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Survey: SMBs will run half of their apps in the cloud by 2018

Spending on cloud-based services make up only a small portion of the IT market, but, at least among small and medium-sized businesses (SMBs), investments in these offerings are expected to grow considerably by 2018, according to a survey conducted by Gartner Inc. These findings, according to the firm, are a sign of how increasingly significant the cloud is becoming to these companies.

SMBs, which Gartner characterizes as companies that employ between 1 and 999 workers and have an annual revenue between $50 million and $1 billion, currently invest about 33% of their IT budgets in cloud-based services; these SMBs plan to allocate more of their budgets to cloud, particularly lower-midmarket midsized businesses (those with 100 to 499 employees).

SMBs are also more open than their enterprise counterparts to purchasing public cloud offerings, even in business-critical areas like business intelligence, CRM and ERP.

The main driver for this growing group of SMBs is that they “are in a hurry to accelerate their business growth with the support of more advanced IT solutions. Cloud is seen as a business accelerator and a cost-containment enabler,” wrote the authors of a report that summarized Gartner’s survey findings.

Gartner’s survey also found that by 2018, SMB organizations will have 50% of their applications running in the cloud. The use of SaaS continues to grow as SMBs introduce new applications into their environments, building extensions to their existing apps using cloud-based services, said the authors. Small businesses (1 to 99 employees), in particular, are interested in public cloud SaaS because of the constraints of their internal IT capabilities. “SMBs have not been able to invest in business applications to the extent that enterprises have, but public cloud solutions are seen as a way to close the gap,” the authors wrote.

Other noteworthy findings from the survey:

  • Platform as a service (PaaS) usage among SMBs will grow between 15% and 20% year over year through 2017. This increase will be driven by these organizations’ urgency to digitize their business quickly but at a reasonable cost, said the authors. PaaS, along with SaaS and other public cloud offerings, facilitates “a development environment that provides quicker time to deployment, enables operational agility and provides concrete tools to help SMBs gain business advantage,” which are currently top priorities for SMBs, they wrote.
  • Through 2018, between 30% and 38% of SMBs will buy communication apps and UC products through the cloud. As cloud UC providers mature and improve their products’ capabilities, UC cloud adoption will rise accordingly, according to Gartner. “SMBs are also in a rush to provide more mobile applications on the communications solutions side, so mobility and cloud go hand in hand in the communications applications segment,” added the report’s authors.
  • By 2018, 50% more mobile devices will be adopted by SMBs for vertical-specific use cases. SMBs are more aware of the benefits of a mobile workforce and the vertical-specific use cases of mobile devices, according to Gartner. For instance, small businesses that range from restaurants and hairdressers currently use tablets for customer engagement, digital signage, inventory tracking and points of sale. And in the manufacturing vertical, for example, SMBs are equipping maintenance workers with mobile devices on which they can access business apps, creating efficiencies in workplace utilization.