SME sector ripe for utility computing: IDC

7 Jan 2004

The winners in the utility computing sector must look well beyond the current market focus of large enterprises to what tech analyst IDC believes is an even greater market opportunity: that of small to medium-sized businesses (SMBs).

In a new study on the utility computing market, Utility Computing Services: The Mid-Market is the Killer App But Who Does the Delivery?, IDC said it is the SMB space that will likely determine the ecosystem of partnerships needed to ultimately deliver utility computing to just about anyone, anywhere and at any time.

“Companies seeking long-term success in the utility computing market must look past the current market adoption model to what we believe will comprise the heart of the market – the SMB,” said David Tapper, programme manager for IT outsourcing and utility services research at IDC.

“Winning in the SMB space will require co-ordinating a set of widely disparate players, such as telecommunications companies, OEMs and giant retailers, all of which have access to the SMB space. At the same time, existing IT services companies looking to compete in this space may be pushed from the spotlight they currently hold and into an unfamiliar role ‘under the hood’ and ‘out of sight’.”

IDC warns that while the SMB sector will likely be the next major market opportunity when it comes to providing utility computing services, getting to these customers may likely require some unorthodox approaches to getting these customers and establishing what types of partnerships, investments and go-to-market strategies will be best suited to securing a position in this marketplace.

Key factors prospective competitors will need to consider will include mitigating risk in terms of playing in more than one camp, focusing on core competencies, setting proper sales and marketing strategies, building the proper brand and position, and developing an appropriate investment model.

By John Kennedy