Research: how SMEs can punch above their weight

By John Leonard
29 Oct 2012 View Comments
sme-small-business

Recently, Computing judged some of the entrants shortlisted for the 2012 UK IT Industry Awards. This was a tricky task, not only because of the diverse range of innovations presented, but also because of the enormous differences in the organisations presenting them, which saw major global household names pitted against start-ups formed five years ago in someone’s spare room.

Further reading

The rise from garage to global domination is not unknown in the field of technology, of course. Clever people take advantage of new ways of working to leapfrog moribund competitors or even develop entirely new business models, as the trajectories of Google and Facebook amply demonstrate. While these two firms were whisked from start-up to behemoth on the backs of internets 1.0 and 2.0 respectively, the new breed is co-opting another disruptive technology - the public cloud.

Little fish, big pond

According to the UK Office for National Statistics (ONS), just 0.1 per cent of the 4.8 million private-sector businesses in the UK employ more than 500 people. The remainder - micro businesses and SMEs - accounted for 64 per cent of private-sector employment and 54.5 per cent of private-sector turnover at the start of 2012.

Small and medium-sized enterprises (SMEs), we are constantly told, are the lifeblood of the economy, going where their larger brethren fear to tread, quickly identifying new niches and rushing to exploit them, creating jobs wherever they go and generally reminding big organisations of what bloated sluggish creatures they have become, out of touch and out of shape.

This rosy picture is habitually wheeled out by politicians on a crusade against red tape, or perhaps seeking to mollify smaller firms annoyed that they have to pay business tax whereas the likes of Starbucks, Google and Ebay seemingly do not. In truth it could never be more than the broadest of generalisations when you consider that 99 per cent of firms in the UK are routinely defined as SMEs.

That aside, however, it is true that smaller firms swimming in the information-rich waters of the digital economy do have some distinct advantages over the bigger fish. One of these is the ability to move quickly as the need arises. Another is the type of close relationship with customers that big players can only dream of. In both of these areas technology can help smaller firms drive home their advantage.

Hiring muscle to extend reach

Questioned by Computing about their underlying infrastructure, IT leaders in UK SMEs were split on their use of some of the most common enabling technologies (see figure 1). While a majority have virtualised aspects of their infrastructure or are in the process of doing so, adoption of unified communications (UC) seems to have plateaued around the 40 per cent mark. Cloud services, meanwhile, have been adopted by 35 per cent of those surveyed, with another 30 per cent implementing or considering, a higher level of adoption than in a recent survey of large organisations.

1-sme-research

Looking first at cloud, at the SME level, we are likely to be talking about shared tenancy, public cloud services. These have been used to great effect by some small firms on the UK IT Industry Awards shortlist.

For example, one small software vendor has taken full advantage of the public cloud by simply reengineering a client’s existing .Net analytics program and moving it to Microsoft’s Azure public cloud IaaS platform, where compute times were reduced from hours to seconds as a result of the massive increase in available processing power. At the fine margins on which the client firm operates, this is the difference between success and failure.

Another small developer built its management and remote support suite in Amazon’s PaaS public cloud, from where it can be scaled up to manage the distributed fixed and mobile infrastructure across a range of different sites, a model which they have successfully exported abroad.

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