Small Companies Nervous Of Cloud Migration

Worldwide small businesses (SBs) (1-99 employees) represent a “significant” opportunity for cloud services, particularly Software as a Service (SaaS), however, one in five SBs (20 percent) currently not using SaaS report that their businesses are too small for such applications, a study from midmarket IT research firm AMI-Partners found.

The report discovered significant subsets of these small businesses believe that they do not have the appropriate expertise to make the migration to hosted applications.

Cloud-based Solutions

Although cloud computing has been available for years, it is only recently that affordable solutions are being presented to small businesses, and those midmarket companies are eager to employ cloud-based solutions. According to AMI research, worldwide SBs have allocated 18 percent of their total software spending for SaaS related software, a figure similar to that of medium businesses (MBs, 100 to 999 employees). However, there are still hurdles for small to medium-size businesses (SMBs) to overcome in order to reach this critical market, the report found.

“Cloud-related information and communications technology (ICT) spending is projected to account for a sizeable portion of total worldwide SMB ICT spending in 2010. Cloud providers are racing to deliver functional, cost-effective solutions to small businesses worldwide,” said AMI senior associate Michael McDonald. “Small businesses have been laggards in adopting new technologies that fall outside their comfort zone, often looking to larger firms as test cases.”

McDonald said cloud service providers targeting SBs should understand that educating the decision-makers of these companies on the ease and simplicity of migrating to SaaS applications is essential, and channel partners should be armed with simple case studies demonstrating these benefits. “The larger issue is the lack of knowledge regarding Cloud,” he said McDonald. “Even though some budget has been allocated for SaaS products, we see a gap between planned and actual spending. Small businesses have the capital available to make significant advances in the Cloud; however, they are still uncertain as to how a Cloud solution will benefit firms of their size.”

Cloud Applications

SMB preferences for cloud-based application bundles, their price sensitivity and purchase channel preferences are further explored in AMI’s upcoming Worldwide SMB Cloud Services Study. The study provides coverage of platforms and devices, IT infrastructure services, business productivity applications, business management/line of business applications and unified communications (UC). A company release said the research would be available later in 2010.