Today’s UK SMB leaders believe that technology plays a strategic role in their business, and are searching for technology solutions that will increase their profitability and efficiency. However, almost three quarters of UK small business entrepreneurs feel that inadequate technology is reducing the profitability of their business, with many feeling that current systems do not fulfil their requirements.

These are the results of a study of 400 small business leaders. The research revealed that business leaders have a reasonable level of understanding about new technologies, particularly cloud computing, which enables businesses, large and small, to use enterprise-grade IT resources over a network at predictable pricing levels.

The study found that 22% of respondents have a “very good understanding” of cloud computing and 31% have a “good understanding”. It also found that 69% of respondents currently employ cloud services within their business, and almost a third are testing a limited number of cloud services.

The most popular cloud services are online storage for files and data, using services such as Dropbox or Windows Live; and web-based productivity applications such as Google apps, and Microsoft 360. According to the survey, 26% of firms use the cloud to back up their business data.

Security concerns

However, a third of small business leaders said they do not use cloud services, and are not looking to use cloud in their businesses. They gave a number of reasons for this, with data security being their number one issue, followed by bandwidth speed and performance worries, a lack of clear benefits, and concerns over contractual agreements.

It is totally understandable that businesses are wary of trusting third parties with sensitive data such as financial and payroll information and customer credit card details. “In reality, much of this is better stored in their own secure data centre, rather than in the cloud.

However, businesses today employ a combination of public and private operations, with their websites being public, by definition, and this is where cloud services can be useful. You want as many people to visit your website as possible, so you need it to scale and be responsive to promotional campaigns. Cloud computing can give you enterprise-grade computing capabilities which most SMBs cannot afford. But the challenge for the cloud services industry is to demonstrate that it can offer secure services to customers, whether these services are banking, ecommerce or VoIP.

Patchy performance

The survey respondents also highlighted another key concern they had about cloud, which was that unreliable bandwidth speed and performance issues could cause them problems.

This is a very real issue, and – like security – service providers vary greatly in terms of the quality of service they give their customers. Some offer dedicated private bandwidth with good contention rates (the number of users sharing bandwidth), and others only operate over public networks. Consequently, outages and patchy access to cloud resources are an understandable concern for business leaders, who operate in a time and cost-sensitive arena.

The cloud computing landscape mimics that of mobile phone operators: there are the large, established operators and resellers and sub-sellers. The lower you go down the line, the more you will find there are folks ahead of you who are prioritised for bandwidth allocation.

When asked about the biggest IT challenges facing their businesses, respondents said that security tops the list, but leaders were also concerned about capital costs; the complexity of managing technology; future proofing their systems; and the slow speed of deployment for IT solutions.

Fortunately, these are challenges that cloud computing is able to help with. For example, businesses can access computing resources and applications at predictable prices, shifting their capital IT spend (Capex) over to operational spend (Opex); with the technology being managed and maintained by experts, and available through a browser, which simplifies IT complexity from the user’s perspective.

In addition, cloud enables businesses to try out new solutions, and deploy quickly, because it uses virtualised environments. And if there are particular applications that only human resources or finance personnel need to use, cloud-based software means that businesses can set these applications up for two or three people, and only pay for what they use.

This makes cloud ideal for SMB entrepreneurs, most of whom are risk takers who try to innovate and improve their business’s productivity and performance by whatever means possible. Over the last 10 years or so, SMBs have placed technology at the centre of their businesses, creating a web presence, and deploying multifunction devices, social media, document management and smartphones.

In today’s market, businesses face relentless pressures to do more with less, and technologies such as cloud are there to assist with productivity, and help businesses to reach markets that were not previously available. My advice to business leaders is – whatever your business needs are, whether you are an SMB or a large organisation – start with your business benefits first and let the technology follow.