Cloud helps SMBs grow through recession, says Rackspace poll

News Maxwell Cooter Feb 21, 2013

Cloud apps like Google, Kashflow and Dropbox offer a way for small businesses to improve economic performance

Cloud services such as Google Apps and Kashflow are driving companies towards profitability, according to new research.

A study conducted by the Manchester Business School and Vanson Bourne found that, despite the gloomy economic prognosis, companies who had adopted cloud were beating the recession.

According to the survey, about 40 per cent of small British businesses have been able to grow during the recession through using cloud and 58 per cent have been able to reduce their IT costs.

But the UK is still lagging behind the US when it comes to cloud.

Speaking at the launch of the report, Dr Brian Nicholson of the Manchester Business School, who was responsible for analysing the results, said the single finding that stood out for him was the way US companies had embraced the cloud.

“As an academic, I'd expected more dramatic benefits for SMEs. According to the survey, only 19 per cent of SMEs thought [they were]  punching above their weight, there was a big contrast with the US where the sample was saving more, reinvesting more and making more profits.”

According to Nigel Beighton, international VP for Rackspace, who sponsored the survey, the two countries have a different outlook and operate to a different timeframe, with American companies looking for short-term gains, while UK firms are thinking more broadly.  

“A lot of US small businesses are building for a US economy, while UK businesses are thinking more internationally; cloud is very attractive to them,” he said.

Jonathan Finney, public affairs manager for the Federation of Small Businesses (FSB), said it was worrying that very small businesses might be excluded from the cloud. “How do small businesses access that information?”

He said the FSB was conducting its own research into small businesses and technology. “Cloud is part of that but at the moment, they don't really identify the benefits.”

Despite these reservations, the outlook for long-term growth remains hopeful. According to the research, 56 per cent of small businesses have invested the savings made by cloud back into the business and it’s an optimistic outlook for jobs too, with 15 per cent of respondents creating new positions as a result of their cloud investments.