2017 Cloud Trends & Issues: How Will Your SMB Respond?

For small to mid-sized businesses (SMBs), the cloud is transitioning from novelty to norm. The benefits of the cloud are clear: The cloud is cost-effective, user-friendly, and extremely flexible. As SMBs, like you, transition away from legacy solutions, they face many challenges, from data security to rising cloud costs. Here’s what you can learn from your peers:

Explore the Data: SMB Use of the Cloud in 2017

The cloud levels the playing field between enterprise organizations and smaller businesses. Information from Synergy Research Group reveals that total spend on cloud infrastructure build outs rose to more than $65 billion from Q4 2015 to Q3 2016. Businesses spent more than half of their investments in private cloud solutions and generated nearly $30 billion from cloud-based infrastructure services and more than $40 billion from cloud-based software solutions.

“IDC’s State of the SMB Cloud Report” released in 2016 drills down into cloud adoption rates. The report shows an incredible growth trend in the SMB sector over the last five years. Adoption rose from 20% to 70% for small companies (up to 100 employees), and 90% for midsize organizations (up to 999 employees).

Survey information from the professional networking community, Spiceworks, showcases the practical side of SMB and cloud services. The company’s “2017 State of IT Report” reveals an overall increase in budget allocations for high priority cloud-based services, including:

• Data storage
• File hosting and sharing
• Email solutions
• Disaster recovery
• Customer relationship management (CRM)
• Experimenting and innovating

As legacy solutions meet end-of-life dates, companies seek replacements and explore cloud-driven alternatives.

Intel Security’s report on creating trust in cloud adoptions highlights a similar trend. The report suggests that hybrid deployments have increased 38% to a total of 57% in the SMB sector, while private-only solutions are decreasing in popularity. Multi-cloud strategies are a cost-efficient way for your team to experiment and test on a shared cloud or public cloud, while maintaining the security and performance of a private cloud for sensitive or critical workloads.

What Factors Drive the Shift to the Cloud?

While cost and legacy solution replacements influence some cloud adoptions, SMBs may also move into the cloud to:

• Improve agility. Smaller businesses can implement new technologies faster than larger organizations, which often gives SMBs a competitive advantage. Cloud computing solutions offer usability, mobility, and service arrangements that allow smaller firms to deploy and develop ROI from cloud investments quickly.
• Meet regulatory requirements and improve security simultaneously. Compliance plays a significant role in operations for healthcare organizations, payment card processors, education, government and more. Cloud providers that offer compliance-friendly support and secure solutions give SMBs the ability to maintain compliance without investing in a specialized in-house team. Encryption, log management, access control, firewalls, and vulnerability monitoring provide SMBs with security best practices they may not otherwise be able to afford.
• Reduce overhead costs and capital expenditures. Cloud solutions give businesses access to robust software and tools without the need to purchase and maintain equipment or pay for hardware. It’s hard to argue with the flexibility and scalability of cloud-based designs.

With several drivers pushing SMBs to choose the cloud over traditional hardware and software deployment models, they must overcome fear of change within their organization, tackle migration, cost optimization and security challenges.

Recognize and Overcome Challenges to SMB Cloud Adoption

While trust in cloud adoption is on the rise and adoption rates are soaring, some clear challenges stand in the way of SMB cloud service adoption, creating divides in service provider offerings.

The report from Intel Security suggests that approximately 50% of SMBs surveyed delayed a cloud implementation due to a lack of cybersecurity skills. Around 65% see Shadow IT activities as one of the biggest problems. Their concerns are valid, as cybercrime and data breaches are a reality of today’s business environment. Many SMBs cannot afford a data breach: More than half of small businesses that experience an attack cannot stay open more than six months afterward.

Despite frequent news stories about the devastating effect of data breaches, “Rightscale 2017: State of the Cloud” report cited that security concerns fell from 32% in 2016 to 25% in 2017. The most common challenge among mature users became managing costs, while cloud beginners stated expertise and security as a top concern.

What This Means for You

Challenges in cloud usage will continue to evolve as the technology becomes more engrossed in your operations. For those of you who are just starting to adopt cloud technologies, you’ll want to choose a provider that guides you along the way, offering expertise and security best practices. For those of you who are more experienced, multi-cloud management and cloud optimization should be your focus. Recent studies suggests actual resource waste to be between 30-40%, on average.

Additional Resources on This Topic:

2016 Review Shows $148 Billion Cloud Market Growing At 25% Annually
How Cloud Technology is Changing the Playing Field for Small Business
Businesses Likely to Boost Cloud Spending in 2017, Spiceworks Survey Says

This article was first published on OnRamp.