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7/21/2014
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SMBs Tie Cloud Computing To Increased Revenue

Small and midsized businesses say cloud is key to customer service, expansion, finds survey by Oxford Economics for Windstream.

Research by Oxford Economics and Windstream Communications has found that many small and midsized businesses have a strong appetite for cloud computing and tie it to increased revenues, even though they often don't have large IT departments to support them getting into the cloud.

Oxford Economics is the research outfit frequently tapped by members of the Fortune 500 or Federal Reserve Board to draw a picture of what's happening in different parts of the world economy. At one time, it was made up primarily of economists from Oxford University in the UK, although time has diminished that link. To conduct its "Path To Value" cloud survey, it solicited feedback in May from 350 business executives in all regions of the US; 33% were CEOs, CTOs, or COOs, while the other 67% held other executive positions.

Windstream, a Fortune 500, Little Rock, Ark.-based telco that has entered the cloud services market, sponsored the survey.

Although some of those surveyed worked for companies with $1 billion or more in revenue, the vast majority were with companies with $750 million in revenue or less, according to Ed Cone, managing editor of Oxford Economics' Thought Leadership publishing and organizer of the Path To Value report. "They don't have huge IT departments. They don't hire tons of consultants," he noted.

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At the same time, they've developed a sophisticated notion of what cloud computing is and view it as "a key to greater collaboration and innovation, improved customer service," and business expansion, he said. Sixty-eight percent said they were not looking to the cloud primarily to save operational expenses or achieve greater efficiencies; 32% said they were.

In addition, where other surveys have been ambiguous about the relationship of cloud computing and increased revenue, the Oxford survey found "a strong correlation between those furthest along in adopting cloud computing and bottom line results," he said. Both new lines of business and geographic expansion were viewed as key results enabled by the cloud, he added.

Image: cloudvaluepath.com
Image: cloudvaluepath.com

Oxford Economics published an interactive infographic on the survey's results.

Among other things, 36% of the survey respondents said cloud was critical to innovation strategy today; 53% said it would be critical in two years. Forty percent said the cloud was enabling them to move into new geographic markets today; in two years, 57% thought it would be vital for doing so. Fifty-five percent said cloud "was important for the long-range vision for our business" today; in two years, 71% said it would be.

Thirty-six percent said cloud was responsible for pushing control of IT out to line-of-business users today; in two years, 53% expected that would be the case.

Almost two-thirds of respondents said their cloud service provider added measureable value to their business results. The most favorable ratings came from the larger companies: 46% of those with revenues of $100-$499 million said the cloud added business value, as did 84% of those with revenues of $750-$5 billion.

Many respondents said cloud was mainly about speed of operation, and time to production was their top measure of success in cloud service use. Results were closely grouped between 67% and 73% between small and large companies across five categories, with an average of 71% saying that use of cloud services leads to a faster time to production for a new product or service.

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Charles Babcock is an editor-at-large for InformationWeek, having joined the publication in 2003. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse ... View Full Bio

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Stratustician
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Stratustician,
User Rank: Ninja
7/22/2014 | 10:10:54 AM
Re: In part, it's an intuitive measure
I think it's curious to see that geographic expansion was one of the side benefits of cloud adoption for this survey group.  I wonder if the correlation is due to the ability to support other locations through cloud services themselves, or if the cost savings/streamlining of services led to the decision to expand.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/21/2014 | 3:09:27 PM
In part, it's an intuitive measure
It's hard to tie use of the cloud to bottom line improvement in an IT shop with lots to do besides implement fancy measurement systems for ops. Some of the bottom line improvement is intuitive -- we wouldn't have done this without access to cloud computing.
Multicloud Infrastructure & Application Management
Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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