Where industrial SMEs stand on cloud adoption today

This article has been translated for your convenience using machine translation. Reasonable efforts have been made to provide an accurate translation. The official text is the German version of this content.

One central topic continues to spark debate as industrial SMEs progress in their digital transformation: Cloud or on-premises? While many tech companies have long declared the cloud as the standard, the picture is far less clear-cut in traditional industrial SMEs.

Cloud-first—with reservations

Many mid-sized industrial companies still rely on local IT infrastructure. The reasons are manifold: legacy system landscapes, regulatory requirements, and the need for highly customized solutions. A strong desire for control also plays a significant role. However, many companies are now showing a willingness to embrace change—for example, by adopting cloud-based collaboration tools, modular platforms, or hybrid data storage solutions. The trend is clearly moving toward a “cloud-first” mindset, but in many cases, it’s not yet “cloud-only.”

Hybrid cloud models can offer a compromise, as they combine the best of both worlds. Hybrid cloud computing blends public and private cloud environments, allowing for shared use of services and applications. This gives companies flexibility in where to run their workloads—retaining control over sensitive resources while also enabling more scalable and cost-efficient operations. For example, resources can be scaled via third-party cloud providers, while more critical workloads requiring heightened security are managed on a private cloud.

Digital sovereignty as a key decision factor

Digital sovereignty is ultimately about one thing: retaining control over your own data, processes, and systems—even when parts of them are outsourced. For SMEs, this raises a number of pressing questions:

• Where is my data stored?
• How dependent am I on individual providers?
• Can I act independently in times of crisis?

This makes digital sovereignty a strategic imperative. Companies that make the right decisions early not only ensure regulatory compliance, they also build resilience.

Practical insights from a digitalization project within the Possehl Group

A cross-company digital initiative within the Possehl Group showcased how these questions can be addressed in practice. Several mid-sized companies from the group joined forces to systematically analyze their existing application landscapes. The goal was to identify technological risks, uncover modernization potential, and enable informed decisions about future IT architectures. Special attention was given to cloud readiness, the security of business-critical applications, and strengthening digital independence.

Key findings included:

• Some companies already demonstrated a high degree of data centralization and technological maturity.
• Others were able, for the first time, to systematically identify outdated applications with security and maintenance risks.
• Nearly all participants saw cloud readiness and data sovereignty as critical evaluation criteria for their applications.

Rather than pursuing a radical “everything to the cloud” strategy, a hybrid approach was recommended in many cases. This is now being successfully implemented.

Conclusion: The path to cloud starts with the right mindset

Industrial SMEs are facing a major strategic decision. The key lies in using cloud technologies intelligently, without sacrificing central control. Those who prioritize digital sovereignty will benefit in the long run.

And this is precisely where a strong partner can make all the difference: With Possehl Digital Services, mid-sized companies gain an experienced team that understands the complex interplay of legacy IT, cloud innovation, and regulatory demands, and delivers pragmatic, future-proof solutions.