SMB cloud market has room to grow, but downtime and security concerns stand in the way

With the gloomy economic outlook, you would expect more small and mid-sized businesses (SMBs) to outsource their IT operations to the likes of Amazon and Salesforce.com. After all, that would allow businesses to focus more on what they do best, and less on managing a hodgepodge of IT systems.

Yet, SMBs in the Asia-Pacific region lag behind their counterparts in North America and Europe, where cloud services have become an essential part of IT.

There are numerous studies that point towards a SMB cloud market that has more room to grow, particularly in Asia. According to a new survey released by Parallels, the SMB cloud market in the Asia-Pacific region is expected to grow 38 percent each year, from US$7.6 billion in 2012 to US$19.8 billion in 2015.

Countries in South Asia and Southeast Asia will grow the fastest, but that prediction is contingent upon the successful rollout and, more importantly, adoption of high-speed networks. Broadband adoption among developing countries in the region remains low.

So what’s holding back more SMBs from buying into the cloud? Assuming they have access to speedy and reliable Internet links, companies will still be concerned with security. No matter what cloud providers say about their networks being more secure than most in-house IT systems, security breaches have occurred.

Another showstopper is downtime, which plagues almost all companies that have made the move to the cloud. In a survey by CA Technologies, 95 percent of over 1,000 respondents in the Asia-Pacific region said they have incurred application downtime and data losses.

Ultimately, businesses have to contend with trade-offs and decide if they can take on some amount of risk. Companies that are looking to minimise capital expenditure and have no in-house IT systems — a group which Parallels deems as cloud leapers — are more likely to embrace the cloud.

Those with so-called legacy systems, sensitive data and a lower risk appetite will be more cautious for sure — at least until the industry works out some common security standards to address the security and privacy issues of cloud computing.