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NZ Business Still Foggy On The Cloud

12 September 2012

NZ Business Still Foggy On The Cloud
• Only 14% of local businesses report using cloud solutions
• 31% say they don’t know enough to use the cloud
• Manawatu-Wanganui most cloud connected region, Christchurch most cloud connected city

Although many New Zealand business operators have discovered the benefits of the cloud, few claim they are using the technology for business activity, according to the latest research by MYOB.

MYOB, which offers the MYOB Live suite of cloud solutions, commissioned Colmar Brunton to conduct a nationally representative survey of over 1,000 SMEs to highlight awareness, benefits and use of online technology. According to the survey, only 14% of New Zealand businesses said they use the cloud for business, while 78% said they did not use it and 8% did not know.

Despite the currently low levels of cloud adoption reported, many liked the freedom and convenience of the technology.

MYOB general manager Julian Smith says despite widespread promotion of the cloud by technology vendors and the clear benefits the online environment can offer, businesses are yet to take to the cloud in great numbers.

“The cloud is very much the industry buzzword at the moment – you can’t browse a business or technology website or publication at the moment without reading about it.

“Yet despite the technology industry’s best efforts to teach others about the concept of cloud computing, our research shows a disconnect between SME cloud usage and their understanding of it,” says Julian Smith.

“Given the widespread use of internet banking and email, to give some common examples of straightforward cloud services and tools, it’s surprising that almost four out of five business owners say they don’t use the cloud. It’s likely that many business operators are in fact leveraging some form of cloud technology without realising it.

“To get more businesses to be comfortable in the use of newer and more advanced cloud products and services, we need to focus on promoting the productivity and financial benefits rather than just the technology behind it. The cloud is already providing significant business improvements – and has been doing so for years. What we need to help business owners see is that the cloud can now offer access to even more powerful business tools that improve the way we work.

“With cloud solutions now ready for the mass market, our approach must be more broad and business-focused. Our clients and partners, many of whom already use cloud solutions, often tell me their main concern is how technology will help them be more competitive and make business life easier. But like many new business tools and innovations – such as smartphones – do most people care about how they work, or the business benefits they bring?”

The research saw respondents highlight a lack of knowledge and security concerns as key barriers to their uptake of cloud technology. For those who said they were using the cloud in their business, the key drivers were their ability to access business data from various locations and their reduced exposure to IT issues.

Key drawcards of the cloud
The most popular reasons for businesses using cloud computing are:
1. being able to access data from wherever they want (59%)
2. the ability to have their team members work remotely (43%)
3. feeling their data is better protected and safer online on external servers (34%)
4. reducing the number and range of IT issues they have to deal with (31%)

“Cloud technology reflects the way modern businesses work,” says Julian Smith. “Increasingly, businesses have teams on the road, in the office and working at home. The power of the cloud provides the freedom to work anywhere at any time, to be with your customers, partners and suppliers while still enjoying a connection to the office.

“Plus, the secure gateway offered by trustworthy cloud providers means you can authorise others to access your business data as you access it. This eliminates the need to transmit data in physical forms to, say, your accountant or book keeper via CD, USB, email and other less secure means.”

Key barriers to cloud usage
For the majority of local businesses however, the cloud is still not widely used, with MYOB’s research revealing a range of issues that business operators said were preventing them from embracing the technology:
1. 31% said they did not know enough about the issues to make the right decision
2. 19% said they were not tech-savvy enough to feel confident to even start looking at the issue
3. 19% were unsure of the safety in storing their data in servers overseas
4. 18% said it is of interest, but there are more important other business priorities to take care of first
5. 17% were unsure their data would be as secure on servers other than their own

Julian Smith said developments in the way the technology is being offered to consumers and businesses, promoted by some of the world’s IT giants like Google, Microsoft and Apple, are changing the way the cloud can be used – making it easier, faster and more efficient to adopt.

“Using next generation cloud technology – cloud-enabled software – can make it easier for SMEs to embrace the cloud. It not only allows you to access your business data online, you can access the same file offline because the cloud and local files are synced. You get the benefits of cloud with that of a desktop application – the best of both worlds. And with a product like AccountRight Live, where we’re cloud-enabling our flagship accounting software, clients don’t need to learn a new system. They work with a solution they know to leverage the benefits of the cloud.”

Potential benefits to customers
More wide-spread use of the cloud could also benefit the Kiwi consumer, according to the research. More than one quarter (26%) of respondents said they were quite likely (21%) or very likely (5%) to pass on savings if they could use the cloud to reduce business administration costs.

Businesses most likely to use cloud
According to the research, the types of businesses or business owners most likely to say they used cloud computing included:
• Businesses with a website (24%)
• Businesses employing 20-199 Full Time Employees (FTEs) (21%)
• Businesses employing 6-19 FTEs (19%)
• Those in business, professional & property services businesses (19%)
• Generation X – business owners 30-44 years old (18%)
• Those running start-up businesses (18%)
• Metropolitan-based businesses (17%)

Not quite the ‘land of the long white cloud’ – cloud computing usage across the regions
The most cloud-connected region in New Zealand, according to the survey, is the Manawatu-Wanganui region with 22% of businesses – higher than any of the main centres. Christchurch is the most cloud-savvy of the main centres, with 17% of businesses using the cloud, while Wellington and Auckland align with the national average on 14%. 80% of small and medium operators across the regions reported not using cloud for business.

In terms of the leading barriers to cloud adoption, Hawke’s Bay had the highest proportion of respondents who said they did not know enough about the issues to make the right decision (42%) while Cantabrians were the most concerned about the safety in storing data in servers overseas (25%).

Full results across the cities and regions for cloud computing usage were:

Cloud ComputingYesNoDon’t know
Bay of Plenty13%82%5%
Hawke’s Bay15%75%11%
Otago & Southland10%77%13%

Note: Northland, Gisborne, Tasman & West Coast, Nelson, and Marlborough were excluded in this table due to small sample size but were included in national results.

About the MYOB Business Monitor
The MYOB Business Monitor is a nationwide survey of over 1,000 New Zealand business owners, across a range of small and medium businesses, from sole traders to mid-sized companies, and representing the major industry sectors. The MYOB Business Monitor is designed to research key areas of business performance, including profitability, cash flow and pipeline work, as well as business confidence.
Note: the weighting of MYOB client and non-client respondents is reflective of overall market proportions.

About MYOB

Established in 1991, MYOB is one of New Zealand’s largest business management software providers. Its 50+ products and services have been employed by more than one million businesses in New Zealand and Australia. MYOB serves businesses of all ages, types and sizes, delivering solutions that simplify accounting, payroll, client management, websites and much more. With a network of more than 20,000 accountants and other professional partners, it provides the support and tools that help make business life easier. Today, MYOB is extending its solutions online and delivering innovation through cloud computing, enabling clients to make smarter connections with their business partners and customers. For further information visit:


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