Cloud Computing Still A Mystery To Asia’s SMEs

Across the Asia Pacific region small- and mid-size enterprises spent $2 billion on cloud computing services last year, an impressive growth rate of 42 percent. Despite the rapid expansion of cloud technology, there is still a lot of room to grow. SMEs make up the vast majority of business across Asia, representing more than 90 percent of all businesses. The Asian Cloud Computing Association (ACCA) reviewed 14 developed and emerging nations in the Asia Pacific region and found that, together, these nations contribute $10.9 trillion to their national economies and generate 49 percent of the region’s total GDP. Two billion, it seems, is a drop in the bucket for the region’s revenue-generating power.

Is The Cloud The Great Equalizer?

The study, titled “SMEs in Asia Pacific: The Market for Cloud Computing 2015,” finds cloud-based technologies a particularly good fit for Asia’s SMEs in both emerging and developed markets. The cloud gives business owners access to the latest IT tools and technologies, without the individual burden of building the needed infrastructure. With little IT expertise, SMEs reap the benefits of enterprise-level software and IT solutions. The cloud is immediately accessible and affordable, thanks to its nature as a subscription-based service. SaaS may level the playing field of technological access, but the study finds there is no one-size-fits all approach. Service providers hoping to break into the Asian market need to tailor products to developed and emerging economies.

Size Matters, But …

Not surprisingly, the largest Asian markets (by population)—China, India and Indonesia—are poised for greater cloud adoption based purely on the number of SMEs. Yet India ranked second-to-last of the ACCA’s ratings of the most attractive cloud computing markets, while China took the fifth slot and Indonesia came in tenth.

The number of businesses is a strong indicator of successful cloud adoption, but the ACCA’s research shows a stable IT infrastructure at the national level more important. Developed markets, like Australia, Hong Kong and Japan, which received the study’s highest ranking, have the infrastructure in place and SMEs in these nations are ready to make the move to the cloud now. SMEs in these nations are also likely to be able to purchase software in the near future.

In developed economies, benefits of the cloud, like the reduction in IT costs, will be a selling point. For emerging economies, a cost-savings driven approach won’t work. Early cloud adopters will likely experience increased IT costs as the needed infrastructure is put in place. The study found that, for nations with less mature IT foundations, the better approach is centered on worker efficiency and the reduction of administrative pain points.

For both developed and emerging economies, the gateway to Asia’s SMEs is through mobile. Internet-enabled smartphone access dwarfs that of broadband or wireless across the region. Mobile penetration tops 100 percent in Indonesia, while less than 2 percent have access to fixed broadband services. In contrast, nearly 90 percent of China has Internet access through a smartphone, while less than half that figure has wireless access on a computer. Even Japan, with its highly developed economy, mobile access is almost three times that of wired Internet. Asia’s businesses and consumers are mobile first and software developers should follow suit.

Learning Curve

The migration into the cloud supports three key trends for small businesses worldwide: mobile devices, remote working and bring your own device (BYOD). Yet just 3 percent of business owners in Indonesia understood what “the cloud” meant. Grasp of the technology in Japan, wasn’t much better: only a third of business owners were able to define it. Education will go a long way to expand cloud adoption. Many of the top reasons cited by Asia’s SMEs for not exploring the cloud include uncertainty about what solutions were available, uncertainty about what to buy, and lack of IT skills. These issues, however, can be solved by raising awareness and familiarity with cloud computing.

So how can service providers close the education gap? The study suggests implementing a dedicated support staff and offering new clients 30 to 90 days of support.

For an in-depth study of each of the countries profiled, read the full study here.