Unlocking The Cloud For SMBs: Why Avoiding The Cloud Is Costing More Than You Think

The use of cloud technology is no longer just an option for businesses; it’s a necessity for staying competitive. Despite this, many small to medium-sized businesses (SMBs) still have concerns about adopting cloud services, often due to fears of high costs and complex technology transitions. However, this reluctance can be much more costly in the long run than many business owners realize. Here’s why.

The high cost of sticking with traditional IT

A common misconception among SMBs is that maintaining traditional in-house IT systems and teams is less expensive than moving to the cloud. This belief fails to consider the broader financial implications. According to a recent survey by Microsoft, SMBs allocate over 10% of their total revenue to IT-related expenses. Further, even with full-time IT staff, about 45% of SMBs require external support to meet their technology needs, adding to the costs. Cloud solutions offer a streamlined approach to managing business processes and reducing costs. They also free up resources, allowing businesses to focus on core objectives like enhancing customer experiences or entering new markets rather than managing IT infrastructure.

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The cybersecurity benefits of the cloud

One of the most compelling reasons to use the cloud is its robust cybersecurity. Verizon’s 2023 Data Breach Investigations Report highlights that SMBs are increasingly targeted by cyberattacks. These incidents can have devastating financial consequences and can cost between $826 and $653,587 per incident, which doesn’t even factor in the cost of potential reputational damage and loss of customer trust. However, cloud providers invest substantially in securing their infrastructure, offering SMBs high-level security measures without the need for significant additional investment. This aspect of cloud computing helps protect sensitive data and reduces the financial burden associated with managing security in-house.

The cloud’s cost savings

Switching to cloud services can be a game changer for SMBs, leading to substantial cost savings. For instance, cloud technology has been shown to reduce costs for SMBs by 36% on average, primarily by decreasing the need for physical hardware and extensive IT personnel. Furthermore, automating processes like ordering and inventory management through cloud solutions can save businesses up to $45,000 annually. Regarding IT budgeting, SMBs typically spend 5% to 20% on security. They can save around $1,000 per month using cloud-based security solutions. Companies embracing cloud technology also report revenue growth rates between 2.3% and 6.9% higher than those that do not.

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Embarking on a cloud adoption journey

For SMBs ready to explore cloud solutions, the path to adoption involves several steps:

1. Choosing a cloud service provider: It’s essential to select a provider that can scale resources to match fluctuating needs, has a reliable performance track record, and has data centers optimally located for your business’s latency, data sovereignty and compliance requirements.
2. Creating a migration strategy: Transitioning to the cloud should be meticulously planned. Establish clear objectives for data security, cost management and training. Also, backup and disaster recovery plans should be considered.
3. Training and employee buy-in: Successful cloud adoption requires that all employees are comfortable and proficient with the new systems. Comprehensive training tailored to various organizational roles is essential, and ongoing education encourages continuous improvement and problem-solving.

Getting these steps right can have a major impact for SMBs. For example, Bryan S Ryan, the largest and most technically advanced supplier of managed print devices in Ireland, switched from an on-premise solution to the cloud and saw major benefits. Not only did they gain access to the latest enhancements and updates they were missing previously, but they also found peace of mind when it comes to cybersecurity.

Conclusion

Avoiding the cloud can lead to higher costs in an era where digital agility is critical. By understanding the substantial benefits and addressing the initial barriers to cloud adoption, SMBs can position themselves for improved efficiency, security and growth. The cloud has transformed from a technological option to an indispensable asset in the toolkit of modern businesses.

This article originally published in Customer Think on Dec. 12, 2024.