The IT industry powerhouses are trying to block the take up of Cloud Computing, suggests Steve Garnett, EMEA president of Salesforce.com, despite its potential as a saviour for SMEs.
“The entire computing industry is pulling against The Cloud,” argues Garnett. “It doesn't want SMEs to stop buying computers and complexity and infrastructure. Google changed the world but the incumbents of the old computing industry are not fans of Cloud Computing. The last thing IBM wants is for people to stop buying servers. The last thing Oracle wants is for people to stop buying databases or SAP for people to stop buying applications.
“The traditional industry does not want Cloud Computing to happen. It's not just shoving your existing software up on the web. What SMEs have had to face is companies that say 'I want your money upfront'. That's tough in these economic climates, a huge pressure on those companies. But that's why traditional vendors want the world to go back to 1999.
"We have about 55,000 customers, a third of which are SMEs (up to 250 employees) and a third of which are very small firms. In the enterprise space, IT pressures have been well documented over they years. We all know that 80% of IT budgets get spent on infrastructure in the enterprise space, while the compression that the recession has brought about has been squeezing out innovation in the enterprise. We wanted to look at what the impact was on the SME sector.”
Very real concerns
Based on 1,000 responses from IT decision makers at UK SMEs, research carried out by Vanson Bourne on behalf of Salesforce.com found that a quarter of UK small businesses express real concerns about the scale of cuts and losses for 2009, with almost one third believing the year will be classed as a success if they do not shrink as a business. The majority also express ‘very real concerns’ about the scale of cost-cutting and losses they will see this year, suggesting companies failing to manage IT effectively may be among those worst hit by the economic environment.
Garnett reckons IT is spreading amid SMEs in the same way that it has in the enterprise market. “Almost a third of UK customers find IT is the biggest cost overhead, ahead of HR - as in hiring people into business to administer your staff and facilities, such as buildings,” he notes. “Those are the necessary evils you have to have when building a business. IT is seen in a negative light and that's pretty damning of the industry.
“The majority of respondents expressed real concerns about cost-cutting. Is there a correlation between spiralling IT costs and losses? It is the people who were most concerned about IT costs who were most concerned about their business. On a more positive note, there is 13% who expect business to boom in downturn and who see recession as an opportunity to grow and take business from rivals. Remarkably the financial services sector was the most upbeat, while manufacturing was the most downbeat.”
So what 'necessary evils' are SMEs willing to spend on? First up is CRM. “Some 72% of our respondents said that their number one focus was to acquire customers,” says Garnett. “They want to acquire rather than retain customers, whereas in the enterprise space most CEOs will tell you that their priority is to hang on to the customers they have by serving them better. It may be that SMEs fear that their installed base just isn't buying any more or that they want to take more market share from the bigger guys.”
Post new Comment