The Who, Why and How of Small Business Cloud Use

By Pam Baker | Posted February 27, 2013

There's a lot of buzz these days about using the cloud, so it's natural to wonder if cloud services might make sense for your business. But that decision requires more then the marketing pitches vendors throw your way and articles that seem a little light on hard facts. A look at what other small businesses actually do in the cloud might be the best indicator of whether or not you should be there, too.

Achieving Cloud Awareness

As it turns out, measuring cloud use among small businesses can be a bit tricky because, while nearly all SMBs use the cloud in one form or another, some of them seem to be unaware of it.  

"At this point, most organizations have made some use of cloud-based services, even if they haven't been formally incorporated into standing business processes," explains Noah Weisberger, director of professional services at Coalfire, a leading independent IT auditing firm.

"This can be the small office that uses Gmail for email and collaboration, or DropBox for sharing files and data. Even traditional brick-and-mortar-only businesses can use an online CRM solution to help keep track of their regular customers and ensure that they achieve the highest levels of service," says Weisberger.


These common uses lead many small business  owners and managers to think of the cloud mostly in terms of software-as-a-service (SaaS) rather than its many other forms.

While some small businesses are blissfully unaware of their cloud use, or think of it only in terms of SaaS, others are so tech-savvy that everything they do in the way of IT is in the cloud. Such diversity makes it difficult to accurately rank the cloud's place in the small business universe.  But one thing is certain; the cloud does have a strong and central place in nearly every small business.

Cloud Scores and Small Business Attitudes

The wide fluctuation in how SMB owners and leaders define the cloud -- and in how they use it in day-to-day business -- makes the reports on cloud adoption numbers all the more interesting.

According to a study by CompTIA, a not-for-profit association for the technology industry, cloud computing awareness among SMBs is on the rise. "Seventy-eight percent of small firms said they were familiar or very familiar with cloud computing compared to 27 percent in the previous year. 20 percent of small firms and 8 percent of micro firms were current users of cloud computing solutions. Asked if they planned to use the cloud in the coming year, 50 percent of small firms and 21 percent of micro firms answered affirmatively."

Those findings are echoed on the ground in less formal settings.

"At the Shift Happens small business conference in Tacoma, WA the other day, an informal survey indicated that more than half of the small businesses were using cloud services," says Bob Bunge, associate professor in the College of Engineering and Information Sciences at DeVry University and a volunteer in a local small business incubator.

So, if awareness is on the upswing and attitudes favor cloud use, but only roughly half of small businesses (exact percentages vary depending on who you ask) currently using it, then it begs the questions: who uses the cloud and why, and who does not, and why not?

Which Type of Small Business Works in the Cloud

It turns out that it isn't the industry, the size, or the label on the pigeon hole that determines which small businesses jump right into cloud use and which hold back.

"There is wide use of cloud services across industries, sectors and company size," confirms Judith Hurwitz, industry analyst and CEO of Hurwitz & Associates, a market research and consulting firm.

"The exception would be companies that have highly private, restricted information that needs to be protected at all costs," says Hurwitz. "An example might be companies that execute government contracts where they are required to demonstrate the security of their data."

And there is the main roadblock in small business cloud adoption: security and compliance concerns.

"This misconception that the cloud is inherently insecure, unproven, comes at a higher cost, and is generally unreliable stems from lack of information about cloud in general and from press stories about cloud failures in particular," says Michael Keen, CTO of Appcore, a provider of local cloud infrastructure for enterprise private clouds and service provider public clouds.



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