Hosted IT solutions better for SME

Thursday, February 4, 2010

Microsoft Corp today released its global SMB IT and Hosted IT Index 20101, which investigates how small and midsize businesses (SMBs) across multiple segments fared during the recession and how they use technology. The research finds that businesses that value IT as an enabler for better business productivity and effectiveness and those that use hosted services performed better fiscally than those that do not.
IT Critical to Revenue Growth
Despite the global recession, more SMBs surveyed in 2010 reported an increase in revenue than in 2008. Those that reported growth in their respective segments view IT as critical to their business success.

* In the past 12 months, 52 per cent of SMBs reported an increase in revenue, up from 39 per cent in 20082.
* Increasing 20 points since 2008, 55 per cent of SMBs view IT as critical to their business.
* Of the SMBs that view IT as critical, 60 per cent saw revenues grow over the past 12 months. In contrast, among SMBs that stated IT is not important, less than 29 per cent saw revenue increase3.

SMBs Moving Towards Cloud Computing
The 2010 index indicates SMBs are beginning to see the benefits of cloud computing; more than 40 per cent of the respondents that use hosted or cloud technology reported revenue rises of 30 per cent or more compared with 90 per cent of respondents not using hosted technology that saw decreases in revenue. The advantages of hosted or cloud technology are viewed as reduced cost and IT management and maintenance, as well as increased business value, productivity and competitiveness.

* Awareness of hosted services is increasing with 65 per cent of SMBs using hosted software to some extent, while 73 per cent of the remainder have considered it, compared with only 44 per cent in the 2008 Index.
* SMBs are beginning to understand the value of "renting" IT as a service - 36 per cent said a pay-as-you-go model would be attractive.

Cloud computing has become a watchword for the IT industry as software and services such as e-mail, websites and e-commerce are increasingly available in an on-premises, off-premises or hybrid model depending on business need.
"Over the last five years, we have seen nearly 40 per cent growth in usage of hosted services," said Michael Korbacher, director of EMEA Software plus Services in the Communications Sector at Microsoft. "Using pay-as-you-go cloud technologies, small and midsize businesses can now afford and easily have access to enterprise-class, secure services across any platform."

Correlating Business Performance With Technology Usage
The findings from the research were concluded by analyst firm Freeform Dynamics Ltd, which independently assessed the SMB IT and Hosted IT Index 2010 to ascertain to what degree IT adoption is driving revenue growth specifically within the SMB community.
The SMB IT and Hosted IT Index 2010 commissioned by Microsoft researched 3,193 SMBs in a cross section of private industries in 15 countries. Overall, the findings show greater awareness of the benefits of IT among SMBs and a high reliance on IT across all industries and geographies. The findings indicate a clear path towards better financial performance than for those not currently taking advantage of IT advances such as hosted services.
"Our assessment of the report tells us that an increased focus on IT correlates with good performance in all of the size categories surveyed," said Dale Vile, research director of Freeform Dynamics. "This whole picture corroborates the notion that technology and hosted services can provide tangible business advantage, even for smaller companies, and it’s not surprising to see that investment in IT and hosting goes hand in hand with good financial performance."

IT Services that were studied in this survey can be found below.



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