Cloud Tech Fosters an Entrepreneurial Environment to Boost Economy

Ola Williams

There is no doubt that economic recovery will be buoyed by the success of our start-ups and small businesses. This is because, across the Middle East and Africa (MEA), an estimated 90 percent of all businesses fall into the small- to medium-sized (SMB) category, highlighting the economic importance of these entrepreneurial enterprises.

The lesson thrust upon us by the pandemic is that building resilience is key to ensuring business continuity in ever-changing market conditions in which many SMBs are operating on tighter budgets. The required resilience is rooted in digital transformation, allowing businesses to streamline operations and evolve to better meet current needs, while developing the agility that will enable quick pivots in response to future changes.

Transformation for SMBs is as much about embracing new technology as it is about the speed of that adoption. It extends further still: transformation should nurture a business’s ability to build on and grow its own digital capability as well. Change is here, and in this ‘new normal’ landscape, innovation is the currency that will set businesses apart. This is why enabling an entrepreneurial environment where innovation thrives is so important.

Cloud adoption amongst SMBs is a critical first step in their pursuit of resilience on their digital transformation journey. Beyond this first step, conducting business in the cloud in the long-term is also the best bet for future-proofing operations in a global digital economy. This economy will be driven by the latest technologies, from artificial intelligence (AI) and machine learning (ML) to the Internet of Things (IoT), which use the cloud as a platform. As the Information Technology & Innovation Foundation notes, “cloud computing is integral to new IT-driven business developments”, which, in themselves, will stimulate the economy by driving new solutions to existing problems.

The importance of the cloud for enabling a necessary new way of doing business cannot be understated, and recent surveys demonstrate the tech’s ability to meet this need. The Future of Business Resilience report, released by Microsoft in 2020, notes that investing in the latest technology (which includes cloud computing) results in 20 to 30 percent higher workforce productivity, and 40 to 50 percent faster speed to market amongst some of the benefits.
Investing in such tech pre-emptively, instead of reactively (as was the case for many SMBs during the pandemic), also delivers 50 percent higher returns, speeding up digital transformation by 14 percent, according to the report. With economies having moved out of the initial response phase to market changes brought about by the pandemic, now is the time to embrace proactive solutions for building sustainable businesses of the future.

Clearly, for SMBs embracing cloud migration, the benefits are myriad: improved productivity, faster speed to market, and a higher return on investment. Cloud tech’s power lies in the fact that it removes potential barriers to establishing and growing an SMB. These barriers include the high cost of IT infrastructure, access to new technology, and the difficulty and investment needed to diversify business to reach larger audiences.

According to a Deloitte report, 93 percent of surveyed businesses from around the globe relied on the cloud to meet some or all of their AI needs. This is just one example of how the cloud enables innovation, as it makes new technologies that will create new solutions accessible, increasing a business’s opportunity to diversify as well. Allowing faster speed to market also creates a space for innovative thinking to flourish in, without the time constraints of a failed test weighing on business productivity.

Fluctuating demand in a constantly evolving market puts pressure on the finite resources of an SMB. For small businesses, the ability to quickly and easily scale up or down on IT services is a cost-saving feature of the cloud that enables agility. The need to sink huge investments into on-site IT infrastructure, along with hiring experienced staff to manage these new IT demands, is removed for a cloud-based operation, enabling easier start-up and continued growth with budgets being channelled to other parts of the business. In fact, 70 percent of surveyed SMBs reported they were able to reinvest savings made as a result of cloud migration back into their business, with 82 percent of them having reported reduced business costs after their migration.

The constant need to invest in system upgrades, to ensure security systems have the latest versions for example, are further costs saved by an SMB that has migrated to the cloud, where updates are automatically made by the cloud vendor. Continuous updates give peace of mind from a security standpoint, as does the automated backing up of data. Data recovery, if ever needed, from the cloud as opposed to an on-premises system is quicker, notes Columbus Global, which in turn spells less business downtime.

In general, an SMB’s spend on cloud will be far less than the spend larger enterprises have to budget for, because SMBs run fewer workloads in the cloud, notes the Flexera 2020 State of the Cloud Report. SMBs are perfectly poised for easier transitions, which underpins the recent growth in cloud spend.
Cloud-based technology will play a critical role in enabling inclusive economic recovery, with SMBs able to innovate far quicker and more securely at a much lower cost. This is the enabling environment that we should be nurturing for SMBs and new start-ups alike if our economies are to successfully rebound post-pandemic.

Ola Williams is Microsoft Country Manager for Nigeria