Cloud to be a Hot Growth Niche for Emerging Firms

TORONTO, Ontario, August 6, 2009 – IDC Canada recently profiled ten Canadian Cloud solutions companies to watch.

"Cloud computing is still only in the nascent stages in Canada, but is expected to grow rapidly in the coming years," says Krista Napier, senior analyst, Competitive Intelligence and Emerging Technology at IDC Canada.

By 2012, IDC estimates 9% of spending on IT services worldwide, including business applications, application development and deployment, system infrastructure software, storage and servers, will be in the Cloud – and the leading area of IT growth (IT Cloud Services Forecast, Oct 2008).

"Still, the barriers to adoption in the short run must not be underestimated, and this poses challenges for emerging ICT firms with limited track records that are bringing cloud solutions to market," says Napier. "Showcasing ROI and cloud success stories will be key for emerging vendors to succeed in the cloud."

IDC has released a new study that profiles ten of these emerging companies in Canada offering solutions that address the cloud. The IDC study, 10 Canadian Cloud Solutions to Watch (IDC #CA4TIW9), provides insight into the solutions, go-to-market strategies, partners, and customers of the profiled vendors. Lessons learned may provide a model for other emerging companies in the Canadian technology marketplace, and help larger vendors, government, and investors identify partnership and investment opportunities.

Some of the key findings from this study include the following:

• Cloud suits emerging Canadian companies. The very nature of smaller emerging companies makes them well-suited to deliver disruptive solutions in the cloud – these companies tend to demonstrate flexibility and speed, they are not restrained by legacy products or investments, and some cloud services such as application solutions require minimal upfront capital to launch initially in the market. This has led to an influx of emerging Canadian ICT companies bringing solutions to market that address the cloud – sometimes as 100% cloud solutions, but often as hybrid offerings that give customers the choice to use the solution as a service in the cloud, or on-premise at first to encourage gradual change.

• Substantial barriers to the cloud pose a challenge for emerging firms. While cloud has generated tremendous attention and excitement, customers are still concerned about datacenter facility outages, exporting data from the cloud, data security, lack of common application programming interfaces (APIs), and data ownership. These concerns are compounded when working with a relatively small unknown vendor. Emerging companies can benefit from partnering with larger incumbents looking to broaden their on-premise solutions to become part of an overall cloud computing strategy that can extend a start-up's reach and legitimacy.

• "Freemium" is the answer – sometimes. The "freemium" model has been an effective approach for many emerging companies delivering SaaS-based solutions to attract individual users with a free version of their solution, and to expand their footprint later with a more robust version of the solution for a fee. However, for instances where customers are unfamiliar with cloud solutions, or where high-touch support is needed to ensure a successful first-time experience with the product, some solution providers have found more success charging for the software upfront.

The ten companies featured in the report (in alphabetical order) include:

Asigra

BoardSuite

CiRBA

Enomaly

FreshBooks

Nulogy

PollStream

Rypple

Teradici

ThinDesk

Contact