An IDC InfoBrief, sponsored by SAP | October 2014 Is the Time Right for the Cloud? Sharpening the Small Business Competitive Edge
An IDC InfoBrief, sponsored by SAP | October 2014
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
pg 2
An IDC InfoBrief, Sponsored by SAP
» What do we mean by Cloud?
» Cloud and Mobility are driving IT spending growth in small and midsize businesses
» Cloud engagements work for big firms – but where are they working for small ones?
» Attitudes towards Cloud are changing, and adoption is growing despite some security worries
» Cost savings and flexibility continue to encourage Cloud use (Cloud users are more likely to post revenue growth of 10%+!)
» Essential Guidance
Contents
pg 3
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
What is the Difference Between Cloud and On-Premise Software?Traditional Applications, Data,
and Resources On Site
On Premise Combination of Both(Most common approach)
Applications and Data Accessed via the Internet
Not sure about Cloud vs. On-premise?TWO KEY DIFFERENCES:
Cloud
1. How you access. In on-premise deployment, applications, data, and servers are all on site at a company’s physical location. In cloud deployment, the physical servers and applications are in a datacenter hosted by a third party with access provided through an Internet connection.
2. How you pay Subscription vs capital equipment; Up-front investment v. on-going cost.
pg 4
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
In the U.S. the largest share of IT growth between 2013 and 2020 will be from the transition to mobile and cloud resources.
Cloud and Mobility Will Drive IT Spending Growth for Small and Midsize Businesses Are You On Board?
The combined benefits of Cloud and Mobility will enhance productivity and improve business efficiency. No wonder IDC expects almost half of SMB IT spending increases to be associated with Cloud or Mobility investment.
2013-2018 SMB Cumulative Totals
28%
$982 Billion 6 Year Total ($150-180
Billion Per Year)
43%
$38 Billion5 Year Incremental
($7B-$8 Billion Spending Increase Per Year)
2013-2018 Total Growth
Faster US SMB Dollar Spend Growth in Mobile and Cloud Compared to Rest of IT
Cloud + Mobile Spending
Cloud + Mobile Spending
The Rest of ITThe Rest of IT
pg 5
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Bigger Companies Have Moved to the Cloud in a Big Way Time for a closer look?
201680% of Global 2000 will have
half of all IT in the Cloud
81% of US companies with 100+ employees currently
use the Cloud
81% 51% of IT budgets will be devoted to Cloud projects/
services by 2016
51%
US Businesses will spend $43 billion on Cloud-based
solutions in 2016
$43B
pg 6
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Cloud Adoption Gaining Everywhere
Note: Includes SaaS and also Online Storage
Source: Regional 2014 SMB Cloud Adoption Survey: Making the Case for Hybrid Cloud (IDC #246358, January 2014)
Global Small Business Cloud Adoption Rate by Key Country, 2013
US UK Germany Japan India China Brazil
17% 18% 16%12%
32%
22%28%
pg 7
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Cloud Use is Growing, Despite Security ConcernsWhy Are More Small Businesses Moving to the Cloud?
AND 15.9% PLAN TO
ADD CLOUD SERVICES IN 2014!
2009 2010 2011 2012 2013
100%
80%
60%
40%
20%
0%
20%
15%
10%
5%
0%
Use SaaS/Cloud Applications
Concern About Security Discouraging Cloud Use
3.2% 6.9%
50% HAVE SECURITY
CONCERNS
9.4% 11.2% 17.0%
Why are more Small Businesses Moving to Cloud?» Increasing familiarity with online resources» Recognition of risks in on-premise solutions – especially for storage and data protection» Improvement in Cloud security solutions
pg 8
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Top Five Reasons Driving Cloud Adoption in Small Businesses
Source: IDC’s US SMB Survey 2013
Factors Encouraging Cloud Computing Adoption (Share of US SBs Citing)
Cost Efficiency and Productivity
Gains Drive Cloud Interest
Pay for capabilities as needed
Ability to add new users without difficulty
Add Cloud resources easily to current IT
environment Remote management /coordination that eases
IT staff workload
Ability to bring capabilities in- house if needed
41.3%
28.2%29.1%
22.1%27.6%
pg 9
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
Small Businesses that Use the Cloud are More Likely to Show Higher RevenuePercentage of Small Businesses with Annual Revenue Growth of 10%+
There is a clear association between Cloud use and revenue growth. In fact, small businesses using
the Cloud are 1.7 times more likely to have 10%+ revenue growth than small businesses in general.
Source: IDC SMB Survey 2013
Total Small Businesses
Small Businesses with Cloud
Small Businesses Plan Cloud
Small Businesses No Cloud Interest
22.6%
37.3%
28.3%13.0%
pg 10
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
The “Big Four” are a good place to start» Email» Web hosting» Storage » Sales/CRM automation
As your comfort increases, add advanced capabilities:» ERP and business management» Groupware and collaboration
Where to Start with the Cloud
Add cloud resources as needed, a natural transition to new capabilities, not a disruptive shift. Cloud resources can be especially effective when combined with mobile capabilities, providing remote workers with access to the latest applications and resources.
Three Steps to Cloud Engagement
Begin with the “Big Four”
1Add on more
advanced capabilities
2Realize the full potential of the Cloud — combine with mobile capabilities
3
pg 11
An IDC InfoBrief, Sponsored by SAP
Is the Time Right for the Cloud?
Sharpening the Small Business Competitive Edge
» Cloud resources are associated with higher levels of performance, so are certainly worth a closer look.
» Access to resources without requiring a major upfront investment is at the heart of Cloud appeal. The ideal is for performance improvements to pay for monthly costs.
» As you consider using the Cloud in your business, think about storage and email as natural places to start. Additional capabilities, such as accounting, customer management and other apps can help sharpen business practices as your comfort with Cloud increases.
» Don’t just think of Cloud as a replacement to your IT investments. Rather look to Cloud to extend/enhance current technology resources. This will let you get the most from the tech investments you’ve already made!
Essential Guidance