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18 February 2015

Security fears stop firms using cloud computing services, says FSB

Reference number: PR 2015 05

New research from the Federation of Small Businesses (FSB) has found that despite three fifths (60%) of small firms questioned using cloud computing services, the remaining two fifths (38%) remain sceptical about the benefits of the technology in the face of perceived risks.

When asked what risks they most associated with cloud computing, the FSB members questioned listed the following top five concerns: data theft or loss (61%), reliable access to online services (55%), concerns over who would have access to the data (53%), liability issues (41%) and over dependence on cloud computing services (33%).

The results build on previous work by the FSB into the benefits of using technology for businesses, and the barriers to take-up of productivity-enhancing new ways of working.These barriers must be addressed to allow more firms to reap the benefits of cloud computing. A 2012 European Commission report found that as a result of the adoption of cloud computing, 80 per cent of organisations could potentially reduce their costs by around 10 – 20 per cent. There are also significant potential green benefits as well, with one study indicating that the energy footprint of small firms can be reduced by up to 90 per cent by moving tasks online.

Commenting on the findings John Allan, FSB National Chairman, said:

"Many small businesses are recognising the advantages of cloud computing services, but there remains a great deal of concern that sensitive data may not be secure or the service not reliable. Businesses don''t want to transition to cloud based systems without knowing who will be liable if something goes wrong. As our previous research has shown, there are significant gains to be made from using this technology so it is imperative more is done to address firm''s understandable reservations and remove barriers to take-up."

Out of all the businesses questioned, just under half (45%) said they were already greatly or fairly reliant on cloud computing services. The most common services currently used by the small businesses who use cloud computing included: storing files online (74%), web based email and calendars (67%), file sharing services (64%), web based office software (38%) and accounting and invoicing services (37%).

When asked what changes would help persuade small firms to use cloud computing services, half of all respondents wanted plain English terms and conditions (48%) and nearly as many wanted simpler and more transparent pricing (46%).

In conclusion John Allan said:

"The fact that so many businesses are already heavily reliant on web based services raises some pointed questions over the resilience of the wider UK economy if we can''t find answers to questions like global data security and legal jurisdiction over data held in other countries.

"Clearly there is more for the industry and regulators to do to reassure businesses that their data is safe and secure. But equally apparent is the message from small businesses that pricing and terms and conditions need to be much more transparent."