Currents

With our eighth edition of Currents we wanted to shake things up and look at the trends influencing developers at work. We decided to look exclusively at technical leaders and founders at small- and medium-sized businesses (SMBs).

We see these organizations as the unsung heroes of the global economy as the size and scale of their output dwarves even the world’s largest companies. Collectively, SMBs represent close to 90% of all registered businesses and employ half of the world’s workforce.

Despite their large footprint, when it comes to cloud services, SMBs remain underserved relative to their enterprise counterparts. They often face unique technical challenges and constraints when it comes to deploying new technology, yet there’s comparatively little focus on this relative to larger organizations.

Our original goal was to understand what’s most important to SMBs, where their unique challenges lie, and what’s keeping them up at night. But then the world changed, and SMBs became among those hardest hit by the economic impacts of COVID-19.

The resulting report includes responses from 500 founders and technology decision-makers at small and medium tech companies (under 1,000 employees), collected in June 2020. Their responses provide unique insight into larger technical challenges, but also how business processes are changing in light of COVID-19.

Key findings include:

• Technical infrastructure challenges make it difficult for new businesses to get started. Technical infrastructure challenges continue to be a barrier to entry for new businesses. Of the half (51%) of respondents who were company founders, 71% cite the cost of maintaining technical infrastructure as the top technical barrier. Other common challenges are know-how around maintaining technical infrastructure (65%) and the costs to lift and shift part or all of infrastructure (57%). Broadly, these businesses need to be able to experiment (and recognize when it’s time to move on) quickly and cost-effectively. Many startups have one key application. They are not like their larger enterprise compatriots with multiple lines of business. If a company’s new, cloud-based tech doesn’t work behind the one thing they do well, it can be disastrous for the business.
• IT and cloud security are top priorities for SMBs, as well as remote hiring. IT security is a top concern for the majority of small and medium businesses: 59% rank it as their number-one priority, and 91% rank it among their top three priorities. Security needs to be embedded in their environment, since the vast majority of small businesses either lack the technical expertise and/or can’t afford to invest in the time required to manually oversee every aspect of cloud security. Ensuring a smooth transition (without creating another liability) when deploying new technology is a key concern here. Cloud spending is also a high priority, though it ranks slightly below IT security. Thirty-nine percent say it is their number-one priority, while 84% rank it in their top three. SMBs prioritize security over factors like reliability and affordability when evaluating a cloud service, particularly features such as firewalls and data protection. Additionally, 40% of respondents say that more than half of the technical positions they are hiring for offer the ability to work remotely.
• Demand for digital services in India outpaces the U.S. With the world’s fifth-largest GDP and one of the fastest-growing cloud adoption rates globally, India is a major cloud services market. Forty percent of respondents in India say that more than half their company’s annual technology budget goes toward cloud services, compared to 15% in the U.S. There is also greater demand for cloud infrastructure in the next 3-6 months, with 80% of respondents in India reporting that they have plans to increase their cloud investment, versus 55% in the U.S. The largest difference between these regions was in hiring, with 63% of Indian respondents saying they’ve increased hiring targets as a result of COVID-19, compared with 30% in the U.S.
• COVID has impacted SMB security, cloud spend, and hiring. The pandemic has impacted a range of key technical areas for SMBs. Sixty-three percent of respondents say that COVID-19 impacted their approach to IT security, resulting in increased investments in multi-cloud disaster recovery availability and reliability, security audits, and data leakage prevention. As a result of the pandemic, SMBs have made investments in cloud technologies as they transitioned to remote work and prioritized resilience. Meanwhile, hiring has remained steady or increased. Seventy-four percent say they either increased or maintained hiring targets during COVID.