In the current macroeconomic climate, with rising inflation and fears of a recession, there is good reason for organizations of all sizes to be cautious. The report found that reliance on cloud computing is growing, with 61% of SMBs surveyed saying they are increasing their spend on cloud computing. The top motivator for migration was cost savings, the report said.
The findings also revealed that 84% of companies believe investment in technology would future-proof their businesses, with economic uncertainty and meeting revenue targets their top two priorities.
Gabe Monroy, DigitalOcean's chief product officer, told ITPro Today that he was surprised at just how optimistic these smaller businesses are, given the uncertain economic conditions. He noted that the survey found that 31% of SMBs expect little business impact from the current economic slowdown.
"People often say in times like these that enterprises get a mild cold while SMBs get the full-blown flu, but having invested in technology like the cloud, managed services/hosting, and automation, the leaders of these businesses have faith that they're prepared to weather the storm," Monroy said.
DigitalOcean Currents Report Reveals How Cloud Is Helping SMBs
The report found that 84% of SMBs believe that investing in the right technology helps future-proof their business.
That confidence can be attributed to the fact that the tech that SMBs' have invested in has to this point helped streamline operations, grow their businesses and revenue, and make them more adaptable to change, Monroy said.
Looking specifically at the cloud, he said it can benefit both new and old use cases. In times like these, small businesses don't have a good handle on what their demand might look like in the next few months.
"They don't want to over-invest in technology and infrastructure if the economy is preventing customers from buying what they're selling,” Monroy said. "Moving to the cloud means moving to a consumption-based pricing model, which allows costs to scale with demand."
The elastic quality of consumption pricing is superior to alternative approaches such as on-premises infrastructure, which is very capital-intensive, slow to maneuver, and difficult to forecast, he said.
How Can the Cloud Actually Help 'Future-proof' SMBs?
A key finding in the DigitalOcean Currents report is the ability of cloud to help future-proof organizations.
The report found that investments in technology — especially in migrating businesses to the cloud — have helped SMBs:
- increase efficiency (67%)
- save money (47%)
- grow more quickly (39%)
- hire fewer employees (23%)
These reasons are all top of mind and will be more challenging for SMBs heading into 2023, and Monroy expects to see cloud adoption in particular continue to grow among this market due to the simplicity, flexibility, and low cost that the cloud offers as SMBs tighten their belts.
"While companies are in cost-saving mode today, they also need to plan for future growth," he said. "Moving to the cloud helps accelerate a geographic expansion strategy to service a global market."
Monroy added that once an organization is the cloud, enabling a new geography can be as simple as deploying an application to a new cloud region.
"We see this phenomenon today, as over 60% of DigitalOcean's revenue comes from companies outside of North America, many of whom are building global businesses that serve customers around the world," he said.
About the authorSean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.