Five IT triggers impacting the SMB in 2014

The Cloud Industry Forum (CIF) has outlined a set of 5 triggers impacting upon small and mid-sized businesses that it believes will shape IT buying behaviour throughout 2014.

Alex Hilton, CEO of CIF, said, “Following our analysis of our recent research project of 250 UK-based SMEs, and in light of wider market conditions and technical innovation, the Cloud Industry Forum expects that the majority of UK small to mid-sized organisations will be adopting and maintaining a hybrid approach to their IT. 69% of organisations claim to use at least one cloud service, however, only 12% of firms today believe they can put everything in the cloud, meaning the vast majority will remain in a hybrid state for the foreseeable future.”

Hilton continued, “As a result of our assessment we have outlined the top five considerations we believe that the SMB will face in 2014 when looking at upgrading or refreshing infrastructure or investing in new IT capabilities which are as follows:

1. Hybrid IT (a blend of on-premise and public cloud services) will increase as the defacto status of IT adoption across the SMB sector. As such, a key consideration for any SMB is ensuring that they can manage their IT as a whole, and therefore, capabilities for monitoring and management of IT operations become more critical in delivering an end-to-end service and will encourage more organisations to adopt IT as a managed service.

2. Desktop refresh advances cloud productivity solutions: The approaching end-of-life of desktop technologies such as Windows XP and Office 2003 will add impetus to the migration of traditional PC workloads to cloud services like Microsoft’s Office 365 where new economies of scale and collaboration can be achieved.

3. Server refresh still supports local IT capability: The approaching end-of-life of older operating systems and solutions such as Windows Server 2003 and Microsoft’s Small Business Server will drive a review and refresh of IT server infrastructure in the SMB sector, with many opting to retain critical services like Credentials (e.g. Active Directory), Print Management and File Management on-premise as a central service.

4. Affordable bandwidth dictates location of services: Whilst we see the sensitivity of data location easing slightly in the UK, it is the constraints on Internet bandwidth for many SMB’s that will continue to dictate where application workloads will be run, i.e. where it is most optimal for the organisation. Those with primarily office based staff will continue core services on premise to gain LAN speed access, whilst those with more remote staff will favour cloud services (and the reality is a mix will be true in most cases).

5. Increasing efficiency of cloud technology favours delivery of IT as a Managed Service: With cash flow pressure still on staffing levels and capital expenditure, and the increasing track record of cloud based service delivery models, the opportunity for an SMB to adopt IT solutions as a managed, OpEx priced, service are increasing and shaping the evolution of the supply chain with a new breed of IT Service Provider.

Commenting on the statements from CIF, David Smart, CEO of Softwerx, a Cambridge based IT services company, stated, “Whilst we have seen significant market increase and growth in cloud based services across the SMB sector, these services are not all remotely hosted public cloud services, but rather a combination of local services running under a virtualised, private cloud model in conjunction with sector or vertical specific applications delivered via hosted private and public cloud models. Business owners are naturally cost conscious and reluctant to just outsource all IT on a whim, rather ‘trust’ has to be built between the Cloud Service Provider and the end user organisation to demonstrate capability and to ensure that the resultant service is both an operational and economic improvement. Once trust is established, and commercial implications understood, the decision to move to IT as a Service is much more a practical and logical outcome, freeing the business to focus on building strategic advantage rather than managing day to day IT operations.”

Nick East, CEO of Bath based Zynstra, specialists in Hybrid Cloud solutions for SMBs, believes that historically smaller companies have had less opportunity to benefit swiftly from technical innovation, being constrained by practicalities like costs, skills or connectivity. “The SMB sector is the largest segment of the UK economy, often hailed as a key to the economic future of the UK. It is typically the home of innovation and entrepreneurialism. However, the majority of IT innovations focus on meeting the demands of individual consumers or larger Enterprises,” he said. Zynstra has recognised this, developing a solution specifically for SMBs which is entirely managed by the channel, saving SMB’s valuable time and enabling them to run applications and store data where it best serves their business needs - either on premise or in the public cloud.&nbs p; East continued “These comments from the Cloud Industry Forum are important in highlighting that SMBs have specific drivers and triggers for investment in IT, and in the light of approaching end of life of current technologies like Microsoft’s Small Business Server solution, it is vital that SMBs have access to solutions tailored to their needs to enable them to exercise choice.”

Hilton concluded: “The UK has a fantastic technical heritage which has continued with the design, delivery and adoption of cloud-based services across all segments of the market. An important reality check that we see today is that cloud is not just a concept for remote hosting, but also needs to encompass the services still operated on-premise and, as such, hybrid IT is the new norm for the foreseeable future. SMBs have an increased opportunity in the face of infrastructure refreshes to embrace change and drive further competitive advantage and operational efficiency by accessing managed cloud services both on-premise and remotely served.”