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Is Cloud Value at a Crossroad for SMBs?

Jun 23, 2024 | Blogs

Value-added insights to help your business plan for emerging demand.

Value and cloud are synonymous. We’ve always known this to be true, as have thousands of our partners across the region.  Proving it to the vast number of small-to-medium-sized businesses in Asia Pacific has been a shared mission for well over a decade.

In this article series, we will present new evidence on the direction of SMB cloud adoptions across the region, and which capabilities they value most in their technology service providers.

To kick things off, let’s take a little walk back in time and catch up on how SMBs in the Asia Pacific were placing in the first years of the race to the cloud, and why 2023 presents a crucial crossroad for SMBs and service providers.

Can SMBs Sustain the Cloud Pace?

It is sometimes said the biggest competitor for cloud vendors and service providers in the SMB space is ‘the way things have always been done.’  More likely to be tech-wary, cost-conscious, and risk-averse, SMBs are not known to place big bets on the fast uptake of new technology, and historically, cloud has been no exception.

The starting gun fired on the race to the cloud in 2006. By and large, SMBs ground along the adoption track in first gear until 2019.

And then COVID bulldozed them right into the fast lane.

Cloud Adoption Autobahn

With little choice but to burn serious rubber to survive the crisis, SMBs across Asia Pacific drove through the challenging hair pin turns in the economy by adopting cloud solutions at breakneck speed.  Those that successfully navigated their way through the pandemic soon recognised the quick wins that flow from modernised operations.

The following two years saw SMBs take huge cloud powered strides on business agility, operational resilience, workforce efficiency, cost effectiveness, and market competitiveness. Advances and gains were fuelled in part by the Capex to Opex switch, and the benefits of subscription-based scale up, scale down compute capacity and spend.

The result is that 2022 will likely go down in the books as the financial year that many SMBs will first achieve revenue growth that is directly attributed to cloud adoptions. A value realisation breakthrough, many, many years in the making.

If correct, this means we can anticipate that SMBs will swing firmly toward wanting more of the same. SMB customers will actively engage in looking for ways that cloud can accrue or add even more value to their businesses.

Importantly for you, dear reader, this scenario would likely result in larger amounts invested to achieve that aim.

Calibrating the Value Machinery

But the fruits of continued and expanded cloud adoption will not remain within easy reach.

To continue generating value from cloud adoption, SMBs will need to keep the three vital pistons of people, process and technology tightly calibrated and pumping at just the right tempo. Achieving this requires operational maturities that many SMBs won’t have had enough time to fully develop.

For example, if an SMB has a digital transformation program underway, but it is not developing relevant skills in its people and it has an antiquated technology procurement process, there is clear misalignment. Three things that properly ‘calibrated’ would build value, instead compete and detract from the transformational objective.

When a lack of operational maturity causes those pistons to misfire, SMBs will look for partner pit-crews that know how to get under the bonnet, identify the cause, and fix the internal business machinery.

Partners! Start your Competitive Engine

Only three years ago, large tracts of the SMB segment in APAC were still on a rambling, piecemeal, ‘each business to their own’ journey to the cloud.

The pandemic rolled the vast majority into a mass cloud adoption and migration event, and at the end of the 2022 financial year, a hundreds of thousands of cloud-powered SMB businesses achieved revenue growth – in the middle of a global crisis. Conversely, those that failed to invest or left it too late found survival very difficult.

This tipping point on value realisation has been achieved, and this is great news for partners. SMBs want more cloud, they want to layer in different solution categories, and importantly, they want partners that deliver ‘value realised’ cloud development strategy. This means they will seek out partners that not only have the technical capabilities to implement cloud solution but can work with their customers to identify opportunities to use cloud, data, and applications to innovate and generate entirely new forms of value in their businesses.

SMBs have pivoted into deep strategy, and partners that can respond and co-innovate with their customers have a lot to look forward to over the next few years.

 

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