Shift to Cloud Computing Gains Momentum Among SMBs: Datto

A significant number of small and medium-sized businesses (SMBs) are moving toward cloud computing, with an emphasis on transitioning core workloads for enhanced business agility and resilience, according to a new report.

According to Datto's Global State of the MSP Report Trends and Forecasts for 2024, about half of the respondents, primarily managed service providers (MSPs), anticipate a considerable shift in their client base toward cloud services in the next three years. 

This trend is especially prominent in North America, with expectations of major cloud migration driven by the adoption of Infrastructure as a Service (IaaS) and the movement of databases and email servers to the cloud. Notably, 47% of respondents expect that between 75% to 99% of their client base will move workloads to the cloud in this timeframe.

Challenges and Solutions in Cloud Transition

As SMBs shift from traditional on-premises systems to cloud infrastructures, MSPs encounter new challenges and opportunities. 

Ensuring continuous data protection and maintaining investment security are paramount as MSPs move towards cloud-based workloads. To address these concerns, MSPs are encouraged to explore backup solutions that allow for seamless transitions, enabling them to adapt to changing client requirements without incurring sunk costs.

Top Cloud Service Providers

Preferred cloud service providers for North American SMBs include:

The Continued Importance of On-Premises Workloads

Despite the growing preference for cloud services, there remains a significant role for on-premises workloads. MSPs are transitioning environments from on-premises to cloud in an iterative manner, according to the study’s authors, acknowledging that this shift won't be instantaneous or absolute. 

On-premises workloads continue to be maintained for reasons including trust and security concerns with public clouds, the need for operational transformation, compliance requirements, and in some cases, the limited financial benefit of moving to the cloud, the survey showed.

Regional Variations in Technology Use

While a general decline in the use of business-critical apps and servers is expected in the next three years, North America diverges from this trend, with a greater increase anticipated compared to other regions.

Datto's report underlines a dynamic IT landscape where SMBs are increasingly moving towards cloud-based solutions, balancing this with the ongoing relevance of on-premises systems. The findings emphasize the critical role of MSPs in guiding SMBs through these evolving digital challenges and opportunities.