Security and Cloud Computing at SMB Crossroads

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Cloud computing may be the marquee player in IT services, but when it comes to giving business leaders the cold sweats, security still steals the show, at least among the cloud’s newest arrivals.

Cloud computing may be the marquee player in IT services, but when it comes to giving business leaders the cold sweats, security still steals the show, at least among the cloud’s newest arrivals.

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In a new poll of 1,300 technology service providers offered up by PSA purveyor Autotask, the IT pros say their clients are more concerned about security than they are about even high-profile matters like MDM and cloud.

Better than half (54 percent) of those queried said security was the top clients concern, followed by support for the cloud (52 percent), mobile-device management (46 percent) and data management (45 percent).

Their concerns are not unfounded. In their annual Security Threat Report for 2013, Symantec Corp. said attacks on SMBs jumped 18 percent from the year earlier. In their own research, Intel Corp.'s McAfee security unit found that nearly 80 percent of SMBs or eschewing data protection in general. Fewer than half have any security safeguards on e-mail on Internet connections and just 9 percent are using device-level security.

This despite the findings by Verizon that nearly a third (31 percent) of data breaches last year hit companies with fewer than 100 employees.

So, the channel's largest customer base is right to be worried.

Security concerns are not, however, having much of a dampening effect on cloud services, which solution providers tell Autotask is now  the top demand driver for IT services.

“The expansion of the cloud is a golden opportunity for managed service providers,” said Len DiCostanzo, senior vice president of community and business development at Autotask. “To capitalize on the cloud’s growth, IT service providers need to focus on expanding their managed service offerings to include cloud services, increasing security and evolving their business model to be more consultative, where they deliver integrated business solutions and trusted service, not just IT support.”

While seemingly at odds, the SMB markets focus on security and hunger for more cloud services indicates a logical intersection along the path of cloud adoption. In fact the Autotask number mesh well with recent research from RightScale that tracked users across the cloud maturity continuum from what it called Watchers (non-users)  through Beginners, Explorers and finally Focused (heavy cloud users).

RightScale’s data from 1,000 IT decision makers shows that security concerns abate sharply when users gain experience with the cloud and recognize its benefits. As in the Autotask research, RightScale found that security is the most-often cited challenge among the Watchers at 31 percent. Those trepidations drop steadily across the maturity spectrum, landing in fifth place at just 13 percent by the time we reach the cloud Focused group, which is far more concerned with matters such as compliance, cost and performance.

"Enterprises are adopting cloud computing in record numbers and have leveraged growing experience to overcome many of the early challenges including security," said Michael Crandell, founder and CEO of RightScale. "Large enterprises are complex and understandably deliberate in cloud adoption, yet with increased adoption they continue to unlock more value."

Among the other findings in the Autotask 2014 IT Service Provider Benchmarking Survey:

  • IT companies are predicting continued growth this year with 87 percent saying they plan to do the same or more hiring this year compared to last year.
  • The hiring spree is being fueled in part by a resurgent economy as well as new client requests (78 percent), the need for new skills (45 percent) and geographic expansion (25 percent).
  • IT company leaders say they most value their technicians’ technical knowledge (34 percent), followed by how much customers like them (20 percent) and how many hours they bill (18 percent).
  • Billing rates appear to be headed upward with 62 percent of IT firms now saying they bill between $100 and $150 per hour, up from 51 percent who were billing at that rate last year.

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