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SMB technology in 2020: Hybrid cloud looms large

SMBs lean into the cloud and experiment with new technologies while grappling with traditional challenges such as lack of in-house expertise and security concerns.

IT leaders at small and midsize businesses are placing hybrid cloud high on their to-do-lists. A combination of on-premises and public cloud services, hybrid cloud delivers the best of both worlds: the responsiveness of corporate servers and the expandability of public cloud services.

"The hybrid cloud is having a huge impact on SMBs. They are moving to cloud storage, Office 365, and AWS as they try to minimize the on-premises footprint to reduce overhead costs," says Joaquin Ochoa, partner and senior vice president of aviation technology and engineering at SubIT, an IT solutions provider.

According to Aberdeen, hybrid cloud is poised for a threefold jump, from 7 percent to 21 percent in 2020. The research firm defines SMBs as having up to 500 employees in studies compiled through November 2019. Meanwhile, private cloud, which is already at 38 percent among SMBs, wi1l see a gain of 16 percent in 2020, according to Aberdeen.

The surge among smaller companies is notable because SMBs reap greater benefits from hybrid IT than their enterprise counterparts, Aberdeen has found. For example, 78 percent of SMBs gain improved IT flexibility compared with only 36 percent of all others, and 79 percent are able to reduce risk, compared with 47 percent of all others (see Figure 1). Why the disparity?

"There could be a number of factors," says Jim Rapoza, research director at Aberdeen. "Probably the biggest is the late-mover benefit: They got started later on hybrid and cloud in general and are able to leverage more mature, easier-to-implement, and more cost-effective solutions." 

Figure 1

Going hand in hand with hybrid cloud will be increased adoption of software-defined data center (SDDC) technologies, which are set to leap from 10 percent currently to 22 percent in 2020. SDDC enables IT managers to use graphical software to flexibly deploy servers, storage, and networking devices to maximize utilization and lower costs―both on premises and in the cloud.

In addition, the use of container technology among SMBs, now at 8 percent, will grow to 18 percent this year, according to Aberdeen. Because containers consist of a standard, portable package for applications and libraries, they are well suited to hybrid cloud implementations and should prove particularly beneficial to smaller companies, according to Rapoza. "Lots of smaller companies might implement containers in the cloud. It's a field leveler for smaller companies. It gives them more power and reduces cloud costs because they don't have to have giant, monolithic applications," he says. 

Time for new technologies

SMB IT leaders also appear ready to take the plunge with advanced technologies, including augmented reality and artificial intelligence. AI, now at 3 percent, will grow to 16 percent, and AR, now at 14 percent, will increase to 31 percent, according to Aberdeen (see Figure 2). "There is a lot of interest in AR for classic SMB verticals like retail (for AR-enabled shelves and displays), hospitality (for AR-enabled maps and check-ins), and field service (for AR views into equipment health and status)," Rapoza explains.

Thus far, AI adoption among large enterprises is much further along than deployment among SMBs, which are four times less likely to have implemented AI than their larger counterparts, Rapoza says. According to SubIT's Ochoa, cost has been a big obstacle among SMBs, but as that changes, many mainstream small businesses, such as medical and dental offices, could be ripe for AI technologies that enable them to better track patient progress and outcomes, he says. SMB aviation industry companies are also well suited to AI: "Being able to do AI will create significant cost savings and will guarantee higher uptime by predicting when parts will fail," says Ochoa.

Figure 2

When it comes to IoT, Aberdeen survey data shows 18 percent are using IoT now and an additional 24 percent expect to deploy it in 2020. Interestingly, 57 percent of best-in-class companies using IoT are SMBs, according to Aberdeen, which defines best in class as the top 20 percent in IoT success metrics.

Ochoa's company assisted a trucking company in deploying cloud-based software that utilizes IoT data to track the company's fleet and cargo shipments. The ability to monitor logistics accurately is important to the company, whose trucks can be hired on demand, much like Uber drivers, Ochoa explains.

According to Aberdeen, blockchain technology―long on hype but short on mainstream deployment―is poised for growth in the retail sector. Of retail businesses that are proficient in the use of blockchain, 44 percent are SMBs, Aberdeen finds.

Back to reality

To bring their technology wish lists to fruition, SMB IT leaders will need to grapple with some traditional challenges, namely lack of in-house expertise and security concerns (see Figure 3). "They are looking for holistic help from their As-a-Service providers," says Rapoza. Other issues SMBs face are under-utilization of resources, too many disparate and disconnected tools, infrastructure that is too complex, and demand that exceeds IT resources, Aberdeen found.

Figure 3

As SMBs implement hybrid cloud strategies, the right partner can help. "The cloud experience should be open and seamless. The best partner doesn't have an agenda," says Antonio Neri, president and CEO of Hewlett Packard Enterprise. Further, the implementation of AI in managing a hybrid IT infrastructure "provides insight and oversight to optimize cost, compliance, and security," Neri says.

With in-house expertise at a premium, SMB IT leaders require IT infrastructure that just works. As those decision-makers evaluate IT infrastructure, their top criteria are ease of upgrades, quality service and support, standards compliance, and integration and interoperability with existing infrastructure, according to Aberdeen (see Figure 4).

Figure 4

The move to cloud services will have an impact on on-premises hardware, driving the adoption of compact, easy-to-manage systems, says Huy Tran, a business technology consultant at Logik 7, a solutions provider.

"SMBs will start adopting more cloud-based services and reducing their hardware infrastructure to smaller, minimal equipment. With the rise of cloud services for hosted email, CRM, QuickBooks online, and other services, most SMBs are reducing their reliance on big on-premises servers and going with smaller servers and what are now being called microservers," Tran says. "These servers have the specs to handle most of their requirements for minimal applications that need to be managed on site, such as local file storage, backups, Active Directory, and network gateway."

With these trends in mind, it's clear that for SMBs in 2020, systems that are easy to deploy, maintain, and manage will get the nod over complex systems that require intensive staff involvement. HPE SMB solutions address these needs in a number of ways, including simplified on-prem storage optimized by analytics, streamlined server management across the hybrid cloud, and converged small office solutions that incorporate server, storage, and networking technologies.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.