Cloud computing now as popular as on-premise IT for UK SMEs, says Sussex ISP

Beaming’s Making the cloud work for UK businesses report, published today, shows that small businesses now use the cloud more than on-premise servers: 39 per cent of 10 - 49 employee firms use the cloud for most IT applications and data today, compared to 36 per cent for on-premise equipment.

On-premise servers are still the most common option for medium-sized businesses, but only just. 41 per cent of 50 - 249 employee firms still trust the majority of their IT applications and data to on-premise infrastructure, but 38 per cent now prefer the cloud.

Looking across a range of factors, around three-quarters (72 per cent) of SMEs using cloud as their primary platform in at least one business function said the move had delivered benefits. Half (50 per cent) of migrated SMEs cited enhanced data security, alongside greater collaboration (48 per cent) and productivity (46 per cent).

However, more than a quarter (28 per cent) of leaders reported that they experienced no benefits from moving to the cloud and a quarter (25 per cent) said the move was more negative than positive for them. 27 per cent of SMEs said their use of cloud had created more security concerns and 24 per cent reported that they were less able to manage workers’ use of online services.

The rising cost of cloud services was also a significant concern, with a quarter of SME leaders (26 per cent) complaining that this was harmful to their businesses. Respondents anticipated a 10 per cent rise in cloud-computing costs this year, on average.

In response to rising costs, 47 per cent of small businesses planned to reduce their use of cloud-based services in 2023 and 36 per cent said they would reduce the amount of data held in the cloud. 31 per cent of medium-sized companies planned to store less data in the cloud, and 33 per cent wanted to downgrade their web-based services.

Sonia Blizzard, CEO at Beaming, commented: “There’s no doubt that the cloud offers huge benefits when its functionality aligns with a firm’s needs. But it’s also clear that moving to the cloud isn't the golden bullet some might think, and costs can soon mount up, leading some companies to review their use of the cloud. Some firms are paying for bells and whistles in SaaS products they do not need. And they’re adding complexity to systems that could be simpler.”

“The issue is not about cloud services themselves, which can offer uniquely powerful services and great value. Instead, it is about SMEs needing to do a post-pandemic ‘spring clean’ of their IT, to realign the services they are paying for with their real needs so they can take advantage of the opportunity that cloud services and associated AI can bring.”