a seasonal report on developer and SMB trends in the cloud
With our eighth edition of Currents we wanted to shake things up and look at the trends influencing developers at work. We decided to look exclusively at technical leaders and founders at small- and medium-sized businesses (SMBs).
We see these organizations as the unsung heroes of the global economy as the size and scale of their output dwarves even the world’s largest companies. Collectively, SMBs represent close to 90% of all registered businesses and employ half of the world’s workforce.
Despite their large footprint, when it comes to cloud services, SMBs remain underserved relative to their enterprise counterparts. They often face unique technical challenges and constraints when it comes to deploying new technology, yet there’s comparatively little focus on this relative to larger organizations.
Our original goal was to understand what’s most important to SMBs, where their unique challenges lie, and what’s keeping them up at night. But then the world changed, and SMBs became among those hardest hit by the economic impacts of COVID-19.
The resulting report includes responses from 500 founders and technology decision-makers at small and medium tech companies (under 1,000 employees), collected in June 2020. Their responses provide unique insight into larger technical challenges, but also how business processes are changing in light of COVID-19.
Just over half (51%) of all survey respondents were founders or cofounders of their companies, while the remainder were technical decision makers. Here’s a look at what’s most important to SMB founders, 88% of whom indicated that they had launched their first companies.
Eighty-eight percent of founders indicated their current company is the first they’ve started. Of the 85% of startups with a dedicated IT team, 82% have IT teams of at least four members or more. Among founders who do not have a dedicated IT team, 86% manage IT themselves.
Most helpful resources when implementing a new technology service:
IT security is a top priority for the majority of small and medium businesses: 59% rank it as their top priority, while 91% rank it among their top three priorities. It also accounts for a large percentage of company spending, with nearly a quarter (23%) of respondents saying that more than half their company’s budget goes toward IT security.
Respondents’ top concerns with regard to IT security are understanding new threats, firewall/network security issues, and antivirus/anti-malware issues. Eighty percent of respondents deploy specific security measures for their company’s cloud-based infrastructure. The two most commonly used security measures are operating system updates and management, and firewalls.
What’s keeping SMB founders and technical leads up at night?
What security measures does your company deploy for your cloud-based infrastructure?
Cloud spending is also a high priority, though it was not ranked as highly as IT security. Thirty-nine percent rank it as their number one priority, and 84% rank it in their top three priorities.
What’s keeping SMB founders and technical leads up at night?
Most essential features when evaluating cloud services:
Most (60%) of respondents say that lower prices for cloud services would make cloud spending more worth the investment, followed by better customer service and support (33%) and more features at the same cost (27%).
Like most organizations right now, SMBs are continuing to embrace remote work options. When asked in June, 40% of respondents report that more than half of the technical positions they are hiring for offer the ability to work remotely.
The most in-demand roles among respondents are service reliability engineer, DevOps manager and frontend developer/engineer. The most sought-after soft skills for IT candidates include teamwork, effective communication skills and dependability.
Top soft skills for IT candidates:
Our survey made it clear that the demand for digital services in India is huge and outpaces U.S. demand in areas like IT security and cloud adoption. As India’s startup ecosystem and developer community continue to grow, the adoption of cloud and IT services will only accelerate.
COVID-19 has made IT security top of mind. Amid a less secure remote work environment and many unknowns, companies are taking steps to strengthen security measures.
COVID-19 also illustrated the need for companies to have crisis plans in the event that employees have to work remotely for the foreseeable future. Eighty percent of respondents say that their IT department is aligned on maintaining company functions across remote environments.
When COVID-19 spread across the globe, SMBs and enterprise companies alike made investments in cloud technologies as they transitioned to remote work, while most companies plan to increase or expand even further in the future.
Sixty-two percent of respondents say that they expanded or upgraded their cloud usage during COVID-19, while only 2% consolidated or eliminated it. In fact, 60% are planning to increase their level of cloud infrastructure investment in the next 3-6 months, and only 6% are planning to decrease it. Among the most cited reasons for expanding/upgrading are the need to increase storage, the need to increase bandwidth and the need for disaster recovery and backup options. SMB and large enterprises will need tools to manage multiple cloud requirements as they spread applications and data across service providers. Simple tools help reduce the complexity for SMBs with limited resources.
Considering the increase in cloud spend across both SMB and enterprise organizations, we believe that it is more important than ever for cloud providers to account for SMBs’ unique technical requirements. As we discussed above, founders find the costs and know-how associated with maintaining cloud infrastructure are to be key technical barriers. Thus, first-time founders may be particularly frustrated during the COVID-19 period if they are required to both increase cloud spend and infrastructure while overcoming these barriers. The solutions have to be affordable, safe, and reliable.
Despite the massive economic disruption brought on by COVID-19, most respondents have not scaled back on hiring and plan to maintain or increase talent pools in the future. Seventy-four percent of respondents say they either increased or maintained hiring targets, while only 26% have scaled them back. Hiring plans for the future are also optimistic: 64% are looking to increase their pool of technical talent, while only 3% are looking to decrease it.
The pandemic also revealed the importance of knowing which services are essential within your company.
An online survey was conducted among a panel of potential respondents. The recruitment period was June 17, 2020 to June 21, 2020. A total of 500 panel respondents completed the survey (excluding terminations and abandonments) from four countries: United States (250), India (150), Canada and the United Kingdom (100 combined).
There were four screeners for the survey to determine eligibility:
The sample was provided by Market Cube, a research panel company. All respondents were invited to take the survey via an email invitation. Panel respondents were incentivized to participate via the panel’s established points program.
Trends in the developer and SMB communities move quickly. As a developer- and SMB-focused company, it's vital to keep up with the technologies and tools these audiences are interested in so we can help them achieve their goals. Currents is DigitalOcean's seasonal report on developer and SMB trends that we created to share knowledge with the community.
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