View from the Cloud: SMEs still missing a trick

 

 

Cloud Computing solutions are – in theory at least – ideally suited to small and medium-sized businesses. Where cash flow is tight and MDs keep a watchful eye on costs and overheads, the promise of hosted, subscription-based IT services with little to no up-front costs is one that surely can’t be ignored. Yet recent research paints the picture of a SME community either unaware or ambivalent towards the benefits of cloud.

 

Independent research, commissioned by Rise, investigated opinions among small businesses towards Cloud Computing. It found only 42 per cent of small businesses have heard of Cloud Computing and as many as a quarter (26 per cent) of those who have heard of it, said they don't really know what it is.

 

Of those who have heard of Cloud Computing, 26 per cent said they are sceptical about its benefits and only four per cent of small businesses said they use Cloud Computing and are happy with it.

 

It is clear from this that despite all of the hype of the last 18 months cloud vendors and the channel have failed to convince SMEs that they should consider cloud, and cloud-like alternatives.

 

Trust plays a fundamental part in the buying decisions of SMEs. Overwhelmingly SMEs will turn to colleagues and peers or existing service providers for advice or guidance on purchasing decisions. In terms of selling into small businesses the biggest mistake made by cloud vendors appears to be the assumption their website can replace the long-standing relationships that small businesses have with their suppliers.

 

The research found that only 46 per cent of small businesses are confident making their own IT decisions and 47 per cent trust partners and suppliers over any other source, for advice on making IT investments. Compare this with just 13 per cent who said they would go to the Federation of Small Business (FSB) for advice.

 

That will be cause for concern for those Cloud Computing vendors hoping their time has come and expecting users to find their own way to cloud services.

 

 

In many ways, Cloud Computing has been about 90 per cent hype and 10 per cent substance to date. Cloud services providers and vendors have played no small part in over-hyping the cloud market, leading to confusion around the actual technology and the inevitable coining of the phrase ‘cloud-washing’ – a phrase which came to the fore at the recent Forrester IT Forum.

 

But the reality is that IT bosses aren't lying awake at night thinking about Cloud Computing. They are thinking about the very real issues within their business and IT companies who want to sell to small businesses must address those problems, not get carried away with self-important discussions about delivery models.

 

Small businesses don't care what it's called, they care if it works. And while the benefits of Cloud Computing are very real and very compelling, it's the pitch and the approach that's wrong. Small businesses thrive on the strength and the durability of their relationships. They pick suppliers who understand their business, not companies who only appear to exist online with a one-size-fits-all offering and a data centre and a helpdesk in India. That approach isn't going to ease the concerns people clearly still have about Cloud Computing.

 

But this situation could be good news for many smaller UK suppliers and resellers once believed to be threatened by the march of large cloud vendors. The biggest cloud vendors are clearly missing a trick. It's all well and good changing the IT delivery model but they can't change the way people want to buy.

 

VAR’s and SI’s, providing IT services and solutions to SMEs can utilise the investment in cloud that has been made by hosted infrastructure providers and deliver low-cost hosted solutions to customers without the upfront investment. Their customers can enjoy the benefits of Cloud Computing, without stripping them of the reassurance and personal service they've enjoyed for years.