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SA SMEs and the cloud

Tablets are a major driving force behind the BYOD phenomenon and the resultant need for cloud services.

By the end of last year, only 9% of small and medium enterprises (SMEs) in SA were making use of cloud services. This is according to the latest findings of the annual SME Survey.

Principal researcher on the survey, Arthur Goldstuck, says the findings are not surprising, as the SME sector generally trails behind when it comes to technology adoption among corporations. According to Goldstuck, only half of all South African corporates are making use of the cloud, so it makes sense for there to be very few SMEs doing the same.

Looking ahead, it is estimated that the number of corporates using the cloud will reach 52%, while only 18% SMEs will do the same.

“While this does represent the proportion of SMEs using the cloud doubling this year, it will still mean that by the end of 2012 less than one in five SMEs will be utilising the cloud,” says Goldstuck.

Enterprise consultant for Mimecast, Barry Gill, says a change in mindset is required not only among IT managers, but at lower levels too. “A shift to cloud services can significantly free up critical resources, and it's important for businesses to think about the future and where IT can add value.”

According to Mimecast, the adoption of cloud computing creates an identity crisis for IT departments – where they find themselves with very little infrastructure to actually manage and shifting from being controllers of devices, to data custodians.

“Enterprises are starting to realise that it's less necessary to run their own computer shop, and to focus on process delivery instead,” says Gill.

Unique challenge

Gill, who is a South African currently working in the UK, says there is an interesting difference in the way enterprises are approaching the cloud and the bring your own device (BYOD) phenomenon abroad and in SA.

“There is complete panic in the UK, because it is and always has been the norm for organisations to provide all connectivity for employees. In SA, however, largely due to financial constraints, in many instances employees have been providing their own devices and connectivity for the longest time.”

The rise of various free cloud storage services have also begun to pose a unique challenge for enterprises. “Users are using these services, because it solves a problem for them. If the corporate body doesn't offer a solution these days – the employees will find it for themselves,” says Gill. “Users now typically have the intelligence and wherewithal to find ways around restrictions.”

Gill advises enterprises to actually look at the employees' needs and why they may be using outside services. “Don't just lock everything down – find out what the use cases are and what it is that you're not offering.”

According to Gill, it is the tablet that is largely driving the BYOD phenomenon and the shift to cloud, because such devices require the extension and portability of services.

“Employees don't like to have to change their behaviour – so solutions need to offer as little change as possible. In that way, I think there's more merit in using apps from service providers in which data is encrypted safely and stored.”

Clear edge

According to the South African SME survey, the sectors in which cloud adoption is the highest include communications (13%), education and financial services (14%) and IT and telecoms (16%). Sectors lagging behind are tourism, transport, healthcare (all 4%) and retail (5%). Goldstuck notes these are the sectors that could be the biggest beneficiaries of shifting to cloud services.

Other findings from the survey included that the age of the business plays a role, with older businesses being more likely than start-ups to adopt cloud technology.

“This is again ironic, since start-ups have the most to gain from the cloud, as, for example, they would not need to invest heavily in infrastructure,” says Goldstuck.

“There is certainly evidence that cloud computing offers more benefits than drawbacks to SMEs, yet a lack of understanding of these benefits means uptake continues to be slow. Despite this, there is a clear edge for those who do make use of it; after all, cloud computing is an enormous cost saver to any business, and cutting costs is a key element of profitability,” says Goldstuck.

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