Cloud computing adoption may have peaked in the SMB: report

Two separate studies of Canadian small and medium-sized business owners (SMBs) by Angus Reid about their IT priorities reveal that those interested in getting on the cloud may already be onboard, and security remains the top IT concern for most small businesses.

The first study was sponsored by HP Canada (NYSE: HPQ) and surveyed 1,005 small business owners across Canada around mobility and productivity, outsourcing and cloud computing. Leyland Brown, vice-president business segments, commercial systems in the personal systems group for HP Canada, said there are some interesting trends around the convergence of those three areas that present some intriguing opportunities for the channel.

The study certainly confirmed SMBs are embracing mobility. Some 69 per cent of SMBs said they have outside connectivity to their company work environment, and 70 per cent agreed it made them more productive. Laptops with WiFi were the top mobile connection method at 59 per cent, followed by smartphones at 32 per cent.

“Mobility is the driving force between new technology products and services,” said Brown. “By the end of 2013, one-third of the world’s population will be online, and it’s this whole mobility trend that’s a big driving force of possibility for SMB owners.”

On outsourcing, the study found that four in 10 SMBs are doing work that was outsourced to them by a larger business, and another 15 per cent feel it’s likely they’ll do so in the future.

“The pace of business process outsourcing (BPO) will continue to accelerate as large firms cut costs and focus on core business,” said Brown, noting BPO is made possible by greater SMB adoption of technology. “It will provide Canadian SMBs with growth opportunities.”

On cloud computing, the results were more interesting, and somewhat mixed. The survey found just under half of SMBs are using a cloud computing service. Remote e-mail and messaging was most popular, followed by remote security and/or data storage and remote web and video conferencing.

However, the room to grow that number may be limited. Of the 53 per cent of SMBs that aren’t in the cloud today, just four per cent said they were considering it for the future, while 96 per cent said they weren’t. Brown said it may be an education issue about what the cloud can do for SMBs, and what is involved in getting into the cloud.

Looking at the numbers overall, Brown said partners need to work with their SMB clients to think about production boundaries: what gets produced inside the firm, what gets produced outside, and how can technology enable this.

“SMBs require technology that’s not only compatible with their customers, but also with their outsourcing partners, and this technology is becoming more complex,” said Brown. “VARs need to think in terms of enabling their customers to enable seamless mobile and cloud interaction with clients.”

Security concerns and VoIP interest

Another survey of Canadian SMBs by Angus Reid, this one conducted for Primus Canada, focused on network security and digital convergence. It found the smaller the business, the greater their concern about security, with 54 per cent of sole proprietorships with nine employees or less expressing concerns about network security.

Despite their security concerns, 31 per cent also said they feel anxious about technology and its impact on their businesses. Still, 53 per cent said they believe digital convergence will prove to be a positive for their business in the future.

Jeff Lorenz, vice-president, sales and marketing for Primus Canada, said the decisions an SMB makes around security can have far-reaching implications.

“You can choose an Internet service provider that will give you connectivity. It may be fast or slow, but you know what your impacts are,” said Lorenz. “With IT security it’s an unknown world for most SMBs and, if they make the wrong decision, it can be very costly.”

The study also looked at VoIP adoption, and found just 22 per cent of SMBs are using digital convergence tools such as VoIP very often or occasionally, even though 76 per cent of those using them said they’ve realized cost savings. Of those that aren’t using them just four per cent said they were interested, signaling the industry has some education and selling to do.

While he notes that 22 per cent of Canadian SMBs is a very large number of businesses, given the size of the market in Canada, Lorenz said VoIP hasn’t taken off as hoped for yet for several reasons. VoIP is traditionally associated with voice over Internet instead of over Internet protocol, and Canadian businesses tend to be more conservative, waiting to see what their peers do and what their experience is before considering adoption.

“We think we’re quickly about to jump that chasm,” said Lorenz.

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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