Solution Providers Seeing Cloud Pressure On SMB Customers

During CRN's VAR Roundtable at D&H Distributing's New England Technology Show this week, several solution providers said they are seeing more small and midsized businesses move their applications, data and infrastructure to the cloud. But in many cases, that cloud migration is being pushed by industry pressure and edicts from larger enterprise customers or business partners.

"What's happening is a lot of the businesses are forced to take cloud applications and services," said Richard Trahant, president of managed service provider Land Computer in Peabody, Mass. "They have no choice in the matter."

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For example, Trahant said he's seeing a lot of cloud pressure on smaller financial services clients that do business or are affiliated with larger companies that are already in the cloud.

"Seventy-five percent of everything those financial advisors are doing in their business is now cloud-based," Trahant said. "They sign partner agreements with larger investment firms and insurance companies, and those companies then say 'Well, all of our email and apps are being run in the cloud, and you have to use it too -- unless you don't want to be an agent or a representative for us.' So they're being forced into the cloud whether they like it or not."

Larry Gold, president of Computer-EZ in Mendon, Vt., agreed and said there's also mounting pressure for healthcare clients such as small doctors' offices that have been acquired by larger regional hospital and therefore must move parts of their IT operations to the cloud.

"It's all going to the cloud," Gold said, "and there's not ... a lot of choice."

Gold said most small businesses are afraid of moving their data and applications off site, but he said there are advantages to certain cloud services, and being able to advise SMB customers about cloud migration is an opportunity for his business.

"Our customers have had their data on their own servers in house, and it hasn't been susceptible to the issues of being out in the open in the cloud," Gold said. "They're deathly afraid of having their data out there and potentially lost. At the same time, being in the cloud does afford them some flexibility."

David Hodgdon, CEO of Portsmouth Computer Group in Portsmouth, N.H., said he still sees many SMB customers that want to keep their IT on site, but others are taking a more open approach to adopting specific cloud services. Hodgdon said he thinks the cloud has major advantages for clients with multiple offices.

"I see the cloud as critical if you have more than two locations and maybe aren't centralized in one location," Hodgdon said. "You can distribute your data and services, and you don't have to worry about your email server going down in one location because it's in the cloud."

The roundtable participants said even SMB customers that have to be dragged to the cloud kicking and screaming are a business opportunity because solution providers can help advise them on which parts of their IT operations should be moved to the cloud and which parts can remain internal.

"We help them with that [cloud transition], because there are still things that need to be done locally," Trahant said. "So it really is a hybrid environment. And for the people that haven't had to deal with it yet, you will."

PUBLISHED AUG. 9, 2013