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This document is offered compliments of BSP Media Group. www.bspmediagroup.com
All rights reserved.
Profit from the cloud TM
Sales Director Sub-Saharan Africa
The Quantification of South Africa
SME Cloud Market
Alex Fine
2 Profit from the cloud TM TM
• Global software company headquartered in
Renton, WA, United States
• African HQ in Johannesburg, South Africa
• 12 years of experience in the Cloud & Hosting
space
• 900+ people
• Close strategic partnerships with IBM, Cisco and
Microsoft
• Certified for ISO 9001 and 27001
• Parallels helps service providers to grow and
profit from the cloud with
• Software
• Deep industry expertise
• and our open partner ecosystem
Introduction to Parallels
SOFTWARE
Profit from the
Cloud™ Profit from the
Cloud™ Profit from the
Cloud™
Profit from the
Cloud™
Profit from the
Cloud™
Profit from the
Cloud™
SOFTWARE
Profit from the
Cloud™
Profit from the
Cloud™
Profit from the
Cloud™
4 Profit from the cloud TM TM
Parallels Automation Customers’ Online Stores
5 Profit from the cloud TM TM
The cloud services market in South Africa
has grown to $165M USD in 2013
$72M USD
$40M USD
$19M USD $34M USD
$165M USD
R 0.0
R 0.4
R 0.8
R 1.2
R 1.6
R 2.0
Infrastructure as aservice (IaaS)
Web Presenceand Web
Applications
HostedCommunication &
Collaboration
BusinessApplications
Total
South African SME Cloud Services Market in $Millions (2013) 2013
6 Profit from the cloud TM TM
SME Hosted Service Penetration Rates
8%
20%
16%
7%
1%
27%
0%
5%
10%
15%
20%
25%
30%
HostedInfrastructure
Website Hosted Email Paid HostedEmail
Hosted PBX BusinessApplications
SME Cloud service penetration rates (South Africa, 2013)
2013
85% of
these are 3rd
party hosted
7 Profit from the cloud TM TM
South African Cloud market for SME expected to
reach $189 USD by 2016
2013 2016
Business ApplicationsHosted Communication & CollaborationWeb Presence and Web ApplicationsInfrastructure as a service (IaaS)
42%
10%
21%
$156M USD
$189M USD
34%
Profit from the cloud TM
South Africa: Hosted Infrastructure
9 Profit from the cloud TM TM
0%
10%
20%
30%
40%
50%
60%
Price Security orprivacy
concerns
Bandwidth /connectivity
issues
Specificapplication(s)not supported
by any provider
Specificapplication(s)
needs to be in-house / other
tech. concerns
Notrecommended
by my ITpersonnel /consultant
SME reasons to keep servers in-house (South Africa, 2013)
Micro Small Medium
Price by far the primary reason to keep servers
in-house; in-house specific apps also important
to medium businesses
Note: Only including the 17% of SMEs with a server in-house
Source: Parallels SME Cloud Insights (South Africa, 2013)
10 Profit from the cloud TM TM
0%10%20%30%40%50%60%70%80%90%
Application penetration on hosted servers (South Africa, 2013)
Micro Small Medium
Webserver, CMS, and Ecommerce systems are
top use of hosted servers with database
applications also widely used
Note: Only including the 25% of SMEs with a hosted server
Source: Parallels SME Cloud Insights (South Africa, 2013)
11 Profit from the cloud TM TM
Server backup and security poised for most growth
among all SMEs in the coming years
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Server backup Security Databaseadd-ons
LAMP stack Control panel Developmentplatform
SME plans to purchase add-on applications (South Africa, 2013)
Micro Small Medium
Source: Parallels SME Cloud Insights (South Africa, 2013)
Profit from the cloud TM
South Africa: Web Hosting
13 Profit from the cloud TM TM
20% of SMEs have website; 85% of these are 3rd
party hosted
Source: Parallels SME Cloud Insights (South African, 2013)
All SMEs
3rd-party
hosted
website 17%
Self-hosted
website 3%
No website 80%
17% 20%
23%
3%
6%
7%
0%
5%
10%
15%
20%
25%
30%
Micro Small Medium
Website use among South African SMEs, 2013
Third-party hosted Self-hosted
15 Profit from the cloud TM TM
0%
5%
10%
15%
20%
25%
