“SMBs are now turning to the cloud to meet their IT needs”. If you have anything to do with the technology industry then the claim will sound very familiar. The implication is that cloud computing is now universally accepted among small and medium businesses, and that a huge shift has taken place in terms of buying behaviour. …
Dale Vile speaketh the truth.
They just don't see any upside in most cases, and at the moment they're right.
Re: Dale Vile speaketh the truth.
Agree entirely. Most SMEs that i know of that are using "cloud" are using the "cloud" of their local MSP. They aren't using Google, Microsoft, etc. That, and despite Dale's protestations about "hysteria," privacy concerns are beginning to filter down to SMEs...though I admit they are far more common amongst enterprises.
Where Dale and I disagree is in the roll of MSPs. I see a lot of SMEs that simply don't have sysadmins anymore. They are managed by an MSP that's running 15 or 20 companies at the same time. When and where "cloud" gets implemented is typically when the MSP decides it is advantageous. Most "cloud" stuff is actually the MSP's private virtual cloud (a rack in a local colo) or their private cloud in their own DC. They sync their client's stuff there, run e-mail, etc.
But the overwhelming majority of SMEs are - in my experience - simply moving to appliances, both physical and virtual. Synology is a great example. While some - if not most - SMEs use a cloud service for something - usually e-mail - they just don't see the advantage to anything else.
Office 365 breaks even compared to a local copy only if you refresh every three years. Most SME's don't. Azure for your servers just doesn't make financial sense, especially if you shift a lot of bits. Bit shifting is expensive.
The problem is exactly what Dale points out: Microsoft, VMware, et al are basing their info off of metrics derived from within their own echo chamber. When you actually start getting out onto the real coalface, all their promises and their "this is demanded by our customers!" fall to pieces.
I wonder how many of us have to say it in how many different ways before vendors start to care?
What do you mean by "cloud"
Most SMB's use "cloud" services for their email, and were doing so long before hosted solutions became known as cloud solutions. Back in the days of dial-up, it was the only way you could do email.
Re: What do you mean by "cloud"
Good point, plenty are using cloud services without realising. More important is that they don't care either as it just works.
In our case, as a manufacturer who makes stuff and who sees computers in general as a necessary evil, we are using it selectively (or piecemeal if you like). Cloud suits some jobs, not others.
The big question for SMB's is....
WTF should I spend all this time an money moving to this think called the 'Cloud' when I really need to be out there making sure I get enough business to keep my company solvent.
Re: The big question for SMB's is....
Amen. That's what they pay MSPs ("their IT guy") for, and, really, why would MSPs outsource their own jobs?
Where is the business case?
Until there is a substantial business case the cloud will remain an amorphous meaningless buzzword for most SMEs - appropriate name really.
Reality at last!
Good article. When most small businesses use Quicken or paper to run their financials, expecting a mass exodus to the cloud is ridiculous. Getting them to move means really cheap turnkey solutions are required.
Maybe we need an Amazon to deliver up some cheap but effective apps to all the businesses they support.
Re: Reality at last!
it's hard enough running multiple-user Sage Accounts across a network and getting adequate performance.
The only way to run it over something as slow as the internet is RDP to a VM or similar.
"have not yet been touched by cloud"
My teacher warned me about this, he referred to it as "inappropriate touching"!
.. A/C as this is obviously a distasteful joke!
Once there was NFS, which thusly could be a pain but worked OK.
And then came mapped networked drives.
And then came the web.
And thusly some marketing shyster said, let's try a different financial model and sell services on the web. Apart from a physically mapped IP address you dont know where its running! Or where your data is! And unlike software on your desktop you will never own the service or functionality which can disappear whenever!
And lo, civil servants wet their pants, as it wasnt their money they were spending. The rest rolled their eyes and muttered 'Heard it all before...'
Re: Snake oil
In the first iteration, my punch card days, it was called time-sharing. Hasn't changed much in the decades since. Back then the neat, and I mean neat in a fashion sense, system engineer whose brain I would pick, wore a suit and a tie. Now? Not so much.
Is reality the truth?
