is actively committed to push the envelope of innovation and work for the interest of SMBs looking for guidance based on their real-world needs.

By David Dzienciol, VP and General Manager, Parallels APAC

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