When it comes to cloud adoption, midsize companies are ahead of big businesses. That means they will take some chances as they migrate to this technology delivery model.
Research firm Gartner published some new data this week suggesting that at least 10 percent of email and cloud applications within what it calls enterprise accounts will be using a cloud-based version of said technology by 2014. That actually is much slower than anticipated by about two years, because of things like corporate inertia, a focus on the strategic, and (realistically) concerns over the feature sets of some of their options.
Among small and midsize businesses, however, adoption rates continue to be much higher. Exhibit A is a study released earlier this year by Microsoft, which is attempting to recast itself as a bonafide cloud service provider after years in the on-premise world. The study, SMB Cloud Adoption Study 2011, found that almost 40 percent of SMBs expect to be paying for one or more cloud service within the next three years, compared with the approximately 29 percent who do so today.
The survey found that 82 percent of SMBs buying cloud services feel that a local presence offered by their cloud service provider is important. Read: they don’t want everything to be remote because they like having someone able to work through issues on site. When it comes to size, companies with 51 to 250 employees appear to benefit most from cloud technology options; 56 percent of this respondent base said they expect to pay for an average of 3.7 services within three years.
The MIcrosoft research was fielded among 3,258 SMBs worldwide in conjunction with Edge Strategies. The actual survey was fielded in December 2010.
Exhibit B in terms of SMB cloud adoption data comes from CompTIA, the technology advocacy organization. CompTIA’s third annual study of SMB adoption trends released over the summer of 2011 suggests that this community can be classified as an early adopter when it comes to cloud-based infrastructure and applications. SMBs’ top three reasons for giving love to this model:
Lower total cost of ownership
Gain access to more/better features
In short, small businesses can look much larger and more innovative through cloud infrastructure while saving money. What’s not to like?
Little wonder, then, that the CompTIA survey found one-third of the roughly 600 companies surveyed were using some sort of cloud applications — from infrastructure as a service (IaaS) to software as a service (SaaS). Here are the top five applications that smaller companies were moving to the cloud (along with the percentage of cloud-friendly companies using this sort of application):
Storage/backup = 71 percent
Email = 62 percent
Document management = 59 percent
Collaboration = 56 percent
CRM = 53 percent
One big red flag, though.
The CompTIA survey reported that among those SMBs that have moved part of their infrastructure to the cloud, approximately one-third have found the transition to be more costly or difficult than expected. What’s more, here are their top five concerns when considering the transition:
Reliability of cloud provider
Reliability of internal internet connection
Integration with current systems
Long-term pay-as-you-go model
The reality is that very few companies will ever be “pure cloud,” which means that SMBs — especially because they ARE pioneers — could experience some hurdles as they migrate some applications to the cloud. That’s especially true because there really aren’t that many “best practices” that have been established, so far. WIth that in mind, here are three ways small businesses can protect themselves if they choose to try cloud services sooner rather than later:
Pay particular attention to integration implications. That might mean hiring an independent expert who can assess where cloud services might fit within your business infrastructure; and that can offer expertise in ensuring that cloud applications tie into on-premise applications seamlessly.
Battle-test network infrastructure. SMBs are right to worry about security and bandwidth, so they should ensure that connections are in order before committing to a cloud application that could affect productivity. They should also explore how the service being evaluated handles tasks offline. And, while I’m listing things to worry about, they should assess how to handle sign-in. Will employees need to first sign into a secure connection and then into the cloud application or will it be accessible from everywhere?
Understand service level agreements and contract terms. Small businesses should really spend time to consider what is included and what is not with a cloud service contract. Does the length of the contract make sense or will you be locked into something too long? How quickly does the cloud provider promise that interruptions will be fixed and does it have the wherewithal to deliver that? Speaking of which, will your organization get true 24×7 support or will it be confined to asking questions during “traditional” business hours. Whatever they are.
Any additional tips that some of you early cloud adopters would like to share? Have at it.