Small firms lag behind larger counterparts when it comes to adopting the cloud

The latest research from the Cloud Industry Forum suggests that UK organisations are becoming increasingly satisfied with cloud-based computing services.

The CIF surveyed 250 UK-based organisations and found that 61% currently use the cloud, up from 34% in January 2011. Cloud adoption in the private and public sector is much the same, at 61% and 62% respectively. However, only 52% of small companies with fewer than 20 employees have adopted cloud-based services, compared with 68% of larger organisations.

CIF found that one in four of the companies that are not using the cloud at the moment plan to do so within the next 12 months. 34% of public sector organisations and 30% of SMBs said they intend to take to the cloud in the coming year.

The chairman of CIF, Andy Burton, said these latest results show that UK businesses are still enthusiastic about the cloud. The public sector has demonstrated considerable growth in cloud adoption, which is not surprising considering the government’s recent push towards cloud services.

He went on to point out that organisations with more than 200 employees have now leapt ahead of their smaller counterparts when it comes to adopting the cloud. Furthermore, 76% of those already using the cloud intend to increase their usage in the coming year. Data backup, email and data storage services are most likely to benefit from increased usage.

58% of respondents said they were attracted by the low cost of cloud services, whilst 71% said their main reason for adopting the cloud is the flexible model of delivery.

It’s good to see that larger organisations are embracing cloud technology, but it seems that smaller enterprises are still reluctant. One would have thought that small businesses would jump at the chance to save money by using online solutions.

Why are small firms not rushing to enjoy the benefits of cloud technology? What should providers be doing to encourage them to adopt the cloud?

Europe continues to lag behind US when it comes to embracing the cloud

According to analysts Gartner, privacy rules, the lingering recession and deepening debt crisis will contribute to a delay in the adoption of cloud computing in Europe.

Interest in the cloud is still high in Europe, but the Continent is set to lag behind the US by at least two years. Gartner VP Paolo Malinverno explained that the opportunities for cloud computing are valid all over the world, as are some of the risks and costs. However, concerns relating to security, transparency and integration take on a different meaning in Europe.

Gartner has identified four main barriers to the progress of the cloud in Europe. Firstly, ever-changing data privacy regulations are deterring companies from moving personal data into the cloud.

Secondly, Gartner claims that different business processes across 40 European countries make it difficult to effectively integrate the cloud into multinational enterprises.

Thirdly, EU regulations can hinder business. The EU legislative process is very slow and still varies widely across the Union. A recent example of this is the legislation concerning e-invoicing, which has been delayed because different countries have different requirements.

The final barrier is the debt crisis in the Eurozone. Major investments have been put on hold and this has meant companies have delayed making strategic and game-changing decisions.

Although these barriers will delay widespread adoption of the cloud in Europe, interest in using the technology is still as strong as it is in other parts of the world, according to Gartner Fellow, David Mitchell Smith.

One would think that during times of economic turbulence, organisations would be rushing to utilise the benefits of the cloud. After all, large companies could save a lot of money on IT costs by moving things such as their accounting functions to the cloud.

Has Gartner identified the correct inhibitors or is there another reason why Europe is reluctant to embrace the cloud?

Why is the public sector reluctant to adopt the cloud?

According to a recent report from VMware, public sector IT workers show little enthusiasm for the cloud and this could jeopardise the government’s plan to reduce IT spending by £200 million a year.

In February, the government launched CloudStore, an “app store” designed to offer cloud services to the public sector. The idea is to make it easier and cheaper for public sector organisations to buy government standard “off the shelf” services like electronic records management, email, enterprise resource planning and word processing. Buying services through the Cloud should also put an end to lengthy and expensive IT contracts.

However, it turns out that 59% of the IT staff questioned in VMware’s survey admitted they were undecided on whether to buy cloud services through CloudStore. Some respondents were concerned about cloud security issues, others said they were locked into existing contracts, and some simply do not understand cloud technology.

Only 31% of respondents said would probably or definitely procure cloud services from the CloudStore, a percentage well down on government expectations.

The Liverpool Women’s and Alder Hey Children’s NHS Foundation Trusts are proof that cost savings can be achieved by moving services to the cloud. Zafar Chaudry, the chief information officer for the Trusts, achieved cost savings of 10% by replacing four data centres with cloud services.

He explained that the Trusts were in a short-term contract and he will be looking to reduce costs further in the future by utilising more CloudStore services. He went on to say that the public sector was set in its ways and its old fashioned ideas need updating.

UK companies have been lagging behind when it comes to leveraging the power of the cloud. Is it because a lot of us are so set in our ways that we’re frightened to venture into unknown territory?

Will the cloud be the dominant force within four years?

