Midsize companies see benefits, risks of cloud technology, study finds
Ohio State, Google Cloud collaborate on joint research project
A new collaborative research project by The Ohio State University’s National Center for the Middle Market (NCMM) and Google Cloud coincides with Google’s recent announcement that the company is building two more data centers in central Ohio, enhancing the region’s reputation as “Silicon Heartland,” said Doug Farren, NCMM’s managing director.
The findings reveal insights into how midsize companies use cloud technology, including drivers, barriers, benefits and challenges of usage.
“The collaboration between Google Cloud and the National Center for the Middle Market to produce these insights on cloud technology use is important for a number of reasons,” Farren said. “Digital transformation has increasingly been a strategic differentiator for middle market businesses, and, as this research illustrates, cloud technology plays a key factor in their ability to transform.”
The joint research project by NCMM, which is housed at the Max M. Fisher College of Business, and Google Cloud was conducted in September 2022.
“We started looking at technology back in 2019,” Farren said. “We were starting to notice in some of our other studies that, whether it be looking at the manufacturing industry or looking at life sciences industries, or even looking at capabilities of these companies, in general, more and more, we were seeing midsized companies starting to invest in technology.”
Before partnering with Google Cloud, NCMM’s research found that midsize companies are increasingly using customer relationship management tools, operating management systems and other cloud technologies. The center shared its findings in a series of pieces published in Harvard Business Review, first in 2021, and most recently this month.
“What was perfect about this collaboration is it fits squarely into a topic that we were already pretty heavily pursuing,” Farren said. “As we got the ball rolling on this project, we spent a lot of time just brainstorming and whiteboarding with the Google Cloud team and they gave us some direction.”
Key takeaways from the research include:
- More than 75% of midsize company leaders believe using cloud technology is critically important, ranking it more important than other business and digital strategies.
- 75% of cloud users in the middle market identified cloud technology as the most important business strategy.
- 92% of respondents identified cloud usage as a necessity (50%) or a game changer (42%), while only 7% saw it as an obstacle for their company.
Respondents reported data security as being the top benefit of cloud technology when choosing a cloud provider, followed by trust and brand reputation. Security, however, was also the most frequently mentioned barrier to cloud use, with 25% of companies saying they have concerns about risk and security.
In analyzing the responses, the Google Cloud team said they were not surprised that the survey revealed the dual role that data security plays both as a driver and a challenge to cloud usage, Farren said.
“One of the benefits that (midsize companies) talk about is, ‘Hey, if you get on this platform, you’re enhancing your firewalls, you’re creating greater protection’” by using cloud technology, he said. “The uneducated information technology person or middle-market business owner or leader might think, ‘Oh, I’m putting more of my information and data out there on the cloud. That makes it easier to get hacked and it exposes me to additional risk.’ Google Cloud has told us that’s an objection that can be overcome with more discussion and education.”
According to the NCMM, the U.S. middle market comprises 200,000 companies with annual revenues of between $10 million and $1 billion. Together, midsize companies account for 44.5 million jobs, or one-third of total private U.S. employment, generating more than $10 trillion in combined revenues annually.
The full NCMM/Google Cloud report is available on the center’s website.