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Leading SMEs to Cloud 9

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Dhaval Gupta
New Update

During our research on the SME sector, especially in terms of their adoption of technology for their business purposes, we found one common but very interesting thread of mis-information. Most SMEs have a very basic online presence in terms of a static website giving details of their business. We noted a very unique, but surprising pattern, namely, their website is listed as say, www.xyz.com, but the mail id is defined as mailme@gmail.com. This means that even though the company has its own domain and has even subscribed to a hosting space for their website, they are still not using mail on their hosted server.

It is also a matter of concern that most of these hosting servers are unmanaged (and hence unsecure), are most probably hosted somewhere outside the country and anyone with even an iota of understanding of hacking, can potentially damage their websites and cause havoc. In our article published in the last issue of PCQuest (Feb 2014), we had highlighted a similar case of cheating at an SME location.

The other gap, in understanding Cloud and related subjects, that we have come across, stems from a near absolute inclination, by SME owners, of treating everything, even remotely connected to computer usage, being branded as IT. We have had SME customers consulting on such wide variety of topics as, networks, software licensing issues, financial accounting applications, ERP, project management, training on business applications, website creation, and even Social Media Marketing. For a typical SME customer, all these are real and live issues that they would expect their IT partner to handle and take the onus of. Whether this means a lack of understanding or treating this issue as a non priority item on their list is anybody's guess. We consider the above, as a basic lack of awareness as well as a hint of apprehension on handling technology, amongst the SMEs.

This brings us to the basic issue of the IT industry's often repeated claim, of portraying Cloud Computing as a solution for almost all ills that plague SMEs. Traditionally the outsourcing business took off mostly because companies felt that the process (to be outsourced) is too monotonous and mundane to be done in-house. It's not that the company cannot do this activity in-house, but they outsource these services because they feel that this activity is NOT their core business, and by outsourcing this activity they can concentrate better on their core business.

As an example think of housekeeping or courier services. Compare them with the IT outsourcing services that the IT industry promotes especially among SMEs. We feel that the IT vendors need to understand the SME's pain and then suggest the right solutions to them. The vendors have to appreciate the fact the customer is NOT outsourcing the process because it is monotonous for them, but because they do NOT understand the nuances of IT usage within the organisation.

Let us illustrate this with a very simple example of designing, explaining and managing the SLA for a Cloud customer. We feel that many times, the meaning of SLA is not clearly defined and hence not clearly understood by both parties, including the customer and the vendor. The SME customer's expectation when they outsource the IT services (whether cloud or on premise) are mostly rather simple to understand and deliver. IT vendors need to improve their understanding and then set customer expectations on this account.

So when the SME customer outsources its process to an IT vendor, they assume that they have passed all manageability issues to the vendor. It is for the IT partner to understand and appreciate this. Is the SME really outsourcing one process or are they passing the onus of all core as well as related business processes to the cloud vendor? The SME customer's expectations are different from say, an enterprise customer's. SMEs suffer from a lack of deep understanding of IT and hence need a different level of hand holding from the IT partner.

The term "cloud" means a smarter way to handle almost all the SME's computing needs. The benefits of cloud computing to customers are very tangible. The actual benefit of cloud is not about implementing IT, but rather, it is about reinventing the business itself. It is more about how the same processes can be delivered, in a more efficient way. SME customers around the world are adopting cloud computing for planning unprecedented growth or introducing innovation, such as entering new lines of business or reshaping an existing process.

With cloud technology now available, SMEs can now plan their growth more systemically. The most significant factor to the successful deployment of cloud is choosing a quality technology partner to whom the IT functions of the organisation can be outsourced strategically. It is the IT partner's duty to take the customer to a ‘cloud-ready' level and to simultaneously develop an adoption strategy, while keeping the legacy systems in mind.

While in many cases, the overall benefits have been communicated to SME owners, they continue to face two primary bottlenecks in cloud adoption-cost and trust. Since many cloud solution providers are start ups, the credibility of these companies along with the trust

of handing them data is also a real concern, amongst

all SMEs.

We feel that SMEs themselves are in various phases of maturity and transition. There are the ones, who are in the traditional business of manufacturing or trading while others are in services and are comparatively newer in business. The latter category of SMEs are technologically more tech savvy and are more likely to adopt technology at the start of their venture.

While this holds absolutely true of the newer, tech savvy businesses, its relevance to the older, more traditional businesses is still a matter of debate, amongst SME owners. SMEs, being cost sensitive, are bound to adopt cloud computing technology widely over the next three to five years. Some key benefits of cloud adoption for SMEs are as follows:

- Reducing IT labour cost by up to 50% in configuration, operations, management and monitoring

- Reducing server and application provisioning cycle times from weeks to minutes

- Improving quality, eliminating up to 30% of software defects

- Lowering end-user IT support costs by up to 40%.

Although India is still an evolving market in terms of overall cloud adoption, recent trends and surveys show an increased activity in the field. Indian companies are increasingly embracing cloud computing for its efficiency in terms of delivering faster results, leveraging existing infrastructure, improving administrative processes, most importantly scalability, and on-demand provisioning of resources. These attributes make cloud computing a perfect model for running businesses. The above coupled with low cost, high flexibility, nil down time, storage on demand, as per need, and high level of automation, should make cloud a preferred solution for SMEs. Some other observations, during our interactions with SME owners are as follows:

- Cloud computing is a new entrant to the technology arena which in form of Platform as a Service, Software as a Service and Infrastructure as a Service promises real reduction in cost of operations in a business. This eliminates the need to purchase expensive software, development platforms and setting up complex ICT infrastructure.

- Cloud computing as a technology has created a niche for itself in the SME sector. The sector understands the overall tangible advantage it offers for their growth.

- While the SME owners have adequate awareness of the benefits of Cloud technology in their organisations, only a few know the actual benefits of cloud computing beyond the basic description. We strongly feel that cloud computing has not gone past the awareness phase.

- Most employees in an SME, even if they were aware of the cloud platform, are not comfortable with adopting cloud based applications. The reasons vary from total lack of understanding to concerns on data security.

- A high number of SME customers still assume that cloud services are only for larger companies.

- There continues to be much confusion on the Private vs the Public cloud.

- Many SME have adopted a wait and see attitude as far as adoption of cloud computing is concerned.

- Many SME owners rue the half baked solution being pitched to them.

We feel that much more needs to be done by the cloud vendors in terms of explaining the business benefits to the SMEs. Maybe then can we dream of taking Indian SMEs almost 45 million of them, to the Cloud.

We are sure, that by then, the SMEs themselves, will be on Cloud Nine.

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