Survey: Small Businesses Are Clueless About Cloud Computing
RackSpace recently published a survey on cloud hosting. The company asked 1500 small and mid-sized businesses in the US and UK what they knew about cloud hosting and if they intend to use it. The results of the survey may surprise you. One key finding was that there is a large gap between small and mid-sized businesses in their adoption of cloud hosting.
Mid-sized businesses knew significantly more about cloud services or were at least using them or planning to use them in the near future. Small businesses, on the other hand, were ill-informed, and 59% of those surveyed had no plans to use the cloud at all.
We spoke with Jonathan Bryce, co-founder of Mosso, a RackSpace company. He was surprised at this finding because, as he saw it, cloud computing is ideal for small businesses. The services are generally easy to get started with and don't require an IT staff or capital equipment. Also, small businesses usually have only one or two decision-makers, so the process should ostensibly be much easier than in larger companies.
Jonathan also noted that the hype surrounding the cloud (whether related to hosting, applications, computing, etc.) is confusing to people, particularly small-business owners. While I'm a little surprised at the size of the gap, small-business owners I know are not technically savvy and don't wake up in the morning wondering how they can cut costs by "leveraging the cloud." They keep things very simple and focus on the everyday tactical decisions to operate their business.
While cloud hosting would save them money, scale their business where needed, and remove headaches, these owners usually have other problems on their mind, like staying in business and keeping employees and customers happy.
Jonathan put his finger on how to change this trend. The small-business community needs more education on the specific solutions and benefits that the cloud provides. They need to see use cases and solutions that directly address their business needs if they are ever going to adopt it. For example, hosted application services probably wouldn't help them, but offering them a hosted billing and invoicing solution integrated with their purchasing system might grab their attention.
Small-business owners think in terms of what solves their problems (as we all should), and cloud providers like RackSpace will have to evolve towards offering specific solutions if they want to capture the small-business market.
(Cloud rack photo by Maximillian Dornseif.)
Disclosure: Rackspace is a RWW sponsor.
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Comments
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Smallbiz only cares about apps, not whether the server is dedicated or cloud based.
i think a massive majority of small businesses do use cloud services (so called) but simply haven't aligned themselves with the current industry nom-de-jour.
indeed virtually all of the small businesses i've worked with over the last few years have used hotmail, gmail or some equivalent rather than host their own mail server. these services arguably run within the 'cloud'.
so are small business clueless or are rackspace trying to sell more consultancy?
Alan i spot on. The SMB doesn't give a damn about the technology or delivery mechanism - just if the app does wat they want.
We re a popular UK cloud-based accounting app. Out customer pay for our software because it's easy to use, not because it's in the cloud.
I run a few small businesses and consult with many as well. I can tell you that it's simply false that cloud computing is cheaper. I've run the numbers a few times and can get a VPS for cheaper than running on the cloud. It's certainly not scalable like the cloud is, but there's also not the learning curve or technical mumbo jumbo associated with clouds either. Being that a VPS is managed, and has apps that do the small things that are needed, there's generally less to be gained.
Summmary: Cloud computing is great, but it's (1) not cheaper than regular hosting until you hit a certain point, (2) not needed for redundancy or backups as you can easily do that with a VPS or even shared hosting and (3) doesn't have the technical learning curve associated with the current setup.
I don't think it's necessary for small businesses to use. It's a shiny object right now. When it can be used practically, quickly, and cheaper than the current solutions, then sure. Until then, don't think you need to evangelize. The only thing positive about it is the ability to scale quickly. Since many businesses aren't focused on growing fast, the evangelism will probably fall on deaf ears.
I think the cloud just needs to become more widely accesible and more utilised across other large companies which will help provide good insightful case studies to show to the small busineses. I am sure people know what it is aboot, but it's moreso the uses that people are clueless about, and they just need more and more large companies to help influence them further.
It is a mistake to focus too much on the plumbing. When there is a housing boom, do you hear about the new way foundations and plumbing are being put into the houses? Do people hear about how the power grid manages spike usage? Even as a network engineer, I have no interest in what the plumbing is. I just want to be able to see if I lost any business. I don't car about diagrams, use cases. When it comes to the cloud, I just want to know if it rained or shined today. The point is, what is more important than the plumbing is what the users of the plumbing will see and will they like it and will it help them do something better or something they couldn't do before? To the same, there needs to be more SaaS, PaaS and the newer Open Platform as Service (OPaaS) companies, such as ModBox http://www.sullivansoftwaresystems.com/modbox talked about when we talk about the cloud because the applications and services are the water for the cloud, the faucet, the light switch - click.
Come on guys, this is a copy and paste press release. I expect more....
I am sure people know what it is aboot, but it's moreso the uses that people are clueless about, and they just need more and more large companies to help influence them further.
The only thing positive about it is the ability to scale quickly. Since many businesses aren't focused on growing fast, the evangelism will probably fall on deaf ears.
I have talked with several guys , I have seen that Small and mid size companies are interested for cloud adaptation but they have lack of ideas how to use this properly.
Enterprise Adaptation :
Many organization has started some adaptation program for cloud user like Kaavo(http://www.kaavo.com/enterprise-cloud-adoption). People think that Testing, "Quality assurance test bed" may be the good area where they can play more safely for cloud.
Application Centric Enterprise Management :
Now people are thinking about application centric infrastructure management , where a whole infrastructure can up in a single click. It will dramatically safe your manpower and resources utilization .
Security and Access Control
It will take time but I hope that many exciting solution will come up for real problem. Security is good area where where people can do more work , already some companies are providing disk encryption (EBS) for cloud, but that is not enough . More works need to be done in this area.
Data Compression and Distribution
One of my client has declined to use Cloud because they have very large data volume . So availability of data from various site will increase more faster access and good compression will reduce the upload and download cost.
I think more we will see more positive ideas about cloud in recent days.
Cloud computing (including SOA and hosted applications) is a platform / infrastructure change and has no *direct* benefit to an end user, like web services, n-tier architecture, COM, CORBA, LAMP, etc. Unlike medium- to large-businesses, a small business is lean and mean. They do not change for change's sake. This is especially true for operational overhead (yes overhead) like IT.
An IT decision-maker for a small business will typically be the owner. They are either using IT solutions that suit their needs or have outsourced those functions that they can. So many already use the "cloud" and just do not use the latest buzzword. Small business owners will cross the scalability issues when they arise and will seek partners with affordable solutions. However, they will be talking apps NOT infrastructure and NOT custom development. Right now, the apps need to catch up to the infrastructure.
Mid- to large-businesses could take a page out of the small-business playbook. A CIO / CTO should act responsibly and make decisions based on needs... especially in this economy. They should not get pressured into buying cloud services because they are the latest trend or that they are "behind the times". Definitely understand what "cloud computing" is but it is another infrastructural tool in the IT toolkit.