CloudingSMEs Deliverable D2.2.1 SMEs Requirements for Cloud Development, Adoption and Evolution

Transcription

1 CloudingSMEs FP7- No CloudingSMEs SMEs Requirements for Cloud Development, Adoption and Evolution PROPRIETARY RIGHTS STATEMENT This document contains information, which is proprietary to the CloudingSMEs Consortium. Neither this document nor the information contained herein shall be used, duplicated or communicated by any means to any third party, in whole or in parts, except with prior written consent of the consortium

2 Document Details Project Acronym CloudingSMEs Grant Agreement No Project Title Deliverable Reference Number Deliverable Title Accelerating the adoption, deployment and use of Cloud Computing by SMEs CloudingSMEs--D2.2.1 SMEs Requirements for Cloud Development, Adoption and Evolution Revision Number V4.0 Deliverable Editor(s) Authors / Contributors UEAPME, EBS Lorenzo Accardo (UEAPME) Luc Hendrickx (UEAPME) Sebastiano Toffaletti (PIN-SME) Fotis Stamatelopoulos (EBS) Makis Magdalinos (EBS) Angelos Lenis (EBS) Andreas Weiss (EuroCloud) Christine Neubauer (EuroCloud) Caterina BerbenniRehm (PatS) Project co-funded by the European Commission within the FP7 Framework Programme Dissemination Level PU Public Statement of originality: This deliverable contains original unpublished work except where clearly indicated otherwise. Acknowledgement of previously published material and of the work of others has been made through appropriate citation, quotation or both. Date: 8/17/2015 2/80 CloudingSMEs

3 Revision History Rev. Author(s) Organization(s) Date Changes V0.1 Lorenzo Accardo, Fotis Stamatelopoulos V0.2 Lorenzo Accardo, Fotis Stamatelopoulos V0.25 Makis Magdalinos, Angelos Lenis UEAPME, EBS 25/11/2013 Structure & Introduction UEAPME, EBS 14/02/2014 Updated Information in Chapter 2; EBS 10/06/2014 Information Analyzed from Background Surveys V0.30 Sebastiano Toffaletti PIN-SME 23/06/2014 Inputs to Chapter 3 on SME Workshops (Madrid & Bologna) V0.35 Makis Magdalinos, Angelolos Lenis EBS 27/06/2014 Initial Consolidation of Requirements in Chapter 4 V0.40 Sebastiano Toffaletti PIN-SME 11/07/2014 Inputs to Chapter 3 on SME Workshops (Manchester Workshop) V0.45 Andreas Weiss, Christine Neubauer V0.50 Makis Magdalinos, Angelos Lenis, Christine Neubauer V0.55 Luc Hendrickx, Fotis Stamatelopoulos EuroCloud 17/07/2014 EuroCloud Inputs to Chapter 2 regarding Empirical Knowledge EBS, EuroCloud 18/07/2014 Inclusion of results from Questionnaires UEAPME, EBS 18/07/2013 Executive Summary; Consolidated Requirements V1.0 Lorenzo Accardo UEAPME 21/07/2014 PreFinal Version for Quality Control V2.0 Lorenzo Accardo UEAPME 01/10/2014 Sending the deliverable to the European Commission V2.1 Fotis Stamatelopoulos EBS 06/11/2014 Outline of Revisions in order to address reviewers comments V2.2 Fotis Stamatelopoulos, Angelos Lenis V2.25 Fotis Stamatelopoulos, Angelos Lenis EBS 07/11/2014 Update on Cloud Computing Status in Greece EBS 11/11/2014 Deleted Section 5; V2.3 Lorenzo Accardo UEAPME 15/12/2014 Added information from interviews with SME Associations V2.35 Andreas Weiss, Christine Neubauer V2.4 Fotis Stamatelopoulos, Angelos Lenis V2.5 Fotis Stamatelopoulos, Angelos Lenis V2.6 Fotis Stamatelopoulos, Makis Magdalinos, EuroCloud 15/12/2014 Information about Cloud Computing Workshops in Germany; Formatting of the Document EBS 16/12/2014 Various Edits EBS 29/12/2014 Analysis of Questionnaires EBS 05/01/2015 Updates to Conclusions and Executive Summary V2.7 Lorenzo Accardo UEAPME 06/01/2015 Various Edits V3.0 Lorenzo Accardo UEAPME 07/01/2015 Preparation of Version for Release Date: 8/17/2015 3/80 CloudingSMEs

4 V3.1 Fotis Stamatelopoulos, Angelos Lenis EBS 28/05/2015 Updates to Introduction and Abstract in preparation of final release V3.2 Lorenzo Accardo UEAPME 30/06/2015 Information about CloudingSMEs Workshops in Section 2 V3.3 Lorenzo Accardo UEAPME 30/06/2015 Updates to Conclusions and Chapter 2 V3.4, 3.5 Fotis Stamatelopoulos, Angelos Lenis EBS 06/07/2015 Updates to the deliverable based on the analysis of additional questionnaires (per Sector and per Size of the SMEs) V3.6 Luc Hendrickx, Patrizia di Mauro UEAPME 15/07/2015 Update to the deliverable on personal interview V4.0 Lorenzo Accardo UEAPME 06/08/2015 Final edit of the document Date: 8/17/2015 4/80 CloudingSMEs

5 Abstract This deliverable presents a set of requirements for cloud adoption, which reflect the viewpoints of SMEs with interest in deploying cloud solution and/or in developing and rolling-out cloud solutions. These viewpoints have been derived based on a number of complementary modalities including: (A) Direct contacts with SMEs in the scope of workshops for SME communities organized by the project; (B) Surveys administered to the SMEs by the consortium upon various occasions; (C) Review of surveys on SMEs requirements regarding cloud adoption, notably surveys that are available in the literature; (D) Analysis of the state-of-the-art and state-of-practice regarding cloud adoption by SMEs in various EU countries; (E) Interviews and face-to-face discussions with representatives of SMEs and SMEs associations The requirements expressed in this document are an important result of CloudingSMEs, since it will drive several other project activities including: (A) The development and fine-tuning of the CloudingSMEs toolbox in WP3; and (B) The production of documents on SMEs cloud vision and roadmap in. Following relevant recommendations received during the CloudingSMEs technical audit, this deliverable has become a living document, which will constantly incorporate new data and information that will become available as part of the project s stakeholder s interviews and workshops. This version of the deliverable is the final one, which incorporates the analysis of 177 questionnaires from SMEs end-users of cloud computing, along with 26 questionnaires from ICT SMEs i.e. providers of cloud computing solutions. Note that these questionnaires were collected during the whole range of SME engagement activities that were conducted during the project s lifetime. Date: 8/17/2015 5/80 CloudingSMEs

6 Table of Contents Document Details... 2 Revision History... 3 Abstract... 5 Table of Contents... 6 Table of Tables... 7 Table of Figures... 8 Executive Summary Introduction Background on SMEs Requirements about Cloud Adoption Background Surveys and State-of-the-art Other Empirical Knowledge about SMEs Needs Analysis of Cloud Computing Adoption in EU Countries Analysis of Interactions with SMEs Overview of Workshops Organization Report on Workshops Report on Interviews and Discussions with SME Associations Analysis of Questionnaires SME Requirements for Cloud Development, Adoption and Evolution Conclusions References Appendix I FP CloudingSMEs Questionnaire for SME End-Users (Demand- Side of Cloud Computing) Appendix II FP CloudingSMEs Questionnaire for ICT SMEs (Supply-Side of Cloud Computing) Date: 8/17/2015 6/80 CloudingSMEs

7 Table of Tables Table 1: Requirements Collection and Analysis Activities Table 2: Additional output due to adoption of cloud computing (% of annual output) (Source: Centre for Economics and Business Research, the Cloud Dividend: Part One, December 2010) Table 3: Barriers to Cloud Adoption (by SMEs) in Greece Table 4: Overview of CloudingSMEs Workshops Table 5: Consolidated List of End-User SME Requirements Table 6: Consolidated List of SME Cloud Solution Providers Requirements Date: 8/17/2015 7/80 CloudingSMEs

8 Table of Figures Figure 1: Top Cloud Computing Benefits for SMEs according to [ENISA09] Figure 2: SMEs Concerns associated with Cloud Adoption according to [ENISA09]... 1 Figure 3: Envisaged Net Cost Savings in Greek Economy due to Cloud Computing Figure 4: Distribution of the participating ICT SMEs according to the number of their employees Figure 5: Level of Cloud Knowledge Declared by the participating SMEs Figure 6: Cloud Knowledge of the SMEs (analyzed according to the size of the SMEs) Figure 7: Main areas where SMEs need support (analyzed according to the size of the SMEs) Figure 8: Factors that motivate SMEs to move to cloud solutions (analyzed according to the size of the SMEs) Figure 9: Types of Cloud Deployments Envisaged by SMEs (analyzed according to the size of the SMEs) Figure 10: SMEs concerns associated with cloud aodption and contracts (analyzed according to the size of the SMEs) Figure 11: Per-Sector Distribution of the SMEs (participating in the survey) Figure 12: Cloud Knowledge of the SMEs (analyzed according to the sector of the SMEs). 58 Figure 13: Factors that motivate SMEs to move to cloud solutions (analyzed according to the sector of the SMEs) Figure 14: SMEs intentions & plans regarding cloud adoption (analyzed according to the sector of the SMEs) Figure 15: Areas where the SMEs need support (analyzed according to the sector of the SMEs) (y axis denotes number of responses) Figure 16: Cloud Models Envisaged by SMEs (analyzed according to the sector of the SMEs) (y axis denotes number of responses) Figure 17: Types of Cloud Deployments Envisaged by SMEs (analyzed according to the sector of the SMEs) Figure 18: SMEs Concerns against Cloud Adoption (analyzed according to the sector of the SMEs) Figure 19: Thorny Issues in Cloud Contracts Envisaged by thesmes (analyzed according to the sector of the SMEs) Figure 20: Modes of ICT Services Delivery in for companies according to their sector Figure 22: ICT SMEs Level of Cloud Computing Knowledge Figure 23: Analysis of how SMEs use (or intend) to use Cloud Computing (y-axis denoted number of responses) Figure 24: Types of Clouds Used by ICT SMEs Date: 8/17/2015 8/80 CloudingSMEs

9 Figure 25: Cloud Models Deployed by ICT SMEs Figure 26: Positioning of the Cloud Solutions Deployed by SMEs Figure 27: Types of Cloud Solutions Deployed by ICT SMEs Figure 28: Motivation for ICT SMEs to adopt/use cloud solutions Figure 29: ICT SMEs needs in terms of cloud computing Figure 30: Evaluation of Different Cloud Issues by ICT SMEs Figure 31: Common Elements and Concerns contained in the SLAs / contracts established by ICT SMEs Date: 8/17/2015 9/80 CloudingSMEs

10 Executive Summary This deliverable presents a set of SME Requirements regarding the adoption and evolution of cloud computing infrastructure and services. These requirements have been derived on the basis of a multi-facet methodology, which has taken into account: (A) A review of the finding of recent surveys on SMEs needs and expectation from cloud computing, including analysis of the state-of-play in EU countries; (B) Discussion with SMEs in the scope of a series of workshops for SMEs, which have been organized by the consortium across several EU countries (including Spain, Italy, Germany, UK and Greece); (C) Analysis of feedback from SMEs received through questionnaires. In the present version/release of the deliverable the questionnaires from 177 end-users (cloud user) SMEs have been analysed, along with questionnaires from 26 ICT SMEs (cloud solution providers). (D) Interviews and guide with representatives of SME Associations in specific sectors (such as the ACCA (the Association of Chartered Certified Accountants) and the European Builders Confederation (EBC)). Based on this methodology, we have attempted to understand what enduser SMEs in their cloud adoption efforts, but also what ICT SMEs need in order to be able to develop, deploy and sell competitive cloud-based solutions and services. In terms of end-user SME needs, the following have been identified: SMEs are in need of better understanding the benefits of cloud computing for their business activities. Existing presentations and discussions of cloud computing with SMEs tend to focus very frequently on technical issues rather than on business benefits. Awareness Rising in SMEs should be customized and tailored to the profile and needs of the SMEs as defined by their size and business activities. General awareness rising should be targeted to sectors that are currently less involved in cloud computing nowadays (e.g., Construction sector), while more focused support (e.g., Sector Specific Best Practices) should be provided to adopters (e.g., companies in the ICT and Services sectors). Awareness rising should be prioritized for Micro SMEs, which do not possess the time and equity capital to invest on cloud education, despite the potential benefits. Cloud Computing Services should be presented to SMEs in terms of their business benefits rather than technical characteristics. End- Date: 8/17/ /80 CloudingSMEs

