a seasonal report on developer and SMB trends in the cloud
Small and medium-sized businesses (SMBs) make up a huge part of the economy, but many solutions cater to enterprises, and SMBs face unique challenges when it comes to running their business and selecting technology solutions. To gather in-depth information about SMBs of all types and their challenges and use of cloud solutions today, DigitalOcean worked with research agency AspenFinn to conduct research with three groups:
To answer our questions surrounding business challenges and identify trends regarding SMBs and cloud usage, a survey was conducted with 2,400 IT decision makers in 48 countries. The main sample consists of a roughly equal amount of respondents in each of the three business types. A summary of findings is below, and you can download the full 50+ page report, which includes regional insights and additional data, by filling out this form.
SMBs of all types have less technical staff than enterprises and are more likely to have multiple priorities when it comes to managing cloud solutions. This report found that the responsibility of managing cloud services often falls on the CEO, president, or even the owner of the traditional SMB. On top of limited technical staff, traditional SMBs note cost (19%), technical training and education (13%), and time required to manage services (12%) as barriers to cloud adoption, showing traditional SMBs are calling for cloud solutions that are less complex and easier to manage.
Traditional SMBs suffer from a knowledge gap around cloud solutions, which means their cloud setups are less complex than tech-focused SMBs and enterprises. For example, 48% of respondents from traditional SMBs are not familiar with the term “cloud native,” compared to the 5% of respondents from enterprises who are not familiar with the term. Meanwhile, 56% of respondents from traditional SMBs are not familiar with the term “digital native,” compared to the 18% of respondents from enterprises who are not familiar.
Of the respondents who reported increased cloud usage in 2020 due to COVID-driven digital acceleration, 82% of traditional SMBs, 82% of tech SMBs, and 92% of enterprises said their cloud usage has continued to increase this year. Sixty-nine percent of respondents believe the cloud has helped their business recover from the ongoing pandemic. Businesses of all sizes say coping with the impacts of COVID-19 is the biggest challenge they face right now, but for traditional SMBs, keeping up with the technology curve is just behind.
We asked respondents if they consider themselves to be a cloud native business, meaning they leverage cloud solutions to build and scale their business. Enterprises and tech-focused SMBs were more likely to be cloud native businesses than traditional SMBs–64% of enterprises, 58% of tech-focused SMBs, and 35% of traditional SMBs say they are cloud native. Cloud native businesses are also more likely to consider themselves startups, find hiring and training employees on technology solutions a greater challenge, and say the complexity of cloud solutions is more of a challenge than non-cloud native businesses.
SMBs are often pulled in multiple directions, and have staff who are managing multiple priorities at once. While COVID-19 is the top challenge facing businesses, technology challenges are a priority for both enterprises and tech-focused SMBs, while traditional SMBs are focused on meeting revenue targets and keeping overhead costs down.
SMBs have less technical staff than enterprises, and may not have a dedicated staff member managing their infrastructure–just 48% of traditional SMBs have a dedicated person managing infrastructure, while 83% of tech-focused SMBs and 92% of enterprises say the same.
While COVID-19 impacts is the biggest business challenge facing all businesses today, enterprises and tech-focused SMBs cite technology challenges as secondary challenges. Ensuring their technology meets the needs of customers and their business, and keeping up with the technology curve are mentioned as challenges by both enterprises and tech-focused SMBs.
19% of traditional SMBs cite cost of services as a top technology challenge, compared to 8% of enterprises and 12% of tech-focused SMB. Time needed to maintain services is also most cited by traditional SMBs, at 12%.
Cost of technology is likely a concern for SMBs as they are paying a disproportionally larger amount of their revenue for tech solutions compared to enterprises.
Traditional SMBs have fewer employees than the other business segments and thus have fewer or no employees dedicated to managing their technology. Those that do have many competing priorities and have the additional challenge of not knowing as much about technology and cloud solutions. There is also lower usage of cloud solutions, software as a service (SaaS) solutions and platform as a service (PaaS) solutions among Traditional SMBs.
Just 16% of traditional SMBs are very familiar with the term 'cloud native' compared to 43% of tech-focused SMBs and 60% of enterprise businesses. Enterprises and tech-focused SMBs are also more likely to consider themselves a cloud native business–just 35% of traditional SMBs consider themselves a cloud native business compared to 58% of tech-focused SMBs and 64% of enterprises.
Multi- and hybrid cloud adoption is more prevalent among enterprises and tech SMBs, while traditional SMBs are more likely to have a single cloud (46%). Additionally, traditional SMBs often start with on-premise infrastructure and graduate to the cloud (51%) compared to enterprise and tech-focused SMBs, who are equally likely to be hybrid or completely cloud-based from the start (65% of enterprises, 64% of tech-focused SMBs). Tech-focused SMBs are most likely to consciously seek out a multi-cloud architecture to meet their needs.
Traditional SMBs have less complex cloud setups and are less likely to use cloud hosting solutions, databases, and containerization systems, with just 9% of traditional SMBs using containerization systems such as Kubernetes/Docker compared to 19% of tech-focused SMBs and 33% of enterprises.
COVID-19 recovery is the top challenge facing businesses in 2021 regardless of size–26% of traditional SMBs, 25% of tech-focused SMBs, and 22% of enterprises list pandemic recovery as their biggest challenge. Additionally, reliance on the cloud due has increased both since the start of the pandemic, and many have increased cloud usage just in 2021.
Overall, 65% have increased their reliance on cloud infrastructure solutions as a result of COVID-19. Of those who reported increased reliance on cloud infrastructure, 86% say their reliance increased just in 2021.
Cloud native businesses, those that leverage cloud solutions to build their business, have unique challenges and characteristics compared to non-cloud native businesses. They have more complex setups and therefore find hiring and training employees on technology solutions a greater challenge, and are more likely to identify as a startup.
Cloud native businesses are more likely to be enterprises or tech-focused SMBs than traditional SMBs, and 61% of companies that consider themselves a cloud native also consider their company a startup.
Cloud native businesses have more complex cloud setups than non-cloud natives. 46% use a multi-cloud setup, compared to 36% of non-cloud natives, and 23% use containers as a service versus 10% of non-cloud natives.
We conducted 2,400 interviews among tech decision makers in 48 different countries from Sept. 22 - Oct 14, 2021. The surveys were conducted in English, Spanish, French, German, Italian, Portuguese, Mandarin, and Japanese. Additional sample was gathered in key countries to allow for a deep dive into these countries. The full methodology can be viewed in the PDF report, available for download here.
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