Small and Medium sized businesses represent more than 95% of all business worldwide. According to the May 1 edition of the Wall Street Journal “Like most companies, smaller firms used the global crisis to pare costs and trim inventories. They are running lean nowadays and have relatively strong balance sheets, with more cash and less debt as a percentage of market capitalization than do large companies, according to Standard and Poor data.” In my opinion, this represents a significant opportunity for hosted applications to the SMB from Cloud Providers.

For instance, I just came from the Microsoft Hosting Summit in Bellevue, Washington where the top hosting providers in the world culminate yearly to discuss their Cloud delivery to the SMB. Microsoft is dedicating millions of dollars in research in order to cultivate the hosted services SMB multi-billion dollar market. In fact, according to Keynote Speaker and Microsoft Server and Tools President Bob Muglia, we should expect to see a radical change in the way in which applications are delivered around the world over the next 10 years. This will come about through the expansion of hosting companies like those in attendance at this year’s Summit.

We’ve spent a great deal of time and effort regarding IT expenditures for the large cap companies over the past 20 years, but the market is ripe now to deliver Enterprise Grade IT to the SMB utilizing Cloud-like services from hosting service providers. Again, the WSJ states, “And if the economy is truly in recovery mode, then lackluster corporate sales should finally pick up, leading to a ‘significant operating-margin boost’ that should propel small-company earnings higher”, says Chris McHugh, a senior portfolio manager at Turner Investment Partners. With higher projected earnings and a mindset to continue to reduce costs, IT-as-a-Service is going to be a top priority for many small and mid-sized businesses around the globe in 2010 and beyond. And with over 36 million SMBs who have interest in a hosted IT-as-a-Service model, Citrix is leading the way with the Citrix Service Provider program.

I spoke to over 25 top Microsoft SPLA (Service Provider License Agreement) partners at this event representing over 2 million active subscribers in the SMB today. In fact, we did more than speak. We talked about the architecture to deliver any Windows based application as an extension of their existing SaaS business using XenApp, NetScaler and Essentials for Hyper-V. Their response… “This [architecture] is the only comprehensive depiction of an integrated design for the datacenter including Hyper-V, Virtual Machine Manager, App-V, SCCM and all Citrix Cloud products as a part of the hosting solution”.