Small businesses have big challenges. Here's the tech they are turning to

SMBs have seen how the cloud can be used to support digital transformation. Now they want more.
Written by Mark Samuels, Contributor
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Encouraged by recent successes, small businesses are rushing to exploit cloud computing like never before – and it's a trend that's set to continue as they look for further digital transformation.

Such is the strength of the shift to the cloud that Laurie McCabe, co-founder and partner at tech analyst SMB Group, suggests on-demand IT might be one of the few areas of tech spending where small businesses are at least keeping pace with their enterprise counterparts.

"They're probably on par with larger businesses most of the time," she says.

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The reason is simple: many small businesses, especially younger ones, are not so encumbered by a reliance on the legacy applications that can proliferate in older, bigger firms.

With effectively a greenfield site on which to build, SMB owners and managers are searching the market for the best cloud-based solutions to the challenges they face, whether that's managing payments, automating time-consuming activities or supporting workplace collaboration.

"If you're a newer business, you're not probably going to buy a lot of software that you have to run on-premises," says McCabe.

"That means you're going to start right out the gate thinking about what's the easiest way for you to get the solutions your business needs – and in most cases, that's going to be through the cloud."

SMB appetite for all-things cloud has been whetted by the requirement to speed up digital transformation during the past two years.

Cloud spending by SMBs has shot up significantly during the past year, according to one report which predicts that 63% of SMB workloads and 62% of SMB data will reside in a public cloud within the next year.

When the coronavirus pandemic hit, smaller firms – just like their enterprise rivals – had to find novel ways to carry on working and serving their customers in extreme circumstances. 

And just like in bigger firms, the answer to many of these challenges came via the cloud, says McCabe.

"We talked to a lot of small businesses in March 2020 and they admitted that they hadn't done all kinds of things that they should have done before. While a lot of small businesses had set up services to enable remote workers, many others were saying they should really have beefed-up their ecommerce capabilities and established new ways to serve customers," she says. 

"So, when COVID hit, it was kind of 'push comes to shove' – they knew they had to invest in IT, and they did it."

Now, with much of the supporting infrastructure for cloud platforms – such as high-speed networks and personal devices – in place, many small firms are looking to make further investments in on-demand systems and services. 

Analysys Mason says the prolonged effects of the pandemic have encouraged SMBs to continue to digitalise their businesses and adopt software-as-a-service (SaaS) solutions. 

In fact, the tech analyst says SMBs continue to be optimistic about their companies, even though they are facing ongoing impediments, such as tough macro-economic conditions and geopolitical instability.

It predicts global IT spending by SMBs will increase by 5.8% year-on-year in 2022; this growth will reach 7.4% by 2025.

More specifically, much of this tech spend will be directed to the cloud. The tech analyst expects global SMB spending on SaaS-based business applications and collaboration tools will grow 17% annually through 2026 to reach $291 billion.

Analysys Mason says small business owners and managers need specific types of tools to help them reach their end goals effectively. In particular, SMBs are looking for solutions that are quick to deploy and easy to use and maintain.

That's a sentiment that resonates with SMB Group's McCabe, who says managers should focus on ensuring that the cloud platforms they select can be adopted and adapted simply. 

"Make sure that people who are going to have to use it can use it," she says. "That means, when you take a look at some of these platforms, make sure it's really easy for people to do whatever it is that they're trying to do."

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McCabe says small business managers who take an honest look at their organisations will find a whole series of things – from ordering products to paying bills and onto managing customer relationships – that are being done in a cumbersome and time-consuming manner.

Tactical use of the cloud can help SMBs to cut the number of onerous activities that staff have to complete and to start being more productive with their time – so long as platforms are implemented in a standardised and integrated manner.

"Maybe your team is using spreadsheets, maybe they're using pencil and paper or maybe they're just taking too much time paying bills. Maybe people in the business are using the cloud, but your business hasn't got a standardised way to manage documents, so some people are using Google Drive and others are using Dropbox," she says. 

"In a lot of small businesses, there's no standardisation. Look at your business operations and look at where things are a mess – and that's where you should start. Use the cloud to clean up the mess because that will give you some direction on what services to implement."

The good news is that, once cloud services are up and running, business owners and managers might start to wonder how their business coped without the technology in the first place.

Trustpilot CISO Stu Hirst says his organisation makes heavy use of on-demand IT platforms and services – and the business reaps the rewards.

"The cloud is all about speed, agility and resilience. It gives your organisation the ability to do things at incredible pace that historically you wouldn't have been able to do before. You're not having to deal with physical infrastructure. There's no need to have to manage any of that side of things," he says.

"That's incredibly powerful for the speed at which we do things. You can then embed guardrails through that process, so security is embedded and there's a set of boundaries within which people can work."

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