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The Cloud & Technology Transformation Alliance is a joint initiative of Channel Partners and The 2112 Group. CTTA's mission is to be a forum through which all members of the technology value chain – IT vendors, service providers, distributors, resellers, agents and end users ‒ can discuss the issues of next-generation technology and systems, define the value of technology in business context, create best practices for adoption and application, and provide guidance for the business community on what comes next. This blog covers some of CTTA's work. More information is at http://cttalliance.com.

Cloud Is a Big Deal Among Small Businesses

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Lawrence M. WalshBy Lawrence M. Walsh, CEO and President, The 2112 Group

Over the next three years, nearly four out of 10 small businesses will have adopted multiple cloud services to either augment or replace their on-premise IT resources, according to a new report commissioned by Microsoft. Perhaps the unstated significance of these results is how small businesses will drive cloud convergence.

Microsoft surveyed 3,258 companies with two to 250 employees in 16 countries on their cloud plans. The results show rapid acceleration as more of these companies plan to increase their cloud services from their current level of 29 percent.

The survey found that small businesses will adopt 3.3 paid services, predominantly business-class email, collaboration, accounting and payroll applications. Larger businesses – 51 to 250 employees – will use about four cloud services.

These numbers apply only to the business-class cloud services and exclude such public and free cloud services as Facebook and Twitter. It also doesn’t account for search engines or search-engine marketing.

Most analysts agree: Most businesses have already adopted at least one cloud resource, but not all enterprises have adopted third-party cloud services. It won’t be until 2014 that all of the Fortune 500 will have adopted one cloud service.

The Microsoft survey focused on applications such as email delivered via the cloud. The rapid adoption is a reflection of small businesses not having the resources in money and talent to meet their totality of technology needs. And, if that is truly the case, cloud adoption isn’t limited to the computer applications, but also communications.

The cloud convergence of IT and telephony is happening as more hosting and cloud applications companies are adding managed VoIP and PBX as a part of their service offerings. Master agents are partnering with IT providers; the deal between CharTec and Outreach Telecom & Energy shows how managed services is creeping into the telephony channel. The willingness of small businesses to invest in the cloud reveals a ripe opportunity for converged offerings or partnerships to gain traction.

Despite the ubiquity of the cloud, 82 percent of small businesses want a local provider as their interface with the cloud services, according to the Microsoft survey. This means VARs, managed services, integrators and telephony agents will play a vital role in the sale and management of cloud computing accounts.

Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com .

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