India can offer $1bn cloud computing services

NEW DELHI, INDIA: The cloud computing market in India stands at $110 million and is expected to reach $1,084 million by 2015.

This is according to Zinnov Management Consulting's, a market research firm, latest study, ‘Cloud Computing in India: Opportunities & Way Forward’.

The study also highlighted that in India's cloud computing market, software-as-a-service witnessed the highest uptake until now. As components of the overall cloud market, software-as-a-service (SaaS) is likely to reach a mark of $650 million by 2015, while platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) markets' cumulatively would touch $434 million each by then.

Though the study has often referred to government as potential growth driver in cloud computing, Praveen Bhadada, Engagement, Zinnov Management Consulting denied to have included estimates of government spending in this report. Though cloud computing model can help government in implementing project in cost effective manner, Government departments have been saying no to cloud business model because of security reasons.

The study further adds that today, there are several multinational and Indian companies entering the cloud space and trying to drive business relevance for the Indian customers.

Divulging details on the SaaS market, the report said that the domestic market for SaaS is estimated to be about $66 million and is currently dominated by collaborative applications, CRM, ERP and email workloads.

Discussing the growth verticals for the adoption of cloud in India, Zinnov’s report highlighted that Telecom, IT-BPO and Retail have the highest spending on IT as a percentage of revenues; verticals like Telecom and BFSI are highly mature with their IT adoption and show higher potential towards cloud adoption going forward.

Pari Natarajan, CEO, Zinnov Management Consulting, said, “The next wave of transformation in the Indian IT industry is ‘Cloud Computing’. This is indeed a perfect storm. The only difference is that, this storm is destructive only to companies who are not willing to change, while it is a huge opportunity for others.”

He added that cloud computing had allowed smaller ISV's access to customers that they could have never had through the use of market places. This has allowed smaller ISVs to be based on cloud platforms (such as Azure, App Engine etc) and avail global customers, and thereby, reducing cost of sales.

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"On the other hand, this has also increased the flexibility for end customers and increased the choice of products and services”, he noted.

In addition to the global providers of PaaS, Indian companies had also sprung up offering cloud based platform-as-a-service. Several Indian companies are beginning to offer IaaS to levearage the untapped market potential, highlighted the report.

Praveen Bhadada, Engagement, Zinnov Management Consulting, said: "The Indian market is extremely exciting for the adoption of cloud, if not more. The growth in IT spending in India is one of the fastest in the world and is expected to be higher than China soon."

He further noted that India being the world’s fastest growing mobile market with over 20 million subscribers being added every month and the capital that companies invested for 3G services, showcased the belief large telecom providers had on data services in the Indian market.

While explaining the finds of study, Bhadala mentioned that India and China has become centre of attraction for ISVs post last global economic crisis.

“In US and European Union market, ISVs saw growth of 6 per cent post economic crisis but they saw growth of 18 to 19 per cent from India and China even during economic crisis. Hence there focus have shifted to this region which will make cloud computing more cost effective,” said Bhadada.

All this clearly suggests that Indian customers are ideal for cloud offerings. Indian SMBs in specific, lack budgets, want business improvement, lack management bandwidth required to manage internal IT and are looking for rapid growth in the next few years. For this entire put together, ‘Cloud Computing’ is indeed the answer, said Bhadada.

The report stated that in an effort to meet global standards, verticals such as education, healthcare, and government show huge potential for cloud adoption in the immediate future.