Press Release

Use of virtualization by SMBs will affect unit shipments and change the types of channel partners they do business with, says AMI

New York, New York — July 22, 2010 — US SMBs are rapidly increasing their use of virtualization with serious implications for their entire ecosystem—such as limiting the growth in shipments of physical IT equipment, especially servers, and changing the channel partner skills they require. IT vendors, distributors and SMB channel partners need to understand this shift and upgrade the entire ecosystem to meet the changing needs of SMBs, according to New York-based AMI-Partners, based on new research.

“Driven by their need to optimize IT infrastructure—especially in the current economic environment and enabled by increasing availability of SMB-focused products from virtualization vendors—there has been a significant increase in SMB virtualization adoption (servers, clients, storage, applications) over the last year,” says Anil Miglani, SVP of IT Infrastructure and Managed Services Research at AMI-Partners.

While first-time server adopters will continue to drive overall server shipments, they will purchase low-priced, low-margin equipment. Most revenues and profits will come from SMBs that already own a few servers each and are ready to use virtualization. These SMBs are getting ready to replace and upgrade their IT infrastructures and many are considering adopting virtualization for the first time. However, given the limited IT skills of SMBs, channel partners will need to enhance their own skills in this area and help SMBs implement virtualization without having to go through the usual trial and error which often negate the savings that SMBs expected to derive from virtualization.

In response to this interest, many SMB channel partners have already started to offer virtualization solutions. However, most SMB channel partners themselves are SMBs with limited skills and resources and find themselves overwhelmed with the rapidly changing landscape. Channel partners who do not quickly acquire the required skills will find their clients looking for others to help them.

As these SMBs successfully implement virtualization, and simultaneously increase their use of cloud-based applications and services, they will require fewer (although more powerful) servers, limiting the revenue potential for SMB channel partners from the resale activities and making the revenues from services even more important. While the initial adopters of virtualization have been the more sophisticated SMBs, this is changing rapidly. IT vendors need to understand the characteristics and needs of SMBs that are already using virtualization as well as those who plan to use it in the near future in order to focus their sales and marketing efforts.

Related Studies

AMI’s upcoming “2010 SMB Virtualization Market Analysis and Assessment” explores the current and planned adoption of different types of virtualization technologies by SMBs including their key drivers and challenges, decision making processes, channels, market sizing and forecast (including impact on unit shipments).

AMI’s “Global SMB Routes-To-Market (RTM) Opportunity Assessment and Sizing “ presents detailed market sizing and forecast for different products and services, as well as shipments and installed base for key IT products sold to SMBs in over thirty countries and six regions worldwide. This research draws on AMI-Partners’ comprehensive quarterly and annual surveys of small (1-99 employees) and medium (100-99 employees) businesses and channel partners as well as detailed discussions held with several IT vendors, channel partners and other key players in this market.

To inquire or learn more about AMI’s SMB Virtualization and Cloud Computing Services Studies, please call (212) 944 5100 or email ask_ami@ami-partners.com.

Analysis of demand for cloud infrastructure, productivity and business applications,

unified communications and telecom services across thirty-five countries

New York, NY – July 15, 2010 – AMI-Partners, the leader in global ICT market intelligence and go-to-market consulting in the small and medium business (SMB) space, has launched a groundbreaking, unique series of services focused on assessing the market opportunity for cloud offerings in the SMB market.

“Cloud services have gained a good foothold in the SMB market over the last two years, and represent the next significant wave of ICT innovation,” says Andy Bose, AMI’s Chief Executive Officer. “A growing number of firms are using cloud services to manage a variety of business tasks, including communications, operations, sales and marketing, among others. As cloud adoption becomes more pervasive, AMI views this as evidence of a major trend on the level of the introduction of PCs in the 1980s, and the advent of the Internet in the 1990s.”

The current economic climate is accelerating SMB cloud adoption; SMBs need to do more with less. Specific business drivers include the need for agility, scalability, and cost control, with customer retention and acquisition as key priorities. Cloud services have the potential to deliver transformative business performance, and are therefore extremely critical to SMBs.

AMI’s Global SMB Cloud Services provides critical market intelligence for ICT vendors to enable:

1. Assessment and quantification of demand for cloud infrastructure and services among global SMBs
2. Identification of specific features, bundles and pricing to maximize SMB cloud service purchase likelihood
3. Track uptake, revenues, and highlight decision making criteria and channel preferences
4. Target key SMB segments via AMI’s lead generation and customer acquisition solutions, based on SMB propensity to adopt cloud services across multiple categories – productivity/business applications, unified communications (UC) and IT infrastructure services.

AMI’s Cloud Services provides comprehensive coverage of:

• • Platforms and Devices
• • IT Infrastructure Services
• • Business Productivity Applications
• • Business Mgmt./Line of Business Applications
• • Unified Communications

Business issues addressed include:

• • Cloud Services bundles – price & seat preferences
• • Incremental revenues & uplift analysis tied to bundles
• • Churn & Impact on Telco ARPU
• • Role of Telcos, IT Vendors, Channel Partners
• • Service provider selection criteria

AMI will be providing actionable go-to-market guidance in twenty-seven countries, starting with the US, Canada, Mexico, Brazil, UK, France, Germany, Russia, China, Korea, Japan, India and Australia, followed by Netherlands, Sweden, Denmark, Spain, Italy, Turkey, Israel, Saudi Arabia, South Africa, Vietnam, Thailand, Malaysia, Singapore, Argentina, United Arab Emirates, Czechoslavokia, Poland, Hungary, Norway, Egypt, Philippines and Indonesia.

“Cloud Services are starting to redefine and blur boundaries across categories of ICT players, especially incumbent communications services providers,” says Mr. Bose, “and players need to stay in the game by identifying and aligning with shifts in SMBs’ buying behavior, channel preferences, cloud usage models and price versus value assessments.”

For more information about AMI-Partners, our Global SMB Cloud Services, or our other global SMB research, please call 212 944 5100, e-mail ask_ami@ami-partners.com or visit www.ami-partners.com.