SMBs using hosted services have better financial performance

Bangalore: Despite the slowdown, more SMBs surveyed in 2010 reported an increase in revenue than in 2008. Of the SMBs that view IT as critical, 60 percent saw revenues grow over the past 12 months. In contrast, among SMBs that stated IT is not important, less than 29 percent saw revenue increase, according to survey done by Microsoft.

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Microsoft released its global SMB IT and Hosted IT Index 2010, which investigates how small and midsize businesses (SMBs) across multiple segments fared during the recession and how they use technology. The 2010 index indicates that SMBs are beginning to see the benefits of cloud computing; more than 40 percent of the respondents that use hosted or cloud technology reported revenue rises of 30 percent or more compared with 90 percent of respondents not using hosted technology that saw decreases in revenue. The advantages of hosted or cloud technology are viewed as reduced cost and IT management and maintenance, as well as increased business value, productivity and competitiveness.

Cloud computing has become a watchword for the IT industry as software and services such as e-mail, websites and e-commerce are increasingly available in an on-premises, off-premises or hybrid model depending on business need. "Over the last five years, we have seen nearly 40 percent growth in usage of hosted services. Using pay-as-you-go cloud technologies, small and midsize businesses can now afford and easily have access to enterprise-class, secure services across any platform," said Michael Korbacher, Director of EMEA Software plus Services in the Communications Sector at Microsoft.

The findings from the research were concluded by analyst firm Freeform Dynamics, which independently assessed the SMB IT and Hosted IT Index 2010 to ascertain to what degree IT adoption is driving revenue growth specifically within the SMB community. The SMB IT and Hosted IT Index 2010 commissioned by Microsoft researched 3,193 SMBs in a cross section of private industries in 15 countries. Overall, the findings show greater awareness of the benefits of IT among SMBs and a high reliance on IT across all industries and geographies. The findings indicate a clear path towards better financial performance than for those not currently taking advantage of IT advances such as hosted services. "Our assessment of the report tells us that an increased focus on IT correlates with good performance in all of the size categories surveyed. This whole picture corroborates the notion that technology and hosted services can provide tangible business advantage, even for smaller companies, and it's not surprising to see that investment in IT and hosting goes hand in hand with good financial performance," said Dale Vile, Research Director of Freeform Dynamics.