SMEs head for the cloud, despite data protection concerns

New research from IONOS has found that seven in ten (71%) SMEs believe cloud services will be a central part of their business in the next five years but data protection in the cloud continues to cause concern and could stagnate future adoption.

The research demonstrated that many SMEs have digitally transformed following the pandemic and are eager to continue driving further benefits. Nearly seven in ten (68%) say they are using more cloud services than pre-pandemic, and 42% say they have invested in the cloud since March 2020.

Conducted by Censuswide on behalf of IONOS, a European provider of cloud infrastructure and cloud services, the research polled IT decision makers at 600 SMEs to get their views on the use of the cloud in their business, including the benefits it has brought to their organisation.

Despite this eagerness from SMEs to digitally transform, 61% still view their business as lagging behind when it comes to adopting cloud services and less than 10% perceive their business as having optimised cloud usage. On the cloud maturity model from the Open Alliance for Cloud Adoption, this is the highest level, where the cloud is an established part of the business model, with a mix of cloud operations leveraged to improve efficiency.

When it comes to the maturity of cloud adoption across departments, unsurprisingly IT infrastructure came out on top in terms of optimised cloud usage, with 17% viewing the department as operating at an optimal level, while marketing was considered the least optimal.

Benefits from cloud investment

Despite this current gap in terms of adoption and future investment, the results did reveal that SMEs investing in the cloud post-pandemic have reaped rewards, increasing productivity (30%), making their business more flexible and agile (26%) and improving internal processes (24%).

When asked what the cloud has enabled them to do that they couldn’t previously, SMEs reported it helping them to deliver better customer experiences (35%), improved procurement processes (35%) and being better prepared to manage IT infrastructure as the business grows (33%).

Data protection is still a concern

However, despite viewing the cloud as central to their future business plans, data protection and security measures continue to cause concern for SME IT leaders. The research found that 44% are still worried that data protection is compromised when using cloud services, and over half (54%) are concerned that security threats are increased by cloud services.

When exploring what they look for when sourcing a cloud provider, only 23% considered strict adherence to data protection a key quality – showing that despite data protection being a concern, SMEs may not recognise the role cloud providers can play in protecting the business.

Looking at the impact on the wider business, nearly three in ten (29%) consider ensuring data protection measures are followed as one of the biggest challenges when implementing cloud services into the business.

Peter Prahl, SVP International and Digital Cloud at IONOS commented on the results: “It’s positive to see that small businesses have not only invested in the cloud in recent years but now feel it is central to the future of their business.

“However, there is still clearly a gap between adopting the cloud and that future investment. This is vital to address to ensure cloud is implemented across whole businesses, integrated properly and used effectively.

“One specific barrier to future adoption highlighted is the lack of knowledge around how the cloud can support data protection. While it can feel like a leap of faith to put all the businesses trust in a cloud service provider, working closely with a cloud provider is one way to minimise risk. Cloud service providers can help to monitor and mitigate DDoS attacks, ensure a safe and secure back up and support with up-to-date expert knowledge on legislation.”