The marketing blitz around all things cloud is probably the largest aggregate campaign in computing history. Vendors have jumped on bandwagons before - Java, .net, Linux, Windows, etc. - but they have never jumped on one bandwagon all at once. Maybe client/server or "the web" but it doesn't seem so. The roar is deafening to IT decision makers. Yet, very, very few have put all their computing eggs in that single basket. As mentioned, a large percentage of businesses use something that could be considered "cloud-based" - email, crm, test images, etc. - but the wholesale every-industry-under-the-sun is moving IT to the cloud hoopla is the most serious line of bullshit from technology vendors in a long time.
We have actually been here before as an industry. Timeshare was the biggest and best thing since sliced bread in the 80's. Billions of dollars were invested and lost in that little frenzy. The reason it failed then is why there is modest uptake now. Security, privacy, control, availability and cost killed the timeshare market. Moore's Law kept spitting out smaller and more powerful computing devices and the timeshare folks couldn't keep up and had a cost structure that eventually put them at a disadvantage in the market. Many things are different today with forced cloud use from personal devices, etc., but from an IT investment perspective it is still about cost, value and risk. Until the CVR profile is overwhelmingly in the cloud providers favor over time, most people will ride Moore's Law and get smaller and lower cost computing that they can control and secure on their own. Cloud approaches are still valuable for many use cases, but certainly not all and certainly not for all audiences. It was nice to read a dose of reality about cloud adoption..
The main issue i have heard is the lack of accountability and legal recourse, especially when a lot of cloudy providers are based in America, what legal recourse would the average 10-100 employee business in the UK have against these companies, not to mention the further damage that has been done to the business argument by the recent PRISM revelations.
You say "cloud" I say "Bureaux Service."
May I suggest people raid the old book services for books about buying bureaux services written in the late 60s and 1970s.
Obviously the prices will be grossly out of date but the principles should still work.
Question is how will you know a cloud solution is better than your current systems if you don't how much the current systems cost already?
Question you need to ask is how much of your data you want to share with the Americans?
This news is particularly hilarious if you have the "Cloud To Butt" Chrome extension installed...
'SMB' is a grossly imprecise term, covering (depending on country and industry) companies with anywhere from 1-1000 employees.
For that matter, 'cloud' is also imprecise, or at least a very broad term covering a huge range of offerings. As I explained to my mother when she asked "What is the cloud?" - anyone who has a hotmail/yahoo/etc... e-mail account has their e-mail 'on the cloud'.
For myself, as an IT services provider, anyone who simply refers to the 'SMB'/'SME' market/segment is not paying enough attention to real businesses and how they operate because the difference between a 10-user company and 50-user company (not to mention a 100-user company) can be HUGE.
I've attended many vendor and channel seminars, presentations, conferences and 'breakfasts' talking about the SMB 'space' and almost all completely disregard the bottom part of that market and so make sweeping assumptions that just aren't valid. Many times I have left day-long conferences after the morning session when I realised that despite it being billed as covering 'SMBs', the reality was that the vendor was only really interested in, well, 'MBs'.
For SMALL businesses, Microsoft's removal of SBS with pre-packaged Exchange is a big driver in moving to the cloud. Many of those companies have aging SBS 2008 or even 2003 servers and the massive increase in cost to retain in-house e-mail is simply too much for most. So, off to Office365 or Gmail or an equivalent 'cloud' solution. From there, we have found that these companies look to move more and more into the cloud.
We do not have a single client previously on SBS that has decided to stick with in-house e-mail going forward, given the cost of the extra licenses for Exchange over the SBS package. They are going to 'the cloud' for lack of any other viable option.
Precision on Cloud and SMB
@dan1980 - You make two very good points. I suggest you take a look at the research linked to in the article.
We interviewed three size bands that most would include in the 'SMB space' - 10-25, 25-100 and 100-250 employees. To your first point, found some pretty big differences between these bands. If you download the report you will also see that we distinguished between different forms of (hosted) cloud - not just infrastructure versus apps as a service, but also different categories of apps.
As an industry analyst, I am always interested in hearing stories from the field, and you are not the first person to mention the demise of SBS as driver to hosted options for some, but the numbers are not as high as your comment implies based on our research (if you sample the market in a representative manner). This is mostly because the majority of resellers are doing little or nothing with cloud at the moment.
If you are up for a chat, I would be interested in your perspective (or anyone else out there selling into the lower end of the market). You can reach me through our website (www.freeformdynamics.com).