Clutch spoke with Dave Linthicum, Senior Vice President of Cloud Technology Partners, as part of a series of interviews about small business cloud storage usage.
Learn more about Cloud Technology Partners at Cloudtp.com.
Could you describe the company where you work and your role there?
I work at Cloud Technology Partners, an elite cloud computing consulting firm. Cloud Technology Partners helps solve companies’ problems by creating a strategy that shows them how to implement or transfer their applications to cloud-based platforms. We also build cloud systems for independent software vendors (ISV) and enterprises that want to get into the cloud business.
I am Senior Vice President of Cloud Technology Partners. I am on the executive team, which works with clients directly, as well as focuses on business acquisition.
Reflections on and Reactions to 2015 Small Business Cloud Storage Survey
Finding #1: 48% of small businesses have not adopted cloud storage yet.
What is your reaction to this finding?
It doesn’t surprise me. You have to remember that most small businesses are indeed small: they run out of houses or are plumbing and air conditioning operations. They are not Cloud-savvy. Especially with the price of PCs being $300 or more these days, using cloud storage may not be attractive to them.
Also, they may not understand how to leverage cloud storage. I think many small businesses will actually avoid using the Cloud if there are other alternatives that are easier for them to understand.
In your opinion, what factors contribute to the large proportion of small businesses that do not use cloud storage yet?
I believe that small businesses do not understand what cloud technology is able to provide as well as they should.
When I talk to small business groups, many do not understand how the Cloud applies to them. Instead, they see cloud computing and cloud storage as something that big enterprises use, not small businesses.
However, at the same time, these small businesses are using software as a service- (SaaS) based systems, such as FreshBook and Salesforce and numerous other applications. They just choose to use local equipment for data storage.
Finding #2: Small businesses identified Dropbox as the most popular cloud storage service provider, followed by Google Drive, Apple iCloud, and Microsoft OneDrive.
Do you have any insight into Dropbox’s popularity over other services?
With Dropbox, it is very easy to sign up, inexpensive to implement, easy to use across multiple computers and within small work groups, and integrated into the operating system of the platform that it is installed on.
Dropbox has done a good job at removing barriers, such as set up, and they make it easy to replicate across all of your devices and computers, whereas Google most likely was not as quick to do this.
Google’s storage is more SaaS-based. You have to upload and download files. Integration with different platforms is more of a recent change.
It is the same with Apple. iCloud supports the Apple platforms better than Windows.
Amazon takes the same approach as Dropbox, but they were late to the party. Dropbox has been around since 2008, so it has more brand recognition with smaller businesses.
What should a small business consider before selecting a cloud storage service provider?
Small businesses should consider a number of factors.
- Security and Privacy: Are their files and data going to be encrypted so that they are difficult to access by the outside world? This step is imperative.
- Performance: How quickly can the cloud storage provider integrate the business’ data? And, how quickly can the business retrieve the data?
- Features and Capabilities: The ability for the cloud storage service to operate in the background and take care of a lot of tasks, such as backing up a computer, gathering files, versioning files, dealing with conflicts, and facilitating sharing.
Finding #3: The most satisfactory cloud storage service provider, based on its Net Promoter Score (NPS – willingness to recommend), is Apple iCloud, followed by Dropbox, Google Drive, and Microsoft OneDrive.
What distinguishing features make these four providers the most appealing to small businesses?
As a cloud storage provider, Apple does a good job because it is able to integrate into Apple platforms very deeply. For example, it automatically deals with iTunes and backs up the applications on your devices. Dropbox does not do that.
iCloud is valuable to me because it makes my device a disposable item. For some reason, if my iPhone or MacBook is destroyed or ripped off, I can use iCloud to delete the data on the device. I can also disconnect from the device, replace it with another device, and restore the data that was backed up on iCloud, which happens multiple times a day. This process is a huge benefit and extremely helpful for people who use Apple devices and platforms.
Dropbox is more of a file-sharing service. It acts as a file synchronization system. Although Dropbox does backups like iCloud, it is concerned primarily with placing information on a remote storage system, so you can synchronize it with your devices and other platforms.
I believe the “Apple saved my butt” scenario is more useful to people, whereas Dropbox has many of the same capabilities but is not associated with restoration and saving data from lost devices and other catastrophes.
Do you have any insight into why Amazon did not make the list of satisfactory services?
Amazon’s cloud storage services are so new. It has really only been around for a year. And, Amazon Simple Storage Services (S3) is an enterprise storage system. It is an industrial strength, enterprise IT global storage service, so small businesses and entrepreneurs do not know or care about it. This is why it does not rank high for small business customer satisfaction.
