How the Cloud accelerate SMEs computing capabilities
A new era
Cloud provides the disruptive potential of digital. Before cloud, enterprises had to invest in expensive compute to create sophisticated analytics, IoT or even simpler application development capability. This favoured large enterprises who could afford this investment and distribute the cost over a larger client base.
Cloud has demolished this cost of entry. High Performance Computing (HPC), the practice of combining computational power across different computers, servers, or clusters to power high-demand workloads that would be impossible to manage on traditional technology is now accessible thanks to the cloud service provider’s offering. Smaller organisations, unencumbered with the slow processes of established corporates, can access this leading-edge compute quickly through consumption-based models. In turn, larger corporates have mimicked their nimbler brethren by adopting agile. Without cloud, it’s hard to see this trend being so pronounced.
Recently, this trend has accelerated. According to a recent research, 69% of companies have accelerated their cloud migration over the past 12 months, and the percentage of companies with most or all IT infrastructure in the cloud is expected to increase from 41% today to 63% in the next 18 months.*
Up to 94% of businesses have already adopted the cloud in some shape or form and the UK's cloud market is currently worth £15 billion.
SMEs Cloud adoption
However, these positive headline numbers mask a wide variety of practice amongst SMEs. Those who embrace digital, like HiiROC, winners of the KPMG Private Enterprise Tech Innovator award, reap benefits.
But a third of small and medium sized businesses say that they do not use the cloud at all and 25% say that they are not currently using the technology, but plan to implement it in the next 12 months. If equitable access to HPC for SMEs is through the cloud, then we need to address the variable level of adoption.
To do so, it is important to explore reasonsBehind this. Over a third of companies do not trust the security of tools and solutions. A further 29% believe transferring to the cloud would be too time intensive, and 16% say that they haven’t a budget for this investment.
There is also a knowledge gap when it comes to cloud technology. Small enterprises are least likely to be familiar with business clouds. In companies with an annual turnover of less than £250,000, 14% claim they understand the technology well. In comparison, in firms with a turnover of over £5,000,000, 45% say that they do.
However, firms of all sizes recognise the value of using the cloud for business.
A study from Google found that SMEs using the cloud grow 26% faster and are 21% more profitable than their peers and a recent survey by IDC found that almost every SME that uses cloud services saves money, with most lowering costs between 10% and 20%. Anecdotally, this coincides with KPMG’s experience from our Private Enterprise Tech Innovator awards, where almost all our UK finalists depend on the cloud for their technology. And, our cyber incident response teams frequently find that enterprises who use the cloud are more capable of recovering quickly from a cyber-attack.
Benefits of Cloud adoption
Cloud can help SMEs improve their businesses both for innovation but also to build flexibility to scale up as demand grows and to keep themselves going successfully in time of crisis. Used in the right way, SMEs can use cloud computing to support profitable growth by:
- Reducing IT costs of legacy infrastructure. One of the most attractive benefits of cloud computing is the savings associated with not having to deal with hardware and networking equipment, whether it be acquiring it to grow or funding its maintenance. In certain situations, the maintenance costs can erode the 80% of the IT budget.
- Improving business agility. SMEs are naturally quicker to design and implement new services due to their organisational structure. The cloud is an incredible accelerator to reduce the go-to-market time of new ideas and products.
- Reducing initial investment, providing SMEs with more liquidity, flexibility and cash flow. Setting up operations in the cloud requires a smaller initial investment, enabling small businesses to be more flexible with their budgets. A Pay as you go model allows to further reduce OPEX. As more employees shift to remote, cloud-based working, SMEs can reduce the costs of office space and utilities.
- Maintaining business continuity in a crisis. By keeping their businesses operations in the cloud, SMEs can implement modern and efficient D&R processes and tools and safeguard valuable data from hazards, including potential environmental and cyber threats.
- Enabling mobility and remote access to applications and data from everywhere. This can be extremely beneficial for businesses whose employees frequently travel. The flexibility that the cloud brings can be especially helpful at times where it may be difficult for staff to get into the office.
- Delivering an evergreen estate. SaaS, PaaS or IaaS managed service include automatic updates, security patches, so small businesses don’t have to worry about vulnerabilities, outdated and unsupported technology. This results in a more secure and more capable environment.
Unlocking HPC for SMEs through the cloud
Understanding the foundations of cloud above will enable SMEs to explore whether HPC would be a useful business asset, and whether they will use Cloud is to accelerate High Performance Computing (HPC) workloads with cloud flexibility, capability, and scale.
Cloud service providers like Google have created Cloud HPC toolkits that allows their clients to create HPC clusters in minutes. Oracle Cloud gives access to the latest Arm-based Ampere A1 Compute to get the superior performance and power efficiencies needed to scale High Performance Computing workloads instantly.
London South Bank University empowers researchers and students to tackle complicated questions with high-performance computing resources on the cloud provided by IBM cloud.
Finally, AWS provide a complete suite of high-performance computing (HPC) products and services to run large, complex simulations and deep learning workloads in the cloud. It scales HPC applications to thousands of CPUs and GPUs with Elastic Fabric Adapter (EFA), powered by the AWS Nitro System.
So – cloud compute has massive potential for SMEs in terms of both HPC, and other requirements. A lot of that potential is being realised, but only by a subset of SMEs. Capturing the remaining latent potential will have a material productivity and competitiveness benefits for the UK’s SMEs.
Laura Foster
Laura is techUK’s Head of Programme for Technology and Innovation.
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
Elis Thomas
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on AI, Semiconductors and Digital ID.