SME’s are usually reckoned to be the businesses most likely to jump onto the public cloud, but chip giant Intel sees sufficient opportunity amongst the laggards to offer a hybrid solution called AppUp which rolled out today. The solution features an on-premise hardware appliance from partners such as Lenovo, a dedicated Intel chip to manage everything, data storage in Intel’s data centers, and a monthly subscription to pay for the appliance, the storage, and some software. Dean Takahashi at VentureBeat and Don Clark at the Wall Street Journal’s Digits blog both have more, but neither seem hugely impressed. This may be the new product category that Takahashi reports Intel’s Boyd Davis suggests, but Intel will have its work cut out to clearly define a value proposition that sits comfortably between simple use of DropBox or box.net and fully-fledged enterprise cloud deployments from HP, IBM, et al. Perhaps more tellingly, can the company overcome the SME fears around security and other cloud issues that AppUp is apparently designed to address? The data is still sitting somewhere out of sight, and for some of the people AppUp’s meant for, that’s just too scary to contemplate. If Intel does too good a job of reassuring those fears, there’s less need for AppUp. If it does too poor a job, there’s less market for AppUp. Tough call.