11 user SMEs prioritize efficiency, mobility, agility and cost as the main benefits. SMEs need support in understanding and negotiating Service Level Agreements (SLAs), especially in terms of Security, Data Protection and QoS issues. SMEs need support in understanding security, privacy and data protection risks in cloud computing along with related solutions. Security, Privacy and Data Protection is the main area of concern for end-users SMEs, given that most of them view their data as a top company asset. SMEs need support in the migration and management of change associated with cloud computing Cloud Computing Services should be registered to services catalogues/directories so that SMEs could locate/identify them SMEs need support in understanding and scoring criteria for selecting cloud vendors and offerings SMEs would benefit from referrals to certified cloud providers. SMEs need support in the adoption of IaaS and SaaS, which is relatively more appealing than PaaS. SaaS solutions seem to be prioritized and better tailored to end-user SMEs comparing to IaaS solutions. Micro SMEs prioritize public cloud solutions over private ones and look for relevant resources and value propositions. Small and Medium sized SMEs are more likely to invest in Private Cloud Solutions. SMEs need their Security and Data Protection concerns to be addressed in their cloud contracts and SLAs. SMEs need support in scoring and evaluating cloud services, since they (currently) do not usually possess the knowledge and expertise to do the evaluation themselves. SMEs are able to make informed choices and have access to objective, comparable and relevant information when choosing services and providers. This is particularly important for MicroSMEs, but also SMEs in specific sectors (e.g., Accounting). SMEs need careful consideration of the kind of services the enterprise is able to buy, the interoperability of these with the current software, the pricing of bolt-on services, the differences between providers and the risk attached to each option. SMEs are concerned about transparency and interoperability, including their ability to switch between vendors once they adopt a cloud solution. SMEs use specific cloud solutions according to their size, but also to their experience in terms of cloud computing. For example, micro SMEs with very limited cloud experience focus on simple public cloud services (e.g., , storage), while gradually adopting Date: 8/17/ /80 CloudingSMEs

12 more sophisticated cloud services (e.g., enterprise applications as a service). At the same time, the following needs for ICT SMEs have been identified and consolidated: SME Cloud Vendors need support in understanding the areas where they could develop competitive Cloud Products and Services SMEs need support in understanding how to complete large cloud vendors, including support in identifying possible product areas and markets SMEs need to identify and adhere to appropriate standards and certifications. Cloud SMEs need to market their products and services in a business-friendly way SME cloud vendors need partnerships with entities that provide business advice (e.g., financial services) and consulting to SMEs, given that these services providers are very close to their clients/customers. SMEs that are cloud vendors and/or solution providers need support in focusing on niche products, services and solutions rather than completing with giant vendors on the basis of cost and economies of scale. SMEs need support in identifying cloud solutions (and related business opportunities) that could be adapted/localized to national or regional needs. These opportunities are not adequately exploited by ICT SMEs. SMEs need to be provided with Best Practices, Blueprints and Cloud Resources that could boost their ability to develop competitive products and services. SMEs should be supported in the development of SLAs and contracts with customers, since their flexibility in cloud contracts could differentiate them from large companies (competitors). The above listed requirements/needs are already used to drive several other results of the project, including the development of the project s vision for cloud development (in ), as well as the areas for which tools (in WP3) and best practices (in WP4) will be developed. Note that the present deliverable is a living document that will be continually updated from results from the CloudingSMEss workshops as the latter are gradually made available. Date: 8/17/ /80 CloudingSMEs

13 1 Introduction The main goal of the CloudingSMEs project is to provide essential support to SMEs wishing to adopt cloud solution, as well as to SMEs that plan to develop, deploy and roll-out cloud based products and services. The relevant support will be provided on the basis of the CloudingSME toolbox (developed in WP3 of the project) and the consolidation of best practices (as part of WP4 of the project). Furthermore, the project is (as part of ) committed to publishing a roadmap for evolving cloud infrastructures and services in-line with SMEs expectations. The above-listed results of the project will be driven by the requirements and preferences of the SMEs in terms of cloud adoption, development and evolution. Therefore, the purpose of this document is to articulate a number of SME requirements regarding cloud adoption and evolution. In order to derive, collect, analyze and consolidate these requirements, the project has conducted the following complementary activities: Review of the state-of-the-art on SMEs wishes and preferences regarding cloud computing, as the latter preferences have been expressed in recently published surveys. Review of the status of cloud adoption across various EU countries, with an emphasis on data and information that relates to SMEs. Organization of a number of workshops for SMEs communities, during which the CloudingSMEs partners have had the opportunities to discuss/interact with SMEs and learn about their requirements and concerns in terms of cloud computing adoption. Collection of requirements through questionnaires. To this end, the project has created and published two surveys/questionnaires, including one destined to (potential) end-users of cloud computing services and another destined to (potential) vendors/providers of cloud computing solutions and services. Interviews with representatives of SMEs and SMEs associations, which have provided insights on the preferences of SMEs in terms of cloud adoption, but also on the barriers that hinder adoption and use. The requirements collection activities and modalities are reviewed in the following table: Date: 8/17/ /80 CloudingSMEs

14 Technical Barriers Review of State-of-the-art Country-Specific Information Workshops for SMEs Questionnaires Interviews Non- Technical Barriers Analysis of Surveys conducted by other initiatives and organizations Analysis of the situation in various EC Countries Direct Interactions with SMEs in the scope of focused/targeted workshops Collection of Data through Questionnaires Guided discussions with representatives of SMEs and SMEs associations and emphasis on specific economic sectors Table 1: Requirements Collection and Analysis Activities On the basis of these activities the project has collected and analyzed information about SMEs requirements. The latter requirements are consolidated and presented as part of the deliverable. They have been extensively used as input to other project developments, including the development of the toolbox (WP3), the elicitation/documentation of best practices (WP4), as well as the publication of guidelines for policy development (WP5). Moreover, they have been used to drive the formulation of the SMEs vision regarding cloud computing, along with the specification of relevant roadmaps for achieving the vision. The main outcome/result of this deliverable is a number of consolidated SME requirements, which are detailed in the document. Overall, the deliverable is structured as follows: Section 2 presents a set of SME requirements regarding cloud computing, which are derived from the literature (notably based on published surveys on this subject). It also includes information about cloud adoption across various EU countries. Section 3 outlines information/requirements collected during a number of workshops for SMEs communities, which have been organized by the project. It also outlines information gathered through interviews with SMEs and SME associations. Section 4 presents a list of consolidated SME requirements regarding cloud computing. Section 5 is the final and concluding section of the present release of the deliverable. As already outlined this deliverable is a living document that will be continually updated with results and information from more interactions with SMEs (i.e. workshops, interviews) as the latter become available. Date: 8/17/ /80 CloudingSMEs

15 2 Background on SMEs Requirements about Cloud Adoption 2.1 Background Surveys and State-of-the-art CloudingSMEs is aware of a range of studies and surveys that have tried to understand the main issues and concerns of small medium enterprises (SMEs), where it comes to adopting cloud computing solutions. These surveys are in several cases associated with the SMEs communities of specific countries such as UK [Sahandi13] and Ireland [Carcary13], and could therefore serve as a valuable complement to the surveys that CloudingSMEs is organizing in the scope of its community building efforts. In particular, the project will take into account results of these studies as part of its attempt to document the SMEs vision for the cloud, but also as part of its effort to provide support structures that will be useful to SMEs considering cloud computing solutions. In the sequel we briefly review these results and outline how these are taken into account in CloudingSMEs. In [Kaur12] the author identifies the main motivations for SMEs to adopt the cloud, which include ease of use, shorter boot times, more flexibility in software updates, possibility for mobility and ubiquitous access, higher and more cost-effective scalability, as well as the opportunity for instant availability of cloud computing resources. At the same time, a number of pale points associated with cloud adoption are identified including data security, issues associated with vendor lock-in, performance instability, dependency on the network, as well as the need to understand and effectively deal with SLAs with a cloud provider. The same article suggests also a scoring-based methodology for evaluating the merits of cloud adoption through comparing them with a traditional data center solution. In particular, the author suggests that the following factors and issues are considered (scored) when choosing between traditional data center solutions and emerging cloud based solutions: Boot Time, Internet Connectivity, Capital Expenses, Operational Expenses, Software Updating, Mobility, Scalability, Storage Space, Implementation (flexibility), Security, Lock-in, Uptime Guarantee, Performance Instability and Network-related Limitations. Another (less recent) study on cloud adoption by SMEs has been carried out by ENISA [ENISA09], which was based on the administration of questionnaires to several SMEs. As part of this study, SMEs identified the following (three) benefits of the cloud as being the most appealing value propositions: Date: 8/17/ /80 CloudingSMEs

16 Flexible and scalable access to IT resources. Reduction of capital expenses when comparing to traditional noncloud solutions. Improved business continuity and disaster recovery opportunities. Figure 1: Top Cloud Computing Benefits for SMEs according to [ENISA09] SMEs found the cloud less relevant in their efforts to control marginal profit and marginal costs or even to improve the effectiveness of their business processes and achieve better performance. The survey did not expose any specific trend in relation to the type of cloud computing infrastructure (public, private, partner, federated/hybrid) that SMEs would prefer to use, yet the choices of federated and partner clouds received slightly more votes. Similarly, there were SMEs showing interest in SaaS, PaaS and IaaS, with SaaS being slightly more popular (and considered more useful). However, SMEs did not find it a good idea to outsource security services in the cloud. In addition to querying SMEs about their prefer cloud types, the [ENISA09] survey attempted also to identify their preferences/wishes in terms of the type of cloud applications that SMEs would like to use in the cloud. CRM/Sales Management was a clear winner in this question, while project management, application development and payroll followed. On the other hand, procurement and human resources applications on the cloud were much less selected by the SMEs. Finally, the survey identified also the major concerns of the SMEs in terms of cloud adoption, which included data privacy, the availability of corporate services and/or data, the integrity of corporate services and/or data, the confidentiality of corporate data, as well as the liability of the cloud provider in case of Date: 8/17/ /80 CloudingSMEs

17 security incidents. A snapshot of the responses to the relevant question about cloud adoption concerns is illustrated in Clouding SMEs Figure 2: SMEs Concerns associated with Cloud Adoption according to [ENISA09] The results of a survey conducted with the participation of 300 (UK based) SMEs is presented [Sahandi13]. As a general remark from this survey, SMEs show interest in the cloud computing paradigms, but are also concerned in terms of security and vendor lock-in. Furthermore, the importance of data privacy and data/services migration risks are underlined. These concerns are more or less similar or the same to the ones expressed in the previously presented surveys. However, the survey among UK SMEs has revealed a strong preference of the survey participants towards specific cloud offerings, notably hosting services, backup services and hosted s and data storage. These cloud offerings do not coincide with the offerings identified in the ENISA survey. The identification of these offering signifies also that SMEs have a strong interest in outsourcing mainstream IT services as a means of cutting costs and improving flexibility. However, the concerns outlined above are considered a serious set-back to the rapid adoption of the cloud. As a remedy the authors suggest that cloud providers have to provide more information on their security features and offering, including information about handling of data in multi-tenant environments. Moreover, security certification of the cloud provider (based on appropriate standards) is SMEs General Interests Cutting cost Improving flexibility SMEs Cloud Service Preferences Hosting Backup Hosted s Data Storage SMEs Cloud Concerns data privacy data/services migration risks Date: 8/17/ /80 CloudingSMEs

18 suggested as a measure that could alleviate cloud security concerns for SMEs. A report and an analysis of findings from a survey on cloud adoption by Irish SMEs are contained in [Carcary13]. It attempts to identify the benefits of the cloud that are envisaged by cloud adopters, as well as the problems/issues faced by non-adopters. The reported benefits and problems are not essentially different from those listed in other surveys. However, the authors attempt to interpret the answers of the various SMEs based on their profile, but also to provide a set of recommendations for Irish SMEs that could be taken into account by policy makers (e.g., Government and State Bodies in Ireland). One of these recommendations is that despite general improvement in cloud awareness (see for example [Craig12]), there is a still a need to invest in improving SMEs understanding of the cloud. For example, the survey revealed that several SMEs were unaware of any cloud computing benefits, while other felt that they did not have the proper technical/it skills to deal with cloud migration. As a result, several SMEs felt that cloud computing was not feasible for them or even not relevant to their industry sector. The authors suggest also that a structured approach that would guide SMEs in cloud adoption is needed. This approach should specify simple steps to cloud adoption for SMEs, based on their profile. In [Abdollahzadehgan13] the authors attempt to identify and categorize critical success factors (CSFs) associated with the adoption of cloud computing by SMEs. Towards identifying the CSFs, the authors identify and catalogue the pros and cons of cloud adoption. In particular, they list cost savings, scalability, flexibility, reliability, maintenance, minimization of licensing and innovation potential as key advantages of the cloud, while they also list lack of control, dependency, risk, the need for an Internet connection, software migration, lack of standards and continuous evolution as the main drawbacks of the cloud. CSFs are identified towards exploiting the advantages of the cloud, while at the same time mitigating drawbacks and risks. CSFs are relating to the (well-known) technical aspects of cloud computing, as well as to organizational aspects, such as: (A) The fact that cloud can be an enabler for small firms to compete with other (bigger) companies both locally and nationally; (B) Cloud s positive impact on the creation of new products, services but also of entire companies and (C) Cloud s potential to help SMEs penetrate markets and increase their profitability. Note that the list of the above-mentioned surveys on cloud adoption by SMEs is not exhaustive. There have also been many other surveys during recent years, without however significant deviations from the already presented ones in terms of the main motivations and set-backs associated with cloud adoption by SMEs. CloudingSMEs have Date: 8/17/ /80 CloudingSMEs

