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Cloud & SMEs: Engines for Growth

Cloud Computing has been called the next great leveller of social and economic inclusion - mirroring the incredible impact that previous innovations such as the PC and the internet have had on the lives and livelihoods of billions across the world. There is one sector in particular that will benefit from the advent of cloud computing with the opportunity to lower costs, increase efficiency and access global markets. That sector is small and medium enterprises (SMEs). The Asia Cloud Computing Association (ACCA) aims to drive and foster the conditions for all businesses, large and small, to leverage this new technology. The Association's aim is also to help provide policy leadership on how governments across the region can play a role to ensure that the cloud meets its potential.

SMES IN ASIA

Even as uncertainty looms over the global economy, Asia Pacific remains poised for continued economic growth. Key to this has been the performance and positioning of small and medium-sized enterprises (SMEs) that represent over 95% of businesses in the region, generate over half of all employment and anywhere from 30-60% of GDP. While there are vast variations in the composition and contributions of SMEs across regional economies, the sheer number of businesses alone makes them a huge potential source of further growth if enabled with the right technologies and incentives.

But, however impressive are the numbers, the vast majority of SMEs are undercapitalized, underdeveloped and underserved when it comes to the technology tools and human expertise needed to run their businesses. With cloud computing the game has changed, offering SMEs the opportunity to leverage enterprise-level applications and development platforms without the associated upfront capital expense or complex technology roll-out. The utility-based model of cloud computing is a boon for SMEs, not only for cost control, but also to permit them to work with services on a smaller scale first before ramping up into full deployment. In doing so, barriers to entry will be significantly lowered. Applications hosted in the cloud can also ensure business continuity and prevent data loss in the event of a disaster, a lesson we have been reminded of several times in recent months.

So while the potential for cloud computing is evident, recent research shows that the adoption rate by SMEs is slow. A Microsoft sponsored Springboard survey reveals that while larger Asian businesses are embracing cloud services, SMEs are lagging behind their enterprise cousins. That is, 62% of organisations with more than 500 PCs have either adopted or are planning to adopt cloud. Conversely, 68% of organisations with less than 50 PCs have no plans to adopt cloud computing.

ROLE FOR INDUSTRY AND GOVERNMENT:

The Asia Cloud Computing Association aims to be one of the leading voices and platforms for industry/government dialogue on how to advance the potential for the cloud across the region, especially for SMEs. Key to this is fostering the right regulatory and policy frameworks that will provide confidence, trust and certainly for vendors and customers. The Association's recently released Cloud Readiness Index is one way to help map the conditions and criteria required for successful implementation and uptake. The Association aims to identify potential bottlenecks that could slow adoption and threaten Asia's digital future. Some of the key areas that the index will track include the provision of affordable broadband availability, laws and regulations on data protection, privacy and cybercrime, government incentives and promotion of cloud services, and licensing and other conditions that might stem the growth of cloud services. Advancing a new regulatory framework for the cloud is not the responsibility of government alone. Indeed, the Association was founded on the commitment of its members to take on a more enhanced role in helping shape the environment for the responsible delivery of cloud services.

The future growth of Asia will depend on the development and fostering of a human capital and knowledge economy especially in the SME sector. The arrival of cloud computing is a real opportunity for governments to further extend technology adoption to the SME sector and maximise their contribution to the national economy. Furthermore, the cloud will not only make existing SMEs more efficient and competitive, but spur the incubation of new businesses and new business models and open up the region to greater trade in digital goods and services.

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John Galliganauthor: John Galligan

Board Member and Microsoft Regional Director, Internet Policy, Asia Pacific