sharpening the small business competitive edge...sharpening the small business competitive edge in...

An IDC InfoBrief, sponsored by SAP | October 2014

Is the Time Right for the Cloud?

Sharpening the Small Business Competitive Edge



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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

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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.

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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

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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

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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%

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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

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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%

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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%

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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

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» 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

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