UK SMB cloud market to top £2bn by 2016

The UK small and medium businesses [SMBs] cloud market will hit £2.5 billion by 2016 as companies move towards fully hosted solutions according to research by a cloud hosting company.

Parallels’ SMB Cloud Insights report shows that the market as a whole will grow from its current annual run rate of £1.4 billion with the UK leading the way in Europe when it comes to cloud services.

“The UK cloud services market for small and medium businesses is almost twice the size of the French or German markets. The demand for IaaS and business applications, which accounts for 75 per cent of all SMB needs, is continuing to grow,” said John Zanni, CEO of Parallels, according to CloudPro. “Looking forward, the UK will continue to experience strong growth across all cloud services and will remain among the most mature SMB cloud markets worldwide.”

The report looks at how SMBs use a range of cloud services across four categories including Infrastructure as a Service [IaaS]; web presence and web applications; hosted communication and collaboration; and business applications.

IaaS is the most lucrative of the four areas with growth of 22 per cent last year meaning it’s now worth £574 million. Closely trailing it is business applications, which includes CRM, support and helpdesk, instant collaboration, and file sharing, and is worth £474 million.

The smallest is hosted communication and collaboration valued at £52 million and mostly made up of hosted PBX and premium email. Even though this is the smallest part of the SMB cloud market it is also the fastest growing of all four and will have reached £124 million by 2016.

Parallels’ research calculates that 22 per cent of medium sized SMBs are using a hybrid cloud with companies choosing to move over to a full public cloud as time goes on, which in turn will speed up the growth of IaaS.