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Thought Leaders in Cloud Computing: Chris Gatch, CTO of Cbeyond (Part 4)

Posted on Thursday, Sep 27th 2012

SM: What is the impact of Apple in all of this?

CG: They’ve changed the browser landscape pretty considerably. They’ve driven HTML 5 shift in the industry and are forcing customers to have to redevelop sites that are moving away from Flash. We haven’t to have client solutions for tools that we roll out that support Mac. Their penetration within the SMB space is high enough. It’s probably around 10%. You have to pay attention. In the business segment, especially SMB, they haven’t been nearly as big a driver or game changer as they have been in the consumer segment. But they’re there. You have to support those clients. Outside of that, I haven’t seen it as a big landscape changer in the business scene.

SM: If a small business owner is choosing a collaborative environment email and calendaring and docs, basically the office suite, where does she go?

CG: We position the Microsoft Office suite. So, if I were starting my own company today, I would choose a combination of Exchange and SharePoint for my document collaboration and email service. The only caveat I would have to that is if I wanted real-time, multi-party document editing, things like Google Docs rate well. If I had strong needs in that area, I might lean more toward something like Google Docs. But for general productivity and collaboration, I think the Microsoft Office suite is the best on the market. There are plenty of hosted solutions available for that today.

SM: Yes, but Google Docs’ collaboration capabilities are extremely significant. As far as I have seen from a huge number of customers, that is gaining tremendous adoption.

CG: I’m not seeing that. It’s probably just the different segments that we’re moving in. You’re probably moving among a lot more early stage companies.

SM: Perhaps they’re more technology-oriented companies. A doctor’s office does not need to do a lot of document editing in real-time with people all over the world. Maybe property management companies do. I don’t know.

CG: I’ll agree. When I’ve seen use cases where real-time document editing is the big driver, Google does very well and has a great solution. But I don’t see that as a primary use case for most SMBs. The reality is this virtual SMB that you described is a relatively small amount of the market. Now, it’s increasing and businesses have more and more mobile employees. But when you look out in our markets, there’re 1.6 million small businesses in the top 25 MSAs and address probably 1.1 million of those. The bulk of those SMBs have one or more business locations. And then they have distributed employees for which they need support for mobility. But they’re not predominantly virtual businesses. For those types of businesses, no argument, Google Docs has a great capability for that.

SM: OK. What else is interesting about the dynamics of the SMB market vis-à-vis cloud computing?

CG: To me, the interesting part is the adoption. I think we’re finally getting to a point where small business owners are realizing the value that comes from the cloud, which is about capital efficiency, not having to make investments in infrastructure. It’s about managing complexity. If you look at the average small business now and how many apps it relies on, if you had to do all of that on infrastructure that you owned and managed, it would be too complicated. You couldn’t keep up with the infrastructure needed to do that. I like to say that my third C is contours. But small business owners are seeing the flexibility of cloud. It can scale up and down with their businesses as they adjust and opportunities come along and go away. There’s so much advertisement going into this area, and there’s so much awareness. The trends are starting to move, business owners are starting to make this change. So, it’s still a bit early, but there’s real momentum now. To me, that’s the story. That’s the really exciting part.

This segment is part 4 in the series : Thought Leaders in Cloud Computing: Chris Gatch, CTO of Cbeyond
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