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SaaS: Groundswell of Cloud Adoption by SMB's
New research data from AMI-Partners shows that as many as 570, 000 SMB‘s (Small and Medium Sized Businesses) are currently using a SaaS-based CRM solution. What’s more, the AMI report expects that the SaaS CRM market in the SMB segment will experience “double-digit” growth over the next five years. By mid-2013, SaaS CRM spending will surpass the spending made by SMB companies on traditional on-premise CRM software. During this time, the report expects that spending on on-premise CRM software will remain constant. And by 2015, AMI expects the SMB SaaS CRM market to have tripled.
570, 000 is a fairly big number. Let’s consider the total number of SMB’s in the US. While the definition of an SMB varies by industry, the US Small Business Administration typically defines an SMB as a business with less than 500 employees. Based on US Census data from 2008, there are about 5.3 million companies in the United States with at least 1 employee and less than 500 employees, of which 3.6 million are companies that have less than 10 employees. The AMI report numbers imply that more than a tenth of all SMB’s in the US are currently using SaaS-based CRM, and that number may reach 30 percent by 2015.
The AMI report mentions three reasons why SMB’s are moving towards SaaS and cloud services:
- Small companies are increasingly using broadband and employees are increasingly using mobile devices
- Small companies view the price model and software capabilities of cloud services to be attractive
- Small companies have been exposed to the cloud from massive amounts of marketing and media coverage
Small companies are also trying to incorporate social media to be able to better communicate with their customers. Jacqueline Atkinson, research partner at AMI, said that “customer engagement on social networking sites is driving SMBs to pay closer attention to their social communities. But it is the influence of the cloud that affects their decision to adopt more advanced customer solutions. Such market trends are creating the right conditions for the integration of social media with CRM applications for enhanced interactions with customers. In fact, U.S. SMB CRM users are a third more likely to engage in social media activities for business than firms who do not use CRM.”
