Last week, I had the pleasure of participating in a panel at the always-enlightening Small Business Summit 2012. This was the seventh annual Summit, a terrific event coordinated by Ramon Ray and Marion Banker. As always, the energy in the crowd of 500 or so attendees was high, and I think everyone attending gained valuable insights in the information exchange. I know I did!
I was part of the keynote panel, Beyond the Hype—What You Need to Know About the Cloud (stayed tuned for slides and video link!), which was sponsored by Dell, and moderated by Rhonda Abrams, small business author and columnist for USA Today. Fellow panelists included Bill Odell, Marketing and Product Management Executive, Dell Cloud Business Applications, and Kathy Fable, CEO and President, Quinn Fable Advertising. The goal of the panel was to cut through the hype surrounding the cloud buzz, discuss what’s driving cloud adoption, and provide guidance on how small businesses can best leverage cloud computing for their businesses. In this post, I’ll discuss the conversation around three key topics of the session.
The Cloud IS the New Normal
The theme of the panel was similar to one of our SMB Group 2012 Top Ten Technology Predictions for SMBs, Cloud Becomes the New Normal. As we shared with the audience, small businesses need now—more than ever–to harness new technology-based solutions (social, mobile, analytics, etc.) in order to maintain a business edge. As a result, demand for cloud-based solutions is accelerating in almost all solution areas (Figure 1).
Figure 1. Source: SMB Group 2011 SMB Routes to Market Study
Those areas showing the biggest potential for cloud gains are marketing automation, business intelligence/analytics, and desktop virtualization solutions and services. But even solution areas that have lagged in moving to the cloud are starting to see a good growth spurt. For instance, while in the past 24 months, only 7% of small businesses purchased or upgraded cloud accounting/ERP solutions, 13% plan to purchase cloud accounting/ERP solutions in the next 12 months.
Small Business Summit attendees affirmed these data points. Early in the session, Rhonda asked for a show of hands to see how many attendees are currently using cloud solutions in their businesses—and everybody except one person raised their hands!
Our panelist Kathy Fable discussed how Quinn Fable Advertising uses cloud computing to run virtually every aspect of its business, including support for many client campaigns. For example, Quinn Fable is running a campaign for Girl Scouts USA to help troop leaders connect with girls across the United States. Like most of Quinn Fable’s clients, the Girl Scouts don’t have the hardware and software to turn something like this on quickly. In this case, print pieces and email marketing will all drive to an online toolkit, which will also serve to capture emails, build databases, and generate engagement via a cloud-based solution—which allows Quinn Fable to quickly and flexibly turn these campaigns on and off to meet client requirements.
This spike in adoption of and enthusiasm for cloud computing doesn’t surprise me. Although cloud computing solutions (aka software-as-a-service, or SaaS) have been around since the late 1990s (when companies such as NetSuite and Salesforce.com were first launched), much has happened in the last few years that has spurred the momentum that is resulting in a hockey stick effect:
- High-speed broadband has become pervasive.
- The advent of the “great recession”—and continued economic uncertainty-the no upfront capital, has made the subscription-based cloud computing model almost irresistibly attractive from a financial perspective.
- Early cloud applications have matured and at the same time, a new generation of cloud applications has launched that incorporate social and mobile technologies from the get-go—which enables these solutions to provide small businesses with even more access and value.
As Kathy discussed, Quinn and Fable use their cloud-based collaboration solutions to make sure that they’re all on the same page, even if they’re not talking to each other or in same time zone, whether on a laptop or a smartphone.
Bill also shared research that Dell just completed which echoed the growing momentum for cloud computing. Study data revealed that among small and medium businesses with 50 to 500 employees that use cloud applications, the average number used has doubled since 2010. This year, Dell expects these SMBs to be using an average of 7 cloud applications.
Small Businesses Need “No IT Staff Required” Solutions
Marc Benioff created and made the “no software” symbol famous. I think “No IT Staff Required ” is probably an even more compelling mantra for small businesses. As evidenced in Figure 2—as well as another show of hands at the Summit—most small businesses simply don’t have any IT staff, let alone the IT expertise or capital budgets needed for do-it-yourself IT. As important, they can’t afford the time it takes to get business payback from a solution that they need to vet, buy, install and deploy in-house. They need to focus their attention on other things, such as making sure the salon’s customers leave looking their best, or that the legal firm is winning cases for its clients.
This reality makes cloud computing even more appealing for small businesses than for larger companies that have the luxury of IT staff.
Figure 2. Source: SMB Group 2012 SMB Mobile Solutions Study
Integration—the Link and the Missing Link
Cloud computing makes it easier for SMBs to deploy new applications—and more applications—to help their businesses grow. The panel discussed that as SMB adoption rises, integration requirements rise too. Ideally, different apps should be able to share data or “talk to” each other. For example, if you’re running Intuit QuickBooks, a CRM solution and an email or social media marketing application, the best scenario is to have data flow from one application to the next. This not only increases data accuracy, but gives a company a much more complete picture of things such as conversion rates, order to cash, business performance and other key metrics.
But integrating business solutions with each other and with other applications shouldn’t cost more than the business solutions themselves. Cloud computing takes a lot of cost and complexity out of the application deployment equation, but integrating cloud apps with both existing on-premise software and other cloud applications can still be difficult, expensive and “one-off.” Lacking IT staff, expertise and budget, SMBs often go without integration and the benefits it provides, both in streamlining business processes and providing the foundation to easily pull in data from across different business applications.
Bill discussed how Dell’s Cloud Business Applications address this issue by providing SMBs with cloud applications, along with turnkey integration services and built-in, cross-application analytics and support. Today, Dell’s analytics dashboard incorporates data from both Salesforce CRM and several SMB accounting solutions (with additional applications on the way).
Dell is one of several vendors (others include IBM Cast Iron, Informatica, Pervasive and Scribe) making big investments in the integration space—for good reason. Cloud-based “integration-as-a-service” solutions can help make integration more affordable and accessible for SMBs. And some, including Dell’s solution, are geared specifically for SMB requirements and budgets.
Small business adoption of cloud computing is on the upswing–and for good reason. But, integration is the missing link that can help small businesses get the most value from these solutions. Targeted integration can help companies operate more efficiently, reduce errors, get a better view of the business and make better decisions. While Integration may not be as exciting to talk about as the latest social media app, in the greater scheme of things, it may be much more important to the overall health of your business.
Security seems to be the number one concern when small businesses consider shifting their functions over to cloud computing. I think its the idea of sharing space containing sensitive information with so many unknown entities. A secure co-location provided by managed IT services is a good compromise between the low cost benefits of cloud computing and the security of a private server.