Small Businesses Pivot to the Cloud: Technology Platforms and Cloud Services Critical During COVID-19, According to Survey

By SBE Council at 17 June, 2020, 10:15 am

NEWS

FOR IMMEDIATE RELEASE

Vienna, VA –  In a survey released today by the Small Business & Entrepreneurship Council (SBE Council), small business owners report that cloud services are essential tools for operating their businesses and critical to their survival during the COVID-19 crisis. They overwhelmingly believe that the costs of these services should be qualify for loan forgiveness under the Paycheck Protection Program (PPP) – 87% of small business respondents believe cloud services costs should be forgivable, similar to other essential costs such as utilities, transportation and rent under the PPP program, according to the survey.

“There is no doubt that technology platforms and the cloud have served as a lifeline for many small businesses during the COVID-19 shutdown period. These tools will continue to play a central role during the recovery period and beyond. They are not a luxury or even an option, but a necessity during the shutdown and uncertain re-opening period in order to communicate, make payroll, market and sell goods and services, and keep the doors of the business ‘open’ generally. COVID-19 has accelerated the use of digital tools and platforms among all types of small businesses, and there is no turning back,” said SBE Council president & CEO Karen Kerrigan.

According to the survey of just over 300 small businesses that use cloud services, and conducted by TechnoMetrica from June 4-5, 2020:

● 84 percent of small business owners report that cloud services are essential tools when it comes to operating their business. This view is widely held across business segments by employee size.

● Approximately 74 percent of small business respondents agree that their core business offering would be unable to operate without the use of cloud services.

● 76 percent say that cloud services have been critical to the survival and operation of their business during the COVID-19 situation.

● 79 percent of small businesses agree that cloud services have helped their businesses more effectively communicate with and/or better manage their customers amid COVID-19.

● 84 percent of small businesses say that cloud services have improved employee productivity and collaboration.

● 67 percent of small businesses agree that they are able to reopen more quickly and efficiently from the COVID-19 lockdown as a result of using cloud services.

● 67 percent agree that a program allowing them to expense cloud services would help them increase their chances of profitability and survival during the post-COVID-19 recovery period.

In their own words: Verbatims from the survey:

“Technology is becoming more required, not an improvement, for most businesses. As such, the costs for the technology, including cloud service, should be deemed essential and included in the PPP obligations.”

“Payroll and accounting during the pandemic would have been much more difficult without the cloud services we use.”

“Without cloud services I would not be able to operate. It has helped my business to maintain operations throughout the COVID-19 crisis.  My customer size has decreased a little, but somehow we are surviving.

“Cloud services cost less and help my company run more efficiently, two things that are greatly needed during COVID-19.”

“Cloud services were extremely important during this COVID-19 crisis. Being able to keep my employees paid is very important.”

“Our in-company communication could not have survived without cloud software. We needed the ability to work on similar things and communicate about them from numerous locations.”

What are small businesses using cloud services for? According to the survey, cloud storage or backup is the most commonly cited activity (with a share of 63 percent); email hosting, web hosting, and applications hosting (46 percent); payroll processing (28 percent); communication and collaboration, video conferencing and webinar services, and invoicing, sales and expense tracking, and/or reporting (35 percent use cloud computing for each of these activities); accounting (30 percent); e-commerce support (28 percent); and customer engagement (22 percent).

In their own words: Verbatims from the survey:

“It helps me contact my customers and stay in contact with them, and helps me reel in new business with large companies and small firms alike. Mainly due to COVID-19, most of my work is now done online vs. on site.”

“We have had to cancel in person meetings and virtually offer services so we have relied more on the internet and cloud for service and communication.”

“These services are integral to many businesses today. They should be in the same category as utilities.”

“They have become essential and will continue to be necessary for businesses small and large to survive.”

“Cloud services are definitely an essential purchase. Reliable record keeping and the great amount of tasks that depends on them are vital to my business.”

“Cloud services are the same as having other employees.”

Small businesses have upped their usage and providers are offering support. According to the survey, 36 percent of small businesses say that they have subscribed to or retained new or additional cloud software or services since the start of the COVID-19 outbreak. Close to two in five (39 percent) say that their cloud service providers have offered them extensions or delayed payments.

While the median spend on cloud services is $324.78 per month, 28 percent spend $501 monthly on cloud services and 14 percent spend $1,001 or more on a monthly basis.

In their own words: Verbatims from the survey:

“Working on the cloud has made the transition to working remotely very easy and efficient for employees to access data and applications simultaneously.”

 “Cloud services are essential to the functionality of my small business from storing customer account information to managing payroll and time clock hours.”

“Before COVID-19, we used cloud services to organize and share customer data for record keeping, for billing, for communication with clients and among the employees. After COVID-19, we switched to providing teletherapy for our clients which kept our business going.”

“Cloud services helped to keep the business afloat during the COVID-19 pandemic. Since dealing with customers at the business was impossible, cloud services made it possible to communicate and schedule work orders to the customers.”

Small businesses cite many benefits of cloud services. Close to nine in ten (89 percent) of small businesses that use cloud services agree that cloud technology saves time and money, followed by improved employee productivity and collaboration (84 percent). Nearly eight in ten agree that cloud services have helped their business better communicate with or manage customers during COVID-19 (79 percent) and have been critical to the survival and operation of their business amid the outbreak (76 percent).

In their own words: Verbatims from the survey:

“Most files and business documents are cloud based. Our financials are housed in a cloud-based system. Our CRM and working documents are housed in a cloud-based system. During COVID-19, all our users were able to access files and necessary documents to complete projects and documents without any hiccups or major delays.”

“Without this service my business wouldn’t run quickly or accurately remotely.”

“Our company worked at home for seven weeks and was able to share information and continue working because of cloud.”

“If we didn’t have cloud services we wouldn’t be able to log in remotely and work from home until COVID-19 is over, hindering from keeping us employed.”

“Cloud services played a major role during crucial times such as COVID-19 because it took away the stress of managing at home.”

“Cloud services are vital to the survival of small companies like mine because without them we do not have a way to reach our customers.”

“During these times cloud services are more important than ever.”

“Cloud services are essential to the survival of my small business.”

Kerrigan said the survey’s compelling results will further help SBE Council educate members of Congress and the Administration about the importance of technology and cloud services to small businesses, and bolster the group’s advocacy efforts to allow these expenses to be forgivable under PPP.

“Congress is sympathetic and receptive on this matter, and ideally we would like to see the SBA and Treasury take the lead on making these expenses forgivable through guidance or clarification on PPP forgivable expenses. Doing so would make a meaningful difference for small businesses, as cloud-based tools are becoming increasingly important – in fact, necessary – for survival and recovery during the COVID-19 crisis and beyond,” said Kerrigan.

The SBE Council/TechnoMetrica Small Business Cloud Services Survey was conducted online from June 4 to June 5, 2020, using a national sample of 302 small businesses, with 100 or fewer employees who use cloud services for their business. Respondents for the survey came from TechnoMetrica’s network of online panel partners. Survey respondents consisted of owners, presidents, and other senior-level decision-makers. The error estimate for this survey is plus or minus 5.75 percentage points, using a probability sample assumption for the study’s convenience sample.

Related content:

Technology Tools and Platforms Become More Essential for Small Businesses in the COVID-19 Economy, SMALL BUSINESS INSIDER blog, May 19, 2020.

Fixing the PPP to Make it Work Better for Small Businesses and Workers, Morning Consult Op-ed, May 13, 2020.

Contact:  
Karen Kerrigan, SBE Council president & CEO
e-mail: kkerrigan@sbecouncil.org   

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org @SBECouncil

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