People 'n' Issues

Tangible SME uptake of cloud services

July 30th, 2015
The uptake of cloud services in the SME sector has been growing steadily, but according to this year’s SME Survey, businesses are now realising the benefits offered by online storage, backups and services.

The uptake of cloud services in the small and medium enterprise (SME) sector has been growing steadily, but 2015 sees businesses finally beginning to wake up to the benefits offered by services like online storage and backups.

The number of SMEs using cloud services in 2015 jumped by 10% – up to 39% – from 2014, according to Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey 2015.

“For the first time, we are seeing a real take-up of cloud services, which indicates that more and more SMEs are overcoming their natural apprehensions around the cloud and are instead starting to realise the benefits this can offer,” he says.

“Of those surveyed, although only an additional 4.5% said they would definitely be using the cloud by next year, there are obvious clues that we can expect an even bigger jump in the numbers. In particular, a fifth of SMEs (19%) said their use of cloud next year will depend on business needs, and another third (35%) say they are currently unsure. We anticipate that at least a portion of these businesses will discover they either need or want the cloud. It is therefore logical to extrapolate a figure that suggests more than 50% of SMEs will be using the cloud by 2016.”

Furthermore, adds Goldstuck, there are many SMEs that are already using cloud services, without even knowing it. He points out that when the survey questioned SMEs about whether they were using particular services, such as online e-mail, some 83% stated that they were doing so.

“Services like this could be referred to as the Invisible Cloud; online e-mail is obviously a cloud-based service, yet the majority of SMEs clearly don’t see it as such.”

A further 47% of SMEs said that they made use of online backups, while 37% utilised online accounting, 27% used an online project management service and 25% had an online customer relationship management (CRM) solution. This, says Goldstuck, is a clear indication that there is massive uptake and yet a lack of understanding among SMEs as to what constitutes the cloud.

“The disconnect in the figures between what SMEs consider to be cloud services and the actual cloud-based services that many of them are already using demonstrates that there is a lack of education about what the cloud really is and what services actually form part of it.”

Clearly, discovering that many of the solutions they already use, such as Gmail and Microsoft OneDrive are part of the cloud, is a key aspect of the migration process. This is because, upon realising this, most SMEs are then prepared to go deeper into the cloud.

“While it is obvious that SMEs are becoming more technology-savvy and mature in the use of cloud – even when they don’t know it is part of the cloud – for more significant uptake to occur, the cloud service providers need to play a role in educating SMEs more effectively around the topic.”

“Ultimately, of course, the real driver will come not from whether they know certain solutions are cloud services or not. Instead, real uptake of cloud will be driven, as implied by the survey results, by selling specific applications to SMEs. If service providers are able to convince more SMEs to utilise specific solutions – like online backup, to protect against the increasing dangers posed by power failures, for example – it won’t be long before they realise the benefits. This, in turn, will make them more predisposed to adopting other cloud services that could be equally beneficial,” says Goldstuck. “The key is to market the applications within the cloud, not the cloud itself.”

Ethel Nyembe, Head of Small Enterprise at Standard Bank, agrees with this approach: “Cloud-based products can provide small and medium business owners with efficient, simple and cost-effective business management solutions, thus saving the enterprise time and money, which is vital for prosperity. For example, cloud-based HR applications are more economical than tailored in-house systems, as they involve no upfront costs and are adaptable, thus giving the entrepreneur the time needed to focus on innovation.”

Elaine Wang, Microsoft Business Unit Manager at Rectron, says: “While it is incredible to watch the uptake of cloud services skyrocketing due to the inherent benefits that it offers to SMEs, they should still consider all possible alternatives in deciding which solutions to implement as well as how to get it done. The results of the research indicates that there is a fuzzy line between consumer and commercial solutions. Therefore, SMEs need to ensure that they are taking full advantage of the security and features behind the commercial solutions, and are choosing the right partner to take them forward.”

SME Survey is the original and largest representative survey of SMEs in South Africa and, since 2003, has contributed ground-breaking research into the forces shaping SME competitiveness.

* SME Survey 2015 is sponsored by Standard Bank and Forest Technologies powered by Rectron

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