Publication: ITWeb: 23 May 2011


Between powerful but prohibitively expensive technology options aimed at large corporates, and cheaper but limited services designed mainly for home users, the choice for SMEs has been poor. Cloud computing promises to change all that.

“Many smaller companies have expressed frustration about the lack of focus on their market sector,” says James McKerrell, CEO of CRS Technologies. “If vendors do focus on them, they give them watered-down products that are unsophisticated and are not easy to scale as the company grows.”

CRS Technologies has responded in its area by releasing an SME-focused version of its HR and payroll system. And it’s far from being the only vendor that is waking up to the power of the SME market.

“SME business is easier to secure because their purchasing decision timeframes are a lot shorter,” says Ashton Steyn, CTO for HP Enterprise Services. “There are also very many of them; it’s the long tail of technology services, and we want to service that long tail.”

“The SME market is where our volume and biggest growth is,” confirms Guy Jelley, CEO of Post Vision Technology. Its flagship product, Project Portfolio Office, is widely used by those who need flexible access to sophisticated project management software.

“There’s a totally different flavour to working with SMEs as opposed to large corporates. They’re quick to see the advantages of buying software-as-a-service – the flexibility, the scalability and the ability to access their information from anywhere. For them, that far outweighs the control and compliance concerns that tend to drive corporates.”

Wesley Lynch, founder and MD of Realmdigital, adds that changing focus from corporates to SMEs involves a learning curve for the supplier.

“People don’t have the manpower to do anything too complicated – they have to get on with running their business. We’ve learned to focus on making sure we enable them to do the really important things, really well. We originally developed our Platform content management system for big clients; when we developed it to offer to SMEs on a software-as-a-service basis, we had to make it simpler and easy to manage without losing anything important.”

All of this has only become possible in the past couple of years as South Africans have finally begun to access decent bandwidth at reasonable cost.

Says Steve Briggs, CEO of ARC Telecoms: “We have finally hit a space from a product readiness, access to bandwidth and technology implementation point of view where SMEs can move from capex-intensive to opex-based technology strategies.”

This is a big selling point for almost all suppliers of cloud-based services. Instead of making large upfront investments in expensive technology, SMEs can now rent pretty much everything they need by the month.

“Cash flow is always the real problem for SMEs,” says Mark Reynolds, Microsoft SA segment director for SMEs. “Instead of spending R200 000 at a time on servers or software licences, SMEs can now rent the services for, let’s say R10 000 a month. That’s the cash flow advantage.

”The other massive advantage of moving to the cloud is you no longer need to support your own services – all the admin involved with updates, security, patches, moving between versions and so on is now the supplier’s problem.”

“In the past nine months, we’ve sold a million licences for cloud products in SA alone,” says Reynolds. “Half of that is for hosted Exchange servers, the rest is Sharepoint and data management. Cloud is growing faster than any other part of our business.”

Hosted Exchange servers for e-mail and Sharepoint appear to be the first move for many businesses considering moving to the cloud – and every ISP in the market is happy to oblige.

“The typical SME has a big capex investment in its Exchange server, which is kept under a desk or in the kitchen while they try to squeeze every last cent of value out of it,” says Bernard Kur, head of products at MWeb Business.

“People are starting to realise that renting is a more affordable option – for under R700 a month – you can get a full server with two hard drives and all the benefits of being housed in a proper data centre rather than under a desk. The same goes for data servers.”

It may be slightly slower to open a file over an ADSL line than over your LAN, acknowledges Kur: “But how important is your data to your business? Everyone is vulnerable to fires, theft and server crashes – SMEs more than most. If your backup is housed in a data centre, you don’t have to worry. And with 10GB ADSL lines being rolled out, the speed issue is rapidly becoming a thing of the past.”

Even telephony is moving into the cloud. Not only are hosted PBX services coming onto the market in numbers, it may be possible to do without a PBX entirely.

“We’ve never owned a PBX at all,” says Realmdigital’s Lynch. “The company was seven years old by the time we got an office, and even now many people only come in when it’s hot and they want the air conditioning.

“We’re heavy Skype users, though. Most people have no idea how powerful Skype can be. We have a London SkypeIn number so it’s a local call for our clients based there; and when I’m in the UK, I can phone the South African office on a local call. Skype Business also makes it possible to buy credits centrally and manage all your users centrally. There’s no need for a PBX.”