A recent report has suggested that within four years the cloud will be the dominant force in business and IT architecture.

IT leaders have been aware for some time that businesses are moving toward a cloud based environment, but they may be surprised to learn that the move to adopt the technology is accelerating rapidly. If this is true, IT leaders and organisations are heading for a period of immense change whereby their core mission and roles could alter beyond recognition.

These findings came to light in the latest Global Cloud Business Software Survey Data Report from Saugatuck Technology Inc.

The report says that enterprises will move rapidly towards hybrid on-premises+Cloud offerings rather than deploying new on-premises business software over the next two years and much of the hybrid focus will shift towards total SaaS/cloud services within a few years.

However companies, especially larger enterprises, will be slower to move financial applications such as those used for budgeting and reporting & planning to public and private clouds.

The top cloud related concerns remain data security, integrity and privacy but businesses are also expressing concerns over customization and integration, which suggests they are thinking of the management benefits of integrating their business operations.

Bill McNee, the CEO and founder of Saugatuck who developed the survey, said the results suggest that IT leaders are going to find themselves faced with rapid and significant changes and they will have to seek out innovative solutions a lot faster than the majority of them are prepared for.

What will your company’s IT infrastructure look like in four years time? Will you still be operating purely in-house systems or will the majority of your applications be in the cloud?

Asia Pacific and Latin America firms love the cloud; why don’t we?

Large companies in Asia Pacific and Latin America are embracing the cloud, but those in Europe and the US still display a certain reluctance to use cloud computing applications, according to a recent study from Tata Consultancy Services.

 The average company in Latin America uses cloud computing for 39% of all applications. In Asia Pacific, 28% of company applications are in the cloud, but in Europe and the US, companies only utilise the cloud for 12% and 19% of their applications respectively. 

N Chandrasekaran, the CEO and MD of Tata Consultancy Services said we’ve reached the point of no return with the cloud. Companies that have taken to the cloud are already enjoying substantial benefits, but there is still huge scope for growth and he believes many more organisations will soon discover that cloud computing provides opportunities across a host of different functions.

Data security remains the biggest challenge for cloud computing providers and companies in Europe and the US remain cautious about adopting the new technology for fear of security breaches.

Tata’s research showed that companies in the West are reluctant to use the cloud for applications that include customer data and only 20% of them would trust critical applications to public clouds. However, companies are keen to utilise cloud marketing applications and other customer facing business functions. Across the four regions, at least two-fifths of the cloud budget goes on sales, marketing and services.

Which applications would you trust to the cloud and are there any that would have to remain company based regardless of the cost?

Business Schools turning to the cloud

On line accounting is proving to be a winner in the business education sector with the Niels Brock Business School in Copenhagen utilising our own E-conomic system to teach accounting to students.

The school has recently changed from Microsoft Axcapta to E-conomic mainly due to continual breakdowns of the old system on their computers. The SaaS approach means that there are no updates top worry about and as it’s all based in the cloud there is nothing that can break down. It’s a win/win. 

The school reports that it can now get its students up and running on E-conomic within 2-3 hours whereas previously it was taking around three days.  This obviously means more productive learning time.

It’s great to feel that we are now helping the next generation of accountants!

 

 

Cloud accounting systems can alter your entire business strategy

Gartner, the market analyst, has predicted that cloud computing will be at the top of the business agenda this year along with information management and social computing.

 A lot of enterprises have already realised that the cloud is a cost-effective way to access additional services to help their business grow. In fact, 29% of SMEs are already using cloud based accounting services according to the Cloud Industry Forum and by 2013, 20% of cloud based applications will be geared towards accounting and payroll.

The role of Financial Directors has evolved into more than just balancing the books. They now have to find ways to transform their business from one that is just getting by into an expanding, profitable enterprise.

Cloud-based technology can help businesses get more out of their assets and their people. With cloud accounting packages the functional benefits become clear within a few months and after six months it should be possible to gauge the impact on the finance department and the return on investment to the company as a whole.

Whilst there are many convincing reasons to switch to cloud-based applications, data security is still a major concern for many companies. However, cloud providers are extremely vigilant and their systems could offer better data protection than current internal systems. T

Once you’ve tried out the cloud and seen the benefits, you’ll no doubt want to use it for more of your core IT applications. Flexibility is the name of game and you should be looking for a cloud provider that gives you the freedom to decide what software you want to integrate with your cloud applications.

FDs who pilot cloud accounting will not only be able to judge the benefits from a financial perspective but also lay down the foundations for a more comprehensive cloud-based company strategy in the future.

Are you a financial director who is already using a cloud accounting system? What benefits has it brought to your organisation and has it encouraged you to expand your organisation’s use of the cloud?

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