Finding #4: The majority of small businesses began using cloud storage after 2011, and there has been a steady increase in adoption since then.
What factors motivate a business to adopt cloud storage?
I think the need to share files is the main reason why small businesses adopt cloud storage. Small businesses are not concerned about storing data because they can go to an all-purpose store and buy a hard drive for around $100.
What small businesses need is the ability to collaborate on files, spreadsheets, and documents and share data about customer acquisition, accounting, and other topics that are important for running and growing a business.
This ability to collaborate through file sharing has been out of reach for small business until storage services, like Dropbox, Apple iCloud, and Google Drive, started putting out inexpensive, manageable systems.
What events do you believe caused the steady increase in adoption of cloud storage since 2011?
I don’t think there was a single event, but rather a need for these capabilities, like collaboration and file sharing, emerged.
In reality, the need has always been there, but I do not think small businesses understood the technology or knew that it was available.
The cloud storage systems themselves started to become more prevalent in 2011. When small businesses realized cloud storage services existed and were affordable, they began using cloud storage. They realized it was an easier way to share files than through a USB drive.
Finding #5: Nearly half, 48%, of the respondents use a mobile device to access data stored on the Cloud.
What is your reaction to this finding?
I would think that most people use mobile devices to leverage storage systems. Cloud storage services’ mobile capabilities are one of the core motivating reasons that small businesses use cloud storage.
The great thing about Dropbox and other storage as a service systems out there is that if I am on the road and someone asks me to answer a question, I don’t have to wait until I get back home. I have access to my files directly on my iPhone or iPad. I can access my files and give the person an immediate response.
It surprised me that the percentage was even that low. I would have guessed between 75 and 80 percent of small businesses would be leveraging their files from mobile devices.
Finding #6: The top task small businesses use cloud storage to accomplish is backup, followed by access to files across multiple devices and collaboration.
What is your reaction to backup being the first priority activity over collaboration?
I think that the main priority for small businesses is to make sure their data is backed up.
I can’t count how many small businesses that I work with that have a single copy of their data on a hard drive. This puts them at risk. Using Dropbox, Mozy, or other backup systems that automatically back up data consistently, is an absolute imperative these days.
The number one service cloud storage providers offer is offsite backup. In other words, they’re not just putting data and files on a tape drive or hard drive that can be destroyed along with the computer during a fire. The cloud storage providers offer an automatic, “don’t have to think about it” way to back up important information
In comparison to this feature, collaboration is not as important for small businesses because the work groups are so small. Collaboration is much easier in these environments.
Small businesses also may group file sharing with collaboration. It make sense that file sharing would be second place to file backup.
Finding #7: Over half, 61%, of small businesses need to be compliant (i.e. HIPAA, PCI, ISO) for Cloud storage implementation.
Does this finding, especially in the small business community, surprise you?
No, not at all.
In your opinion, how is the integration of compliances with cloud storage service providers important?
Small businesses that are legal firms or doctor’s offices have to deal with HIPAA standards and personally identifiable information (PII), so the ability to implement policies about the use of information and deal with storage services that are HIPAA certified is an absolute imperative.
Cloud storage service providers have to consider the risks and liabilities inherent in building these storage as a service systems. The most valuable ones allow you to control data, audit data, and do anything a regulation dictates for your business.
Benefits of Small Business Cloud Storage Usage
In what ways would using cloud storage benefit a small business?
Adopting cloud storage could benefit a small business in terms of disaster recovery. It could keep them out of trouble by automating backup and recovery operations to lower the risk of losing important information.
Small businesses could also benefit from an easier and more efficient means of file sharing. They could collaborate and share resources among work groups easily versus using email or passing around an external hard drive.
Cloud storage also makes small businesses more productive. This higher degree of productivity is everything to them. It is the ability to automate the delivery of goods and services to clients.
Are there ways in which using cloud storage could hurt a small business?
I think businesses can get in trouble if they don’t understand how to protect their data or what questions to ask about keeping their files secure. This could lead to mistakes that cause data breaches or result in breaking compliance regulations unknowingly. And, if small businesses are not technically astute, this would be a scary situation.
In this scenario, I would recommend that small businesses get additional consulting help or outsource IT work to a market that can reduce the risk.
Future Trends in Small Business Cloud Storage Usage
What trends in small business adoption and usage of cloud storage services do you foresee in the next year?
I think we will see accelerated cloud storage adoption. I think people understand that the capabilities are there: it’s less expensive and security and compliance safeguards have improved.
There’s a need, and pretty soon, through word-of-mouth, small business will discover cloud storage’s potential and realize it’s a huge benefit without a lot of cost.
Did you find Clutch’s study, as a whole, useful and/or interesting?
I thought the study was a good data point.