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2012 Press Releases

The Relevance of Cloud Technology and the NBN to Small and Medium Businesses

Article By Dave Patnaik, Managing Director, Trend Micro ANZ

With the global economy facing challenges on many fronts, businesses all round the world need to innovate and take advantages of the latest technologies available to increase their productivity.

It is time to do more with less. Many small and medium businesses (SMB) in Australia have been struggling for the last couple years in the wake of the GFC. The high cost of borrowing, combined with the credit crunch and irregular cash flow, are hindering their growth. Around one million SMBs in the country constitute more than 95% of businesses and provide employment to around 70% of the active workforce, and hence their state of affairs matter greatly to the Australian economy.

Speaking to several SMBs in the country in the last few months, I sense that most of them are trying to expand their market reach by reducing costs and increasing productivity.

That is why the adoption of cloud in Australian market is ramping up quickly. Most of businesses are trying to minimise hardware cost by exploring “pay as you use” services as part of their operational expenses. However, it is also clear that cloud adoption is not a straightforward process as several points need to be considered in advance.

There are obvious questions on the usage of public cloud such as the location of the data, retrieval of the data and security of the data. In the case of private cloud, though there is a greater control on the infrastructure and the design of the system, security of the virtual machines could pose significant challenges. Despite all challenges associated with cloud technology, it can lower operational costs, improve productivity, increase innovation and flexibility and speed up system deployments for any business.

Cloud technology, if used appropriately, could also offer significant benefits to SMBs in this country. In a business environment with minimal capital outlay, limited customer base and with irregular cashflow, the adoption of cloud technology should lower operational costs, increase productivity and improve business continuity.

A recent survey on Cloud Adoption for Small Business conducted by Microsoft highlights that the number of very small companies with less than 10 employees using a paid cloud solution will potentially triple in the next three years. The number of companies with between 11 and 25 employees will potentially double, and even in the 26-100 employee segment, an additional 1/3 of companies will adopt the cloud.

The key drivers to this change as pointed out in the survey are the reduction of cost and the increase of productivity in order to remain competitive in a challenging market.

Business research by the Harvard Business School also highlights that organisations that operate in international markets grow faster than those focussed on a single market.

The expansion to international markets will require a SMB to have a proper collaboration, storage, mobile, infrastructure, application and data security strategy in place. All these can be done with minimal cost and maximum business continuity by adopting cloud technology. However, careful steps must be taken to choose cloud vendors, understand their provisioning contracts, data jurisdiction issues, and most importantly, data security measures used by the providers.

Cloud technology adoption is very dependent on high speed broadband. The broadband speed in Australia is slower compared with other developed countries in the world and, given the geographical locations of regional and capital cities, the NBN initiatives from the Government seem to be a step in the right direction.

High speed broadband in Australia will drive cloud adoption with SMBs and that in turn will improve business flexibility, minimise operational costs, and increase productivity and national/international market expansion.

As cloud technology gears up in Australia with the roll out of the NBN, it is the perfect time for SMBs in this country to expand their business in national and international markets. As SMBs are the backbone of this country, their growth will bring in significant prosperity and momentum to the Australian economy.

More information on Trend Micro cloud solutions for small business will be provided at the EVOLVE.Cloud 2012 cloud security conference in Sydney (1 May) and Melbourne (3 May).

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