30%
35%
40%
Searchengine
optimization
Security andhealth
monitoring
Mobileoptimization
SSLcertificates
Contentmanagement
E-commercecapabilities
Backup Contentdelivery
network -CDN
Site buildingtools
SME plans to purchase web applications (South Africa, 2013)
Micro Small Medium
Overall, strong growth potential for web apps;
SEO and security have highest demand in
coming years
Source: Parallels SME Cloud Insights (South Africa, 2013)
Profit from the cloud TM
South Africa: Hosted Email, Office
phone and voice
17 Profit from the cloud TM TM
16% 20% 19%
16% 9% 2%
2% 6% 13%
66% 66% 66%
0%
25%
50%
75%
100%
Micro Small Medium
SMEs with Email Accounts (South Africa, 2013)
Hosted service provider Free email provider In-house server No Email
Hosted email and ISV/free email highest use; 66%
of SMEs have yet to get email
Source: Parallels SME Cloud Insights (South Africa, 2013)
All SMEs
ISP or Hosted
Service Provider 16%
In-house
server 2%
Free email
provider 16%
No email 66%
18 Profit from the cloud TM TM
PLANS: 40% SME’s consider purchasing hosted
emails
17% 24%
11%
34%
43%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Micro Small Medium
SME plans to purchase hosted email
Yes Maybe
Source: Parallels SME Cloud Insights (South Africa, 2013)
19 Profit from the cloud TM TM
1% 2% 8%
16%
58%
73% 50%
36%
18%
30%
3% 2% 3% 1% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Micro Small Medium
PBX Use (South Africa, 2013)
Hosted PBX In-house PBX
Regular phone lines Mobile phone lines only
No phone lines
SME hosted PBX use is very small; most SMEs
use land lines or mobile phones only
All SMEs
No phone
lines 3%
Mobile phone
lines only 30%
Regular
phone lines 49%
In-house PBX 17%
Hosted /
Virtual PBX 1%
Source: Parallels SME Cloud Insights (South Africa, 2013)
20 Profit from the cloud TM TM
Price is main concern for switching to hosted
PBX, & many SMEs have already paid for in-
house PBX
0%
10%
20%
30%
40%
50%
60%
Price Already paidfor an in-
house PBX
Technicalconcerns
Security andprivacy
concerns
Do not knowabout
hosted/virtualPBX
Learning anew product /
complexity
Notrecommended
by my ITpersonnel /consultant
We areplanning to
switch
SME reasons against switching to hosted PBX (South Africa, 2013)
Micro Small Medium
Source: Parallels SME Cloud Insights (South Africa, 2013)
Profit from the cloud TM
South Africa: SaaS
22 Profit from the cloud TM TM
0%
5%
10%
15%
20%
25%
Instantcollaboration
File sharing Online back-up andstorage
Payroll andHR
Onlineaccounting
Support /Help desk
Phoneconferencing
Virtualdesktop/VDI
Webconferencing
Online CRM
SME application Use by size (South Africa, 2013)
Micro Small Medium
Instant collaboration, file sharing, backup and
payroll/HR are most important overall
Source: Parallels SME Cloud Insights (South Africa, 2013)
23 Profit from the cloud TM TM
SMEs indicate highest likelihood of adopting
online backup and storage and instant
collaboration tools in next 3 years
Source: Parallels SME Cloud Insights (South Africa, 2013)
17%
26%
12% 9% 10%
8% 10% 9%
6% 6%
40% 18%
29% 29% 27%
26% 23% 23% 25%
20%
0%
10%
20%
30%
40%
50%
60%
Online back-up andstorage
Instantcollaboration
Onlineaccounting
File sharing Phoneconferencing
Payroll andHR
Virtualdesktop/VDI
Webconferencing
Support /Help desk
Online CRM
SME plans to purchase online applications (South Africa, 2013)
Yes Maybe
24 Profit from the cloud TM TM
78% of SMEs show some preference to buying
apps in bundles; small and medium SMEs have
stronger preference for a single service provider
46% 59% 61%
33%
27% 30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Micro Small Medium
Purchase online applications as part of a discounted package/bundle?
Yes Maybe
5.8
7.0 7.1
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Micro Small Medium
How important is it to you to buy cloud services from 1 provider (scale 1-10)
Source: Parallels SME Cloud Insights (South Africa, 2013)