By 2024, 35% of Indian SMBs will shift one-third of their core workloads to cloud: IDC

By 2024, 35% of small and medium-sized businesses (SMBs) in India will shift one-third of their core workloads to the cloud to drive business agility and future resilience, according to a report published on Wednesday by the market research firm International Data Corporation (IDC).

For most small and mid-sized organisations, the reality of moving to the cloud has been a gradual transition of on-premises resources to the cloud, with many now running hybrid environments. A study by cybersecurity firm Sophos published in November 2022 highlighted that the cloud is a growing target for cyber-attacks. Nearly two-thirds of SMB organisations experienced attacks such as phishing and ransomware attacks, it said.  

Nonetheless, IDC reasoned that SMBs have survived pandemic shutdowns and supply chain disruptions by leveraging technology and providing their clients with online services through various digital channels. But with the rising inflationary impact, customers have become more cost-centric, pressuring SMBs and making it more challenging to achieve business resiliency – and therefore a growing number of these businesses will see a significant shift to the cloud.  

In September, IDC's 2022 Worldwide Future SMB survey, also revealed that 46% of SMBs in the Asia-Pacific have significantly digitised their businesses by adopting ecommerce, digital payments, and automation technologies. Digitally matured SMBs across India too are adopting technologies to future-proof their businesses against additional market disruptions, it said. 

“SMBs are increasingly investing in technology solutions to become more cost-efficient, improve customer acquisition and retention, and balance growth with quality. By adopting a more digital way of doing business, SMBs in India have tremendous potential to expand - leading to an increase in their market share," said Supriya Deka, Senior Market Analyst for Digital Small and Medium-sized Business, IDC Asia/Pacific.

The report further predicts that in the next 3-4 years, at least one third of SMBs will increase investments in automation and digital tools to make up for the shortage of workers, reduce manual processes and human error, and boost productivity.  

According to the study, over half of medium sized businesses will hire key technology decision makers by 2026 as they continue to invest in digital transformation and seek to have IT thought leadership on staff. 

Notably, IDC predicts in the next five years, the total budgets dedicated to IT investments and connectivity services at Indian SMBs will increase by 20% as SMBs turn to technology to compete with larger businesses.