Diagram showing overview of cloud computing, with typical types of applications supported by that computing model. For small and medium-sized businesses, the cost effectiveness of cloud computing makes it an attractive option for businesses fighting to stay competitive and profitable. Cloud computing allows businesses to efficiently react to the constantly changing speed of technology so they can expand operations.

Virtualization is the technology that allows cloud computing to be so versatile and efficient. Using virtualization users can lower costs and reduce the need for excessive Information Technology (IT) personnel; allowing businesses to focus on their core business goals.

Because of these advantages, plus the ability to outsource the daily operations of cloud computing, the use, adoption and expansion of this technology will continue to proceed quickly and impressively.

The fifth annual US SMB Cloud Insights report predicts that the cloud services market will expand at a compound annual growth rate (CAGR) of 11.4 percent over the coming three years. That translates to the industry expanding from a value of $25.2 billion this year to a sizeable $34.9 billion by 2018.

“Over the five years that we have been conducting this study, we’ve seen a rapid and consistent growth in SMB consumption of cloud services,” said Birger Steen, chief executive officer of Odin, the provider of the report and cloud services provider. “Applications and capabilities that were previously reserved for enterprise-size organizations are now benefiting millions of smaller businesses. At the same time, SMBs are becoming more sophisticated in their IT and telecom choices, and developers are creating more services and applications specifically for this market segment.”