Cloud computing has become one of the main game changers in IT evolution over the past decade, offering many benefits to businesses, in particular SMEs.
In the UK, 581,173 start-ups were registered with Companies House last year, and part of this accelerated growth can be put down to the fact that cloud computing technology allows new ventures to be in business almost instantly with an IT infrastructure that would be far beyond their reach if they were required to buy and host it on-premise. This rapid deployment means that new innovative SMEs have the ability to punch above their weight and compete with larger, more established peers almost immediately.
For already established SMEs, deploying cloud services may not seem as simple, with research from the Federation of Small Businesses stating that only a quarter of small firms are actually investing in technology such as cloud computing, even though they could reap many benefits from going down this route. It seems that new SMEs are more keen and willing to embrace new technologies than their counterparts.
Barriers to entry
Many major business houses across the globe have already switched from on-premise IT solutions to the cloud and are enjoying the advantages it brings. So why are SMEs holding back from making the transition? A survey conducted by Oxford Economics found that many SMEs, while accepting the need to go global in order to stay ahead within their own market, were more interested in other technologies such as business intelligence and mobile solutions, rather than implementing cloud technology.
Many SME business owners are simply scared about the concept of cloud, and have concerns about the perceived costs, complexity and risks that are involved. Indeed 35 per cent of SMEs do not fully understand the benefits that the cloud can provide them, and are therefore simply ignoring it. Cloud computing is changing the way people do business, and by ignoring the potential of this technology to evolve their business, SMEs are missing out. It’s now essential that they look at adopting the cloud, and the benefits it can bring in terms of transforming productivity, and enabling them to remain competitive.
To bring the cloud down to earth, there are four key areas that SMEs should understand and consider.
Cloud technology is associated with large cost benefits, as the need for infrastructure, upfront capital expense and on-going maintenance costs are largely reduced. A recent report from the European Commission found that the adoption of cloud computing could result in 80% of organisations reducing their costs by about 10%-20%.
Many cloud computing services offer the option to pay monthly, which SMEs for whom cash-flow is an important factor is a significant aid. Pay-as-you-go options allow businesses to access sophisticated software with no upfront fees and no lock-in period.
Mobile technology has meant that business can now be done anywhere where there’s an internet connection. Cloud computing enables businesses to make the most of this by allowing staff to access their applications and files on the go. This can be extremely beneficial for businesses that employ freelancers for example, or employees who frequently have to travel. The flexibility that the cloud brings can be especially helpful at times where it may be difficult for staff to get into the office – businesses can be run from any location as employees are not reliant on on-premise technology or servers.
Until now, one of the largest barriers to adopting cloud computing has been concerns over data security, with 66 per cent of businesses citing this as their main worry. However, research shows that in spite of public perception, cloud providers can typically offer increased security at a much lower cost that SMEs could otherwise afford. Data being hosted in a UK data centre can in fact be much more secure than if businesses were to manage it internally.
With their capacity to adapt in an ever-changing businesses environment, SMEs are vital for the growth of the UK’s economy. Many innovative start-up businesses are achieving growth by making the most of the benefits that the cloud provides, but all businesses should be aware of the transformational potential of the cloud. SMEs at all levels must be educated with the know-how to stay ahead of the game, and the wider business and digital community must ensure they work to encourage and support the adoption of new innovative technologies, including the cloud, among SMEs.