How the cloud can help small firms go global
International expansion is both a dream and a risk for many small businesses, but switching to cloud-based infrastructure is a good first step
A cornerstone of Boris Johnson’s successful election campaign was his commitment, and slogan, to “Get Brexit Done”. For the 340,500 UK small and medium-sized enterprises doing business internationally, questions remain over ongoing trade negotiations and the terms Britain will be able to agree, or not, both with the European Union and the rest of the world.
When coronavirus took hold, these questions were put to one side as struggling small firms focused on trying to deal with the hammer blow of the pandemic. But at the same time, lesser-told stories of success have begun to emerge.
Small companies in the ecommerce sector are thriving, for example. One such business is fulfilmentcrowd, an 85-strong fulfilment outsourcing company near Manchester, which managing director Lee Thompson says has seen “two to three years of growth in two to three months” during COVID-19.
The ability to grow at speed and adapt to increasing and evolving customer needs is only possible because of fulfilmentcrowd’s cloud infrastructure. The decision to turn off the company’s datacentre in 2019 and switch to a cloud-based infrastructure was a pivotal moment in the company’s success, says Thompson.
Switching to a cloud-native model has also enabled the business to slash its operating costs, both the costs of hardware and maintenance, which amounted to £600,000 a year, and what Thompson refers to as the “unknown costs” of committing staff to a low-value task. “If I’ve got a very senior developer who’s having to upgrade a server, that’s a cost which is disproportionately high,” he says.
How the cloud can foster rapid growth
Many other businesses are also leveraging the benefits of cloud-based infrastructure to help growth. New research conducted by Public First, on behalf of Amazon Web Services (AWS), found companies running on the cloud are nearly three times as likely to be growing more than 5 per cent a year than those that are not.
Cloud use is even more prevalent among the UK’s fastest-growing companies. According to the Public First research, 16 of the UK’s 17 “unicorns”, companies that are valued at more than $1 billion, are powered by AWS. Babylon, a healthtech unicorn headquartered in London, which enables users to have virtual consultations with doctors via text and video, now has more than 4.5 million registered users worldwide.
Via the app, the patient describes their symptoms to a virtual assistant that then suggests relevant health information followed by self-care treatment advice or a video call with a doctor. Babylon uses artificial intelligence to access 530 million knowledge streams, the largest knowledge base in primary care medicine. The app “learns” from every interaction it has with a patient, so its accuracy is forever improving.
“We use natural language processing so the app can talk with patients in a friendly, human way,” says Dr Ali Parsa, founder and chief executive of Babylon. “We take the data and infer what is likely wrong with the patient using probabilistic graphical modelling.” Babylon also uses predictive analytics to tell the patient what will happen if they follow a suggested course of action.
Opening the door to international expansion
From the very outset, Babylon was set for international growth and it needed to collaborate with a cloud services provider that could match its global ambition.
“AWS was a natural partner for us because of its scale,” says Parsa. “It enabled us to distribute our servers worldwide. Imagine in the past, if we wanted to grow we had to find new spaces one by one, place our own servers there one by one.”
Sarah McVittie, co-founder of Dressipi, a fashion prediction platform which works with retailers including John Lewis, Topshop and River Island, says her company wouldn’t be able to process its customers’ mountains of data and offer them actionable insights in real time without the elasticity of a cloud-based infrastructure.
“Cloud has changed the speed at which we can process the data. For any one of our clients, we’re processing millions of datapoints. We are producing 40 million outfit suggestions a night for some of our clients. That wouldn’t be possible and would be way too expensive without the cloud,” she says.
Shamus Rae, founder and chief executive of EngineB, a startup applying the principles of open banking to corporate data, says being able to leverage microservices means small businesses can punch above their weight from an innovation perspective.
“It means when you’re trying to compete with larger organisations, you don’t have to compete on technology spend around the stuff that isn’t a differentiator for you,” he says. “The cloud is really helping small companies act big and be big where necessary. That’s a dramatic shift.”
Cloud-native businesses can also be much more fleet of foot when it comes to international expansion. Rae adds: “We now have projects in India, Australia and South Africa, despite putting no focus on these areas. We’ve not done any marketing there, but the inbound interest has happened because we’re available and visible. We couldn’t do what we’re doing without it being cloud based.”
Allaying concerns over security
In his former role as head of innovation, digital labour and cognitive transformation at big four accountancy firm KPMG, Rae occasionally encountered business owners still grappling with the security implications of not managing their own IT infrastructure, particularly in new international markets. He would be at pains to allay their concerns.
“There’s a perception, but it’s not a reality. The security issue and protection of data issue is solved. If you look at the large cloud providers, their technology around security is immense,” he says. “The biggest issue in data security is someone in your office accidentally pushing a button on a phishing email. There is no issue in terms of cloud security of data.”