WASHINGTON — July 14, 2010 — This week at the Microsoft Worldwide Partner Conference 2010, Microsoft Corp. is highlighting market opportunities for hosting and communications service providers as adoption of cloud services among small and midsize business (SMBs) continues to rise. Microsoft is helping service providers take advantage of those opportunities through its software, services and programs that enable them to become trusted advisors and full-service IT providers to businesses.
“Microsoft sees service providers becoming more important as the cloud becomes more predominant. Given their experience in deploying and selling infrastructure and software as a service, businesses will depend on them for IT as a service,” said John Zanni, general manager of Worldwide Hosting for the Communications Sector at Microsoft. “The next step for service providers is to look beyond their current hosted offerings to become full-service IT providers and trusted advisors to businesses.”
The IT Needs of SMBs
According to Microsoft’s global SMB IT and Hosted IT Index 2010, a survey of nearly 3,200 SMBs across 14 countries, awareness of hosted services is increasing with 65 percent of SMBs using hosted software to some extent, while 73 percent of the remainder have considered it, compared with only 44 percent in the 2008 index. Of those respondents currently using hosted services, the business advantage attracted them: Almost 36 percent wanted to find ways to improve business productivity, while 31 percent did not have the resources to manage their IT. Surprisingly, only 25 percent of respondents said cost was a factor. In terms of opportunities for hosting providers, three out of four respondents have considered using hosting for IT tools. For instance, SMBs in China, one of the fastest-growing markets, are the most likely to have considered using hosted services for four different IT tools: backup, file-sharing and collaboration, e-commerce, and customer relationship management. In terms of the IT currently used by SMBs, e-mail is the most pervasive IT tool worldwide (95.6 percent), followed by backup tools (92.4 percent). However, this does not mean that these tools are used by every company worldwide, as the research shows that even in a heavily regulated industry, more than 7 percent of financial services companies worldwide do not have any backup tools. This represents an enormous opportunity for service providers to provide hosted IT services to SMBs.
Reducing Customer Churn by Attaching Cloud Services
For service providers, reducing customer churn is critical to revenue growth, profitability and market share. During the past several years, Microsoft has heard from its service provider partners that they were experiencing significantly lower churn rates among business customers using Microsoft Hosted Exchange, Microsoft Office Live Meeting and SharePoint when compared with those using basic POP or webmail services. In order to further understand the impact of service adoption and churn, Microsoft commissioned a study of 695 SMB executives and technology decision-makers in the United States and Europe in early 2010 and found that SMB customers that use enterprise-class e-mail and other online communication and collaboration services change providers half as often as those using basic POP or webmail. This dynamic presents service providers with an opportunity to combine their existing network service offerings with enterprise-class e-mail to better serve their customers and improve their bottom line. Microsoft recently published a white paper on the findings of the survey, which can be viewed at http://www.microsoft.com/hosting/en/us/resources/default.aspx.
As the second most-used IT service among SMBs, backup tools represent another opportunity for service providers as SMBs continue moving toward the cloud. Microsoft partner and leading unified storage architecture provider NetApp is helping service providers expand their business by developing differentiated services to meet these customer needs. Through the Microsoft Dynamic Data Center Alliance, NetApp integrated its disaster recovery solutions with the Dynamic Data Center Toolkit, which provides sample code and guidance for building cloud services based on Windows Server 2008 R2, Windows Server 2008 Hyper-V and Microsoft System Center. This gives hosting service providers the ability to offer enterprise-class data protection solutions for disaster recovery, clustered failover, and backup and recovery services to their SMB customers.
nGenX Corp., a provider of cloud computing and managed hosting solutions based in Overland Park, Kan., with customers in Chicago’s financial district, recently announced Guardian GeoCloud, an automated cloud service that will empower end users with complete control over their cloud-based infrastructures while lowering IT costs and management hassles. With the help of the Dynamic Data Center Toolkit, nGenX was able to work with NetApp to include enterprise-class disaster recovery in Guardian GeoCloud.
“A major concern of cloud computing among our customers is reliability, as downtime or lost data translates to lost revenue, a damaged reputation and halted productivity,” said Robert A. Bye, executive vice president at nGenX. “By integrating disaster recovery into Guardian GeoCloud, we are able to achieve the reliability that our customers demand, providing replication and failover of their virtualized environments to a remote datacenter. Moreover, our customers now have access to a level of disaster recovery and security traditionally only available to large enterprises, at a fraction of the cost.”
More information on the Dynamic Data Center Toolkit is available at http://www.microsoft.com/hosting/dynamicdatacenter/Home.html. Information for hosting providers interested in partnering with Microsoft is available at http://www.microsoft.com/hosting/en/us/default.aspx.
Hosting Solutions Partner of the Year
Microsoft also recently honored U.K.-based cloud computing company Outsourcery Ltd. as its 2010 Hosting Solutions Partner of the Year for the company’s work with Microsoft Communication Services. In the United Kingdom, companies operating across all sectors are increasingly relying on hosted solutions. Outsourcery provides advanced, integrated solutions that help businesses get in touch with colleagues right away via instant messaging, videoconferencing, audio conferencing, Web conferencing, Live Meeting, and desktop and document sharing, while monitoring users’ presence information and enabling them to choose the most effective way to communicate. Outsourcery solutions allow communications systems and devices to work hand in hand with Microsoft Office applications, Outlook e-mail, instant messaging and Windows Mobile-based devices. With Microsoft Communication Services, Outsourcery is able to take advantage of Microsoft branding to better market solution bundles to its customers.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.