Australia prides itself on being a ‘fast-follower’ in technology trends and Cloud Computing is no different. Here is a snapshot of what is happening in Australia for SMBs.
The primary reason for adopting cloud is flexibility and cost reductions. The major ways this is achieved is through shared hardware/software infrastructure and a new way of licensing the software applications. In a Cloud environment your application resides in a computer room somewhere in the world, it is accessed through the World Wide Web or “Cloud”. All you need is a PC, with a web browser and an internet connection.
You don’t need to buy a dedicated server to sit in your office to run applications. This means you don’t need to buy hardware and software, run backups or maintain the systems.
The application is designed to be shared with other SMB’s, although your data and specific application settings are maintained and accessible only by you. If you need more users you buy more, if you need less then you hand them back. Many of your favourite email systems like Hotmail and Gmail are essentially Cloud Applications. So are new style applications like Google Docs.
The way that you buy software is also different – and it’s called Software as a Service(SaaS). In the most basic terms, instead of buying a software licence at a large upfront fee, you buy software on a monthly basis. The inherent flexibility of the application and the licencing model means that initial costs can be low. Another change is that software vendors market their products differently, with the offer of ‘free trials’ of software being common.
The poster child for business applications in the Cloud is Salesforce.com, who added more than 800 new customers in Australia last year. This has been achieved by aggressively running the dual strategy of serving small business and also departments in large businesses. Their lowest entry point is $5 per user per month for contact management, with basic sales and marketing at $35 user/month to a complete CRM for $95 user/month.
Telstra has entered the market as a partner of Microsoft under the T-suite banner. These include Microsoft Dynamics CRM as well as Exchange, SharePoint and Live Meeting. Telstra has just announced that the Office Suite (Word, Excel, PowerPoint etc) will be available next year. Telstra also works with local software companies providing a small business CRM from WORKetc and Accounting from Xero.
Microsoft will enter the market in its own right next year, teaming with the likes of Telstra and its large partner network to deliver a range of Cloud applications that will compete with Salesforce.com and Google Docs directly.
Other large software vendors include ERP from Netsuite, CRM from Oracle and SAP’s Business ByDesign applications.
Smaller software vendors are also active – local company saasu has 10,000 customers in accounting for Small Business (competes with MYOB); StrategyMix is an add-on to CRM systems to deliver marketing automation.
This is just a summary of the current market and in our own research over 80% of companies are either undecided or considering Cloud-based applications. It seems that Cloud applications are a trend that are here to stay.