SMBs eagerly adopting IaaS, 60% prefer resellers over providers

As the “as-a-service” cloud model revolutionizes the way businesses of all sizes use technology, a study released by AppDirect reveals that SMBs are eagerly adopting infrastructure as a service (IaaS) and that they prefer to purchase solutions from resellers.

The report also found that 72% of SMBs already run most of their workloads in the cloud, and that eight out of 10 plan to increase their IaaS spend over the next three years.

SMBs inceasingly using IaaS solutions

For years, SMBs have been eager SaaS adopters. Now, as their understanding of—and comfort with—the public cloud has increased, many SMBs are adopting IaaS solutions to manage critical parts of their businesses.

Small businesses already spend more than $60 billion on IaaS, a figure that is set to reach more than $90 billion by 2023.

“As-a-service solutions have been a game-changer for SMBs, giving them access to enterprise-grade technology that levels the playing field, and IaaS is no different,” said Dan Saks, co-CEO of AppDirect.

“Our report shows that SMBs are eager to adopt IaaS, but they want trusted partners to help them scale the solutions that are best for their businesses. There’s a huge IaaS opportunity for IaaS resellers who offer the products and ease of use that SMBs want.”

SMB spending is on the rise

Just 20% of SMBs say they will hold spending at current levels, while 80% plan to increase IaaS purchasing over the next three years. Many are starting to shop around for the best products and deals, with 69% SMBs buying from multiple providers to get better pricing.

Others also pursue a multi-vendor strategy to diversify their technology (41%) or find the products that best suit their needs.

Resellers are valuable partners

Businesses have two main options to purchase IaaS services – going directly to a provider or working with a reseller. They prefer working with resellers by nearly a 20-point margin—59% vs 41%—primarily for the more personalized attention that resellers offer.

In fact, resellers have the edge in almost every area measured, including trust, support, understanding business needs, and flexibility. Providers came out ahead only on pricing and discounting options.

Challenges for resellers in gearing up to serve SMBs

SMBs prefer to purchase from multiple providers. However, resellers are experiencing significant obstacles to a multi-provider strategy. Lack of skilled staff (82%) is the biggest challenge, followed by provider exclusives (46%).

With most SMBs looking to spend more on IaaS, resellers who balance investing in additional personnel and platform technology that can streamline IaaS provider onboarding and management are likely to see a return on their efforts to reach SMBs.

Many resellers seem to recognize this fact. 56% of resellers plan to increase their investment in selling to SMBs over the next three years.

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