Digital acceleration took off during the pandemic, and companies are still prioritizing adapting to the digital-first world. In fact, recent surveys show 38% of companies are planning to spend more on digital transformation in 2022 than in 2021.
However, even with an increase in investment, not all organizations are on the same page of this transition. In this blog, we'll examine the findings from the latest DigitalOcean Currents report and what it reveals about the ways companies are leveraging the cloud to adapt to the digital future.
The Knowledge Gap
There is a large cloud knowledge gap between traditional small-to-medium businesses (SMBs) and enterprises.
For example, 48% of respondents from traditional SMBs are not familiar with the term "cloud native," compared to just 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.
Because of this knowledge gap, SMBs are interested in simpler cloud solutions. The survey found that SMBs across all industries generally have fewer technical staff than enterprises with 43% having zero full-time technical staff, and are more likely to have multiple priorities when it comes to managing cloud solutions as a result. Because of this difference, SMBs are actively seeking cloud services that reduce time spent managing infrastructure.
Given the increasing investment in digital transformation and SMBs' need for streamlined services, there will likely be an increase in the adoption of cloud services with easily manageable infrastructure in 2022.
Pandemic Recovery
While the knowledge gap is primarily a concern for SMBs, 69% of all businesses — from major enterprises to bootstrapped startups — reported the cloud was a major factor in their pandemic recovery. Of the respondents who reported increased cloud usage in 2020 due to COVID-driven digital acceleration, 82% of traditional SMBs, 83% of tech-focused SMBs, and 92% of enterprises said their cloud usage continued to increase in 2021.
The broad popularity among different-sized businesses signals that adoption won't slow down anytime soon. However, the increased adoption doesn't mean smaller businesses are not struggling to keep up with larger companies on the technology curve. The majority of businesses, regardless of size, listed the impacts of COVID-19 as the biggest challenge they face right now. But for small to medium businesses, keeping up with the technology curve is the second biggest challenge, mostly due to the perceived cost of and time needed to manage tech services.
One Size Doesn't Fit All
Beyond increased adoption rates, the survey also found different-sized businesses need different cloud architectures to meet their needs, and what works best for the enterprise could cost SMBs and startups valuable resources.
For example, multi- and hybrid cloud adoption is more prevalent among enterprises (44% multi-cloud, 44% hybrid cloud) and tech SMBs (40% multi-cloud and 36% hybrid cloud), while traditional SMBs are more likely to have a single cloud (46%).
In most cases, traditional SMBs often start with on-premise infrastructure and graduate to the cloud (51%). This is a slight difference compared to enterprise and tech-focused SMBs, who are near equally likely to be hybrid or completely cloud-based from the start (65% of enterprises, 64% of tech-focused SMBs).
However, tech-focused SMBs are most likely to consciously seek out a multi-cloud architecture to meet their needs because of limited architecture management resources as less than half of SMBs have a dedicated staff person managing infrastructure.
Going Forward
While companies of all sizes have leaned into the cloud to offset the negative impacts of COVID-19 on their business, this recent survey shows smaller companies still struggle to overcome the tech curve. Going forward, it's likely that SMBs and startups will continue to seek out simple, cost-effective and flexible cloud services and straightforward educational services/communities in order to continue to reap the benefits of the cloud and grow their businesses.
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