The cloud is a great divider of opinion among small businesses, as a recent Computing article, “Cloud computing? No way say half of SMEs”, revealed. A survey on which that article was based demonstrated that small and medium-sized enterprises (SMEs) are split down the middle, with half having embraced the cloud to a greater or lesser extent, and half keeping all of their technology in-house. Respondents were also equally split with regard to whether cloud is an ideal solution for SMEs.
On the face of it, cloud offers smaller businesses many advantages: access to enterprise-grade technology; moving capital expenditure onto the operational budget; increased flexibility and agility as technicians are freed up to do more strategic work; and being able to expand and contract operations at will.
So why do so many SMEs seem to view these alluring (and heavily-marketed) features with suspicion, and what can the industry do to change perceptions? We asked three UK-based cloud providers for their opinions.
Prem Subramanian, CEO of SpectraWaves, a cloud provider specialising in smaller businesses, blames “cloud-washing” by hosted services providers keen to jump on the cloud bandwagon for muddying the waters.
“The message to SMEs today is very confusing as a lot of providers who don’t really offer a cloud have started using the term,” he said.
Confused messaging was also mentioned by Lee Wade, CEO of Exponential-e, a firm that provides cloud services over its own network, who argued that cloud providers need to provide more informative education for the end-users, especially those already invested in on-site IT.
“What’s missing is the understanding of how cloud can work with existing IT rather than as a direct replacement. Once this complementary application is understood, the imperative will change,” he said.
Orlando Scott-Cowley, director of technology marketing at Mimecast, provider of a cloud platform for email and information management, believes that education is best provided through a dedicated sales channel.
“The most successful cloud service providers in the SME space are all ones that have a healthy reseller channel, and on occasion also offer a ‘small business edition’ of their platform. Winning hearts and minds is an important job and an important function of the reseller channel,” he said.
“Business-to-business cloud services have significantly matured in recent years, particularly for the SME sector, but awareness of the benefits hasn’t quite kept pace,” Scott-Cowley added.
SMEs have long complained that IT vendors treat them as second-class citizens as they rush to land lucrative enterprise or public-sector contracts. In theory at least, cloud should be a way for smaller organisations to level the playing field and enjoy tailored services and enterprise-class infrastructure. But, especially for those businesses operating a complex hybrid environment (as most do), the real level of dedicated engagement and support they receive may be disappointing.
“There is a high degree of ‘cloud-washing’ going on from vendors who offer hosted solutions that don’t fit the cloud model,” Scott-Cowley said. “Due diligence before you buy is the only way to make sure you’re getting the level of service you pay for.”
“The biggest challenge the SME faces is in the integration itself. A purpose-built hybrid environment is something quite different from taking an existing IT environment and evolving it into a hybrid system,” said Wade, listing a number of factors that SMEs need to check before signing up.
“What is the cloud provider able to do that limits the changes required to existing systems? What type of management and monitoring is provided to isolate problems to either side of the hybrid environment? What type of tools are available to shift workloads between the two sides of the environment?”
Almost a quarter of SMEs responding to the original survey complained about quality of connectivity to the internet. On this issue, the cloud providers were split, no doubt reflecting their different business models.
“Poor connectivity is the primary reason why SMEs are not adopting cloud services,” Wade said, citing latency, unreliability and security fears about the internet as factors limiting take-up.
Subramanian agreed, adding that some SMEs are missing out because of a lack awareness of the options open to them: “Many are either not aware of connectivity options like EFM or FTTC, or discount them as too expensive. Once we present TCO with FTTP/FTTC connection and cloud services, it becomes an interesting discussion.”
However, Scott-Cowley said that, apart from in some remote areas, connectivity is no longer a real issue. “Generally speaking, connectivity for businesses is reliable and cost-effective and should not be a barrier to cloud adoption for the majority of SMEs,” he said.
Only a few SMEs will ever move everything into the cloud. For most, it will be a stepwise process with each migration considered on its own merit. So, once they’ve done their due diligence, checked connectivity options against the SLAs offered by cloud providers and ensured that their internal infrastructure is sufficiently robust to cope, what should smaller organisations be looking to move to the cloud first?
Mimecast’s Scott-Cowley recommends starting with standalone applications that must be kept up to date.
“If you aren’t ready to go wholesale to the cloud there are certain ‘hygiene’ applications where cloud services should be ideal for SMEs. These include anti-virus, anti-spam and other security-related services.”
Meanwhile, SpectraWaves CEO Subramanian recommends starting with those administrative tasks that are labour intensive and reasonably easily automated.
“Backup, disaster recovery, file storage and telephony are great areas for adopting cloud initially. Desktop, business applications and others can follow an initial adoption,” he said.
Exponential-e’s Wade suggests that SMEs should focus on areas of the business where cloud can offer a meaningful competitive advantage because of the ability to react faster to changing business needs. In this category he lists email, CRM, web hosting and storage. Wade also predicts that the imminent end of support for Windows XP will see a surge in interest in cloud-based alternatives to the traditional desktop.
“Many SMEs will need to upgrade to Windows7/8, which will mean a costly capex investment. The adoption of a VDI solution will mean an opex-based model without all the support headaches,” he said.
Speaking of desktops, what did the cloud providers make of the seemingly low levels of take-up of Microsoft’s cloud-based Office 365 by the survey participants? Only 13 per cent of Microsoft Office users said they planned to move: is this a surprise?
“Yes and no,” said Scott-Cowley. “Certainly from Mimecast’s experience, interest levels in Office 365 are extremely high, but interest doesn’t necessarily translate into a firm plan to migrate.”
He put the reticence down, at least in part, to worries about disruption to users that migration might entail, and the possibility that they could experience inferior performance.
“But the truth is that Office 365 comes in enough ‘off-the-peg’ guises to suit the needs of most SMEs,” he said.
Costs and quality
Some survey respondents complained of poor service levels from cloud providers and about costs that worked out higher than expected. What should SMEs look out for in the draft contract to ensure they are properly covered and not likely to be subject to nasty surprises? The respondents were united in their response that it is all down to due diligence on behalf of the buyer.
“A lot of complaints are due to lack of appropriate business planning and due diligence,” Wade said, advising potential customers to be particularly wary of hidden costs levied by pay-as-you-go providers. Among the areas to look out for, he said, are the cost of retrieving data, both in the course of normal operations and also if the contract is terminated.
Subramanian agreed: “Look for termination clauses and try and agree if possible a fixed monthly price with the cloud provider,” he said.
Guarantees of performance such as levels of latency and uptime should be fully and clearly set out in the SLA. However, the recompense available should things go wrong is often unclear even when the SLA is watertight, and for that reason companies should be careful about the data they entrust to the cloud.
“Hybrid mode offers small businesses the chance to ‘on-ramp’ to the cloud, meaning they have the chance to take a measured and managed approach,” said Scott-Cowley.
“Asking yourself ‘How much infrastructure is just enough to have on site?’ is a clever way of finding a balance between putting services in the cloud or not. For some ‘just enough’ might be none, for others it might be 100 per cent, for many it’ll be 50/50.
“Resistance is futile. It’s a journey that a business needs to begin even if it is a simple test environment,” concluded Wade.
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