SMB and Midmarket hybrid cloud adoption likely to explode exponentially

The explosion in cloud use has led to considerable increases in the extent of automation within SMBs. Techaisle SMB survey research data illustrates, SMBs are absorbing cloud systems at a very rapid rate: core infrastructure requirements (such as storage and productivity applications), systems of record (e.g., accounting), and systems of engagement (e.g., collaboration/conferencing) are increasingly cloud-based, and the cloud is paving the way for new automation in these areas, and in systems of insight (analytics) within SMBs.

As the adoption of cloud applications increase, there is a pressing demand for hybrid within SMBs. SMBs want to integrate multiple delivery sources into a single unified fabric. They also want to assign workloads to the best (rather than “best possible today”) location and connect data and critical services (notably, security) across platforms. Techaisle data shows that 34% of midmarket cloud workload is on hybrid cloud, 31% of midmarket firms are using advanced hybrid infrastructure with automated links between platforms. In 2021, the percentage is likely to increase by 45%. Techaisle expects hybrid momentum in the SMB market to grow in 2021 and beyond, with a 5X increase potential in the small business segment.

Comparing 2020 and 2021 data shows that although there was tremendous interest in expanding hybrid automation/orchestration in 2020, many SMBs put their plans on hold in favor of emergency responses to pandemic-related requirements. Still, though, the need for capable hybrid architecture and management is only becoming more acute over time.

However, it is not a “gimme,” at least within the small business segment. While a hybrid model for IT service delivery is the reality for most SMBs, small businesses may find reliance on public cloud services a more straightforward option because hybrid cloud environments are the most complex to manage. But, Techaisle data suggests that the use of hybrid cloud will continue to increase as both a conscious strategy and a reaction to using public and private resources within a single infrastructure. Techaisle believes that these findings contain an important – and fascinating – message for suppliers. The selection of a cloud delivery strategy is not a “religious issue” – the results do not indicate that buyers identify primarily as private, public, or hybrid users. Instead, it appears that they select the best approach for the task at hand, with few qualms about changing directions in response to the evolving needs. While legacy systems, processes, and thinking may inhibit cloud adoption, different business segments that are increasingly involved in procurement decisions opt for siloed cloud application delivery without regard for the organization’s broader technical or overall process goals.

Midmarket organizations have deployed cloud-based applications belonging to an average of 14 categories and report intentions to expand portfolios by an average of 8.3 in 2021. Small businesses were starting at a much lower level – with an average of 6.8 categories represented in the current cloud application portfolio – but with very ambitious expansion plans.

Driving expanded use of SaaS is vital to overall cloud maturity within SMBs. Still, it requires both skilled resources and automation tools that typify organizations taking an advanced hybrid approach to infrastructure. The use of cloud (and hybrid IT) is growing in the SMB market. In 2021, the ability of SMBs to address risks, challenges, inhibitors, and constraints to new adoption will determine the pace of adoption and the extent to which the business benefits of cloud compel senior management to allocate scarce resources to cloud initiatives.

Technology market trends often progress rapidly – but even by those standards, the pace of cloud adoption in the SMB market has been stunning. As recently as five years ago, most SMBs were still evaluating cloud’s use to address business needs and operations. By 2020, the cloud was no longer a future issue: 80% of small businesses and 99% of midmarket organizations use the cloud to support some or all of their business processes.

It is fitting to think that the challenges associated with SMB hybrid adoption are taking place at three levels: within the SMBs themselves, within the hyperscaler ranks, and within the partner community that connects cloud with SMB business needs.

Learn more about Techaisle’s SMB and Midmarket global cloud research