Jun 08, 2012
Only 9% of SMEs were using cloud computing at end of 2011Back
Africa|Education|Africa|South Africa|Cloud Computing|Profitable Using Cloud Services|Technology Adoption|Transport|Arthur Goldstuck|Infrastructure|Information Technology
© Reuse this
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.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other ICT News
Updated 3 hours ago Despite being Africa’s economic powerhouse, South Africa has fallen behind in terms of the number of people per 100 that have access to fixed and mobile broadband, Saab Grintek Technologies CTO Suraj Ramlall said on Tuesday. Broadband in South Africa was generally...
Updated 3 hours ago Some of the best innovations worldwide had been conceptualised and delivered during or immediately following a recessionary period, Internet Solutions MD Saki Missaikos said on Tuesday. Speaking at the Southern Africa Telecommunication Networks and Applications...
Updated 3 hours ago Fibre has emerged as a key aspect of telecommunications group Telkom’s turnaround and its ambitions of becoming “a clear broadband leader”. Speaking at the Southern Africa Telecommunications Networks and Applications Conference, in Port Elizabeth, on Tuesday,...
Updated 2 hours 33 minutes ago Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
Updated 2 hours 36 minutes ago A consortium led by two Kenyan firms won a government tender to build a 1 000-MW, coal-fired power plant, company officials said on Tuesday, part of moves to satisfy rising demand for energy in East Africa's biggest economy. Kenya suffers from regular blackouts due...
Updated 2 hours 42 minutes ago The announcement of the successful bidder for the construction of Durban’s long-awaited passenger cruise terminal was imminent, Transnet National Ports Authority (TNPA) CEO Tau Morwe told delegates at the African Ports Evolution Conference in Durban on Tuesday. ...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...