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TECHNOLOGY NEWS: Cloud computing on the rise among small and medium businesses

A new study has found a rise on the adoption of cloud computing among small and medium sized businesses in the first half of 2010. During the first half of 2010, 14 percent of small and medium businesses (SMBs) reported using cloud computing services and another 10 percent reported plans to deploy cloud-based services, according to a new study conducted by Spiceworks.

A global survey of 1,500 IT professionals at small and medium businesses (SMBs) with fewer than 1,000 employees found smaller SMBs are more aggressive when it comes to cloud services adoption than their larger SMB counterparts.

Thirty-eight percent of SMBs with fewer than 20 employees use or plan to use cloud solutions in the next six months. This adoption rate is markedly higher than the 17 percent of organizations with between 20 and 99 and the 22 percent of organizations with more than 100 employees that use or plan to use cloud services over the same time period.

SMBs in emerging markets are leading the way in cloud computing adoption, with 41 percent of small and medium businesses in Latin America/South America and 35 percent of SMBs in the Asia/Pacific region adopting cloud services. This is ahead of the 24 percent of SMBs in North America and 19 percent in Europe that are adopting cloud services.

Technology companies are adopting cloud services at a faster pace, 34 percent of SMBs in the tech sector use or are planning to use cloud services. Companies in the services sector (e.g. finance, HR, consulting) comprise next fastest growing vertical segment with 22 percent using or planning to deploy cloud solutions. Most other industries trail closely behind with 20 percent adoption rates.

However 62 percent of SMBs have no plans to move to the cloud in the next 12 months citing technology and security concerns. Companies with 20-99 employees and typically one full-time IT professional on staff were least likely to move, along with companies in core industrial segments (manufacturing, aerospace, engineering) and social services (government, education, healthcare).

"Small companies with little existing infrastructure and outsourced IT are moving most quickly to the cloud, whereas larger SMBs are taking more measured steps due to considerable investments in onsite technology," said Jay Hallberg, co-founder and vice president of marketing for Spiceworks. "With seven times as many users as the enterprise market, it's important for cloud service vendors to consider cloud service adoption patterns and to make it simple for SMBs to manage hybrid on-premise and cloud solutions."