Cloud and the small Business

This article at forbes addresses how small businesses are rapidly embracing cloud and what are the potential success factors needed to address the small business space. All the major players are making products in this space. As pointed out in the article the Cloud does enable the small Business segment to buy and consume services without the pain of buying, setting up and maintaining hardware infrastructure and software products.  

In my opinion selling applications to the small businesses could be  the Long Tail of the Cloud. For those not familiar the Long Tail by Chris Anderson talks about how the internet enabled businesses like Amazon to cater to niche audiences that were not served by big retailers due to the low volume of business. I do not believe that there will be vendor loyalty and the businesses will cherry pick the services from multiple vendors.
Vendors like Zoho are aggressively targeting this space with services in the $10-$12. I do believe that there will be a market for custom applications as well. Maybe not for an individual business but for a cluster of businesses. CustomerSquare run by a friend of mine is targeting specific verticals in the retail space. The cloud   reduces the risk significantly for the small business provider . He pays per month , if it doesn't suit him he can dump it with a second thought. He will not be stuck with a boxed piece of software that lies unused. For the vendor also there is an increasing opportunity to upsell services , add small incremental features ,test market them and get additional revenue. He get's instant feedback and can drop things that don't work out well. No more long product cycles and no more upgrade battles.