2012 will be ‘breakthrough year’ for cloud adoption
November 28th, 2011
Will 2012 be the year that smaller businesses embrace the cloud in a bigger way?
Depends on who you ask, of course. As we prepare to bid goodbye to 2011, ITBusiness.ca turned to some cloud consultants and providers fortheir view from the trenches, and also looked at some statisticalreports for a snapshot of indicators about SMB cloud adoption in the coming year.
Based on those signposts, cloud deployment could be headed for an uptick among SMBs in the next 12 months.
IT consultant Stuart Crawford takes that bullish view, predicting 2012 will be a turning point when more SMBs will move to the cloud. That migration will be fueled by aging SMB IT systems, a resulting overall increase in SMB IT spending plans, and the fact that many SMBs feel the wait-and-see period is over now that larger enterprise has already taken the cloud for a testdrive.
“I think that’s the next (cloud) frontier, those traditional on-premise solutions for smaller mid-market companies, the 25- to 100-employeetype of companies,” says Crawford, president and chief marketing officer at Ulisitc Inc., a Calgary Internet consulting firm with a managed services provider (MSP) focus.
“Next year is going to be a breakthrough year…We’ll see a lot of this cloud solution (SMB market) really take off, especially since many PC refresh cycles are coming due in 2012,” says Crawford, a member of ITBusiness.ca’s editorial advisory board.
“Successful adoption in the (larger) enterprise will make it more comfortable for adoption by the SMB market. If their larger competitors are using these technologies and gaining market share from the smaller business market, then (SMBs) have to transform the way they do business using technology,” he says.
A flurry of global studies released this year seems to support an optimistic outlook for SMB cloud deployment. A survey of 573 firms in18 countries by business IT specialist Avanade Inc. found 55 per cent are expanding their IT budgets in 2012 and 60 percent cite cloud computing as their top IT priority next year.
The Avanade study also shows SMBs have invested more in private cloud deployment than their larger counterparts in all IT categories studied:security, networks, software, storage, data centres, virtualization and staffing. And Canada seems to be catching up to its American neighbours: overall cloud adoption among Canadian firms surveyed (of all sizes) grew 68 per cent since Avanade’s earlier 2009 study, versus just 19 per cent growth among U.S. companies surveyed.
A Microsoft Corp.study of 3,258 SMBs in 16 countries found that 39 per cent of themexpect to be paying for one or more cloud services within the nextthree years, up from the current paid usage rate of 29 per cent. The report, which came out in March, also says the number of cloud services that SMBs pay for will almost double in most countries over the next three years.
In April a Spiceworks Inc.survey of 3,000 IT professionals worldwide reported that SMB cloud adoption had doubled in the previous six months. Twenty-eight per cent of SMBs reported using at least one cloud service in the first quarter of 2011, up from 14 per cent in the second half of 2010. The study also forecast SMB cloud deployment would hit 42 per cent by mid-2011.
A September ITBusiness.ca study jointly conducted by Dell reveals SMB numbers that are not only morerecent but also more bullish on the cloud. About 44 per cent of 300Canadian SMBs surveyed said they’re already using some form of cloud technology this year, a higher percentage of current cloud usage than those cited in the Avanade, Microsoft or Spiceworks reports.
Yet another key statistic consistently tops all of these surveys and others on cloud technology: security concerns, the number one reason cited by those who haven’t moved to the cloud yet.
“There’s some hype (about cloud security) and it’s creating awareness but it’s confusing (people) too,” he says. Negative publicity about cloud service outages at Amazon.com Inc. and Microsoft Corp. have definitely dampened SMB enthusiasm for the technology, Quibell says. But he believes more SMBs are now ready to sign on to the cloud after educating themselves about its risks and rewards.
“It doesn’t matter what the technology is, there are risks inherent,” Quibell says. “In many cases (data) is way more secure … if it’s housed in professionally managed data centres and getting away from laptops that can be fried or stolen. If people look at it from that perspective they’ll really make an intelligent, informed decision.”
Some SMBs opt for private rather than public cloud to mitigate security and privacy concerns, he says. That trend is reflected in the Avanade study, which found that security, privacy and regulatory concerns are fueling a preference for private versus public cloud as the market matures. Just over 40 per cent of companies Avanade surveyed are utilizing private clouds and a further 34 per cent plan to do so in the next 12 months.
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