How the cloud has made SMBs more efficient, adaptable and successful

used with permission from Microsoft for Work
by Chris Chute

As an IT industry analyst, I report on how cloud IT adoption has grown with US small and medium businesses. Historically, the smaller business space has been more conservative when approaching new IT services that are hosted offsite. However, the results of my most recent surveys were startling: 2014 served as a great awakening for SMB IT managers, owners, and CIOs to the benefits of cloud IT.

Our most recent SMB surveys indicate that small businesses (firms with fewer than 100 employees) now understand how to harness the cloud to reduce costs associated with basic office functions like payroll, accounts receivable management, or productivity software like Microsoft Word, Excel, and PowerPoint.

Medium businesses (firms with between 100 and 1,000 employees) looked to Bring Your Own Device (BYOD) trends to increase employee productivity, driving a whole new wave of growth in B2B app adoption via mobile payments or workforce enablement with mobile applications used on tablets. Microsoft SharePoint and other collaborative platforms also found traction while a Microsoft Office 365 cloud delivery model reduced barriers to server deployment, usage, and maintenance.

Furthermore, I’m seeing how SMB customers view cloud IT as a business driver. Outperforming SMBs of all sizes (those that have experienced revenue growth over the past year) have started to view cloud IT as a competitive advantage that can drive top-line business results. Outperformers prefer the cloud as a delivery model of choice 61 percent higher than the average SMB respondent (26 percent versus 16 percent, respectively). Furthermore, Outperformers prefer cloud delivery 51 percent more than Laggards (those that experienced revenue declines in the past year).

By the end of 2014, 38 percent of US small businesses have been deploying cloud solutions, compared with only 21 percent in 2013, and IDC expects this to grow to half of all small businesses by the end of 2015. Small businesses are now using the cloud to increase the productivity of employees using core office and data-centric applications. The strongest growth in cloud apps is in data backup and archiving, Office 365, and accounting. Growing small businesses are discovering that cloud IT can have a simple, direct impact on productivity. For instance, by simply replacing an on-premises Microsoft Exchange mail server with a cloud-based Office 365 service, the service provider can now handle all mail server maintenance and upgrades, which have always been a drain on an IT manager’s time and resources.

More than three-quarters of US medium businesses are using cloud IT at this point. For medium businesses, cloud IT revolves around using sophisticated applications like industry-specific apps, ERP, and business continuity storage services. For instance, a mid-size business can equip its external workforce with tablets to create work orders, schedule appointments and collect payments via credit cards. This means the business can schedule more jobs and thus increase revenue, and collect payments at the point of service, thereby increasing cash flow.

Cloud IT is relevant to any size business looking to remain competitive, and the best part is that it is so easy to access. Any size business can now pay monthly to access what used to be very expensive software. Channel partners are now able to prescribe a variety of cloud services according to business needs, and in many cases allow for try-before-you-buy. SMBs that have yet to embrace cloud IT can take the first step of replacing basic functions, like an Exchange server with Office 365, and realize immediate efficiencies. More experienced SMBs can look to adopt mobile productivity or storage services as an addition to what they are currently using. Regardless of where an SMB is in its cloud journey, these services can now make a company much more competitive on a much more cost-effective basis.