SMB Cloud Users Twice As Profitable: Study

by CXOtoday News Desk    Oct 01, 2015

cloud

Companies that are embracing cloud computing are likely to grow faster and enjoy twice the profit of their non-cloud using rivals, according to a study. The Exact 2015 SME Cloud Barometer report, an independent study of 2,975 SME leaders in the UK, the USA, France, Germany, the Netherlands and Belgium, found a correlation between companies with three or more cloud products and revenue growth. The ‘heavy users’ of cloud achieved higher revenue growth and over twice the profit of their less committed cloud users.

Penetration of cloud computing in the UK is relatively high in comparison with its European peers, according to the study. The UK has the second highest number of ‘heavy’ cloud software users (27 per cent) behind the USA on 29 per cent. However, the Netherlands, Belgium and France were not significantly behind, with their rates of cloud adoption being 25, 24 and 24 per cent respectively. Germany, with a cloud adoption rate of 10 per cent, was more significantly behind.

Nearly half (47 per cent) of the SMEs in the UK now use at least one cloud business software tool. The study examined the correlation between growth and cloud adoption and found that on average those companies it defined as heavy users enjoyed revenue growth of 26 per cent in 2015. In comparison the companies that used only one or two cloud computing systems grew revenues by an average of 14 per cent. Those with no cloud systems at all showed the slowest growth rates, with revenues on average growing by 10 per cent.

Of the UK sample, the most popular reason given (by 54 per cent of the survey) for adopting new cloud systems was that the ‘need to replace outdated versions’. Saving money on IT was the most frequently cited motivation for cloud computing among UK SMEs. Getting better access to information was the third most important criterion for cloud.

Erik van der Meijden, CEO of study sponsor Exact, claimed that most SMEs see it as a strategic purchase. “[They] said they felt that technology is going to have a strong impact on the competitive landscape in their market over the next three years.”

While the study depicts the state of cloud adoption in the SMBs only in some parts of Europe, the global personal cloud market is expected to top almost $90 billion in revenue by 2020, according to the latest forecast by Allied Market Research. The research firm anticipates a compound annual growth rate (CAGR) of 33.1 percent between 2015 and 2020, with growing customer awareness cited as boosting growth and personal cloud for individuals continuing to lead the market.

Individual users will comprise around 60 percent of total market revenue by 2020 according to Allied, however the SMB segment is expected to take nearly a quarter of revenue at a CAGR of 35 percent across five years. In terms of share between cloud providers and user-hosted solutions, provider-hosted personal cloud will constitute nearly 75 percent of the market value by 2020; yet user-hosted cloud is expected to grow at a CAGR of 46 percent to make up the remaining quarter.

The report further states that advances in smartphones, tablets and mobile devices have driven the growth of the personal cloud market as storage needs grow, it says. The change was catalysed by the virtualizing of the work environment as employers began using personal cloud storage as a solution to work problems.