Although the move towards the cloud is a sure thing internationally, local SMEs seem to be weary to make the shift, at least in certain regards.

Research emerging from the Sage Business Index, which surveyed over 2000 South African SME’s in late 2011, indicates that 85% of small-to-medium sized businesses opt to host payroll or accounting software on PC’s or local servers rather than in the cloud.

“The concept of the cloud, and the benefits thereof, are not yet widely understood by small business owners in South Africa,” says Ivan Epstein, CEO of Softline and Sage AAMEA (Asia, Australia, Middle East and Africa).

Only some software in cloud

Nearly half of the Index respondents say that they have some of the organisations software in the cloud, and Epstein says the main factors for the gradual move are broadband penetration and security concerns. “Companies are concerned about losing control when moving their data into the cloud, so it is clear that trust, transparency, understanding of the cloud and the options available, are key education and information points for our customers.”

According to the Sage Business Index, the two biggest reasons for introducing new technology in an organisation would be to help improve efficiency (64%) and help provide a better customer service (54%). Further to this, 38% said they would adopt new technology to save costs.

“In any size business there is always a drive to reduce service and infrastructure costs and cloud based products and services offer this benefit. Rising cost pressure might force the hand of some business owners to adopt web-based solutions, but I believe that once they have made the leap they will be pleased with the result,” says Epstein.

In November 2011, the IP EXPO Corporate Cloud Survey 2011, a report by World Wide Worx commissioned for the IP EXPO technology trade show, stated that out of 100 large JSE-listed corporations interviewed, just under half (46%) were already using cloud computing. Interestingly, almost the same percentage of SME respondents in the Sage Business Index said the same.

“Small business is not far behind large enterprise when it comes to technology adoption, but unlike larger companies, the expense to replace existing technology or systems is a barrier for SME’s.” 53% of respondents cited this as the biggest obstacle.

Two pronged strategy

Epstein says that web strategy is a big focus for Softline and Sage in 2012, “We are pursuing a two-pronged strategy based on ‘Connected services’ and ‘Online business solutions’. Connected services bring the benefits of the web to existing users of desktop-based products by connecting and extending their desktop software and increasing their lifetime value. “The benefit for SMEs is that the deployment is swift, seamless, affordable and secure,” says Epstein.

‘Online business solutions’ have been developed to address a new way of working, either through new products designed purely for the web or adapting existing products to live online. “The strategy combines best of both worlds by offering the reach and convenience of the web with the richness, control and resilience of desktop solutions. It offers our customers a choice of solutions best suited to their needs,” comments Epstein.

In related news, a Cisco study revealed that Mobile cloud traffic will grow by 28 times between 2011 and 2016.

Image: Ivan Epstein, CEO of Softline and Sage AAMEA