19 extensively analyzed and briefly presented the findings of such surveys as a prerequisite step towards organizing its own requirements collection and analysis activities (such as workshops for SMEs). In particular, the above surveys have provided a sound basis for: Formulating the project s questionnaires (included as Appendices to the document) addressed to both end-user SMEs (interested in adopting cloud solutions) and ICT SMEs (interested in the development of cloud solutions and products). Guiding discussions and presentations during the workshops with a view to eliciting more detailed and SME focused information comparing to the information derived from the above analysed surveys. Identifying the main cloud areas, where the project gather/analyse requirements and provide support. 2.2 Other Empirical Knowledge about SMEs Needs We can summarize current Trends from surveys, presentations of guests from several EuroCloud events. In general the trends are similar to the last chapter and here we point out some key aspects from our point of view: Most important positive effects of the cloud include (source: KPMG): Fast scalability of IT-Performance Less IT-Administration effort Easy access on geographically allocated IT-Resources Most important hurdles for cloud adoption include (source: KPMG): Fear of data loss Difficulties with integration into in-house solutions Uncertainties with respect to existing legal and regulatory Provisions Significant confidence-building factors include (source: cloudwerker user): Backup- and Security concept Availability and reliability Safety by storage Transfer and access data Date: 8/17/ /80 CloudingSMEs

20 A third of respondents locate missing functions as greatest difficulty in software solutions. General Statements derived from craftsman (source: cloudwerker market) include: SaaS: Focus on Software as a Service - Paas and IaaS are not relevant. Capital: The lower capital lockup and higher liquidity on the basis of savings in investments of hardware and software is a strong argument for smaller craft enterprises to prefer Cloud Computing. Mobile: Basically the application of mobile terminals is useful for all craft enterprises that do their work outside. For example, the entry of order data, customer data or measurement can be supported by mobile Terminals and this way increases productivity of the company. Craftsman cooperation: The cooperation of craftsmen brings significant benefits for customers (from one source) and hence becomes a competitive advantage. Some recommendations for Cloud suppliers (source: KPMG): Providers should strongly highlight the positive experience with cloud solutions and the real delivery of benefits that counts. Providers should address safety concerns and provide information on the existing legal situation. Providers could assist (advisory) in building an internal private cloud. In a second Step outsourcing of these services could be discussed. What is important is the ability to integrate cloud solutions. Companies do not want further "IT islands" in the cloud. A very strong service mentality and National/European data center are important for (potential) users. Date: 8/17/ /80 CloudingSMEs

21 2.3 Analysis of Cloud Computing Adoption in EU Countries In the sequel we include a brief analysis of the adoption of cloud computing by SMEs in Greece. Relevant information for other EU countries (including Germany, Italy, Belgium) will be added in subsequent releases of this living document Cloud Adoption by SMEs in Greece Greece is characterized by a strong percentage/presence of SMEs in its business ecosystem. The large number of SMEs in the Greek business ecosystem provides fertile ground for the development of cloud computing solutions, given that SMEs would like to benefit from «pay-asyou-go» and «pay-as-you-grow» opportunities. Recent studies (e.g., [Danchev13]) conclude that SMEs in many different sectors could benefit from the cloud on the basis of more flexibility and reduced costs in their IT expenditures. As shown in Table 2, potential gains in output ranges from 0.10% in construction to 0.28% in finance & business services. Furthermore, the cloud s scalability benefits could be another source of productivity improvement (especially for the largest SMEs in areas such as communication, trade and financial services). Table 2: Additional output due to adoption of cloud computing (% of annual output) (Source: Centre for Economics and Business Research, the Cloud Dividend: Part One, December 2010) Date: 8/17/ /80 CloudingSMEs

22 Figure 3: Envisaged Net Cost Savings in Greek Economy due to Cloud Computing During the years of the recent financial crises, numerous start-up companies have been founded in Greece, including high-tech start-ups. Cloud computing reduces capital expenditure thereby reducing the barriers for new businesses (including start-ups) to enter markets [Etro09]. As a result, cloud computing is a catalyst for the creation of new businesses. [Etro09] estimated that at least 3,491 new SMEs will be created in Greece over the medium run as a result of adopting cloud computing, out of which most companies (1,498) are expected to emerge in the Trade sector. Moreover, the emergence of new companies will put competitive pressures on existing businesses, which will lead to overall productivity improvements. The Greek SME market is also characterized by a very high variability in terms of the mix of computing resources (e.g., CPU, storage, network infrastructure) that the various companies require. Nevertheless, most of the Greek SMEs do not have the resources, expertise and equity capital to invest in highly customized solutions. As a result, providers offer aggregated computing resources and benefit from the multiplexing of spare resources/capacities stemming from the variations in user profiles and cloud services bundles for the various customers. Despite the potential benefits for SMEs, cloud computing adoption in Greece is still in an early stage of development. The main obstacles are of both technical and non-technical nature and are summarized in the following table. Date: 8/17/ /80 CloudingSMEs

23 Technical Barriers Lack of Know-how Security and data transfer risks Legacy technologies integration and migration costs Trust in cloud reliability Non- Technical Barriers Legal uncertainties (notably in terms of liability) Low-awareness on cloud technologies Legal constraints and regulations (notably in terms of processes that can be outsourced) Counter-party risk and matching difficulties Table 3: Barriers to Cloud Adoption (by SMEs) in Greece Date: 8/17/ /80 CloudingSMEs

24 3 Analysis of Interactions with SMEs 3.1 Overview of Workshops Organization CloudingSMEs is from its contract committed to the organization of several workshops for SMEs communities. The workshops have a manifold purpose and support several of the project s objectives including: Raising awareness about cloud computing within SME communities. Building up the CloudingSMEs community. Soliciting and collecting SMEs feedback regarding the main areas where they need support. The identification of these areas will be later on taken into account in the CloudingSMEs support activities (such as the development of the toolbox in WP3). Soliciting and collecting feedback on the tools that have already been developed by the project, based on the methodology outlined in a later section of this deliverable. This feedback will be exploited in order to fine-tune the tools of the toolbox, as part of the final releases of the respective deliverables of WP3. Disseminating the project s achievements to SME communities towards encouraging the use of the project s results and boosting their wider sustainability and use. This deliverable includes the part of the workshops that has to do with the collection of requirements from SMEs. In order to support this requirements collection process, the workshops were organized on the basis of the following principles: Wide coverage of different types of SMEs. In particular, attention was paid into involving both (demand-side) end-user SMEs and (supply-side) ICT SMEs. Discussion of topics beyond basic information and requirements. To this end, the questionnaires listed in the Appendices of this deliverable were administered to SMEs, while more targeted discussions were held in selected topics of primary interest for SMEs. In the sequel we provide short reports on the three workshops that were used in the requirements collection process, with emphasis of the requirements collection aspects. The reports concern the workshops that have been organized at the time the present release of the deliverable is provided. As already outlined, the present deliverable is a living document, which will be constantly updated on the basis of additional information from workshops and interviews with stakeholders, as this infor- Date: 8/17/ /80 CloudingSMEs

25 mation becomes available. An overview list of the workshops is provided in the following table. Place & Date of the Workshop, Organizer Madrid, Spain, June 11th, 2014 (organized by UEAPME and PIN-SME) Bologna, Italy, June 19th, 2014 (organized by UEAPME, ECIPA, PIN-SME) Manchester, UK, July 10th, 2014 (organized by PIN-SME, UEAPME) Aachen, Germany November, 11th, 2014 & Cologne, Germany, December 12th, 2014 (organized by EuroCloud and BiTMi) Piraeus, Greece, February 25th, 2015 (organized by UEAPME and EBS) Milan, Italy, March 25th, 2015 (organized by ECIPA) Dublin, Ireland, May 12th, 2015 (organized by UEAPME) Cremona, Italy, June 12th, 2015 (organized by ECIPA) Bayreuth, Germany, May 20th, 2015 (organized by EuroCloud) Stuttgart, Germany, June 18th, 2015 (organized by Cloudzone and EuroCloud) Frankfurt, Germany, July 2nd, 2015 (organized by EuroCloud) Paris, France, 3rd July, 2015 (organized by UEAPME) Luxembourg, Luxembourg, 9th July, 2015 (organized by UEAPME) Number and Type of Participants 30 participants in total (approx. 24 ICT SMEs and 6 end-user SMEs) 30 participants in total (approx. 9 ICT SMEs and 21 end-user SMEs) 35 participants in total (approx. 31 ICT SMEs and 4 end-user SMEs) 45 attendees out of the SME community with a balanced mixture of Cloud users, Cloud Provider and Consultant for SMEs 35 attendees from the retail sector, End- User SMEs 21 participants mostly professionals in the ICT sector and/or ICT SMEs 40 participants, SME users as well as ICT services providers 15 participants, mostly professionals in the ICT sector and/or ICT SMEs 18 participants, SME users as well as ICT services providers 30 participants, SME users as well as ICT services providers 25 participants, SME users as well as ICT services providers 20 participants, SMEs users and Stakeholders 60 participants, SMEs users and Stakeholders Table 4: Overview of CloudingSMEs Workshops 3.2 Report on Workshops «CLOUD PARA PYMES» SME Workshop, Madrid, Spain, June 11th, 2014 (organized by UEAPME and PIN-SME) Workshop Overview PIN-SME and UEAPME organized a workshop in Madrid, Spain, which tools place June 11th, The workshop (titled «CLOUD PARA PYMES») was dedicated to issues relating to the adoption of the cloud by SMEs and aimed at a direct interaction of the CloudingSMEs consortium with Spanish SMEs. Local arrangements and organizations were undertaken by CONETIC (Confederación Española de Empresas de Tecnologías de la Información, Comunicaciones y Electrónica), the Spanish association of ICT SMEs, and member of PIN-SME. The Date: 8/17/ /80 CloudingSMEs

26 audience included a mix of end-user SMEs (approx. 20% of the audience) and cloud vendors ICT SMEs (approx. 80% of the audience). The program included presentation by the CloudingSMEs consortium, notably presentations focused on the support tools (toolbox) and activities of the project (e.g., workshops). Based on these presentations the consortium derived feedback for fine-tuning these developments, but also for appropriately focusing these developments on the core needs of SMEs. The program included also open discussion on the main issues associated with cloud adoption by SMEs. As part of this discussion there was an exchange of views about potential crucial issues impacting cloud adoption, including security, privacy, data protection, cost-benefit issues and the establishment of SLAs. Moreover, a part of the debate/questions regarded the different offers on the market addressed to SMEs. This was also a good opportunity to highlight the differences between services offered of large companies and SMEs. As already outlined the CloudingSMEs were also distributed to the participants both electronically and in paper version. The collected answers are analyzed in a subsequent section. The following paragraph summarizes the main SME requirements that were identified based on the discussion. Discussion on SMEs Requirements and Needs The discussion revealed a general agreement on the main cloud computing issues, where SMEs need support. Note however that cloud vendors had in general slightly different concerns from end-users. In particular: End-Users expressed interest in receiving support on cloud security, data protection, negotiation and formulation of SLAs (Service Level Agreements), identification of trustful vendors, cloud cost/economics issues, as well as management of change within their organizations towards adopting cloud computing. Cloud Vendors were mostly concerned about support in positioning and communicating their (cloud) products and services in the market, in understanding, selecting and implementing cloud standards, as well as in formulating SLAs towards their customers. Note that the above-listed areas are more or less similar to those identified in the background studies analyzed as part of the second chapter of the deliverable. Apart from technical issues, SMEs raised the ever important organizational and behavioural issues that are associated with the adoption and use of cloud computing. In this context, they also Date: 8/17/ /80 CloudingSMEs

27 expressed concerns about the possible reluctance of employees (notably IT departments) to adopt cloud computing and support its implementation. A special requirement about the cloud concerned the need for raising awareness in a targeted and effective way within both potential adopters and vendors. To this end, it was deemed important to emphasize the business (rather that the technical) characteristics of the cloud, as part of communication activities. Instead of emphasizing technical features and mechanisms, service types (e.g., SaaS, PaaS, IaaS), cloud types (e.g., Public, Private, Hybrid) it was mentioned that awareness raising about the cloud should focus on the elaboration of the business benefits and the cloud s potential to improve bottom lines. This requirement was raised by both cloud vendors and cloud end-users. It will be taken into account in sub SMEs Workshop, Bologna, Italy, June 19th, 2014 (organized by UEAPME, ECIPA, PIN-SME) Workshop Overview This workshop was organized by PIN-SME, UEAPME and ECIPA. Local arrangements were undertaken by the CNA association of SMEs, which is a member of both PIN-SME and UEAPME. The audience included SMEs from both the demand and supply side of cloud computing. However, the mix was balanced differently from the Madrid workshop, since participants were approx. 70% end-user SMEs and 30% ICT SMEs. The website and the existing tools CloudingSMEs (ROI/TCO, Strategic scorecard, Cloud Security Scorecard) were presented with a view on users opinions in order to fine tune them. Furthermore, a presentation on the cloud computing benefits for SMEs was given and a discussion of SMEs requirements and concerns about cloud adoption took place. Some of the SMEs were concerned on the cloud offering available on the market for SMEs. This provided a first class opportunity to highlight the differences between services offered of large companies and SMEs. As in all workshops, participants filled in questionnaires that were distributed both electronically and in paper version. In the sequel we highlight the main requirements that were derived from the discussion. Discussion on SMEs Requirements and Needs Due to the fact that the majority of the audience consisted of end-users the discussion was not very technical. Note that the majority of the ICT SMEs were not cloud vendors/experts as well which reinforced the nontechnical character of the discussions. Overall, most of the SMEs were in Date: 8/17/ /80 CloudingSMEs

