Small and medium-sized enterprises (SMEs) have yet to embrace cloud computing, despite promises of reduced costs and improved efficiencies, the yearly SME survey has found.

Only 9% of SMEs made use of the cloud at the end of 2011, despite a correlation between profitability and cloud adop- tion, with 11% of SMEs that are strongly profitable using cloud services. Conversely, of those breaking even or making a loss, only 7.5% use the cloud, says SME Survey principal researcher Arthur Goldstuck.

However, this is not surprising as the SME sector tends to follow in the wake of technology adoption by corporations, he explains.

“Around half of all corporates in South Africa are still not making use of the cloud, so it is no shock to see how few SMEs are doing the same,” he adds.

“Although the number of corporates expected to be using the cloud this year will reach 52%, the number of SMEs doing the same will only reach 18%. While this does represent a doubling of the proportion of SMEs using the cloud this year, it will still mean that by the end of 2012 less than one in five SMEs will be using the cloud,” says Goldstuck.

“This means that SMEs are not bene- fiting from the multiple, obvious benefits they stand to gain from cloud adoption.”

Broken down by sector, communications (13%), education and financial services (14%) and information technology (IT) and telecommunications (16%) are all well above the overall rate of adoption. However, tourism, transport and health- care (4% each) and retail (5%) are sectors that are far below the mean.

Some of these sectors are potentially the biggest beneficiaries of managing their processes through the cloud, Goldstuck says.

“They could benefit from reducing the operational and capital costs of IT, and from obtaining richer functionality and better business flexibility.”

Further, the age of a business plays a role in the likelihood of adoption, with only 5% of new businesses indicating that they use the cloud. Among all other age categories of SMEs, more than 8% have taken to the cloud.

“This shows that new businesses are more cautious about adopting cloud ser- vices. This is ironic, since start-ups have the most to gain from the cloud as, for example, they would not need to invest heavily in infrastructure,” says Goldstuck.

“There is certainly evidence that cloud computing offers more benefits than drawbacks to SMEs, yet a lack of under- standing of these benefits means uptake continues to be slow. “Despite this, there is a clear edge for those who do make use of it; after all, cloud computing is an enormous cost saver to any business, and cutting costs is a key element of profitability,” concludes Goldstuck.

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