SMBs and the continued migration to the cloud

If they weren't already utilizing cloud resources, push came to shove when the pandemic hit and most small- and mid-sized businesses found themselves leaning on SaaS offerings to stay afloat.

Because cloud is seen as central to digital transformation, SMBs are now more likely to use either cloud/SaaS offerings or a combination of cloud and on-premises software than only on-premises software in every aspect of their business except accounting, according to SMB Group. In 2022, these investments will increase because of cloud computing's ability to maximize operational efficiencies and enable innovation, while minimizing costs and risk.

"The SMBs that have accelerated tech adoption during the pandemic were one and a half times more likely to have revenues rise,'' says Laurie McCabe, cofounder and partner at SMB Group.

Already, some 24% of small businesses are in the so-called "advanced IT maturity segments," compared to 16% two years ago, according to research firm Techaisle.

Cloud investment areas in 2022

The increased migration is made easier with vendors offering a portfolio of turnkey services, like Dell's APEX Cloud Services.

"We've been pushing cloud for many years, but mid-2020 really lit a fire under small businesses," says Graham Caparulo, president and principal consultant of Diligex, a managed services provider (not affiliated with Dell) that specializes in working with SMBs in all sectors.

Nearly all of Diligex's clients are now fully cloud-based, he says. "In 2022, it's not much of a conversation for us anymore as to 'When are you going to adopt cloud and shift over?' The conversations this year are more cybersecurity-focused."

Security is critically important with so many employees continuing to work remotely and sharing files. Caparulo's staff is talking to clients about securing those remote environments and "pushing endpoint management tools" on employee-owned devices to ensure there's a division between personal and business data.

"It gives the business greater control over their data and what happens to that data once the employee is no longer with the organization," or when a device is lost or stolen, Caparulo says.

Mark Stapleton, vice president of cloud services at cloud MSP Aunalytics (not affiliated with Dell), agrees that security is a big focus area this year, along with deploying multi-cloud environments for scalability and redundancy. Even so, Stapleton sees SMBs that are still dipping their toes into cloud services, often starting with disaster recovery.

Many SMBs launched eCommerce operations during the height of the pandemic simply to stay in business, McCabe says. That helped them understand the value of efficient data management. Now, they are looking to digitize more of their operations in areas including marketing and sales, she says.

Data in the cloud can also be updated in real time, so information is likely to be much more accurate than someone entering figures onto a spreadsheet manually, McCabe says.  

Another prime area for investment, she adds, is "Contactless anything -- payments, transactions where you tap your credit card or you [purchase] things on the web and then pick something up."

Contactless engagement is also driving interest in cloud-based augmented reality technology, which may replace service calls in some circumstances. For example, if a customer's oven is broken, a store can use an AR program to show them how to fix something before coming out to do a service call.

Security must remain top of mind

Caparulo is advising his SMB clients to add cybersecurity insurance to the list of investments this year. "We do that because we've seen clients that come into our organization before they're an actual client and … they've been hit with ransomware and they don't want to again," he explains.

A lot of companies end up paying the ransom to retrieve their stolen data, and some who had insurance were reimbursed, he adds.

Diligex required all of its clients to deploy multi-factor authentication in 2021, even though "we had a lot of people on the fence," Caparulo says. "We mandated it, and said, 'Sorry, you can't work with us unless you're going to enforce MFA." Some 95% of their clients are now using MFA and, "We'll continue pushing it this year."

He also recommends that SMBs with any data in the cloud have a security risk assessment done to identify potential vulnerabilities. Diligex charges between $3,000 and $7,000 for an annual assessment.

Sticking points remain

A lot of SMBs don't have internal IT staff, and that makes cloud investment decisions easier. But there are some sticking points, such as cost and resistance to change.

A common complaint is, "Why would I move to cloud, and why can't I leverage my existing capital that's been spent,'' says McCabe. Concerns over data access and perceptions of insecurity also give SMBs pause.

If the business is working with a consultant or MSP, those providers can help lower barriers by demonstrating cloud use cases and potential cost savings, she says. In many instances, cost is no longer a barrier to entry.

"At the end of the day, the cloud is the gateway drug to all these other embedded technologies that very few SMBs could afford to learn about and adopt," McCabe says. But now, because cloud vendors are offering new technologies such as machine learning, AR, edge computing, and IoT, small firms can incorporate them without a major up-front outlay. "And you don't have to figure all this out yourself."