28 need of more information regarding the potential business benefits of cloud computing, while some of them were also in need of tutorials on cloud computing. Nevertheless, there were also SMEs with a better understanding of cloud computing issues, which prioritize advice on privacy and data protection issues, especially given that several of the them were able to link these issues to recent security incidents that received high publicity (such as the U.S NSA (National Security Agency) scandal). Several of the participants mentioned also that they use free cloud services (e.g., Google Gmail, Dropbox) and therefore did not find the economical issues very interesting. On the other hand, they show interest on the cloud catalogue service of the CloudingSMEs toolbox, since it would allow the identify/locate offerings. They also underlined that they would benefit from comparisons of the various offerings as part of a support service. Furthermore, they commented that the tools should operate as a one-stop-solution. Cloud vendor selection was another topic that received particular attention. Participants seemed very concerned and interested in the criteria that could enable a proper choice of a cloud service provider. The definition of objective criteria and their matching to providers needs was deemed very important SMEs Workshop, Manchester, UK, July 10th, 2014 (organized by PIN-SME, UEAPME) Workshop Overview The event was co-organized by PIN-SME and UKITA. The latter is the British association of ICT SMEs member of PIN-SME. It took place at the Technology Centre Wolverhampton Science Park (WV10 9RU Wolverhampton). The audience included approx. 35 people, composed for 90 % by IT companies that provide cloud services. The remaining 10 % are consultants and association s staff. The presentation of CloudingSMEs and the related discussion time consumed more than one hour. The rest of the time was mainly dedicated to the EU Growth Vauchers, a funding scheme of the UK Gov for SMEs that get strategic consultancy services. CloudingSMEs leaflets and questionnaires (Supply side) have been distributed. The presentation of CloudingSMEs focused on the advantages of Cloud for SMEs, as well as on the related challenges. The presentation also included the tools currently available on cloudingsmes.eu, ie Strategic, Security and TCO scorecards. Date: 8/17/ /80 CloudingSMEs

29 Discussion on SMEs Requirements and Needs The following points summarize the main conclusions stemming from the discussions during the workshop: Participants consider that the Cloud adoption in UK is still low compared to the US. Several participants raised the issue that SMEs lack education about the subject. In this direction they also stressed the fact that US companies have more opportunities to become certified in cloud computing, thereby being able to stay informed and/or educated about cloud developments. There was interest on some of the CloudingSMEs tools, such as the TCO calculator. However, it was suggested that they become more personalized and tailored to SME needs. In terms of the TCO calculator, there was also an interesting comment which concerned the fact that the cost actually depends on which data the SME Company decides to migrate to the cloud. In several cases it is not advisable to move all data, or applications to the cloud, but rather a subset of them. This can have an impact on the TCO of the cloud solutions. SMEs highlighted the role of consultants and providers of services in cloud adoption. For example, they stated that SMEs might be more willing to adopt financial cloud-based SaaS services in case this is recommended by their accountants. SMEs cloud providers suggested that end-users should deal with providers accredited by SME associations as PIN-SME and UKITA. In general participants showed interest in the ways CloudingSMEs could help them promoting and showcasing their services. As a result, they were willing to provide information about their cloud services in order to be included in the cloud services catalogue of the CloudingSMEs toolbox SMEs Workshops, Aachen, Germany (November, 11th, 2014) and Cologne, Germany (December 12th, 2014) (organized by EuroCloud, BiTMi) Workshop Overview The German associations BITMi and EuroCloud Germany performed two workshops during the last quarter of 2014, in particular: One workshop in Aachen, held November 11th, hosted by the Chamber of Commerce Aachen. Another workshop in Cologne, held December 12th, hosted by the eco Association of the German Internet industry. In total the two workshops had 45 attendees out of the SME community with a balanced mixture of Cloud users, Cloud Provider and Consultant Date: 8/17/ /80 CloudingSMEs

30 for the SME target groups, with a segmentation of 1 person up to 300 person enterprises. Both workshops where held in the standard format, which is public available on the CloudingSMEs website. In both sessions there where a very active discussion about the needs of SMEs to understand the value of Cloud Computing and relevant feedback about the necessary support, expected by this initiative, was given. Discussion on SMEs Requirements and Needs As a main conclusion from both workshops a set of key statements were collected and consolidated. In particular, the attendees saw a strong need to: See real showcases which are showing the benefits and decision points to use Cloud Services. Get support to identify relevant offerings for their business. Receive guidance and checklists to identify business processes to be supported by cloud services. Graduation of knowledge to get access to pre filtered information and prepared in a SME friendly way. Receive support for cost benefit analysis. Receive support for security and data privacy assessment. Beside this there is a general concern in terms of broadband infrastructure and resilience as well as uncertainty about legal questions which might occur if the provider is not offering the service according to local law of the user and the data are not processed and stored in the country of the data owner. In terms of quality assessment the EuroCloud Star Audit (which was presented in the workshop) was well accepted, especially due to the graduated rating of stars in similarity to hotel categories. It would be valuable to combine such a rating with cloud marketplaces and vendor listings to identify appropriate services in compliance with local law and adequate security and SLA measurement SMEs Workshop, Piraeus, Greece, February 25th, 2015 (organized by UEAPME and EBS) Workshop Overview In February 25th, 2015, UEAPME and EBS organized in Greece a workshop for end-user SMEs. The workshop was supported/hosted by the National Confederation of Hellenic Commerce on behalf of UEAPME. Date: 8/17/ /80 CloudingSMEs

31 Α link to materials and video of the workshops is available (by the National Confederation of Hellenic Commerce): EBS members were the main speakers from the CloudingSMEs consortium. They also talked to SKAI TV (one the most popular news broadcasters in Greece): The workshop attracted 35 participants (SME) mainly from the retail sector. The agenda/programme included short speeches by the president and director general of the confederation, which showed interest on the subject and expressed interest for follow-up actions. Furthermore, both referred to EU studies regarding the potential benefits of the cloud in general and for SMEs of the retail sector in particular. Discussion on SMEs Requirements and Needs There was great interest shown around e-commerce (due to its growing momentum in Greece) and how e-commerce could be sup-ported via cloud services (E-shops as a Service). CloudingSMEs presented cloud services with relevance for retails, notably POS-as-a-Service, CRM-as-a- Service, ERP-as-a-Service, Shop-as-a-Service. The participants understood the concept, even though some of them had only a poor understanding of cloud computing. Furthermore, they expressed a number of concerns regarding: (A) Security and Data Privacy Issues, and in particular how their data are secured and protected; (B) Migration Issues, with emphasis on issues relating to switching from one provider to another; (C) The scope and functionalities of available services. They were concerned about what types of cloud services are available, whether they could get a bundle of multiple services (e.g., POS, CRM, ERP), as well as whether cloud services offer more functionalities comparing to legacy IT services; (D) The fact that national rules in Greece do not usually subsidize or provide incentives for the use of cloud services, whereas this is usually done for IT assets (e.g., equipment) purchased for on premise use SMEs Workshop, Milan, Italy, March 25th, 2015 (organized by ECIPA) Workshop Overview The Milan workshop Digital skills for the development of the Italian economy, development of digital skills in Italy was centred on the analy- Date: 8/17/ /80 CloudingSMEs

32 sis of the new digital scenario, and a particular focus was given to cloud computing, to which the afternoon session was fully dedicated. The CloudingSMEs project was presented, and also the possibilities that cloud technologies offer to SMEs, as well as risks associated with it and best practices in order to prevent business losses. The workshop was attended by 21 participants (plus speakers and ECI- PA/CNA Lombardia personnel), mostly professionals in the ICT sector and/or ICT SMEs, some representatives of other regional CNA branches and some participants from the university sector. Discussion on SMEs Requirements and Needs By the rapporteurs and by the interventions of the public showed the widespread shortage of digital culture in small enterprises and the need for a specific approach for SMEs in the dissemination and training on digital skills and on cloud computing SMEs Workshop, Dublin, Ireland, May 12th, 2015 (organized by UEAPME) Workshop Overview ISME, the Irish SME organization organized on the 12 th May a workshop in Dublin, entitled: CloudingSMEs : Benefits and Savings. Costs and Pitfalls. A must for all SMEs. Around 39 people participated in the event. The questionnaires were distributed and 27 participants filled them in. 12 micro enterprises, (0-9); 10 small enterprises (10-50); and 4 mediumsized enterprises. (51-250). The workshop lasted 4 hours. First the CloudingSME project has been presented - the outcomes of the project so far: identifying what keeps SMEs away from Cloud Services, why should SMEs care about Cloud Services and key needs of SMEs as users. This was followed by a demo presentation of all the tools and services freely available for SMEs through the project. From the providers side there was a presentation on The Magnificent Seven: The benefits for SMEs of using the Cloud by Johnathan Eustace, SMB Cloud Lead, Microsoft. He discussed what the cloud really is (or according Microsoft), the impact it can have on a business and how one can begin to position a business to take advantage of the opportunities cloud technology presents. Finally, there was a testimony of an SME experience of the Cloud. The workshop was closed by a Q&A session. Discussion on SMEs Requirements and Needs Depends on the level of awareness and knowledge about the cloud. Personal advice. Date: 8/17/ /80 CloudingSMEs

33 Main remarks/questions/ concerns expressed during the meeting Is Office 365 safe? What about the future of Cloud Computing? How secure Cloud can be? How to find the right provider? There is no one size fits all solution for SMEs. Can I go with my accountancy software to the Cloud? Cloud solutions should take hazzle away from the SME entrepreneurs. What about digital signature? Is it allowed? What about anti-virus software? Access to internet is a problem in Ireland, especially in remote areas. There are frequent cuts. Cutting cables (due to road works) When was the last time Microsoft went down? Issue of 99,9 % availability insurance is possible for this. TCO is important Broad band and fail over. Data: what happens with my data in case of sudden death? We received from a participant in writing what he had mentioned during the meeting and it is worth citing it. He stressed that the term Cloud comes in many shapes and forms and for any SME looking to go this route you really do need an on-site assessment to see what is viable and what is not viable for them as a business. One size does not fit all and this is very important when it comes to SME s all over Ireland and abroad. He thought that the wrong message was been brought across by the speakers from BCM and from CloudAssist, as they gave the impression that Microsoft Office 365 will eliminate your server and you will have no need for anything else. He continued: This is far from the case as I have learned the last 4 years calling out to SME s all over Ireland and the UK. We built our own multitenant environment within 2 Data Centres and do not use Azure, even though we are a Microsoft Partner. I assess what s the best solution for the business and it would be wrong of me to say that Cloud suits everyone as this is not the case. Yes, it s a fantastic offering, but may not suit a business for a many number of reasons including: (A) Cost/Uncertainty over any Savings (B) Legacy Hardware or Software (C) Broadband or Failover broadband not adequate (D) Performance Concerns Date: 8/17/ /80 CloudingSMEs

34 (E) Reliability is not mission critical and downtime is acceptable to the business (F) Security Concerns (G) Control concerns (H) Vendor Lock-In concerns We have moved clients away from other Cloud providers with considerable Pain involved in the process and we see ourselves as experts in migration tasks. Simple questions that SME s would never think to ask before they sign up to a Cloud Provider such as How much bandwidth is available to us should we decide to move away from your Data Centre and are there any restrictions we should know about should we ever decide to leave. This is where proper guidance is so important to SME s when looking at hosted options and would save a lot of agony for SME s who were not completely satisfied with the solution provided. He felt that it was too focused on Microsoft Office 365 and Cost Savings. Perhaps the clients there did not get the real questions they want answered i.e. Can I move my applications, Active Directory, SQL services etc. to a Cloud Environment and if so, will it be more expensive than an on premise solution, is my business viable for such a solution, are other SME s going this route for a full hosted offering not just Office 365, what are the benefits other than cost, will this technology enable my staff to work smarter and be more productive, is there any employee re-training involved with a full hosted solution? So you see, there s a lot in it as you know yourself. Further he stated that: I feel the main problem with Microsoft 365 is the fact that SME s in Ireland believe that Cloud is cheap as the 365 service is so cheap. This is far from the case as I know this from projects we have delivered in Ireland and the UK. CloudingSMEs rightly pointed out that the savings that were presented from Office 365 were not a true reflection in the case where a client still required an on premise server. The organiser had distributed an evaluation form for the event. 33 participants filled it in. On the question What was the most useful part of training for you? presentation of case studies was mentioned twice. One person mentioned the learnings about Office 365 and its possibilities. One third of the replies were very satisfied about the concept of the workshop: the content and presentation of the toolbox, the questions in the tools to understand SME needs, the Information regarding benefits and drawbacks of going to the cloud, the general information provided through the CloudingSMEs project which was very informative, the Date: 8/17/ /80 CloudingSMEs

