Robust Growth in the Australian SMB Cloud Market

Country’s SMB cloud services market grew 35 percent during the past year

SYDNEY, AUSTRALIA – 29 August 2013 – Parallels, the hosting and cloud services enablement leader, today released the key findings of Parallels SMB Cloud Insights™ for Australia, a detailed annual market report illustrating the country’s cloud market growth and providing revenue opportunities for service providers to deliver cloud services to small and medium businesses (SMBs).

Australian SMBs are rapidly closing the gap in cloud adoption, compared to the rest of the developed world. The report estimates the Australian SMB cloud services market to reach A$1.2 billion in 2013 – a significant increase from A$865 million in 2012. Parallels has determined that this rapid growth highlights the growing acceptance by Australian SMBs, of the cloud opportunity, particularly in four specific categories: infrastructure as a service (IaaS), web presence and web applications, hosted communication and collaboration, and online business applications (a category also known as software as a service, or SaaS).

“The Parallels SMB Cloud Insights™ report affirms the vital role cloud services play in Australia’s SMBs business operations,” said David Dzienciol, Vice President and General Manager, Parallels Asia Pacific. “The time is now for Australia’s SMBs to explore the implementation of enterprise grade and cost-efficient cloud services to propel their business relations with Asia-Pacific, Europe and North America.”

Out of the total A$1.2 billion market opportunity for Australia’s SMB cloud services, Parallels estimates that IaaS contributes A$343 million to this opportunity; web presence and web applications contribute A$275 million; hosted communication and collaboration (composed of hosted premium email and hosted PBX) adds A$134 million; and, business applications accounts for the remaining A$430 million.

“Parallels SMB Cloud Insights™ offers valuable intelligence for service providers to gain insight into the needs of SMBs in Australia and to help us target the appropriate opportunity segments with the right mix of services,” said Anthony Banek, CEO for OzHosting.com. “The valuable insights shared in the report are unparalleled and they serve as a cornerstone for Australia’s SMBs that are striving to migrate to cloud services.”

The third edition of the Parallels SMB Cloud Insights™ identified the following cloud services and applications categories that were most appealing to Australian SMBs in 2013:

• Infrastructure as a Service: 18 percent of Australian SMBs now use a hosted server, a 5 percent increase over the previous year. The growth was driven largely by micro SMBs (those with under 10 employees) converting from in-house servers to hosted servers.

• Web presence and web applications: At 27 percent, the Australian web presence market’s growth rate is among the fastest in the developed world and helped Australian SMBs to close the gap between web presence use in Australia and other developed markets.

• Hosted communication and collaboration: Although the overall market for these two services – at approximately A$134 million – is much smaller than the web presence and IaaS market sizes, it is growing much faster. The hosted communication and collaboration market grew approximately 50 percent in the past yeaHosted premium emails:

For hosted premium email, market growth was driven by two main groups –

1) SMBs of all sizes who upgraded to hosted premium email from their free email accounts and,
2) micro and small SMBs who converted from in-house servers to hosted premium email – Hosted PBX adoption: Lack of awareness is a major barrier to hosted PBX adoption. One-third of Australian SMBs still haven’t heard of hosted PBX.

Business applications: The business applications market will be the fastest growing category of cloud services in Australia over the next several years, reaching A$874 million and growing at least 27 percent year-over-year.

The report concludes that Australia will continue to experience strong growth across all cloud services, as cloud services become mainstream among Australian SMBs. Parallels foresees that Australian SMBs will expand beyond traditional hosted services to consume an ever larger number of cloud applications over the next several years, particularly in the online business application category.

About Parallels

Parallels is a worldwide leader in hosting and cloud service enablement and desktop virtualization. Founded in 1999, Parallels is a fast-growing company with more than 900 employees in North America, Europe, and Asia.