By Chad Muckenfuss, VP of Cloud, Telarus
Cloud used to be a pretty tidy conversation: UCaaS, phones in the cloud, maybe some SD-WAN. Easy door openers, clear outcomes, done.
But the cloud conversation has changed. If you’re still talking about it the way we were two or three years ago, you’re leaving significant revenue on the table. What’s happening now with SMB and mid-market customers is different, driven by growing interest in private cloud cost savings and broader cloud repatriation (hybrid cloud) trends.
Organizations are rethinking where workloads belong and how to approach infrastructure. And this is creating one of the biggest opportunities I’ve seen in this space in a long time.
Let me explain why.
Cloud by the Numbers: The Market Is Moving, Fast
Before we talk strategy, let’s ground this in what’s actually happening out there.
Global cloud spend hit $781 billion in 2025, and we’re on track to push past $900 billion this year. That’s a 20%+ year-over-year growth rate three years running—which, in any other category, would be the story of the decade.
But here’s the one that stopped me cold when I was pulling these numbers together: cloud spend in North America represents 4.4% of U.S. GDP.
Let that sink in for a second.
Nearly 1 out of every 25 dollars of domestic economic activity is tied to cloud infrastructure and services—representing a structural shift in how ALL businesses operate.
Here’s where it gets interesting for you:
- 44% of small businesses (50 employees or fewer) use cloud infrastructure at some level. That means more than half of the SMB market hasn’t even started.
- 61% of small businesses now run more than 40% of their core workloads in the cloudup 54% from last year.
- SMB technology budget allocation to cloud jumped from 50% last year to 60%+ this year.
If you’re an advisor and you’re not leading with cloud in your SMB conversations, you’re missing the single biggest budget line your customer is spending on right now.
The Mid-Market Is Where It Really Heats Up
Here’s something I want everyone reading this to understand: the mid-market is the fastest-growing segment in cloud adoption—bar none.
At Telarus, we define mid-market as roughly 250 to 2,500 employees, and it’s the largest segment of our business.
Why Mid-Market Companies Are Moving into Cloud Faster Than Any Other Segment:
- They make decisions quickly. No board of directors to delay the buying process. One or two decision-makers, and it’s done.
- They run lean IT teams. A 500-employee company might have one to three IT people total—so they need outside help.
- 19% year-over-year growth rate in cloud adoption—the highest of any business segment.
- 83% of mid-sized businesses run cloud-based ERP or CRM as their core operational infrastructure.
It’s also worth noting that hybrid cloud is the preferred model for the mid-market. The blend of public and private, driven by the realities of cost, security, and performance—that’s where the smart conversations are happening. 73% of organizations overall have adopted a hybrid cloud approach.
Here’s the Pivot: Cloud Repatriation Is Real
During the COVID era, most businesses rushed to the public cloud through hyperscalers like AWS, Azure, and GCP. Then the bills came due, and for a lot of companies, it’s been a costly and rude awakening. The public cloud model works brilliantly for certain workloads— the dynamic, unpredictable, burstable loads that need to scale instantly is what they were built for. But the truth is, 70-80% of most companies’ workloads are stable and predictable. Running those on consumption-based pricing is like paying for a rental car daily for years instead of buying or leasing one.
Then come the egress fees, or the unexpected licensing and scale-up that was supposed to be temporary and is now a line item on the P&L.
That’s why cloud repatriation is surging. Customers are moving key workloads from public cloud to private cloud and locking in fixed, predictable costs. The numbers tell the story: Telarus field experience shows 20–30% average cost reductions after these migrations, with ROI typically hitting inside 12–18 months.
This is your story—and your door opener!
The Hardware Problem That Nobody’s Talking About (And Everybody Should Be)
Right now, two factors are driving urgency with customers: hardware costs are through the roof, and lead times are getting worse.
I just finished working on a mid-market customer with three data centers across the U.S. that’s planning a three-phase hardware refresh. Nothing unusual—one rack per site, with 5–7 year-old servers due for refresh.
- Phase 1, Q12025: ~$380,000 for the refresh at site 1.
- Phase 2, Q12026: Same exact spec, middle-of-the-country site: $1.23 million.
Read that again…same hardware, same scope, THREE times the cost in twelve months. And if you order hardware today, you’re not seeing it, touching it, or racking it until mid-2027.
The reason for this? AI. The hyperscalers and AI infrastructure buildouts have gobbled up virtually every available chipset, memory module, and GPU. Add in rising electricity and colocation expenses, and the costs of running your own infrastructure get ugly, fast.
This is a gift for every advisor who can ask “Do you really want to manage that yourself?”
Because the alternative—a private cloud approach—delivers predictable monthly costs, guided migration support, and removes the risk and delays tied to hardware availability.
That’s the conversation customers are ready to have.
The Easiest Door Opener You’ll Use All Year
If you only take one thing away from this blog, make it this. Every time you’re in front of an SMB or mid-market customer, ask two questions back-to-back:
- “Does your company use Microsoft 365?”
Ninety percent of them will say yes.
- “How do you back up all of your Microsoft 365 data?”
