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?