According to research by Close Brothers, 58 per cent of UK SMEs do not use cloud-based computing where software, storage and other services are delivered over the internet using remote servers.
In total, a third of small and medium sized businesses (33 per cent) say that they do not use the cloud at all and 25 per cent say that they are not currently using the technology, but plan to implement it in the next 12 months.
The reasons given for not using the cloud for business vary. Of those not using the technology, over a third of companies (36 per cent) do not trust that it is secure enough. A further 29 per cent believe transferring to the cloud would be too time intensive, and 16 per cent say that they cannot afford to invest in it.
There is also a knowledge gap when it comes to cloud technology. Three quarters of SME senior business decision makers (73 per cent) say they do not understand it well. One in ten (ten per cent) admit they do not know what it is.
Smaller enterprises are least likely to be familiar with business clouds. In companies with an annual turnover of less than £250,000, 14 per cent claim they understand the technology well. In comparison, in firms with a turnover of over £5,000,000, 45 per cent say that they do.
However, firms of all sizes recognise the value of using the cloud for business. According to responses, the top reasons SMEs would consider adopting the technology are to enable flexible working (29 per cent), to save space (28 per cent) and to improve organisation and documentation (25 per cent).
David Thomson, CEO of Close Brothers Invoice Finance, said:
“SMEs appear to still be at the early stages of adopting cloud technology, but these businesses could gain the most. Companies should consider how virtual servers could be used in their organisation and what kind of system might best fit their specific requirements.
“The cloud offers a number of benefits for smaller businesses, including increased storage space, remote access to data, and reduced costs. It can also protect against a loss event as companies no longer need to rely on hardcopies of documents, manual back-ups or local infrastructure.
“However, while this technology has the potential to enhance operations, it is important to make an informed decision when choosing how to use internet-based applications. Businesses should remain alert regarding IT security and sharing sensitive information.”