SMEs require a high level of trust in their cloud service provider
Cloud is not a tool to save costs, but a tool to drive efficient utilisation of IT investments, says BCX.
According to statistics, 63% of SMEs don't survive past their second year. There are several factors that inhibit the growth of these entities in SA, including government red tape, lack of skills, labour regulations, lack of innovation, crime and access to funding.
Cloud computing is an area that could address most, if not all these challenges as it provides IT resources that are scalable, on demand and pay-per-use, convenient, independent of location and cost effective.
So says Dr Nkosi Kumalo, managing executive of sales at BCX, who will be presenting on 'The role of Cloud Computing in addressing SME challenges in South Africa' at the ITWeb Cloud Summit 2019, to be held on 12 February at The Forum in Bryanston.
During the course of his research, Dr Kumalo surveyed 265 mature SMEs, or SMEs that have passed the survival stage and are classified as small or medium companies that employ between 50 to 200 employees by the National Small Business Act. The research revealed that a high percentage of the respondents do not have an in-house IT department, and more than 62% have experienced server downtime over the past 12 months.
An enabler of growth
"Cloud computing becomes a strong enabler of growth as it takes away the pain of IT outages and the need to onboard expensive skills to support downtime. Information technology downtime has a big impact on both staff morale and customer service, which are unique selling points for SMEs. The nimbleness and agility of SMEs makes them to be attractive partners in the business environment and IT is key to giving them an edge in this regard," says Kumalo.
There's an enormous opportunity in making SMEs active contributors in how cloud is served to address their needs.Dr Nkosi Kumalo, BCX
According to him, cloud software usage is weighing heavily on non-core applications like messaging, office, payroll processing and suchlike. "Thirty percent of matured SME companies surveyed are using ERP applications, but the rest are not. All companies surveyed are aware of cloud computing and its benefits, but the transition towards mission-critical services is slow and a major concern for adoption of cloud."
He says it's also common to see that SMEs do not have a deliberate approach towards cloud computing adoption, and have a preference for using ready-made solutions that are available in an on-premises environment. He further states that there's an enormous opportunity in making SMEs active contributors in how cloud is served to address their needs. "SMEs appreciate cloud solutions, but protection of IP and relinquishing of control is a top concern, requiring a high level of trust between the service provider and the cloud user."
Kumalo adds that data growth is also another major issue when it comes to resource forecasting, as it becomes extremely difficult to know the capacity needed in the following year for budgeting purposes.
"Cloud computing provides a perfect solution to scale up and down, depending on usage requirement."
Above the hype
Delegates attending Kumalo's talk will get a clear definition of cloud, above the hype, and will learn how cloud is not a tool to save costs, but a tool to drive efficient utilisation of IT investments.
Cloud is not a tool to save costs, but a tool to drive efficient utilisation of IT investments.Dr Nkosi Kumalo, BCX
"SMEs need to understand business policies and industry regulations so that they can embrace cloud computing in an informed and compliant manner. It's unwise to generalise and be emotional about a journey towards the cloud, they need to look beyond the noise," he concludes.