Forrester study: “SMBs: The Future Is Co-Managed”

In a 2023 study commissioned by Datto, Forrester Consulting surveyed 421 cloud strategy decision-makers at small and medium-sized businesses (SMBs) about their organizations’ current IT infrastructures and how leveraging external partnerships streamlines operations, saves money and contributes to organizational success.

Although the past five years have posed many different challenges for small businesses, the most notable among these organizations has been the move to the public cloud. While the 2020 pandemic accelerated this move as businesses adapted to work-from-home needs, it was not the primary reason for its adoption. In fact, many organizations were already looking to the public cloud for potential cost savings and as a solution to meeting tougher global compliance regulations prior to the pandemic shutdowns.

Today this adoption continues, and according to the study’s findings, many IT professionals expect 61% of their workloads to be in the cloud within the next two years. Interestingly, the other 39% of infrastructure and applications were still expected to operate on-premises, with many respondents not expecting a full cloud transformation. In this blog we will further examine what has led to this adjustment.

Public cloud: expectations vs. reality

Streamlining operations and increasing speed, modernizing existing apps and services, and cost-effectiveness are three of the top expectations businesses cite when positioning a transition of their IT infrastructure into the cloud. For many survey respondents, it appears the cloud has had less of an impact than once thought.

Potential cost-effectiveness was cited as the primary decision for the transition by 93%. But for many SMBs migrating to the cloud is a significant undertaking, and our study found only 47% of respondents said their organization had seen greater cost optimization. Additionally, respondents cited other challenges that have offset the benefits of migration. Only 33% reported seeing increased speed of setup or buildouts and only 31% saw improved ability to meet compliance regulations. With cloud service costs continuing to rise, more SMBs will need to consider the expected benefits of migration. Furthermore, many organizations will need to ask if this lackluster performance is due to the cloud or the limitations of their IT organizations.

Complex technology and a skill set challenge

SMBs had painted the cloud as a “promised land,” and at first glance this study shows us that few of the cloud’s expectations have been met. The question we ask is — is it the capabilities and structure of the cloud that has not met our expectations or is it something else?

The harsh reality is that cloud infrastructures are complex, and as mentioned earlier, 39% of many SMBs’ infrastructure remains on-prem, meaning that many of these cloud migrations are hybrid, leading to even further complexity. Decision-makers noted that one of their biggest challenges was maintaining interoperability between cloud and on-prem infrastructures. This creates a complex disjointed hybrid environment and opens concerns around security.

Yet 52% of the respondents stated that a lack of in-house staff expertise is challenging their organization’s operations in the public cloud and 74% felt that their organization does not have the capability or capacity to train employees as the cloud grows in complexity. This may be the answer to why cloud migrations are not meeting business expectations.

Leveraging partnerships

Managing both public cloud and on-premises infrastructures is becoming increasingly complex and expensive for SMBs. The cloud can only enable transformative outcomes if organizations are willing to undertake careful groundwork and planning and accept expert advice. Without a skilled and experienced staff, SMBs will continue to struggle to get the most out of their hybrid deployments. Leveraging partnerships with managed service providers (MSPs) will enable SMBs to manage their hybrid IT environments with skilled partners, enhance performance, increase security and keep their costs more predictable.

To learn more, download the Forrester study “SMBs: The Future Is Co-Managed.”