Power to the SME

Johannesburg, 21 Oct 2011
Read time 3min 30sec

One of the recurring themes of this year's Microsoft Partner Summit, held in Durban this week, was the empowerment of small to medium enterprises (SMEs) in the age of the cloud.

Cloud technology gives smaller enterprises access to tools they could not have afforded otherwise, industry players agreed. This means the barrier to entry becomes much lower, and the quality of services that smaller businesses are able to provide is increased.

“Cost is a big decider for small businesses,” Microsoft's small and mid-market solutions and partners director, Mark Reynolds, explained.

Ensuring that the business runs on the latest software versions, and managing the backend of these, is a big and expensive task, he said.

“Many smaller businesses don't have IT departments or IT managers even. Sometimes they just have a friend or a relative, and as good as that may be in the short term, they will eventually need a trusted adviser. The cloud can give them that.”

In addition, the cloud can provide backup and security services that smaller businesses may otherwise not be able to invest in upfront.

“The great opportunity that I see is for small businesses to take a leap to get up to speed with technology from where they were. The ease of use is certainly there.”

Microsoft SA information worker business group head Tracy Bolton added that SMEs can use cloud functions for more advanced services, such as workflow and mobility applications, that they never could have afforded access to before.

Punching above their weight

“The big corporations are getting worried,” HP's SA manager for TS Consulting,Rudi Raath,admitted.

“What are the large organisations going to do to stay competitive, knowing smaller vendors have Office 365 and CRM? It's good for the customer because the pricing goes down and they get better services, but it's scary. An outsourced team of people in India can work as part of an organisation, and they only have to pay per use.”

He believes cloud technology has put smaller businesses on an even footing with global giants; the only differentiator will be in how they service customers.

JJ Milner, MD of Global Micro, agreed: “Being big isn't insulation in this situation; you have more to pay and don't benefit as much from a wide geographical presence as you once did. Now, a 200-man business can compete worldwide.”

“A two-man business can have the same infrastructure as Microsoft,” said Microsoft EMEA Cloud partner strategy director Martin Walker.

Agile advantage

Additionally, small businesses can adapt to change - such as moving to the cloud - much quicker than their larger competitors.

“We're moving from a world where big defeats the small, to a world where the fast defeats the slow,” explained Microsoft director of dynamics channel capacity and readiness Anders Spatzek.

“I think there's going to be an emergence of 200- to 300-man-strong businesses closing significant deals,” said Milner. “They're more agile, hungrier, than larger competitors.”

He explained that the same is true for smaller companies, but he believes the medium-sized enterprises have the experience to capitalise on opportunities. Small businesses will have an advantage when it comes to niche areas that they can specialise in, he believes.

The SA context

The availability and reliability of Internet in SA is an ongoing concern when discussing the cloud.

However, Reynolds, speaking about Microsoft's own cloud solutions, said that is not such a concern anymore. “We did latency testing in South Africa nine months ago,” he said. “We decided that we could not deploy Office 365 here then.”

However, the results were completely different three months ago. Tests with a number of businesses showed that latency was within acceptable limits. “I feel positive about bandwidth in SA,” he said.

Bolton, when talking about the opportunities that cloud gives SMEs, said empowering smaller businesses is particularly important locally, where it can have a great impact on the economy.

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