35 fact that it allows the entrepreneur to build its own knowledge and the balanced views as pros and cons were presented and discussed. On the question What aspects of training/organizing could be improved? there was in the first place the request to have testimonies from SMEs that are already in the cloud. In addition more technical examples would be welcomed as well as practical examples of solutions : to show products working such as Google apps DocuSign, Office 365, Dropbox, Salesforce, Box etc. as well as how to implement the Cloud. Practical advice would also be welcomed. More in general show casting the benefits of applications that are enabled by cloud operations are also demanded. On the other hand many people found the presentation already to vendor centric and the presentation by Microsoft biased. Some people saw the presentation as just a sales pitch for Office 365. Analysing the last question What ideas or actions you learned during this training that you will take back in your workplace? we can consider that the message brought has been heard. The workshop convinced entrepreneurs to meet with their IT partner what to do and that it is important to find an IT partner. Others stated that they will look at the Microsoft partnership and apply the toolbox questionnaires to their requirements. Participants declared that they will look up the CloudingSMEs website and spend more time then they might otherwise might have done in comparing and reading the small print when purchasing packages and also to an in depth review of the cost. Awareness about the security of the cloud was also mentioned as point to be taken. On the products themselves, ic Office365, its functionality, the cost saving aspect and its mobility were retained as major points. DocuSign was also considered as useful SMEs Workshop, Cremona, Italy, June 12th, 2015 (organized by ECIPA) Workshop Overview CNA is organizing the project DIGITALY in collaboration with Amazon, Google, Seat and Registro.it, a series of events all over Italy to promote the digitalization of Italian SMEs: last May ECIPA defined the modalities to gather more information on cloud computing from end users and ICT SMEs during these events. The DIGITALY event organized in Cremona last June 12th was attended by 15 participants, mostly professionals in the ICT sector and/or ICT SMEs. The speakers from Amazon and Seat PG have described briefly the correct approaches for digital marketing and online sales. As part of the workshop ECIPA presented the Clouding SMEs project and collect six (6) questionnaires filled in by end users. Date: 8/17/ /80 CloudingSMEs

36 3.2.9 CloudingSMEs Workshop in Bayreuth, May 20th 2015 (EuroCloud) The event was held as a joint event of the EuroCloud Association, the Chamber of Commerce for Upper Franconia Bayreuth and the ebusiness pilot Upper Franconia. It highlights both the technical aspects of the new technology as well as application examples of a company. The Focus of the event: New Digital Worlds: Opportunities for Upper Franconian companies. The Clouding SMEs workshop was embedded within two other key Items of the agenda: Flexible IT support for adaptive businesses Prof. Dr. René Peinl, Institute of Information Systems of the University of Hof Interview with Markus Mühle, owner of a horticultural company and users of an online timesheet cloud solution There were 18 participants both from ICT SMEs and User side. Within the Clouding SMES presentation we asked all the users the key questions to tell about their Business and sector Cloud knowledge Questions and expectations Here are the Results of 14 very active participants: The sectors: 6 of 14 were from the IT environment 8 of 14 were from other industries like horticulture, marketing, logistics, automation technology and technical planning and stakeholder (IHK HWK) Their knowledge: 2 said they have no idea 3 had moderate knowledge 4 were experts 5 had advanced knowledge Their general demands and requirements: 1 said more enterprises should use the cloud 2 ask for more Best Practice Examples 2 said central access of cloud solutions is beneficial 3 claimed that processes and interfaces are important 4 demand more Privacy and Security in cloud solutions itself and as a focus of promotion of the provider companies Date: 8/17/ /80 CloudingSMEs

37 All of them were open minded and focused on solutions for their own business and what may be usefully for a general enlargement for cloud solutions. A discussion between the horticultural company, the Stakeholder of HWK and EuroCloud started how to use the Best Practice Example for further Workshops for other Craftsmen and micro Companies to ease a direct adoption CloudingSMEs Workshop in Stuttgart, June 18 th 2015 (EuroCloud) This Event is held in German in by EuroCloud Germany in partnership with bwcon (As a leading economic initiative for the promotion of innovation and high-tech location Baden-Württemberg) and Karlsruher Messeund Kongress-GmbH and smart businessit (regional Imitative for innovation). Also smart businessit support this roadshow dates. The countywide initiative "smart businessit: Strengthen IT. Link the country" aims here to strengthen the IT hub of Baden-Wuerttemberg and specifically the segment of the enterprise software furthermore ensure a high pace of innovation for providers and users in this sector. Approximately 30 participants used the opportunity that different experts demonstrated the benefits of cloud computing CloudingSMEs Workshop in Frankfurt, July 2nd, 2015 (EuroCloud) This Event is held in German in by EuroCloud Germany in partnership with the GI-Rhein-Main which is a regional group of the society for computer science, the IEEE Computer Society and the German Chapter of the ACM, the German department of the Association of Computing Machinery. The roadshow is part of the Event "Cloud Computing Science Meets Practice" which is organized together with the GI Regional Group Rhine Main. Parallel there will be a lecture program. The entire agenda can be downloaded as a pdf file at the following location: Program Cloud Computing 2015 Wissenschaft trifft Praxis! Approximately 25 participants used the opportunity that different experts demonstrated the benefits of cloud computing. Date: 8/17/ /80 CloudingSMEs

38 CloudingSMEs workshop in Paris, July 3 rd, 2015 (UEAPME) UEAPME s French representative SME organisation CGPME hosted on 3 July in Paris a workshop in the framework of the CloudingSMEs project on Le Cloud, un outil stratégique pour les PME? ( Is the Cloud a strategic tool for SMEs? ). The workshop was opened by Ms. Prat, Vice- President of the Innovation and Digital Economy Committee of CGPME, reflecting on this topic. The INSEE, the French National Institute of Statistics and Economic Studies, presented a study on the emergence of Cloud Computing and Luc Hendrickx, representing CloudingSMEs, spoke about how to facilitate the adoption of and the use of the cloud by SMEs. He presented also the different tools toolbox to the audience, according to the standard presentation demo which for this occasion had been translated in French. These tools were evaluated very positively and considered as very useful by the around 20 participants /entrepreneurs present. Further presentations came from the CNIL, the National Commission for IT and Liberties, on the recommendations of this commission in the field of privacy for enterprises who want to use the cloud 1 The workshop was concluded by a round table discussion with SME cloud providers and SME cloud users on how to improve the performance of your enterprise in the cloud. Discussion on SMEs Requirements and Needs An important point raised during the workshop was the issue of data protection and cloud computing. As cloud computing allows unlimited mobility there are also more possibilities to access the network of the firm from outside. This different access points are increasing risks and need to be protected adequately. The questions raised and debated during the workshop were the following: Do we use the Cloud without knowing it? What are the right questions to ask before using the Cloud? What are the most frequent functionality needs of SMEs? Can problems of compatibility arrive? What about the security of cloud computing? Can/should all data of an enterprise be put in the Cloud? What is the importance of the location of the data for the security? Free cloud services are they really for free? Is the Cloud green? Which is the economic model of the Cloud? 1 See: Cloud computing : CNIL's recommendations for companies using these new services, 20 June Date: 8/17/ /80 CloudingSMEs

39 What happens at the end of a cloud computing contract and the SME want to recuperate its data? Is reversibility possible? Does cloud computing really reduce the cost of an enterprise? Can the use of soft and hardware by an enterprise have an impact on the security of the Cloud? How high is the level of protection against cybercrime in the Cloud? Which is /can be the impact of cloud computing on the IT policy of an enterprise? The problems with cloud computing in France, do they also exist in the other countries? CloudingSMEs workshop Luxembourg, July 9 th, 2015 (UEAPME) In the framework of the Les Journées ehandwierk on Le Cloud computing dans les PME artisanales which took place in Luxemburg from 8-9 July, the Chambre de Métiers organised different workshops with the aim to inform craft enterprises on the cloud and exchange best practices. The event was organised in cooperation with the Ministry of Economy, the Commission Nationale pour la protection des données (CNDP), Luxinnovation, the Fédération des Intégrateurs, Enterprise Europe Network and UEAPME. The event started with a general presentation on the Cloud, its flexibility, possibility to reduce costs and risks. Further were the rules on data protection highlighted by a representative of the National Commission for Data protection. The CloudingSMEs project has been presented in the workshop Facilitate the adoption and use of the cloud by SMEs. The functioning of the different tools of it as well as the many barriers and loopholes SMEs can encounter were showed. Around maximum 60 craft enterprises participated in the event. The workshop was held in French language. The local organisers had opted for an open workshop, so that participants could chose the interventions they were most interested in and could go in and out. Discussion on SMEs Requirements and Needs The aim of the event was really to promote the uptake of cloud computing by craft enterprises. Therefor 8 companies offering cloud services presented their products. An interesting issue came up during a debate on the question what happens with the data in case of bankruptcy of the cloud provider. The law of 9 July 2013 amending article 567 of the Commercial Code 2 aims to make cloud computing in Luxembourg more secure 3 tackles already this 2 See: 3 See: Date: 8/17/ /80 CloudingSMEs

40 problem. The law states that, if the provider of the cloud computing service goes bankrupt, the owner of the data or the person who entrusted the data can now reclaim said data provided it can be separated from any other data at the time the bankruptcy proceedings open. The matter of the access to the data can be specified in the contract concluded between the provider of the cloud computing service and his client (e.g.: obligation to create backups). However no information could be given on how much time it takes to recover the data. 22 participants filled in the evaluation form. On the question which part of the seminar was for you the most interesting? 16 participants replied of which 8 indicated the CloudingSMEs presentation, 2 mentioned the issue of cloud security, 2 the product presentations and 3 the general information about the functioning of the Cloud. As proposals for the future the need of awareness rising on Cloud computing among SMEs was raised, the position of craft/smes vs international companies. Remarkable for a trilingual country was the suggestion to have a workshop in Luxembourgian or German. As already stressed the information needs of SMEs are different and depend on where they stand in the process of Cloud adoption. 86% considered the general content of the seminar very good. 91% considered the impact or excellent or very good. 76% replied that the usefulness for their professional life was very high. 3.3 Report on Interviews and Discussions with SME Associations Overview Following discussions during the first technical audit of the CloudingSMEs project and relevant recommendations the consortium has decided to employ an additional modality for interacting with SMEs and deriving information that could be used for developing roadmaps and policy guidelines. This modality concerned interviews with SMEs and SMEs associations. The consortium has employed this modality with a focus on receiving sector-specific information about cloud computing. In the sequel, we present the main outcomes of interviews with representatives of associations active in the accounting, building and construction sectors Association of Chartered Certified Accountants ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. They support their members and students in 170 countries, helping them to develop successful careers in accounting and business. They work with a network of 83 Date: 8/17/ /80 CloudingSMEs

41 offices and centres and more than Approved Employers worldwide. ACCA is an UEAPME Member. The input from ACCA was gathered through two telephone interviews by Luc Hendrickx with Emmanouil Schizas, Senior Economic Analyst and Acting Head of Small Business Policy, on 28th October and 22 December 2014 and the information provided by him. Accountants are the most trusted and most used advisers of SME owners. As they are on a regular basis in direct contact with the owner manager they are fully aware of his/her problems, questions and doubts on a wide range of issues, including ITC while at the same time not being themselves an expert in it. Consequently they can play an important role in raising awareness among SME on cloud solutions and influence their uptake. As SMEs have limited management and resource capacity they highly rely on external advice. Therefore, according to ACCA, any initiatives aimed at increasing the SME use of cloud solutions must actively involve the advisory community, if a critical mass is going to be reached. ACCA is convinced of the fact that there is a potential for significant efficiency gains. Cloud computing enables flexibility in the enterprise: flexible working (being able to access information from anywhere) and significant economies of scale previously accessible only to large corporations. This is especially an interesting advantage for accountants. Nevertheless caution is needed in how to present the issue to their constituency as many fashionable terms have to be avoided. As part of the discussion, the following main conclusions and remarks have been drawn: Cloud computing is not a familiar term for the general public but nevertheless a familiar concept for many people through the widespread use of web-based services (e.g., gmail, hotmail, yahoo. A survey done in the UK in 2011 reveals that 60% of UK small firms admit that they do not know what cloud computing is (Blundel and Gray 2011). The ACCA survey confirms this: just over 50% of ACCA members say that SMEs have very limited or no understanding of cloud computing. Lack of awareness is a key obstacle to greater adoption of cloud solutions. More things need to be understood about the nature of this problem and whether lack of awareness relates to the existence of the digital solutions on offer, the ease of adoption or the potential efficiency gains. An SME owner needs careful consideration of the kind of services the enterprise is able to buy, the interoperability of these with the Date: 8/17/ /80 CloudingSMEs

