The Road to Embracing Cloud for SMBs
Small and medium-sized businesses represent an integral part of the economy across the world with their tremendous potential to innovate and scale. Many of today’s multi-billion dollar companies were once SMBs and have successfully reshaped their industries and contributed to society. However, in today’s world, SMBs encounter unique operational challenges, such as using the right technology and managing the cost of the technology stack.
Although some of SMBs have leveraged cloud services such as hosting, storage, collaboration, and productivity tools to tackle these challenges, many still seem to be missing opportunities that the cloud brings.
Following the unprecedented COVID-19 pandemic, it is beyond any doubt that SMBs already on the cloud were more resilient in times of crisis and coped immeasurably better with changes such as the shift to remote working. The cloud provided the essential collaboration and productivity tools to sustain businesswide operations and communication during global lockdowns.
Cloud Services Models Adopted by SMBs
Small and medium businesses predominantly adopt three different cloud service models based on business objectives, budgets, and the extent they prefer to actively manage the services:
(For more details on IaaS, PaaS, and SaaS, you can check our blog post here.)
Major Barriers to SMB Cloud Adoption
Digital Ocean conducted a survey with 2,400 IT decision makers in 48 countries.
Among the respondents who reported increased cloud usage with the COVID-enforced digital acceleration, more than 80% of traditional and tech SMBs stated that their cloud usage continued to increase significantly in the following year. For traditional SMBs, keeping up with the technology curve is still one of their notable challenges. The results also reveal the need for simplicity for SMBs.
SMBs have less technical staff than larger enterprises and are more likely to have multiple priorities when managing cloud solutions. The responsibility of managing cloud services often falls to the CEO, president, or even the owner of the traditional SMB. In addition to limited technical staff availability, traditional SMBs attribute several barriers to cloud adoption such as; cost (19%), technical training and education (13%), and the time required to manage services (12%) which underlines their requirement for cloud solutions which are less complex and easier to manage.
According to the McKinsey whitepaper “Winning in the SMB Cloud,” we can consider the cloud benefits for SMBs from two standpoints: capability and financial gains.
Capability: With cloud adoption, SMBs gain access to technologies that they might otherwise need high-level IT support to maintain, such as dedicated servers and storage for running enterprise ERP or CRM packages. Leveraging public cloud-based IaaS and SaaS solutions, they can simply select a vendor, sign a contract and enjoy the managed services. Additionally, SMBs can achieve more reliable and high-performing service levels than would be attained on a typical on-prem installation. In summary, the cloud allows SMBs to concentrate on critical aspects of their businesses whilst technology is transformed into a support capability that is future-proofed, enabling continued growth.
Financial gains translate the capability into financial returns. The cloud gives SMBs the opportunity to outsource substantial (or all) portions of their IT estate to the cloud, leading to substantial cost savings.
In this article, we will take you on a deep dive into the benefits of the cloud for SMBs, and how it helps boost competitiveness.
1) Reduced Maintenance and Development Costs
One of the most compelling benefits of the cloud is the favorable financial savings by not investing in and maintaining legacy infrastructure, such as hardware and networking equipment, data servers, and other typical physical IT needs. The cloud is consumed as a service, for instance, server-intensive apps like email services. Instead of having on-prem email servers, SMBs can leverage cloud email services with its associated benefits.
A cloud service lets you choose a subscription model that fits your business needs, with the costs being proportional to the services and storage space used. Consequently, SMBs can develop affordable solutions without having large IT teams to build and deploy apps or deal with the logistics and security of the applications.
Additionally, cloud solutions require no prohibitive upfront payments as they are accessed online without licensing fees, hence only paying for a small portion of the hosting, power, hardware expenses as well as the features required. Therefore, SMBs can redirect savings to other functions of the business, for instance, sales operations and marketing their products & services.
Furthermore, cloud service models (SaaS, PaaS, IaaS) include automatic updates taking away the need for SMBs to think about security vulnerabilities, compatibility, synching, or future-proofing. In addition, cloud solutions take care of all future technology improvements and help keep pace with technology without a steep learning curve.
2) Increased Data Security
SMBs are more often understaffed and underequipped to deal with cyber threats effectively. Cloud services with built-in up-to-date security features and multi-layered security infrastructure ensure maximum protection against fraud, ransomware, malware, and other cyber-attacks on the web. Leveraging a cloud solution with ‘best in class’ security measures and data compliance will ensure that SMBs can safeguard their systems against attacks, data losses, and incorrect data processes.
3) Efficiency – Remote Access, Mobility, and Process Automation
With the transformation to hybrid and remote working practices post-Covid and digital-first era, accessing work-related files and applications is driving SMBs to provide remote capability. The cloud has become essential to productive remote work, business travel, task completion, and customer visits by providing flexibility across all business functions and empowering today’s workforce.
Once a user is created on the cloud network using systems such as LDAP, an employee can access cloud-based systems via multiple devices, platforms, and locations with their login credentials based on access rights. Likewise, when an employee leaves the SMB, the user can simply be removed from the cloud network after backing up the data.
4) Scalability and Flexibility
Historically, when an SMB expands its operations, it is required to purchase additional IT hardware. If the SMB needs to downsize, the capital expenditures incurred for the assets will be wasted. With a cloud solution, the SMB will be able to scale up or down easily and be much more cost-effective with usage-based fees.
SMBs using the cloud do not need to plan infrastructure investments many years in advance (difficult without reliable data for predictions) as major cloud providers work on a subscription OpEx model, providing flexibility and adaptability models which facilitate change. This flexibility allows SMBs to gain a competitive advantage in the marketplace.
5) Disaster Recovery and Business Continuity
It is essential for businesses of all sizes to remain ready for any circumstances with a dependable disaster recovery plan. Nevertheless, It is more critical for SMBs to have a robust DRP, as downtime creates margin erosion and lost productivity, and combined with scarce resources, the impact is tremendous. The cloud provides seamless backup solutions to manage resources in multiple locations, split them into separate access areas, and minimize the risks in case of a disaster.
6) Collaboration and Productivity
The cloud enables new and exciting opportunities for real-time team collaboration and productivity for SMBs, such as co-editing documents, tracking changes and versioning documents, managing meetings, instant chatting, and high-quality audio/video calls from anywhere, disrupting the definition of “work.” Cloud collaboration solutions simplify tasks that need to be completed by a group of employees, and the physical distance does not hinder efficiency.
7) Democratization of Data
Real-time data processing and AI/ML operations play a pivotal role for today’s businesses, nonetheless complex and costly for most SMBs. By democratizing AI/ML knowledge and making it easily accessible via managed services and easy-to-use dashboards, the cloud makes it easier to deploy and accelerates innovation for SMBs.
8) Faster Deployment and Time To Market
Cloud services simplify the application development lifecycle and present faster TTMs. With built-in scalability, resiliency, API, database-as-a-service, provisioning, deployment, and monitoring capabilities, software engineers can focus on core functionality instead of on other critical aspects of product development that require significant time and effort.
SMBs also unlock the advantages of cross-collaboration with multiple third-party technology providers by accessing the broad ecosystem and solution marketplace of cloud vendors. Due to built-in integrations and connectors in cloud vendors, SMBs can develop much faster solutions and streamline new products and services in the cloud.
As the key differentiator of defining a business as an SMB is its limited resources and capabilities, the value and benefits of cloud solutions allow the business to redirect investment earmarked for the IT landscape into other critical functions and hence create a competitive advantage.
Kartaca is a Google Cloud Premier Partner with approved “Cloud Migration” and “Data Analytics” specializations.