KPMG report says many UK SMBs are reluctant to embrace cloud services

‘Majority of UK businesses only spend 10% of their IT budget on the cloud’

71 per cent of UK organisations are spending a mere 10 per cent (or less) of their IT budget on cloud services, reports KPMG.

Its global study of almost 2,100 contracts covering deals worth £7.8 billion suggests that cloud-based services are ‘failing to capture the popular imagination of UK businesses’. 

KPMG’s 8th annual ‘Service Provider and Performance Satisfaction’ study includes analysis of current corporate IT spend in Britain by examining more than 330 UK-based contracts.

It also reveals that many organisations are also continuing to rely on ‘tried and tested’ outsourcing models – the survey shows that favoured destinations for IT support services remain India (51 per cent), Poland (8 per cent) and South Africa (8 per cent).

Asked why they are reticent about employing cloud services, the top three reasons cited by UK C-suite respondents centred around data location, security and privacy risks (26 per cent), concerns over regulation and compliance (16 per cent) and cynicism around the ease with which cloud services can integrate with legacy IT systems (15 per cent).

The survey goes on to reveal that, despite the economy picking up, some companies across the UK are still nervous when it comes to committing to long-term investments. Asked about their IT outsourcing plans for the next two to three years, just 43 per cent said they plan to increase spending. This figure contrasts with 77 per cent this time last year. 

However, the findings also suggest that satisfaction levels remain high in the UK, with 77 per cent of respondents saying they’re comfortable with the support they receive. 

“Despite widespread acceptance that cloud services offer access to the latest technologies, and make IT more accessible, adoption remains relatively sluggish," said Jason Sahota, director in KPMG’s Shared Services and Outsourcing Advisory team. 

"While concern about the security risks surrounding new technology is understandable it may also be disproportionate, as cloud options are just as safe as other outsourcing solutions. Of course, investors and stakeholders will welcome caution on the part of the buyers, but they also want to see innovation, meaning that UK plc will need to find the right balance to remain competitive.”

Image source: Shutterstock

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