IT is classed as a ‘necessary evil’ by most small and medium sized enterprises (SMEs), according to a recent report by research firm Vanson Bourne conducted for Salesforce.com.
The economic downturn is hitting smaller businesses particularly hard, and the research revealed that almost a third of SMEs will class 2009 as a success if they do not shrink as a business.
Over half of SMEs expect to spend less money on IT this year, and a third said that IT now represents the greatest overhead for their business, ahead of facilities and human resources.
“It’s pretty damning that IT is being seen in such a negative light,” said Steve Garnett, chairman of Salesforce.com in EMEA.
Fortunately it is not all doom and gloom, according to the survey. Around 13% of the SMEs interviewed expected their business to boom in the downturn, and saw the current recession as an opportunity.
The research was carried out among UK small and medium enterprises in recent weeks.
Participants at a roundtable in London to discuss the research agreed that smaller businesses in particular are well positioned to use cloud computing as a way to access enterprise-class applications and services without the upfront costs.
Garnett believes that the adoption of software-as-a-service (SaaS) is partly down to a lack of awareness about cloud computing, what services are available and how to implement them within a small company.
However, a large proportion of the resistance is down to traditional IT companies and channel partners not wanting to upset existing business models, and fighting the transition to a cloud-based platform.
“Small businesses right now are investing far too much in upfront costs for IT infrastructure. They also incur huge costs managing that IT when they could be saving cash and reinvesting in their business,” said Garnett.
“Cloud computing significantly reduces the need for the costly infrastructure associated with traditional on-premise software, and the additional management overheads. This is why we’re seeing an increasing number of businesses moving to cloud computing models.”
One hurdle to adoption highlighted at the roundtable is trust. Cloud computing can offer a range of economic and productivity benefits, but many businesses are wary of handing over precious and often sensitive information to a third party, particularly if they do not know the brand very well.
It is therefore imperative that proper service level agreements are in place to guarantee accessibility, and a proper exit strategy worked out should they decide to migrate to another provider.
“One of the biggest advantages of SaaS is that everyone has access to the same applications, security and service levels, be they a global juggernaut or a one-man band,” explained Garnet.
Interestingly, Vanson Bourne’s research found that the vast majority of SMEs believe the governments needs to do more to help smaller businesses through the recession, which could include education and resources, as well as monetary support.
Ultimately, however, the panel concluded that businesses need to change their view of IT from a ‘necessity’ to an ‘enabler’, so that they can focus on core competencies while enhancing productivity and gaining a vital edge on the competition.
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