Mixed messages from Microsoft survey on Canadian business use of cloud

The study found 85 per cent of Canadian businesses admit they aren’t fully using benefits of new technology, but on the other hand, their attitude towards adoption, particularly of cloud, is better than in last year’s survey.


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Janet Kennedy, Microsoft Canada President

TORONTO – A slight majority of Canadian businesses say that they are now in the cloud, according to a new survey conducted on behalf of Microsoft Canada. On the other hand, most have failed to move beyond very early incremental adoption. Moreover, the vast majority – 85 per cent – acknowledge they are failing to thoroughly utilize the benefits of new technology. Those numbers aren’t great – unless they are contrasted with the numbers from the same survey Microsoft conducted last year, when a significant leap forward is evident.

“The cloud is not where we are going – it’s where we are,” said Microsoft Canada President Janet Kennedy at a Microsoft event in downtown Toronto where the survey results were announced. “Businesses both large and small have to embrace its full potential to drive growth.”

Kennedy said that a key metric in the new study was that more than half – 55 per cent – of respondents needed to be in the cloud. That’s a huge improvement from last year, when only 10 per cent said they feel familiar with cloud computing. Moreover of that 10 per cent, fewer than half – 45 per cent – were able to select the correct definition of cloud computing from a list of choices.

This year, while the numbers are considerably better, they still fall far short of showing a tech-savvy business sector.

“The data are both enlightening and a little depressing to be honest, but represent a great opportunity, especially for SMBs,” said John Ruffolo, CEO of OMERS Ventures.

52 per cent said that they are considering or implementing cloud solutions, while 55 per cent said that in the future, businesses will need to be in the cloud

“This year’s survey also shows that some are still intimidated by the cloud – 49 per cent,” Kennedy said. Worse still, only 18 per cent said that they are actually implementing cloud technology into their businesses. 29 per cent cited cost as a reason for the delay, despite considerable evidence showing cloud reduces cost. 35 per cent cited concerns with existing systems, and 52 per cent said the issue was security.

“Security is still seen by many as a problem even though none of the major high-profile breaches this year involved the cloud,” Kennedy said. “They were all on-prem.”

Ruffolo, whose company funds Canadian startups, was blunt in stating that if a company doesn’t have the cloud somewhere in their business model, they won’t be getting funding from OMERS, because at some point they will be disintermediated by a company that does do cloud. He also said that the slow cloud adoption rate was part of the slower Canadian pickup of technology.

“The rate of startups is actually greater in Canada than in the U.S., but after about Year 5 the productivity gains in the U.S. are greater than in Canada, because the U.S. is better at embracing technology,” he said. “We are in the middle of a technological revolution, and you have a choice to either embrace it or ignore it, and its fine to ignore it – but you will die.”

Kennedy touted some of the data, on what executives want in cloud solutions, as being comforting to Microsoft and its recent moves in Canada. 59 per cent said they wanted control of data, 48 per cent wanted to work with vendors with an established reputation, and 41 per cent said they want data centres in Canada. She said the data affirmed what she called the most significant move Microsoft had ever made in Canada, the decision announced in early June that it would open its first Canadian data centres in Toronto and Quebec City.

“Only seven months later, those two data centres for cloud services are almost open,” Kennedy said.

Kennedy was less pleased with another data set from the survey, on the Internet of Things. She referred to the data as showing a “black hole for C-suites.” 53 said they were completely unaware of it. 72 per cent were confused by it. 24 per cent said they had no sense of how it could impact their businesses.

“Canadian businesses don’t understand the Internet of Things and how quickly it’s coming,” said Amber MacArthur, a widely recognized Canadian digital tech expert who spoke at the Microsoft event. “The tipping point there is in the home, with consumers adopting the Internet of Things for cost savings. That has already started to happen and in the next four years we will get to those 20 billion connected devices.”

Brent Moore, CEO, CAN Telematics, a Microsoft customer, said he expects broad business adoption of IOT when the ROI savings become widely recognized.

“It’s simply a matter of functionality and price, when its far greater for ROI,” he said. “This includes insurance reductions, safety, reducing wear and tear, intelligence, and logistics.”

Views on security this year show an improvement over the 2014 survey, but still have a way to go. This year, 52 per cent said they had concerns about data security in the cloud, and only 35 per cent said they feel their data is safer in the cloud. In 2014, however, 45 per cent said they feel their company’s information would be downright “unsafe” in the cloud, 72 per cent would not be comfortable putting confidential strategic plans in the cloud, and 65 per cent did not feel secure in sharing their business data and information with a cloud services provider.

This study (as well as last year’s) was conducted on behalf of Microsoft Canada by Northstar, a globally integrated insights consulting firm, among 700 C-suite executives in Canada. Margin of error is +/- 3.7 percentage points, 19 times out of 20.