Nine times out of 10, you’ll get this answer: “That’s part of my Microsoft licensing.”
And here’s where you get to be the hero: “No, it’s not.”
Microsoft has a retention policy. They do NOT provide backup. That means your customer’s email, Teams chats, SharePoint, OneDrive—all the documentation for every employee, scattered across a mobile workforce—isn’t protected. All it takes is a single accidental deletion, a ransomware hit, a disgruntled employee on their way out the door, and that data is gone.
This is the “oh no” moment that opens the door to a broader conversation.
And we’ve got you covered on the solution side. For example, Sky Data Vault is one of the suppliers we work with that’s built specifically for this, offering SaaS backup for Microsoft 365, Salesforce, and many of the other major SaaS platforms. Simple per-user pricing. Easy to explain. Easy to sell.
We had a customer using Sky Data Vault who experienced a ransomware breach through Microsoft 365 that started to proliferate across their users. Sky Data Vault restored the clean version. Total time from detection to back in business: under 90 minutes. Minimal data loss. Business continuity preserved.
That’s the story your customer wants to hear before it happens to them.
Discovery Questions That Actually Work
Once you’ve opened the door with the Microsoft 365 backup question, here’s the sequence I coach advisors through:
- “What other SaaS products or licensing do you subscribe to?” (Salesforce, HubSpot, Box, Slack, QuickBooks Online, etc.—build the list.)
- “Do you have servers on premise?”
(If yes, pivot to the hardware cost conversation above.) - “How is your current infrastructure strategy working for you today?”
(Open-ended, non-confrontational, lets them tell you where the pain is.) - “What’s your cloud spend looking like—and do you have visibility into what you’re actually using?”
(FinOps door opener. The CFO loves this question.) - “How has the Broadcom-VMware situation affected your environment?”
(If they’re running VMware, there’s a deal here. Period.)
Write the answers down. Put them together, then—and this is the most important part— loop in your Telarus Solutions Engineering team. That’s why they’re here! You don’t have to be the expert, the Telarus SE Team will do that for you!
Your Job Isn’t to Be the Cloud Expert. Your Job Is to Open the Door.
I want to be crystal clear about this, because I see advisors getting stuck here all the time.
You don’t need to know every hypervisor, speak fluent Kubernetes, or price out egress fees on a napkin during a lunch meeting.
Your job is to ask the right questions, recognize the signals, and bring in the Telarus engineering team to drive the technical conversation alongside you.
Your job is to ask the right questions, recognize the signals, and bring in the Telarus engineering team to drive the technical conversation alongside you. That’s the model, that’s the “secret sauce,” and that’s why the Telarus powerhouse exists.
The sales engineers want to see you win. The partner development managers want to see you win. And the suppliers all want to see you win. Use them, leverage them, and don’t try to carry the technical weight yourself.
The Bottom Line: This Is Your Year to Stake Your Claim with Cloud
- The cloud conversation isn’t optional anymore. It’s a $900+ billion market, it’s growing 20%+ year-over-year, and it touches every single customer in your book of business—whether they know it or not. Public cloud cost overruns are pushing customers toward repatriation. Hardware costs and lead times are making on-premise untenable.
- The SaaS explosion has created backup blind spots that are one incident away from becoming headlines, and the mid-market is moving faster on all of it than any segment in the market.
This week, I want you to start with the Microsoft 365 backup question and put it in front of 10 customers. I guarantee you’ll walk out of at least three of those meetings with a live opportunity—and that’s before you’ve even gotten to hybrid cloud, VMware displacement, or ERP conversations.
Your PDM and SE team are ready. The portfolio is deeper than it’s ever been, and we are handing you the playbook.
Let’s go open some doors!
FAQ: What Advisors Are Asking About Cloud
Why are customers repatriating workloads from public to private cloud?
Most cloud workloads are stable and predictable. For those, long‑term consumption pricing, egress fees, and surprise licensing can make public cloud more expensive than a fixed‑cost private cloud model, especially when you factor in 20–30% potential savings over 12–18 months of repatriation.
What is the main cost advantage of private cloud?
Private cloud lets customers lock in predictable monthly costs, avoid the worst of the hardware cost and lead‑time crunch, and right‑size compute for steady workloads instead of paying burst‑pricing forever.
How can advisors start impactful cloud cost conversations?
We recommend leading with two questions: “Do you use Microsoft 365?” and “How do you back up that data?” From there, expand into on‑prem hardware plans, current cloud spend visibility, and how the Broadcom‑VMware changes are affecting them.
Missed the live HITT session on this topic? Catch the full recording and Q&A in the forum section of Telarus University, or review the ICYMI recap to get the key takeaways in five minutes.
Want to go deeper? Join me at any of our Beyond the Solution: Cloud education events—we’ll work through real customer scenarios, conversation frameworks, and the specific supplier plays that are winning right now.
ABOUT THE AUTHOR
Chad Muckenfuss
Chad Muckenfuss is VP of Cloud at Telarus, leading the cloud and data center practice for the industry’s largest technology services distributor. Connect with Chad to discuss your cloud strategy and opportunities for 2026.