Are SME’s lagging dangerously behind?

Summary

This blog post, "Are SME’s lagging dangerously behind?", is a blueAPACHE article from 2015 covering security. As cloud adoption ramps up in Australia, we are seeing disparity in adoption between business sectors. The enterprise market are focused on realising return from infrastructure as a service (IaaS) and platform as a service (PaaS), while medium sized businesses are still very much focused on simple easy-to-consume software as a service (SaaS). It is written for readers evaluating emPOWER Cloud, Advanced Infrastructure Managed Services. Published in 2015. Figures, product names and event details reflect that time; for current information see the linked service pages.

Key facts

Article

As cloud adoption ramps up in Australia, we are seeing disparity in adoption between business sectors. The enterprise market are focused on realising return from infrastructure as a service (IaaS) and platform as a service (PaaS), while medium sized businesses are still very much focused on simple easy-to-consume software as a service (SaaS).

Enterprise Research

In October 2014, Frost & Sullivan released their State of Cloud Computing in Australia Report which highlighted that the Australian cloud computing market had matured from early adopter status to the early growth stage of adoption by the wider market. This growth was projected to continue with an average CAGR of 30% through 2018, when the cloud services market is expected to reach $4.55 billion. Frost & Sullivan’s survey of IT decision makers in Australia showed that platform and infrastructure are expected to grow at faster rates than software. Deterred by the high cost of hiring IT staff, a growing proportion of IT requirements are being outsourced, and IT departments are shrinking in size and number. The survey revealed that cloud services enable easier access to IT resources from any location, provides faster access to data for applications such as data analytics, frees up resources that can be used for other tasks and improves business redundancy. Phil Harper, Senior Research Manager, Australia & New Zealand, Frost & Sullivan explains “Two thirds of companies that have adopted cloud services believe it has significantly improved their overall business performance. A significant proportion of organisations feel it has enhanced their ability to innovate and explore new business models.”

Small to Medium Sector Studies

The Australian Communications and Media Authority’s (ACMA) 2014 report into cloud computing shows that less than half of Australian small businesses are currently taking advantage of cloud services in 2013. It showed that the uptake of cloud services by SMEs has been slow compared to consumers, with only 44 percent of SMEs actively using cloud services. A more recent study by Ovum (commissioned by NBN Co.) rehashed these numbers, and found SMEs are currently favouring basic cloud hosting services, including email, security and web services, ahead of newer cloud products including advanced business critical applications, online marketing tools and data security. The Ovum report suggested that found higher-speed broadband will encourage a take-up of more cloud computing products among SMEs.

Agility Advantage

The differences are logical. Enterprises have the resources to make platform and infrastructure changes faster and realise the benefits quicker, while SMEs will adopt the lower risk and easy-to-consume Software as a Service when the need arises. And while the disparity makes sense; it does raise questions around how the medium sector will be able to compete against larger organisations that are becoming more agile through cloud adoption. Agility, flexibility, scalability, responsiveness, and speed to market have been key differentiators that smaller businesses have promoted when competing against larger organisations. The challenge is these differentiators are no longer exclusive to size – they are already being realised by larger organisations leveraging cloud. Technology decisions are moving to business units, scalability is built-in and the ability to respond to opportunities is faster and simpler than before. The days of the slow moving enterprise that was easy to compete against are becoming a distant memory. If SMEs lag too far behind in their cloud adoption for business critical technology, will they find themselves struggling to compete? Will they lose their nimble advantage? Medium-sized organisations who aren’t seriously evolving their technology strategy to maintain to business advantage may well find themselves at risk of becoming the next Kodak. Further information:
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Related

• emPOWER Cloud
• emPOWER Cloud (pillar hub)
• Advanced Infrastructure Managed Services
• emPOWER Managed Services (pillar hub)
• emPOWER Security
• emPOWER Security (pillar hub)
• blueAPACHE Cloud (case study)

Frequently asked questions

What growth rate and market size does the article project for the Australian cloud services market through 2018?

The article cites Frost & Sullivan's October 2014 State of Cloud Computing in Australia Report, which projected the market to grow at an average CAGR of 30% through 2018, reaching $4.55 billion. It says the report found the Australian cloud computing market had matured from early adopter status into the early growth stage of wider adoption.

What percentage of SMEs does the ACMA report say were actively using cloud services, according to the article?

The article cites the Australian Communications and Media Authority's 2014 report, which found only 44% of SMEs were actively using cloud services in 2013. It says this shows SME uptake of cloud services was slow compared to consumers.

What did Frost & Sullivan's Phil Harper say about companies that have adopted cloud services?

The article quotes Phil Harper, Frost & Sullivan's Senior Research Manager for Australia and New Zealand, saying two thirds of companies that have adopted cloud services believe it has significantly improved their overall business performance. He added that a significant proportion feel it has enhanced their ability to innovate and explore new business models.

What cloud services does the Ovum report say SMEs were favouring over more advanced products?

The article says a study by Ovum, commissioned by NBN Co, found SMEs were favouring basic cloud hosting services, including email, security and web services, ahead of newer products such as advanced business-critical applications, online marketing tools and data security. It says the report suggested higher-speed broadband would encourage greater take-up of these more advanced cloud products among SMEs.

Is this post still current?

No. This post cites specific 2014 and 2015 industry reports and market projections from Frost & Sullivan, ACMA and Ovum, and those figures reflect that period. For current information on cloud adoption, a reader should use the linked service pages rather than this post.

Source

• origin post (2015)

Knowledge Base