Bredin Report: How are SMBs embracing cloud technology?

The next generation of almost every application small and midsized businesses (SMBs) use is being delivered on a SaaS or cloud model. To understand SMB application usage and purchase intent, and how SMBs feel about the migration to cloud applications, we recently surveyed over 300 U.S. SMB principals.

The survey results are compelling. They can help you improve your cloud sales, marketing and onboarding efforts, including opportunities to fine-tune your positioning, content and collateral.

Cloud terminology

Don’t assume your customers are familiar with all of the terminology you’re using:

  • While over 70% of SMBs have a “very good understanding” or “an idea” what “cloud application” means, nearly 30% hadn’t heard it or weren’t sure what it meant.
  • When it comes to “SaaS,” nearly 50% hadn’t ever heard the term.
  • “Hosted application” is also confusing to many SMBs; 43% are unsure of its meaning.

While familiarity with the language varies by company size and industry – details we get into in the report Selling the Clouds to SMBs – be sure to define your terms in communicating with SMBs.

The applications SMBs use most

We asked SMBs about their current software usage. Of the 22 application areas we surveyed, the five most popular – whether hosted locally or in the cloud – are:

  • Accounting/billing/invoicing (58%)
  • Storage/file backup (50%)
  • Email marketing (49%)
  • Security (47%)
  • Office productivity (41%)

For 2018, the applications SMBs are most likely to adopt are:

  • Mobile payments (20%)
  • Expense management (16%)
  • Production management (14%)
  • Web analytics (14%)
  • Social media management (14%)

Which functions are SMBs already handling in the cloud?

Among the software SMBs rely on today, the ones they are most likely to use in the cloud are marketing automation, fleet management and business analytics. Accounting/billing/invoicing, customer service/helpdesk and social media management are the areas they’re least using a focused cloud solution, suggesting great opportunity for migration to the cloud in those areas.

Cloud adoption plans: uncertainty ahead

While 56% of SMBs expect their cloud usage to grow over the next two years (and 76% of SMBs with 100-500 employees expect such growth), roughly one in three say they’re unsure whether they’ll adopt new cloud applications by 2020.

What motivates an SMB cloud adoption?

The top three motivators for SMBs to use cloud applications are improved functionality, security and reliability. The benefits that are least compelling to SMBs are that their competitors are adopting the cloud, their partners and suppliers require it, and they are looking for improved collaboration.

How SMBs inform themselves about cloud offerings

We asked how SMBs get information at each stage of the buying process. Not surprisingly, SMBs rely heavily on peer and colleague recommendations to learn about cloud applications, but an equal percentage (26%) are very likely to become aware of a cloud application through the resources section (i.e., the section with articles, blog posts, posts, case studies, research reports, etc.) of a company website, so don’t skimp on your site content.

When researching, SMBs shift their focus from the resources section to the product section of a vendor website. Some 25% said they’re very likely to research cloud applications there. Peers and the resource section follow just behind, at 24%.

The product section remains most important when SMBs are making a purchase decision (25%) – although it is tied with a call or meeting with a vendor sales representative. Make sure you’ve got high-value content on your site for each stage of the buyer’s journey, as well as in your reps’ hands.

About Bredin

Bredin was founded in 1991 by America's foremost small business expert, author and syndicated columnist Alice Bredin. From its beginning, Bredin was designed to be a breed apart: 50% research consultancy, 50% creative agency, 100% focused on SMB. Based in Somerville, Mass., Bredin helps Fortune 500 companies understand, reach and retain SMB customers through timely, targeted research and award-winning marketing programs.