Of course, committing your business to the cloud to this extent means it’s critical that the services are available when you need them. Here it’s important to distinguish between the services you may be buying in the cloud, and the connectivity you use to get to them.

“A cloud service is only as good as its weakest link, which is usually the connectivity,” says HP’s Steyn. “We discuss the need to have multiple mechanisms in place with our clients. Often that will mean an ADSL line backed up by a 3G or other wireless service.”

Once your connection is secured, you can discuss a service level agreement – and here again, says Steyn, it pays to be realistic.

“Is it really critical to your business that your server be available 24/7, or are business hours good enough? Providing 24/7 guarantees makes things expensive, when more restricted guarantees might be perfectly adequate.

“People also need to understand exactly what they can do without, and how quickly a service needs to be brought back online if there’s a problem. Once you know the answers to those questions, you can negotiate an SLA that’s appropriate to your business,” he says.

“Those who are putting their toes in the water are seeing amazing productivity increases,” says ARC Telecom’s Briggs. “Cloud services are affordable, easy to set up and easy to administer. Hosted Exchange servers are the obvious first step, and we’re a couple of months away from being able to offer hosted Microsoft Office products as well.

“Instead of paying a high annual licence fee for each user, you will be able to order per month. If you grow by 10 staff, you add 10 seats; if you shrink, you remove 10 seats. There’s no unused capacity.”

There is a more radical option. “Everyone should be on Google Apps,” says Lynch. “If you’re still using your ISP for your e-mail – and worse, paying for it – you need to change.

“Google Apps provides fantastic e-mail and calendar-sharing, all using your own domain name and with excellent security and uptime, for free. Or for $50 (around R350) per person per year, you can get a service level agreement and 24/7 support. Our experience with this as a service has been awesome. There’s even a free migration tool for moving from Exchange.”

The global uptake of Google apps is impressive. According to Luke McKend, country manager for Google SA, three million businesses around the world already run Google Apps and the number is growing by more 3 000 a day.

The first question people usually ask about Google Apps is: “What if it goes down?” But in fact, as McKend points out, most enterprises would kill for the kind of uptime Google users enjoy – Gmail was available 99.984% of the time in 2010.

“Google’s track record in terms of trust and data security is excellent,” says McKend. “We’re building the infrastructure to support all these systems and processes for the long term. Cloud is not a short-term play.”

McKend also points to several other Google tools – most of them free – that can help businesses improve both their productivity and their profile.

“Any business for which location is important should have a Places account,” he says. “This physically locates your business on the map of your city and provides all your contact details.

“It’s free, and it takes literally a couple of minutes to set up. I’m amazed at how few businesses are taking advantage of it.” (Try a Google search for ‘Cape Town restaurant’ to see how this tool works in action).

Google sites and Blogger offer free ways to create a Web presence, with Webmaster and Website Optimiser providing tools for managing that presence to best effect.

Those seeking more international markets, says McKend, should check out Insights for Search and Global Market Finder. These show the volume of searches for particular keywords over time, and in different countries, even, in the case of Global Market Finder, in different languages. Who knew, for example, that Sweden was second only to SA for interest in pinotage? This is marketers’ gold.

“It’s important for SMEs to recognise that with a bit of expertise and time, they can compete very effectively with a large business,” says McKend.

Facebook, more commonly known as possibly the most powerful way yet invented for employees to waste time, also holds promise as a marketing tool.

“If you’re a referrals-based business, especially one that has an entertainment or leisure flavour, it’s more important to have a Facebook page than a Web site,” says Lynch. “The cost is low, and it’s easy enough that even a part-time admin person can upload images and posts.

“Facebook is inherently social, and offers a huge variety of tools for getting your message out. Most SMEs don’t have the time or the technical knowledge to maintain a Web site, but they can all use Facebook. It’s even automatically mobile-compliant, so there’s no need to build a separate mobile site,” he comments.

Travel businesses are a natural fit with Facebook, adds Lynch. “It’s very easy to build image galleries and then tag people so they go and have a look and maybe share the pictures with their friends. To achieve the same thing on a Web site is much harder.”

Lynch cautions against getting professionals into build-a-page right away, though: “The building of Facebook pages is still an incredibly overpriced market, but you can get really, really far with what is freely available before you get someone to custom-build for you. Once you know what’s working, you can decide whether you need to build something to extend that.”