How the Mid-market is leading the way on cloud computing

The organisations that seem to take best and quickest advantage of the benefits of managed hosting and private clouds are what we rather vaguely call the mid-market. In their 2010 survey, Savvis found that amongst companies with fewer than 1000 employees, adopting virtualised or cloud computing strategies is seen as the most effective way of realising greater efficiencies or cost savings. This was in contrast to larger corporations who tended to favour general reductions in infrastructure costs or consolidation.

In Europe, where pure-play hosting companies often operate in the shadow of large telcos and hybrid providers, the mid-market and SMB has been the sweet spot for the sector’s growth. Smaller and mid-market companies have moved more quickly than larger enterprises to take advantage of hosted, virtualised and cloud-based solutions.

Gartner report that the biggest driver for shifting to hosted systems has been proprietary web-based applications, but they foresee a next wave of packaged applications moving to hosted platforms.

Gartner expect to see a continued focus on business process improvement, cost reduction and analytics across the IT sector, but they report that business expectations are shifting from greater cost-based efficiencies to achieving better results based on enterprise and IT productivity. As economies move out of recession, Gartner expect to see a premium on results and productivity versus cost-efficiencies; and a big shift towards more collaborative and innovative solutions. This is an environment in which mid-market companies have a massive opportunity in their own right and as agile suppliers to larger enterprises in an IT landscape based on virtualisation, Cloud and Web 2.0.

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