The financial downturn will cause many small and medium-sized businesses to turn to cloud computing, it has been stated.

BroadGroup, a consulting firm in the UK, has reported that a large number of organisations have already turned to cloud computing as part of a wider cost-cutting initiative.

It stated: "Cloud computing is the ultimate recession technology."

BroadGroup continued: "For companies doing development, it cuts costs while also making it possible to bring new products and services to market quickly."

Cloud computing "can offer potential savings of up to 25 per cent of the total cost", it added, particularly for those companies hoping to adopt more enterprise software as part of an overall IT upgrade.

In 2008, Kashflow managing director Duane Jackson stated that it was very important that businesses in the UK did not get left behind when it came to web-based software, with many of these services equalling or outdoing systems which are installed on many company servers.

A recent Connect survey found that the two major concerns about outsourcing services like IT support were 'loss of control' (56 per cent) and 'budget over-runs' (43 per cent).