A closer look at the cloud take up in Singapore


By Pavel Ershov, Vice President, Parallels Service Providers Business, Asia Pacific and Japan

Rising cloud adoption may not be new to many mature economies, but the type of cloud services that each market adopts can be surprising to even seasoned market observers.

In Singapore, for example, the unified communications segment accounts for a bigger chunk of cloud usage among small and medium businesses (SMBs) than in other countries.

The recent Parallels SMB Cloud Insights for Singapore report indicated that unified communications accounts for 24 percent of the country’s total market for cloud services. The larger portion of medium business within Singapore’s SMB population could help explain this.

Pavel Ershov
Pavel Ershov, Vice President, Parallels Service Providers Business, Asia Pacific and Japan

These are typically tech-savvy organisations already tapping on the flexibility of the cloud in their hosted e-mail and hosted PBX services. Typical triggers for switching to hosted PBX include a shift in office locations, which necessitates a change in phone systems.

In the coming years, unified communications is set to grow at a compound annual growth rate of 29 per cent over three years. It’s a market growing among new and existing users, so it is an important field to note for cloud service providers.

Unified communications won’t be the only growth driver though. The biggest portion of cloud services in Singapore is still in Infrastructure-as-a-service (IaaS), which takes up 38 percent of the pie. This is worth S$195 million and is set to grow in the years ahead as more companies take their compute and storage needs to the cloud.

Use of managed servers is big in Singapore. Not surprisingly, SMBs are willing to pay more for better quality service. A majority would be happy to pay more for higher availability and unlimited storage, as discovered in our study.

Perhaps more interesting is Singapore SMBs’ desire to buy more add-on services once they have outsourced some of their previously on-premise server functions. Server backup and security are the top two features they would like to have, representing key opportunities for cloud service providers.

All in, the Singapore SMB cloud services market is worth S$520 million. Besides IaaS and unified communications, business applications make up 27 percent of the pie–85 percent of SMBs use at least one online app–and web presence accounts for 11 percent of the market.

These insights point to a number of opportunities. Although the Singapore market is smaller than many other countries due to the small number of businesses, its SMBs know the benefits of cloud services. They are also some of the fastest adopters of the technology.

The country is also home to very fast fibre broadband links. Many homes are well-connected to the Net at speeds of at least 100Mbps, which consumers use to effortlessly share files. For many executives of Singapore’s SMBs, the leap onto the cloud is not as difficult a concept to agree with as with other markets. These cloud leapers form 60 percent of SMBs without servers–and they plan to leap to the cloud for their first solutions.

Ultimately, what cloud service providers must be aware of are the different services that SMBs seek in each country. Opportunities await those that provide solutions that fit their customers well.

Find out more about SMB cloud adoption from Parallels’ SMB Cloud Insights here.