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| NEWSTRACK | June - July 2010 |
UK software vendors overestimating understanding of cloud computing in SMEs
GFI SOFTWARE, an infrastructure provider for small and medium-sized enterprises (SME), has announces the results of The 2010 GFI Software SME Technology Report, an independent market research survey conducted in March this year across 250 SMEs in the UK. This annual study by GFI of UK SME attitudes and understanding, undertaken by Redshift Research on behalf of GFI Software, has shown that IT vendors and resellers have been largely overestimating the market’s appreciation and understanding of the terminology surrounding cloud computing. High proportions of senior business decision-makers (64 per cent) do not understand the term cloud computing, but only 15 per cent have not heard of managed services or hosted services, despite their conceptual similarities.
The research also showed that the key perceived disadvantage of cloud computing—namely high security risks—is not supported by the reality as security was cited as the principal barrier to adoption by only 12 per cent of respondents.
The benefits to cloud computing were particularly striking from the research. Of those companies who have so far moved some services over to the cloud, 16 per cent have seen a full return on investment (ROI) in less than six months and the vast majority report full ROI in less than a year.
GFI Software note that the hybrid approach of deploying certain applications, either on-premise or in the cloud according to the particular needs or nature of the business, is gaining increasing traction. More and more organisations, of all sizes, are requiring greater flexibility from IT. SMEs should not be confined to strictly either on-premise or hosted technologies but should, instead, be given the option, according to their own needs. This demand is growing steadily in the UK and there is therefore great opportunity for vendors and resellers who can offer this choice and allow SMEs to maximise their potential return on investment.
Research highlights
- The degree of understanding of cloud computing terminology is understandably considerably lower in the business sector than in the IT security sector—62 per cent of senior business decision-makers have never heard of cloud computing—but as many as 24 per cent of IT professionals have never heard of cloud computing or do not understand the term.
- In contrast, only 15 per cent and 11 per cent of senior business decision-makers have not heard of managed services and hosted services respectively. Given these terms are practically synonymous with cloud computing conceptually, it would appear there is too much emphasis on jargon, and not enough on the basic components of cloud-based services.
- Eight-six per cent of companies with between 100 and 249 staff have deployed, or are currently deploying, cloud computing technology, but only 69 per cent of companies with between 10 and 99 employees, and 39 per cent of companies with fewer than ten employees have done or are doing so.
- Security—widely seen by the IT industry as the main barrier to adoption—is indeed the second highest perceived disadvantage of cloud computing, yet only 12 per cent of respondents who have actively elected not to pursue this model cite security as the main reason for not doing so, showing a clear disparity between perception and reality.
- Similarly, 44 per cent of those companies that have decided not to deploy cloud computing cite too high cost as the main reason, yet low cost is also seen as the second highest perceived advantage of the new model
- Forty-three per cent of respondents who have chosen not to deploy cloud computing would reconsider if the vendors’ terms and pricing were improved while 40 per cent would reconsider if contracts were less restrictive.
- There is a growing resistance to the on-premise and hosted polarisation. SMEs are increasingly embracing a hybrid model that mixes and matches services to reflect business needs and existing IT skills/infrastructure.
Download a copy of the full report in PDF format here.