42 current software, the pricing of bolt-on services, the differences between providers and the risk attached to each option. It has to be ensured that SMEs are able to make informed choices and have access to objective, comparable and relevant information when choosing services and providers. A second step is necessary when SMEs will have this basic understanding: SMEs will still need further support (strategic advice to enable them to decide when outsourcing their computing resources will be the most efficient option). Once migration to the cloud has taken place, transparency is needed on how enterprises can leave or switch providers. Accountants with a greater understanding of cloud computing cited security concerns as the major obstacle to adoption, followed by a lack of awareness. Compared with their less knowledgeable colleagues, they were also more likely to emphasise a lack of advice. Accountants with little experience of cloud computing were much more likely to cite lack of awareness and complexity as the main obstacles to adoption. SMEs mention that there is no clarity on the costs for cloud solution. The general concern of guaranteed internet access /access to broadband was mentioned, as crucial documentation and enterprise resources cannot be put online unless they can be guaranteed to be accessible. The alternative is to build costly redundancies into the business systems, which would eliminate most of the benefits of cloud adoption. Putting sensitive documents in the cloud is an issue for SMEs, and recent news of cybersecurity threats are likely to make many owner-managers worry. As there is the need to make back-up and consequently the need to have two systems the question remains if with cloud computing the savings are not negative and one has to pay twice. Problems encountered: some cloud services provided are not as good or as virtual as expected. SMEs are often not able to distinguish good and bad cloud services. Motivated by this interview and the CloudingSMEs project, ACCA will launch in 2015 a new survey into how Cloud services are adopted by small and medium sized practitioners around the world, the results of which will be available during the last quarter of European Builders Confederation European Builders Confederation (EBC-Construction sector, having 20 member organisations representing 2 million craft and SMEs). The Association filled in the CloudingSMEs questionnaire for end-users and an- Date: 8/17/ /80 CloudingSMEs

43 swered some questions on cloud computing. The conclusion is that cloud computing is not used by craft men and micro companies of the sector nor by companies up to fifty (50) people. The reasons are connected to the fact that they do not know it exists or they don t trust cloud computing providers for the security and privacy services they offer UNIEP-Construction sector The Association filled in the CloudingSMEs questionnaire for end-users and answered some questions on cloud computing. The conclusion is that cloud computing is not used by craft men and micro companies of the sector nor by companies up to fifty (50) people, which is in-line with the relevant finding of the interview/discussion with the EBC association. The reasons are similar to the case of EBC (i.e. limited awareness, security & privacy concerns) UNIZO UNIZO is the representative organization for the self-employed and SMEs in Flanders and Brussels. It represents in total members from all sectors: retail, production, services and liberal professions. It has regional offices in the main cities and a national helpdesk which is 7 days a week and 24h a day reachable. The input from UNIZO was gathered during a half-day interview by Luc Hendrickx with Johan De Neef who is the national ICT coordinator of UNIZO on 15 th January He was responsible for the introduction of cloud computing in the organization itself. As ICT coordinator he organized over the years tens of conferences and workshops on ICT and Cloud computing all over the country. He was also responsible for the creation of the ICT Coach 4 an on-line tool to help SMEs with the implementation of ICT and cloud in their enterprise. He accompanied many SMEs in adopting cloud solutions. As such he gathered an in-depth insight on the needs of SMEs in this field. A lot of people have an (understandable) aversion to the new communication technologies. Indeed every month new high-tech playthings are put on the market, trendy sites, and useful apps leading to an ever increasing gap between the generations. This problem is automatically solved amongst private persons: elderly are accompanied and teached by their grandchildren or local initiatives. For SMEs the situation is quite different. Entrepreneurs are more and more confronted with digital natives : youngsters which have been raised in an environment with internet and electronic communication and this needs a 4 See: Date: 8/17/ /80 CloudingSMEs

44 certain adaptation. Digital technology has become an indispensable part of the entrepreneurial world. The ICT Coach was directed towards SMEs active in the food supply chain: agriculture, food industry, distribution/retail and packaging industry but also supporting services such as service providers and all liberal professions. We have experienced that the basic needs are the same for all SMEs. The ICT-Coach is an instrument that tries to identify the ICT needs of the sector and to solve the problems. Most SMEs have questions like: how much should i invest in automatisation? What is the return on investment and by when? How can IT help me in making my work easier and simpler? Which are the available systems and which are the ones that fit the best to my enterprise? SMEs need expert answers to their general ICT/cloud questions, through first-line advice. Then they need a clear picture of their ICT needs after an audit in their enterprise. After the audit they receive a report with an advice tailored to the needs of the SME. Then they are put in a trajectory counseling: if they receive the advice to buy e.g. an accounting informatisation package they are accompanied in searching for the most appropriate one. Info-sessions were also organised around the 4 most requested themes: 1. E-business; 2. Business Intelligence (BI), Enterprise resource planning (ERP) and Customer relationship Management (CRM); 3. Software as a Service (SaaS); 4. Electronic document management. According to UNIZO Cloud computing can lead to cost reduction for the enterprise. If one can work completely in the cloud then there is no need any more to invest in local ICT infrastructure such as servers, back-up tapes, extra hard disks etc. which often have recurring costs (unforeseen interventions, adding new users, ) and fixed costs (electricity, cooling, ). Due to the application of the pay -per-use principle, one has in principle a better view on the structure of the costs. As the Cloud is a booming industry, the offer on the market is increasing and the prices are going down, while the quality of the services is improving. Cloud computing is also the basis for a new approach to work: flexible, independently from location and time, based on mobile technology. Mobile working opens new perspectives such as time shifting and can help to reduce the traffic jams. Mobile working will become a necessity, it Date: 8/17/ /80 CloudingSMEs

45 needs a new approach towards work but it can offer significant time gains and allows for on-line co-operation without physical interaction. But the cost savings and the cost efficiency of cloud computing is not always evident for an SME. One has to evaluate this for every individual enterprise and the stage (age) of the enterprise is also important. Some products and packages are nowadays put on the market at dumping prices. The threshold to step in is very low and people risk to fall into the trap. For these products the entry cost is low, but the redemption fee is quite high. One needs to map all the factors: the cost for the product plus the cost to quit. One of the advantages of cloud computing is that it allows scalability. However it has to be highlighted that often the scalability only works in one direction: one can increase but not decrease. The contract should be carefully red. Especially for SMEs it is important to check the cost at long term. Experience shows that it still remains recommendable to consider the two options (intern or extern). One should not only check what the average monthly cost is but it should also be extrapolated over 5 years (which is the lifetime of in house ICT infrastructure. For start-ups it is affordable and recommendable to adopt from the beginning cloud computing as it avoid high investment costs for in house infrastructure. For existing enterprises it remains recommendable to do the assessment. In both situations however, one should not underestimate the costs. Service providers offer often the cheapest solution which mostly appears to be very basic and consequently only covers part of the SME needs. From the moment the storing capacity need to be increased the costs are quickly on the rise. Basic is most of the time very basic and it are the options that lead to high prices. Before making a choice to go to the cloud one has to look at the complete package. The offer of a specific service provided by one party can be transparent, so the total cost of ownership is transparent for what they offer. But as there are most of the time different parties involved, then it is not transparent at all. E.g. the network: it is necessary to be able to print. However this network is not provided by the cloud provider. Another important issue for SMEs is the unlimited access to the stored data: often this is not guaranteed in the contract. If it is a concern it has to be in the contract negotiation. The availability of the service depends on all the links in the chain (workstation can be broke, internet out,...). Using the cloud is a chain from the beginning until the end. Experience shows that the internet provider is by far the weak link. Date: 8/17/ /80 CloudingSMEs

46 Other concerns of SMEs that have to be taking into account and one need to raise awareness on, is what about migration to another provider at the end of the contract? What in case of bankruptcy of the provider? What happens with the data at the end of the contract? Are they really destroyed? As a private account is nowadays within the reach of everyone, it is often used for business too. The awareness about the risks of doing so is still too low. It appeared that it is of utmost importance for an SME to draft a check list or to have at its disposal such a list to avoid often occurring problems: on the scalability, the conditions in and out, the security, This depends on the type of contract, the type SLA. It allows to evaluate the SLA which deals with the quality of the service provider. One of the main advantages of cloud computing is that it guarantees the users always the latest version (software, anti-virus,...). It offers thus technological advanced solutions which accessibility would normally be too expensive and thus not affordable for the majority of SMEs. Cases as XP can in future be avoided. Cloud computing can thus contribute to professionalized the ICT infrastructure and services in a SME. It at allows the entrepreneur to focus on its own core business and activity. He does not have to care about updates etc. it creates room for innovation and flexibility and scalability. The other side of the coin is however the compatibility with other programmes. The SMEs are mostly not aware of this and it is not always told to them when purchasing cloud services. Also for small sectors it can create problems. The example was given of the Belgian textile sector where the two main suppliers had developed in the time a management system in DOS. The investment to renew it is however to high. For the future to make these applications profitable for SMEs one has to internationalise. Another point of attention is that to archive will become a problem. On the future and role of ICT SMEs they will probably deal with niche markets, such as web hosting and concentrate on service and support. Date: 8/17/ /80 CloudingSMEs

47 3.3.6 Interview with Steven Van Uffelen INCA Solutions 10 th March INCA Solutions is a Belgian SME cloud providers. It organizes also on a regular basis IT workshops for its clients. Luc Hendrickx interviewed on the 10th March Mr. Steven Van Uffelen, CEO of INCA Solutions, during a two hours interview in the premises of the enterprise. For understanding the actual state of play of cloud computing, it is important to know and understand the approach of one of the biggest players at the moment, Microsoft. The approach of Microsoft is not to talk with their customers but what they call their partners. Their business strategy is that everything what is standard they are delivering it themselves, they commercialise themselves and they go through public selling, bring it to the consumer. In the eyes of Microsoft an SME is a consumer and not a business. This is of course not a solution for an SME. Microsoft answer to this is that the SME has to deal with this through a partner on premise, thus with its own infrastructure or with a private hosted cloud. For them the ideal solution for every customer in the world, is the ideal mix between the public cloud, the private cloud and on premise. Public Cloud based on functionalities. Let s apply this Microsoft philosophy to a small SME, e.g. an accountant. He needs Word, Excel, PowerPoint, a mailbox, a fax, a datacenter, he should be able to use 3G or4g and he has an accounting software package. Nobody at Microsoft is willing to look at that list, so he has to verify himself what of this list can be offered by Office365 and he discovers that the accounting software is not in Office365. When he calls Microsoft what to do, they tell him that this is normal and that he has to keep the accounting software on his own server. But is it than not better to keep everything on my server? He asks. No, Microsoft answers, that is too complex, and then there is a security problem, your mailbox need to be performant. The ideal world is the hybrid world. When this accountant now wants to send out a mailing, this will take more time than before, and if something does not work, nobody is responsible for it anymore, contrary to the time when everything was on the sever and the accountant s computer seller was dealing with all the problems. It becomes even worse and the internet is going down due to the many data transfers when he adds other cloud solutions such as Salesfor.com, CRM, It is a problem when a public cloud is offered to a business environment, while not all the functionalities that a business environment need are available in the Public Cloud. And those world players will never be able Date: 8/17/ /80 CloudingSMEs

48 to offer all the business functionalities, as the legislations are different (eg accounting rules) in the different countries. The victim of this strategy are the small enterprises. By the time that they have understood the problem, they have already brought their mailbox to the cloud and have thrown away their Office licenses and they use Office 365. In addition, in case of problems, nobody is willing to help him. This is a consumer public cloud versus a business SME. This is a disaster and will lead to catastrophes all over Europe. Public Cloud based on capacities. A second move is not a cloud based on functionalities but on capacities. It offers space to put your server on and what you put on your server that is your decision. You pay according the CPU you use, for the network connectivity, for a certain amount of storing capacity etc. The problem with this approach is that a Public Cloud environment has to give guarantees to a business customer. To this remark the big players reply that if you need support, or when you have a problem, then you should address you not to us but to a partner. And if this leads to a business continuity problem then this is consequential loss. The contractual terms are clear on this. There is for everything a technical solution, but this is too expensive. If you want to discuss this, then, you have to discuss this with your IT supplier. However, with this approach the IT partner is nevertheless able to guarantee his customer the same service as he did before. But when a problem occurs at the level of the datacenter, then he will try to exempt him from his responsibility by stating that this has nothing to do with his service. The consequence of this is now that all over Europe the IT providers in their contracts with SME businesses insert a split responsibility. So the contract deals only with the service providing but not with the continuity of the service. This is certainly not in the interest of the SME businesses. The same problem occurs in the field of security. There is nowadays no cloud system that not has been hacked yet. But all the general terms mention that the customer agrees with the fact that all possible measures have been taken. This means that these providers re never responsible and will never be obliged to pay damage claims. The victim of this, apart from the customer is the IT providers as he will be confronted with all the complaints. Private Cloud. The third zone is the private cloud. In this kind of Cloud there is a mix of capacity and functionality with a clear end responsibility, a clear SLA and Date: 8/17/ /80 CloudingSMEs

