SMEs foggy on cloud adoption
A mere 9% of small and medium enterprise (SMEs) in South Africa made use of cloud computing by the end of 2011, despite its obvious benefits according to a new study.
Cloud computing generally refers to accessing services and applications via the Internet that would previously have resided on the user’s computer or internal network, while reduced costs and improved efficiencies are some of the more obvious benefits of the cloud.
Arthur Goldstuck, MD of World Wide Worx and principal researcher of the survey, says that this is not surprising, as the SME sector tends to follow in the wake of technology adoption among corporations. He adds that around half of all corporates in SA are still not making use of the cloud, so it is no shock to see how few SMEs are doing the same.
“Although the number of corporates expected to be using the cloud this year will reach 52%, the number of SMEs doing the same will only reach 18%. While this does represent the proportion of SMEs using the cloud doubling this year, it will still mean that by the end of 2012 less than one in five SMEs will be utilising the cloud,” Goldstuck said.
“This means that SMEs are not benefiting from the multiple obvious benefits they stand to gain from cloud adoption. But it is clear why it’s not happening, and it is for the same three key reasons that adoption has not been more pervasive among corporations.”
Goldstuck believes that many of these organisations simply don’t understand the concept of the cloud, due to industry terminology shrouding it in jargon. “This in turn means that they fail to see the real advantages it offers. And, as with the corporate hold-outs, many consider it to be unsecure. This is especially ironic, considering that most cloud solutions are more secure than the average SME’s PCs,” he said.
The survey found that broken down by sector, communications (13%); education and financial services (14%) and IT & telecoms (16%) are all well above the overall rate of adoption. However, tourism, transport and healthcare (4% each), and retail (5%) are all sectors that are far below the mean.
The research lead points out that the age of the business plays a role in the likelihood of adoption, with only 5% of new businesses indicating that they utilise the cloud. He notes further irony in the cautious approach taken by new businesses, since start-ups have the most to gain from the cloud, as they would not need to invest heavily in infrastructure.
“Furthermore, there is a correlation between profitability and cloud adoption, with 11% of SMEs that are strongly profitable using cloud services. Conversely, of those breaking even or making a loss, only 7.5% utilise the cloud,” Goldstuck said.
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