Telecom Operators Missing Out on Massive Cloud Revenue Potential from SMB Customers

By Laura Stotler, TMCnet Contributing Editor  |  September 23, 2015

Telecom operators are in an ideal position to capitalize on the growing SMB demand for cloud services, according to new research. BCSG, which offers a cloud business app marketplace for SMBs, conducted a study of 500 companies in the UK and US and found that telecom operators are primed and ready to expand to the SMB market.

According to the research, SMBs are ready to embrace cloud services and have an idea of what types of services might be a good fit for their businesses. BCSG found that 43 percent of SMBs are willing to purchase cloud services from their incumbent telecom service provider, while 40 percent would be willing to purchase software and tools to aid them in expanding their businesses. That willingness could translate to more than $22 billion in business opportunities for U.K. and U.S. telecom operators interested in expanding cloud services to SMB customers.

“Not only is the SMB market a potential goldmine for operators looking to add greater value to customers through service diversification, they also present a captive and willing audience,” said Tom Platt, Commercial Director at BCSG. “It is vital that operators seize the initiative by helping their SMB customers realize the value of cloud services and business applications.”

The groundwork is already in place for an expanded relationship between SMBs and their telecom operators. BCSG found that about a third of SMBs queried are already working with their providers on hosting and business applications. Yet only 31 percent of those companies have a cloud migration strategy in place, creating a massive opportunity for telecom operators, who already have cloud expertise and experience to offer their customers.

According to Platt, one of the barriers to adoption has been confusion on how the cloud can benefit SMBs as well as why they should adopt business apps. But telecom operators have the expertise and channels to offer both support and guidance in helping SMBs on their path to the cloud. Yet many are not taking this extra step, which could be detrimental in the long run. BCBG found that 52 percent of SMBs queried will contemplate switching operators within the next two years to gain access to a broader range of technology and services.

“Long tenure from SMB customers does not imply loyalty – and operators can’t afford to be complacent,” said Platt. “These results demonstrate the value of operators broadening their service offering to SMBs. This should see operators accelerate their plans to offer a fuller range of cloud services, including business apps, to SMBs and drive new revenues and better customer retention.”

Edited by Stefania Viscusi