49 a clear support. However such a cloud is quite expensive and not affordable for SMEs. For micro enterprises which only need Word, Excel, PowerPoint and Outlook, and outsource their accountancy to an accountant, Office 365 is indeed sufficient. But small enterprises they cannot use the public cloud and also not the outdated on premise solutions. But these companies are pushed to the cloud for the sake of mobility, flex work, telework etc. What INCA does is to offer a private cloud which is shared amongst different SMEs. There is support, capacity, functionalities accounting everything together but virtual separated for security reasons. The term Cloud is often abused as there are thus different types of Cloud and policymakers do not know the difference. This is also due to the fact that it is in the interest of the marketers of the IT multinationals to pretend that there is only one kind of cloud, namely the one that they want to sell all over the globe. One has also to warn for using Google Docs for business purposes as it is a extremely weak security platforms. Caution is also required when using Gmail. The general contract terms of Google allow indeed the screening of s. Their strategy is to extend the functionalities. If it is labor intensive and there is a risk for complaints then they do not do it themselves. If it is easy and the general contract terms can tackle the problems than they do it themselves. Recommendations. An important national and European rule is the obligation for a seller to provide information; A first recommendation should be that the obligation to provide information is a general one and that how stronger and more monopolistic a service provider is, the stricter the information obligation should be ensured. Today the reality is the opposite. There is no difference in the offer of the big players towards consumers and towards SMEs. They thus provide the same product with the same guarantees, services, framework conditions, and accompaniment. My rights as a business client are however not the same as a consumer client. The protection of SMEs is thus worse. An SME has different expectations than a big company. An SME owner is not at alit competent. If he is given the illusion by those cloud providers that it is allowed that he is not IT competent and that they take over all the problems, than they should also take up their responsibility. Date: 8/17/ /80 CloudingSMEs

50 In a lot of cases one still needs a server. A real information obligation means the responsibility of the service providers to be clear towards their business clients, about what one can expect and what not, and to give professional advice about the total cost of the hybrid model which to allow the customer to assess if the choice he is making is indeed the choice he wants to make. There are of course reasons why the bug players do not clearly inform their business clients. In the first place this is very expense, secondly this implies a responsibility that they don t want to bear and thirdly they have than to admit that their product is not really cheap. These companies do not have the cost structure to do this and one can even accept this that the information can be provided through internet sides or product documentation. But at European level one could introduce the obligation to have a least an information line for customers which have questions on the effective cost calculation. The result of these cost calculation could then be checked against the rules of unfair competition and misleading publicity. Unfair competition: The European Commission should look into the practices of the big players if they do not abuse their position to use for themselves other conditions than the customers, clients or partners. More concretely the license rules they impose for the use of Office, which are different for the licenses for Office 365. This makes the private cloud too expensive and is unfair completion. Too big to fail. In a contract between SMEs it is normal that there is a clause that deals with bankruptcy. In the contracts of Google, Microsoft and Amazon no such clause is mentioned. Are they too big to fail? What if one of them goes bankrupt and what will happen with all the data of all these SMEs? In the contracts of INCA it is clearly stipulated that in case of bankruptcy the SMEs can ask the curator to give their data immediately back. This is certainly a best practice. In some other cloud providers contracts it is mentioned that the service can be stopped at any moment and that there is no obligation to give the data back to the customer. This is certainly an important point of attention, also for the legislator. Scalability. One has to be very careful using the cost argument. The cost is in general not lower. The cost are split and that is why one has the impression that the cost is lower. But if one has effectively insight what the real cost structure is than cloud computing is not cheaper. Date: 8/17/ /80 CloudingSMEs

51 Scalability is an advantage and flexibility is an advantage. Mobility is also an advantage of cloud computing. But the message should be that only for a limited number of SMEs cloud computing is cheaper namely when they can use standardized products. Vulnerability An SME is characterized by the fact that in general it has not much elasticity: stock, staff, finance, credits, etc A seriously underestimated issue is the increasing dependency of IT which can lead to bankruptcy. It should therefore be avoided to give the people a false sense of security. Due to this false sense of security, people without any critical attitude, entrust more an more to an IT system. A good example of this is electronic archiving. Cloud and telecom The situation that the cloud service providers and the telecom providers are not the same is a difficult issue, especially in an international context. One should certainly not look at the SLAs of the telecom providers. One should prepare for a worst case scenario when telecom providers are hacked and due to the connectivity the whole economy is going down. 4G should also be bundled with classic cable connectivity to ensure a fallback position. Telecom providers should be obliged to have an SLA that gives automatically the right to use 4G communication in case of not functioning of a business line. By doing so there will be a protection for the user of a cloud environment: the cloud providers has to ensure the functioning of the server and the telecom provider has to guarantee the accessibility of the server. But as a conclusion:. Nowadays it would not be recommendable to install in an SME with 10 staff a server. The Cloud is absolutely the way to go. Because of the mobility, flexibility, globalization, exchange of information, harmonization, standardization safety if well done and security. There is no way back. 3.4 Analysis of Questionnaires In the sequel we provide SMEs answers to the questionnaires. Note that these results are based on the set of questionnaires that have been filledin as part of the workshops and interviews outlined in the previous section. Given the process of direct contacts with SMEs is on-going, additional results will be presented in subsequent deliverables releases of this deliverable, which is intended to be a living document. Indeed, subsequent deliverables will present consolidated results following the conclusion of all the workshops for SME communities that are organized by the project. Likewise the responses presented in the sequel have been taken Date: 8/17/ /80 CloudingSMEs

52 into account in the consolidation of the requirements list, along with outcomes and conclusions for the direct interactions and discussions with the SMEs Overview of Results from End-User SMEs Questionnaires A total of 177 End-User SMEs Questionnaires have been collected and processed in the scope of the present version/release of this deliverable. The analysis of the questionnaires has been performed according to the size of the SMEs that participated, as well as according to the sector of the SMEs. In terms of size, the segmentation of the participating SMEs in micro, small and medium SMEs has been considered according to the number of their employees. In terms of the per-sector analysis, emphasis has been given in four sectors (ICT, Construction, Logistics and Transport, Services), from which a critical mass of responses has been already received. Following paragraphs report on the per sector and per size analysis, while also discussing critical findings from the analysis of the samples as a whole (i.e. regardless of sector or size) Analysis Per (End-User) SME Size In order to analyze the responses according to the size of the SMEs that participated in the survey, we segmented the set of responses in three groups, in particular: a group comprising the SMEs with 0-9 employees, a second group comprising the SMEs with employees and a third group comprising SMEs with employees. The percentage of SMEs from each group is depicted in Figure 4 Overall, from the 168 SMEs that reported their size (out of the 177) and which are included in the current analysis of the survey, 66% of them were micro SMEs, 26% of them small SMEs and 8% medium. 14; 8% 44; 26% 0-9 Employees 110; 66% Employees Employees Figure 4: Distribution of the participating ICT SMEs according to the number of their employees Date: 8/17/ /80 CloudingSMEs

53 In terms of cloud knowledge the majority of the participants declared having basic knowledge (30%), while poor (26%) and fair (17%) followed (Figure 6). Note that in this final version of the report, the SMEs that declared fair knowledge increased, comparing to these in earlier versions of the report, while the SMEs declaring very poor knowledge decresed. This is mainly to the targeted sectors in the workshops that contributed the additional questionnaires, which included several SMEs from the ICT sector that have in general a better knowledge/understanding of cloud computing comparing to the average SME. Overall, few SMEs of the sample declared having a good knowledge of cloud computing, which underlines the need for raising awareness about the cloud within SMEs communities, but also for helping/educating them in understanding cloud issues. This need is also in-line with similar findings in other questions of the survey. 21; 13% 23; 14% 29; 17% 44; 26% Very Poor Poor Basic Fair Good 51; 30% Figure 5: Level of Cloud Knowledge Declared by the participating SMEs When looking at the responses per SME size (Figure 6) it is evident that larger (medium) SMEs feel more confident with cloud issues comparing to smaller size SMEs. Hence, the issues of raising awareness and supporting education are much more important and applicable to the case of micro SMEs. Date: 8/17/ /80 CloudingSMEs

54 Employees Employees Employees TOTAL 10 0 Very Poor Poor Basic Fair Good Figure 6: Cloud Knowledge of the SMEs (analyzed according to the size of the SMEs) Employees Employees Employees TOTAL Figure 7: Main areas where SMEs need support (analyzed according to the size of the SMEs) Figure 7 illustrates that SMEs prioritize security and privacy issues, technical knowledge, and cost-benefit analysis as the main areas where they need support. There are no significant deviations across the SMEs of the different sizes, yet cost-benefit and ROI (returnon-investment) analysis is deemed more important for medium SMEs, when compared to small and micro ones. This is mainly due to the fact that medium SMEs are likely to deal with more complex cloud deployments and associated cost-benefit calculations. It is also noteworthy that Date: 8/17/ /80 CloudingSMEs

55 SMEs do not really priories needs for business cases formulation they want less support in issues that relate directly to the way they operate. Figure 8 illustrates the factors that motivate the various SMEs in order to adopt cloud computing. Most SMEs expect cost reduction and increased efficiency, agility and mobility as a result of cloud adoption. It is also noteworthy that several SMEs mentioned other motivating factors, such as their need to improve their existing ICT operations, pressures from competitors and more. Reduced costs and mobility are particularly important for micro SMEs, since their employees are not usually tied to the working environment Employees Employees Employees TOTAL Figure 7: Factors that motivate SMEs to move to cloud solutions (analyzed according to the size of the SMEs) In terms of the type of cloud deployments that are envisaged (or already used) by the end-user SMEs, public cloud deployments are prevalent (as shown in Figure 9), followed by private and hybrid ones. It is however noteworthy that several SMEs did not have the knowledge to aptly answer this question. Medium SMEs show a higher interest in private cloud deployments, given that they are more likely to have the maturity and resources needed to implement a private cloud solution. Date: 8/17/ /80 CloudingSMEs

56 Employees Employees Employees 10 TOTAL 0 Public Cloud Private Cloud Hybrid Cloud Community Cloud Don't Know Figure 8: Types of Cloud Deployments Envisaged by SMEs (analyzed according to the size of the SMEs) Employees Employees Employees TOTAL Figure 9: SMEs concerns associated with cloud adoption and contracts (analyzed according to the size of the SMEs) Figure 10 illustrates how the main areas of concern for SMEs, in relation to their existing (or future) contracts with cloud services providers. Privacy and data protection are the main concerns of the SMEs, followed by the need for understanding cloud issues. These concerns are of top priority for the micro SMEs. Small SMEs seem equally concerned about cloud understanding issues (as much as there are concerned for security/privacy), but also about costs issues and the lack of control. This is reasonable given that small SMEs have to deal with more complex cloud cost structures (comparing to micro ones), while they are more likely to try to innovate based on IT (and hence are concerned about lack of control) Analysis Per Sector As already discussed the per sector analysis considered a segmentation of the various SMEs according to their activity sector. As shown in Date: 8/17/ /80 CloudingSMEs

57 Figure 11, the participating SMEs covered a wide range of different sectors including ICT, Apparel, Art Restoration, Construction, Graphical Arts, Logistics & Transport, Plant Installation, Services, Trade & Industry, Vehicle Repair, Education & Training, Manufacturing, Accounting & Auditing, Retail and some others. In this final round of processing the per sector analysis considered the responses of seven of the above sectors (ICT, Construction, Services, Logistics & Transport, Trade & Industry, Education & Training, Retail), given that those sectors had a critical mass of responses (i.e. over nine responses). Note that this analysis includes three more sectors comparing to previous releases of the report, which provided results only regarding four of the above-listed sectors (i.e. ICT, Construction, Services, Logistics & Transport). ICT Retail; 10; 6% Other; 17; Accounting & 10% Auditing; 3; 2% Manufacturing; 6; 3% Education & Training; 9; 5% Vehicle Repair; 3; 2% Trade & Industry; 20; 11% ICT; 22; 12% Apparel; 2; 1% Art Restoration; 2; 1% Construction; 16; 9% Graphical Arts; 2; 1% Logistics & Transport; 12; 7% Plant Installation; 4; 2% Apparel Art Restoration Construction Graphical Arts Logistics & Transport Plant Installation Services Trade & Industry Vehicle Repair Services; 49; 28% Education & Training Manufacturing Figure 10: Per-Sector Distribution of the SMEs (participating in the survey) In terms of cloud knowledge (Figure 12) we can report some differences between SMEs participating in different sectors. In particular, ICT companies appear more knowledgeable in cloud issues comparing to companies from the Services sector. Likewise, Services companies have a better cloud knowledge when compared to companies from the Construction sector. SMEs of the retail and trade&industry sectors seem to have knowledge and awareness about cloud computing at a level similar to the SMEs of the Services sector. However, the case for SMEs in the Education & Training sector is rather different, given that none of these SMEs declared good knowledge and understanding of cloud computing. This diversity should be taken into account when planning educational and awareness actions for SMEs. Date: 8/17/ /80 CloudingSMEs

