Cloud helps SME industry call all the shots

SMEs operate in a complex business environment characterized by heavy competition, increased globalization and coming of age of the customer service revolution. The forces of globalization have come home with their full impact and force and no SME can hope to remain immune from these issues for very long.

All over the world and across industries SMEs are fast becoming the driving force behind the new resurgence in the economy. Some amazing small business stats proving the SME story are:

1. Over 50 percent of the working population in the US works in a small business

2. There are 28 million small businesses in the United States along and majority of them have no other source of income

3. Almost 500,000 new business get bootstrapped every month

4. Seven out of 10 new employer firms survive at least two years, half at least five years, a third at least 10 years and a quarter stay in business 15 years or more

5. Revenues in small business category in the US alone is fast approaching a trillion

6. Ninety-nine percent of business in EU belongs to the Small Business Category

7. More than 45 percent of India's GDP is contributed by the SME sector

 

8. Small businesses have generated 65% of the net new jobs after 1995

9. Almost 50 percent of small businesses are home based

10. Almost a third of the SME's generated over 20 percent of their income internationally

These stats prove that the SME growth story is not limited to the developed world but has taken roots almost everywhere in the developed and developing world. SME's are no longer seen as mere suppliers to multi national companies. They have their own ecosystem which is largely independent of the health and goodwill of big companies. In some markets they are taking on their bigger rivals with great vigor and confidence that comes only with a solid grounding in marketing and technology.

So what has changed now? Before the advent of the cloud big companies simply bulldozed smaller companies out of existence by upping their technology spending. Massive investments in technology gave them a clear and definite edge over the small businessman who could not match their IT spending even if they wanted. These investments bankrolled most of their intelligence gathering, marketing and customer service functions, giving them great leverage over their competitors.

In the controversial Harvard Business Review article "IT does not matter" Nicholas Carr wrote, "You only gain an edge over your rivals by having or doing something that they can't have or do." For a very long time, big companies focused on building IT weaponry to literally blast competitors out of their sight.

That maxim does not hold any longer. We are in the early days of yet another seismic shift in technology. If steam and electricity changed the world of business and finance in the early days of the 20th century then cloud has the potential of doing the same in the beginning of the 21st century. SMEs have already woken up to the many advantages of transforming their business initiative to cloud and started pushing for higher cloud technology adoption.

Unlike the stereotypical image of SMEs as a technophobic small time operator SMEs of today are thinking big and acting globally, going toe to toe with their bigger rivals, and investing aggressively in cloud technologies to make themselves nimble. They are showing a lot of faith in their ability to tap cloud technologies to their advantage.

In today's world, technology is no longer a barrier to entry. There is no problem of scarcity of information. The problem is of abundance. With real time information flowing freely from these cloud technologies it boils down to who pulls the trigger first. The winner takes it all. SME's, by virtue of their leaner structures, are in a better position to use this abundance of information because they have fewer layers of decision makers. For once it is the big biz who are on the back foot.

The author is the CEO and founder, Knowlarity Communications, Gurgaon, India.

First published in CIOL