UK SMB cloud market set for explosive growth

New research predicts annual run rate for UK SMB cloud market will rocket by more than three quarters in just two years

The UK is the jewel in the crown of the western European SMB cloud market, according to new research.

The UK SMB cloud market is already twice the size of that in French and German markets, according to cloud vendor Parallels' annual SMB Cloud Insights research. Between now and 2016, the overall UK cloud market will rocket 79 per cent to £2.5bn, it added.

The SMB cloud market swell will be prompted by growing demand in infrastructure-as-a-service (IaaS), web applications, hosted communications and business application technology, the research found.

A wave of smaller firms buying cloud-based servers for the first time has partly led to the value of the UK SMB market for IaaS soar 22 per cent annually to $574m (£355m) over the past 12 months.

The second most valuable cloud sector among UK SMBs is business applications, which is currently worth $474m. This includes file sharing, online backup and storage – a larger range of use cases compared to 2012's research, claimed Parallels.

Business applications and IaaS technologies make up the most of UK SMBs' spending, said John Zanni, Parallels' chief marketing officer.

"The demand for IaaS and business applications, which accounts for 75 per cent of all SMB needs, is continuing to grow," he said. "Looking forward, the UK will continue to experience strong growth across all cloud services and will remain among the most mature SMB cloud markets worldwide."