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Why SMBs Should Be America’s Cloud Role Models

The pandemic accelerated the digitization of daily business operations, ushering in a new era of technology dependency, particularly around cloud migration. Now, businesses of all sizes are racing to upgrade their critical infrastructure, data, and applications to the cloud.

With spending on public cloud services expected to reach nearly $600 billion in 2023, leveraging the cloud is now essential for businesses. In recent years, industry leaders have looked to Fortune 500 companies as role models for cloud adoption. In reality, though, some of the most agile cloud users are small and medium-sized businesses (SMBs).

Unlike Fortune 500 companies, which are less agile because they can be overwhelmed by bureaucracy, SMBs can use their unique attributes to lead the charge for cloud migration. With the right support, agile small businesses have the opportunity to innovate in the race to digitization. Here are five reasons why small businesses are well positioned to lead the migration to the cloud:

1. They are more scalable

SMBs can take advantage of its more manageable size to rapidly scale cloud solutions. Cloud service providers can get the exact amount of processing power and storage that smaller organizations need, helping SMBs scale operations dynamically.

Smaller businesses were once constrained by a lack of capital to scale local resource constraints. That was the problem faced by GrayHair Software, a medium-sized company that provides data insights for mail tracking. Before moving to the cloud, GrayHair would have had to spend significant amounts of time and money manually adapting their traditional server environment to customer needs. Moving to the cloud, they rapidly deployed computing resources to accommodate more complex systems and applications.

2. SMEs are more agile

As they transition to the cloud, SMBs will also use their agility to remain competitive in processing efficiency.

According to dell, companies that invest in big data, cloud migration, mobility, and/or security enjoy up to 53% faster revenue growth than their competitors. Because they can more quickly transition their systems to the latest cloud technologies, SMBs have a revenue growth advantage over less agile tech giants.

SMB cloud customers will also benefit from access to advanced technology features not yet available for on-premises installations. Since cloud providers take responsibility for maintaining equipment, updating underlying server hardware and network infrastructure, SMBs can try out the latest cloud technologies without slowing down revenue generation.

3. Adopting end-to-end cloud solutions dramatically reduces costs

Traditional local servers are expensive to buy and maintain. Many of these expenses must be capitalized, which adds budget stress. While larger companies may need local servers to handle the large amount of data they process, SMBs can more easily migrate all of their systems to the cloud to save costs.

With the cloud, smaller businesses can avoid the large upfront cost of physical facilities. Instead, they can lease the necessary computing resources from a provider on a monthly or annual basis, creating a tax-deductible operating expense from day one.

When looking at data systems technology, trying to cobble together imperfect solutions for legacy systems increases the chance of errors and system inefficiencies. Instead, the best cloud providers offer end-to-end solutions that SMBs can more easily adopt fully. While fragmented data systems can eat up IT hours and dollars for large enterprises, SMBs can adopt cloud systems to improve functionality and data security.

4. SMEs can safeguard their digital assets

As a business grows, so does its digital footprint, its exposure to hackers, viruses, and human error. The costs of a data breach range from ransomware payments to irrecoverable reputational damage.

According to Sales force, 94% of companies said they saw an improvement in security once they moved to the cloud. While SMBs typically lack a dedicated team of cybersecurity professionals to protect company data, enterprise-grade data encryption, cloud backup, and disaster recovery are built into any cloud service. trustworthy will help them quickly take their cybersecurity strategy from non-existent to world-class with little. to no additional investment.

5. SMEs have access to tax incentives to finance innovation

Digital transformation is not without costs, and Fortune 500 companies can more easily foot the bill. However, smart SMBs have a little-known advantage in one of the most powerful federal tax incentives.

The federal Research and Development tax credit was introduced in 1981 to increase technical jobs in the United States by encouraging companies to invest in innovation. The credit can be claimed by contributing companies that develop, design, or improve products, processes, formulas, or even software.

Small businesses making the move to the cloud can claim this credit as one of the best opportunities to reduce tax liability and reallocate those resources to improve competitiveness.

R&D credit for cloud-based integration ultimately creates an opportunity for SMBs to reinvest in themselves and advance their efforts beyond cloud computing.

With their agility, scalability, and access to specialized tax credits, SMBs are poised to dominate cloud adoption for years to come.

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