A recent report from Forrester, commissioned by Crayon, reveals that small- to medium-sized businesses are increasingly relying on third-party service providers to enhance their capabilities in artificial intelligence and cloud solutions. The report, which surveyed six hundred thirty-seven senior leaders across Australia, New Zealand, India, and Southeast Asia, found that thirty-one percent of respondents plan to combine their in-house teams with external providers to improve their AI capabilities within the next year. Furthermore, seventy-two percent prioritize tech-enabled experimentation. The survey identified a significant interest in artificial intelligence, with eighty-three percent experimenting with free AI tools, despite many not planning to implement the technology in the near future. Notably, forty-seven percent of respondents intend to manage their workloads on hybrid cloud solutions over the next two years. Additionally, eighty-seven percent of businesses reported increasing their budgets for third-party services, with fourteen percent planning to increase spending by over twenty percent. The report emphasizes the critical role that external service providers play in helping SMBs navigate challenges related to stakeholder management and strategy alignment in their AI and cloud transformations.
European customers are increasingly considering alternatives to U.S. cloud service providers, driven by concerns over reliability, pricing, and data security. At the recent KubeCon EU event, discussions highlighted the growing interest in local cloud solutions, with reports indicating that inquiries for services from companies like Nextcloud have tripled. Mark Boost, CEO of CIVO, noted a significant shift in attitudes, as organizations fear that U.S. providers could abruptly cut services due to geopolitical tensions. The major players—Amazon Web Services, Microsoft, and Google—currently dominate approximately 70 percent of the European cloud market. However, stakeholders are now questioning the control these companies have over their data, reflecting a broader trend toward digital sovereignty in the face of uncertainty. As organizations weigh their options, a methodical transition to trusted local providers may be necessary, though some are seeking rapid moves away from U.S. hyperscalers due to perceived threats.
Manufacturers in the United States are bracing for challenging business conditions, as many anticipate a recession-like state due to ongoing trade tensions. Recent surveys indicate a significant decline in optimism among factory owners, with the New York Federal Reserve reporting the second lowest outlook in over twenty years. The Philadelphia Federal Reserve’s survey also reflects this negativity, showing negative indicators for general activity, new orders, and shipments. Employment remains steady for now, but future hiring intentions have dropped to their lowest since 2016. In contrast, manufacturing output rose by 0.3% in March, aided by a surge in auto sales ahead of impending tariffs. This juxtaposition highlights the volatility and complexity of the current manufacturing landscape.
Why do we care?
The Forrester report signals rising demand from SMBs for AI capabilities—but crucially, 31% plan to combine in-house and external resources, not fully outsource. This underscores a hybrid expectation: advisory + enablement, not just delivery.
Note that many SMBs are in exploration mode, not implementation. Providers that push too aggressively on AI projects could hit resistance, wasted effort, or client frustration. And, That 87% figure sounds bullish, but if it’s all targeted at advisory and pilots, traditional managed services might get squeezed. Providers banking on “business as usual” service contracts could find themselves disintermediated.
Some guidance. Develop AI-readiness assessments and pilot frameworks that help SMBs go from free tools to structured investment. Start building relationships with local cloud infrastructure providers, especially if you serve Europe. Pivot from “we run your tech” to “we help you strategically use tech.” Advisory services, aligned to boardroom concerns, will be worth more than tickets closed.