Dive Brief:
- The decreasing costs of basic cloud services are bringing scalable solutions within reach for small- and midsize-businesses, according to a report by IT services and consulting firm Accenture commissioned by AWS.
- Nearly half of all businesses across developed economies now use cloud to access tools previously only available to large enterprises with the resources to develop them internally, the report said. Accenture used survey data collected by Dynata from 562 micro, small and midsize enterprises in May and June.
- Through cloud adoption, SMBs in the healthcare, education and agriculture segments will unlock nearly $80 billion in annual productivity gains in the U.S. and $161 billion globally by 2030, the analysis found.
Dive Insight:
Organizations that have yet to commit to cloud represent an opportunity for hyperscaler growth in a market dominated by AWS.
As the largest cloud provider, AWS took in one-third of global spending on infrastructure services during the three-month period ending June 30. Microsoft and Google Cloud, AWS’s main rivals in the U.S. market, accounted for another third, at 22% and 11% respectively, according to Synergy Research Group’s analysis.
AWS has leveraged its size advantage and operational efficiency to go after the SMB market, Sid Nag, VP analyst at Gartner, told CIO Dive via email.
“AWS has also achieved significant price performance ratios with their silicon and chip technology such as Graviton, which they are most likely passing on to customers,” said Nag.
The hyperscaler has steadily cut prices for cloud services, Ben Schreiner, head of business innovation at AWS, said in an interview with CIO Dive. The company tallied 129 price reductions since 2006 in an April blog post.
While individual SMBs exert little sway on the balance of power, in aggregate they amount to a sizable pool of potential customers, accounting for 99% of all firms and 67% of jobs in the U.S., the Accenture report said. They also generate between 40% and 60% of GDP in developed economies.
AWS is actively recruiting this market segment to cloud, Schreiner said.
“We don't necessarily believe that there's a one-size-fits-all strategy, but we do have a program that we developed for small and medium businesses,” said Schreiner, referencing an SMB-focused analytics program the company introduced in North America this year. The program provides business owners with individualized guidance from AWS analytics experts.
“Owners want to make data-driven decisions, but their data is in a spreadsheet somewhere or in five different places,” Schreiner said. “They struggle with how to get it into one place that’s safe and secure.”
Only 19% of decision-makers from midsize businesses and 24% from small businesses had confidence in their firm’s capacity to generate insight, according to Forrester. The analyst firm surveyed 320 data and analytics professionals in June for a second report commissioned by AWS.
Similarly, fewer than one-third of respondents expressed confidence in their ability to secure data assets as their operations expand, Forrester found.
“Every proprietor that I've talked to knows that they are understaffed when it comes to security,” Schriener said. “They don't have a chief security officer or a small army to fend off the bad guys and we all know the bad guys are out there and they don't care who you are or how big your company is.”
