Small business: A cloud-computing opportunity?

Rackspace's recent survey tells us that less than a third of small businesses have heard of "cloud hosting." It's not their fault; no one thought to tell them about it.

James Urquhart
James Urquhart is a field technologist with almost 20 years of experience in distributed-systems development and deployment, focusing on service-oriented architectures, cloud computing, and virtualization. James is a market strategist for cloud computing at Cisco Systems and an adviser to EnStratus, though the opinions expressed here are strictly his own. He is a member of the CNET Blog Network and is not an employee of CNET.
James Urquhart
2 min read

There has been much ado about Rackspace's recent "cloud hosting" survey (PDF), in which it finds that small businesses are essentially unaware of services that fit that description.

Specifically, the survey found that more than two-thirds of small businesses (not defined in the survey, unfortunately) have never heard of "cloud hosting."

Several prominent bloggers, the CNET Blog Network's Dave Rosenberg and CloudAve's Krishnan Subramanian among them, have pointed out that the question asked may have courted the response received. To quote Rosenberg:

Not too surprisingly, the majority of SMBs were not aware nor terribly interested in "cloud hosting." I suspect that some of this had to do with the use of the term "cloud hosting" rather than an interest in moving toward hosted applications and infrastructure. I would argue that questions about using "the cloud" versus "cloud hosting" would have come up with a different set of answers.

Good point, but I think that there is more to this story.

To me, what this survey shows is not that small businesses have failed to grasp cloud computing, but that "cloud hosting" providers have done a terrible job of marketing to that segment. In other words, the sex appeal of enterprise sales models and their big individual deal totals has driven most providers to focus on strategizing on how to get the so-called "enterprise" market--which really means Fortune 10,000-scale companies.

I understand why. On paper, those guys have the budget to spend big. However, we also know that a large percentage of the early adopters of cloud services such as Amazon Web Services are small businesses and start-ups. In fact, there is a "barrier to exit" for enterprises wanting to move to the cloud. So why not focus significant investment at courting the former?

What I'd love to see is various cloud providers (at all levels of the stack) creating programs that specifically advertise and market themselves to mom-and-pop services, manufacturing shops, and so on. Targets for volume should be impressive; 100,000 customers should not be a surprising goal.

Software as a service would probably lead the way, but opportunities to get custom Web applications via platform as a service (perhaps through partners) or even information as a service, when it makes sense, should be at least tried in this vast marketplace.

Even with its flaws from a general cloud-computing sense, the Rackspace survey is incredibly valuable. The customers are out there. Figure out how to go and get them.