58 Very Poor Poor Basic Fair Good TOTAL ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 11: Cloud Knowledge of the SMEs (analyzed according to the sector of the SMEs) Figure 13 presents the factors that motivate SMEs from different sectors to adopt cloud computing. ICT, Services and Trade & Industry companies look primarily at cost issues. Cost seems to be a secondary motivation for Construction and Logistics&Transport companies, which look more at the flexibility and ubiquity benefits of the cloud. Costs issues seem to be important for retail sector companies, including both overall costs and the ability of the cloud to lead to reduced CAPEX. It must be underlined however that the Other option was selected by (too) many participants, which is probably due to two main reasons: (A) Other considerations for specific sectors (e.g., competitors activities) and (B) Poor understanding and limited knowledge of some of the participants about the cloud Reduced Costs Reduced CAPEX Flexibilty & Scalability Efficiency & Agility Mobility & Ubiquity Greener IT Other ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 12: Factors that motivate SMEs to move to cloud solutions (analyzed according to the sector of the SMEs) Date: 8/17/ /80 CloudingSMEs

59 Figure 14 illustrates the current status and plans for cloud adoption by the various companies segmented per sector. ICT and Services companies are using cloud computing much more than companies in the rest sectors. Companies from the construction sector are reporting a lack of knowledge towards adopting cloud solutions. It is noteworthy that companies from all sectors report to a higher (e.g., ICT / Services / Trade & Industry sectors) or lower extent that they are already using some short of cloud computing solutions. This is particularly important, given that in several workshops it was discovered that even more SMEs are using cloud computing, since in several cases they are using cloud services without knowing it ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 13: SMEs intentions & plans regarding cloud adoption (analyzed according to the sector of the SMEs) Figure 15 reports the areas in which the various SMEs that participated in the survey think they need support. Services sector companies prioritized security, privacy and data protection, especially given that several of them think their data as their primary company asset. However, security/privacy issues are deemed important from several other participants as well. Construction companies report the need to get support on building technical knowledge, while ICT, Services and Education & Training sector companies acknowledge the need for cost-benefit analysis as well. As already outlined SMEs do not seem to massively ask for support in (cloud-related) business case formulation issues. This is especially true for Services companies, yet there is a significant percentage of retail and trade&industry companies that appear in need of support in formulating business cases abased on cloud computing. ICT and Services sector companies seem to be more concerned about SLA issues, which is also largely due to the fact that companies from those sectors were already using cloud computing. Date: 8/17/ /80 CloudingSMEs

60 ICT Construction 10 Services Logistics & Transport 5 Trade & Industry 0 Security, Privacy, Data Protection Technical Knowledge Contractual and SLAs Cost-Benefit Business Case Formulation Other Education & Training Retail Figure 14: Areas where the SMEs need support (analyzed according to the sector of the SMEs) (y axis denotes number of responses) In terms of cloud models, it seems that most companies prioritize SaaS as more important and useful for their needs, following by IaaS (Figure 16). However, this is also largely due to the fact that during workshops and other activities, SMEs seemed to understand SaaS model better than others. This trend holds for all companies regardless of their sector. Companies of the construction and education & training sectors reported also «other», but this can be also due to fact that some of the companies lacked knowledge about cloud computing (as explained during the analysis of earlier questions about cloud knowledge). Note that only companies of the ICT, Services and Trade sectors seemed to understand and report preference for PaaS IaaS PaaS SaaS Other TOTAL ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 15: Cloud Models Envisaged by SMEs (analyzed according to the sector of the SMEs) (y axis denotes number of responses) As far as desired cloud deployments are concerned, all companies underlined the importance of public cloud services for them, followed by private cloud (Figure 16). As expected, ICT and Services sector companies Date: 8/17/ /80 CloudingSMEs

61 had a better understanding of the scope of public cloud solutions, since some of them had deployed or used private clouds. Construction and education & training companies did not at all reported a need/thought for private cloud deployments, but this may also have been due to their poor understanding of terms (despite efforts to illustrate those terms during the workshops). The latter is also the cause for the fact that several SMEs (out of all sectors) declared a lack of knowledge in this question Public Cloud Private Cloud Hybrid Cloud Community Cloud Don't Know ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 16: Types of Cloud Deployments Envisaged by SMEs (analyzed according to the sector of the SMEs) Figure 18 illustrates that the main concerns of the SMEs against cloud adoption are associated with security and data protection, following by cost issues and lack-of-control. The latter has particularly been reported by companies in the ICT, services and transport & logistics sectors. These concerns are in-line with earlier findings e.g., on the issues where SMEs need support Cost Privacy & Data Protection Lack of control SLA Issues Poor Understanding Other ICT Construction Services Logistics & Transport Trade & Industry Education & Training Retail Figure 17: SMEs Concerns against Cloud Adoption (analyzed according to the sector of the SMEs) SMEs perceive QoS and Security issues as the most important areas for their cloud contracts followed by Incident Management. ICT companies opinions are distributed evenly between the QoS, Security and Incident Date: 8/17/ /80 CloudingSMEs

62 Management options, while construction sector companies are slightly more concerned about security and incident management comparing to QoS. Logistics companies tend however to prioritize QoS over security, thereby differentiating themselves from companies in the other sectors.in general, most SMEs do not envisage peak loads a very important issue probably because several of them do not deal with very high loads ICT 15 Construction 10 Services Logistics & Transport 5 0 Peak Loads QoS Physical & Network Security Incident Management Other Trade & Industry Education & Training Retail Figure 18: Thorny Issues in Cloud Contracts Envisaged by thesmes (analyzed according to the sector of the SMEs) As a last note Figure 20 illustrate the fact that Construction and Logistics & Transport sectors companies had limited experience from outsourcing ICT infrastructure and services in general, thereby making them more cautious against cloud computing. On the other hand ICT and Services sector companies have better experiences from outsourcing, since at least at a percentage of 50% are using/employing some form of outsourcing of their IT services (either complete outsourcing or combined with some in-house deployment). Retail 2 Education & Training 1 Trade & Industry 4 TOTAL Logistics & Transport Services 3 13 Both OutSource In-house Construction 2 ICT Figure 19: Modes of ICT Services Delivery in for companies according to their sector In general, the companies prior experience with outsourcing (combined with their level of cloud knowledge and understanding) makes them more Date: 8/17/ /80 CloudingSMEs

63 receptive to cloud concepts and the idea of cloud adoption. This is evident in the companies of the ICT, services and retail sectors, the majority of which declared experiences with outsourcing of their ICT infrastructures and services Overview of Results from ICT SMEs Questionnaires We have also analysed (questionnaires based) feedback from 26 ICT SMEs, notably SMEs that deal with the development and provision of cloud-based products and services. As evident from the figure below, ICT SMEs participating in the survey had a very good knowledge of the cloud computing infrastructures and services, which 9/10 of the cases was characterized as «Expert» or «Good». Note that companies that deal directly with cloud as part of their product or services stategy identified themselves as Expert (in most cases) or Good. Other classifications were selected by companies that use cloud as an enabling technology for their products and services, without being cloud developers themselves. 2; 8% 1; 4% 13; 50% 10; 38% Basic Fair Good Expert Figure 20: ICT SMEs Level of Cloud Computing Knowledge As shown in Figure 22 participants are already providing cloud-based solutions, either solutions that they develop themselves or solutions that use cloud computing as an enabling technology. Date: 8/17/ /80 CloudingSMEs

64 2; 6% 1; 3% Already Developing Cloud Solutions 15; 43% 17; 48% Using Cloud as Enabling Technology Plan to Use Cloud (Midterm) Do not deal with Cloud Already Developing Cloud Solutions Using Cloud as Enabling Technology Plan to Use Cloud (Midterm) Do not deal with Cloud 0-9 Employees Employees Employees TOTAL Figure 21: Analysis of how SMEs use (or intend) to use Cloud Computing (y-axis denoted number of responses Figure 22 illustrates that ICT SMEs develop and offer public, private and hybrid cloud solutions, with almost an even distribution of SMEs responses in those three categories. There is a clear difference here from the end-users responses, which were mostly towards public cloud solutions. Furthermore, regarding the types of cloud models deployed (Figure 23) we see a prevalence of SaaS solutions, followed by PaaS and IaaS solutions. This is again slightly different from what reported by end-users, but we should underlined that end-users might not be very familiar with the subtle line and differences between PaaS and SaaS (but also between PaaS and IaaS) solutions. Overall, there is a clear tendency in the offering of software solutions for the end-users. 5; 10% 16; 30% 15; 28% 17; 32% Public Cloud Private Cloud Hybrid Cloud Other Date: 8/17/ /80 CloudingSMEs

65 Public Cloud Private Cloud Hybrid Cloud Other 0-9 Employees Employees Employees TOTAL Figure 22: Types of Clouds Used by ICT SMEs Employees Employees Employees TOTAL 5 0 IaaS PaaS SaaS Other Figure 23: Cloud Models Deployed by ICT SMEs Figure 25 reports an important finding regarding the nature of the solutions offered by the ICT SMEs. The majority of the SMEs characterized their solutions as «differentiated» and/or «Niche». This reinforces the fact that ICT SMEs should focus on niche solutions/markets than trying to complete with large vendors purely in terms of economies of scale and cost, where large vendors have usually competitive advantages and more capabilities than SMEs. Surprisingly few of the ICT SMEs develop solutions that are peculiar to a particular region, which can be another means of differentiating themselves from giant vendors. Figure 25 provides an indication of possible types of niche/differentiated solutions developed by our sample of ICT SMEs, which include mobile and media clouds. Nevertheless, we cannot consider this list of solutions definite and representative (due to the nature of our sample of respondents). Date: 8/17/ /80 CloudingSMEs

66 Employees Employees Employees TOTAL Figure 24: Positioning of the Cloud Solutions Deployed by SMEs Employees Employees Employees TOTAL 0 Mobile Cloud Media Cloud Sensor Cloud Other Figure 25: Types of Cloud Solutions Deployed by ICT SMEs Figure 27 presents the reasons for which ICT SMEs adopt/use/deploy cloud solutions. We see a prevalence of reasons relating to efficiency, mobility/ubiquity and scalability, followed by reduced costs. The picture is similar to the one presented in the same questions by end-user SMEs, with only some minor / fair differences, thereby leading to a common perception and vision of SMEs for cloud and its benefits. Date: 8/17/ /80 CloudingSMEs

67 Employees Employees Employees TOTAL Figure 26: Motivation for ICT SMEs to adopt/use cloud solutions In Figure 27 we illustrate the areas/issues that ICT SMEs prioritize as most important for further developing innovative and competitive solutions. SMEs (especially micro SMEs) view access to finance as the most important issue. Legal issues, certification issues and continued knowledge/education follow. Legal issues are more important than certification ones for micro SMEs, which legal expertise is far away from their day-to-day operations and competencies. Small and medium SMEs prioritize certification over legal issues, but in all cases access to finance are characterized by far as the most important support factor for their ability to develop and offer competitive solutions Employees Employees Employees TOTAL Technical Knowledge & Education Access to Finance Legal Issues Certification Business Planning Other Access to Human Resources Figure 27: ICT SMEs needs in terms of cloud computing Moreover Figure 29 illustrates how the ICT SMEs perceive (in terms of importance) various issues that relate to the development and evolution of their cloud solutions. In addition to access to grant funding (which is prioritized over Venture Capital funding), SMEs seems to seek best practices, blueprints, access to cloud resources, collaboration/clustering with Date: 8/17/ /80 CloudingSMEs

68 other stakeholders, as well as support in legal issues. The availability of open source infrastructures and libraries has been deemed less important. The need for best practices, collaboration with stakeholders and support in legal and regulatory issues seem to be the most important to ICT SMEs comparing to the rest. These are areas where support to ICT SMEs should be provided according to the current analysis Indifferent Not so important Important Very Important Prerequisite 10 0 Open Source Products / Libraries / Ecosystems Access to Grant Funding & Research Grants Access to Venture Capital funding Access to Cloud Educational Resources & Assets Access to Best Practices & Blueprints Collaboration & Clustering with other stakeholders Legal & Regulatory TOTAL Figure 28: Evaluation of Different Cloud Issues by ICT SMEs An interesting finding is also reported in Figure 30 which illustrates the main areas covered in the contracts where the ICT SMEs engage. Despite the end-users need/concern about security management, it seems that cloud contracts are more focusing on QoS and incident management (e.g., how to deal with issues, tickets etc.) comparing to security issues Employees Employees Employees TOTAL Figure 29: Common Elements and Concerns contained in the SLAs / contracts established by ICT SMEs Date: 8/17/ /80 CloudingSMEs