What cloud offers to SMBs in India

BANGALORE, INDIA: IBM was the pioneer of cloud computing and as a technology it has been around for nearly a decade now. While the West has become one of the early adopters of cloud-based computing, the market in India is yet to take off on a full-fledged scale.

"We are still in the early days of cloud computing and from the India market perspective, clients are in the earlier stages of understanding the benefits of cloud computing. Every business is a potential user and can benefit from the cloud," said Anil Menon, VP Channels, Software Group, IBM India and South Asia.

While things are still nascent, vendors like Microsoft and Google are talking about cloud computing big time.

"Cloud is the new era of computing and it is here to stay for at least for the next 10 years. Microsoft has always led the industry in the software space. With businesses looking to the cloud, to bring higher efficiencies, it is natural for us to extend our strength and expertise of the past 15 years in the cloud space and offer the value of our experience to customers," said Rajan Anandan, MD, Microsoft India.

Cloud computing has been touted as the next big thing and by all means it is, but as far as the Indian market is concerned while there is a lot of hype and interest generated around this technology the ground realities reflect a more sobering truth: that SMBs in India are still some way off from shifting to the cloud in a big way and that the initial vendor push is more oriented to the enterprise customer.

Diptarup Chakraborti, Principal Research Analyst, Gartner said, "The penetration of cloud computing in India is negligible at the moment and there have been very few deployments that have actually happened. Cloud computing involves a paradigm shift because from a situation where one was buying IT infrastructure for the last 30 years, one has to now think of taking IT assets on rent and therefore it is still at a stage where a lot of vendors are trying to build awareness around it. It is only in the last six months that cloud as a technology has gotten a push from vendors in a major way. It is all about creating awareness and tapping the latent market demand. In my view, it is the vendors who are not ready to address the SMB segment at the moment. Right now they are more interested in showing proof of concept models to large private enterprises because that is where they can potentially make money and so their concern as of now does not extend to the SMB customer."

Cloud for SMBs?



Most channel partners across the country are seeing increasing demand for cloud computing solutions from enterprise customers and are not very bullish in their outlook for the SMB segment.

Pune-based Shro Systems recently entered this business and is confident that they will see some cloud computing deals this year. CEO Anirudh Shrotriya said, "A lot of inquiries that we have been getting are from bigger enterprises looking to migrate to a private internal cloud setup and so we have been only addressing the top layer of our customer accounts. The key verticals for cloud include manufacturing, IT/ITeS and BFSI. This is because their setup is huge and they typically have multiple projects with multi-user groups. There is a need for elastic infrastructure to be available as per the peak and dip in demand patterns. This is best offered by a cloud based environment and hence a lot of customers from these verticals are opting for the cloud."

Bimal Raj, CEO, Allied Digital Services, an SI based out of Mumbai said, "We are just a year old in this business and while today cloud computing may be just a single digit percentage of our revenue but we see this business growing at an aggressive rate in the years to come. We are predominantly seeing traction for cloud-based solutions from the upper mid-market to large enterprise customers and not SMBs as of now. These would be customers from manufacturing and distribution, BFSI among other verticals. We recently tied up with a large core banking solution provider and we have been managing the cloud setup for their customers. We have four of such customers in the US and two in India."

Devendra Taneja, PC Solutions, Delhi talks about private and public clouds. "There are two types of cloud services, private and public cloud. The former normally deals with large enterprises at one location and the other is more useful for a company with multi-geographic locations. Cloud here in this country is definitely a buzzword but there is still time left before we see a mass shift of companies to the cloud environment. In India, I feel private cloud will gain more momentum than public cloud. This is our first year on cloud business and we hope to do 10 per cent of our total business on cloud by the end of this year. In the coming three to five years I see around 60 per cent of my business coming from cloud services which is quite substantial."

KV Jagannath, CEO of Hyderabad-based Choice Solutions feels that cloud is more relevant for the enterprise because it can help them save on licensing cost.

"Cloud computing can help enterprise customers deliver better value, as it helps them save on the licensing cost on enterprise applications like ERP, which can be quite substantial over a period of time. The requirement of an SMB customer on the other hand is more primitive with mailing applications being one of the most used and so they do not feel the need for cloud at the moment. SMBs are not initiators, they are followers and in my opinion it will take at least three years to educate the customer fully on the benefits accrued due to cloud," he said. Choice Solutions has opportunities in the pipeline and hopes to get some wins very soon and currently operate where enterprise application providers hold a monopoly.

"I offer GIS, CAD/CAM applications on the cloud to my customers and also testing apps which can typically cost around Rs 30-40 lakh," said Jagannath.

There are those that believe that computing is future but there is still some time before it comes through. Sudhir Kothari, Embee Software, a Kolkata-based SP said, "The business of cloud is nil in the East as of now and it is very minuscule in the West as well. There is no doubt that cloud is very much the future of computing, but it is still some good two years before it actually happens. At present we have no clients on cloud. However, we are talking to few clients and are likely to close some business in March."

There are some partners who believe that SMBs are ready for cloud already. Ranjan Chopra of Delhi-based Team Computers is one of them.

"I feel SMBs are ready to be on cloud right away as it makes perfect commercial sense. Currently, we are seeing both enterprise and SMBs adopting cloud because of lower costs per transaction. I think the key factors which will drive growth especially in the SMB sector would be lower costs and innovation and lower risks," he said. Team Computers is expecting to make around Rs 5 crore in its first year from selling cloud solutions.

"As far as cost saving on cloud over premise is concerned, I think the delivery costs are much lower. In my view, in the coming year about 20 percent of the infrastructure business will move to cloud and this will only pick in the times to come. In fact, for most new businesses which will be set up in the future, cloud makes a lot of sense," added Chopra.

Agreed Anil Lanba, EVP, Pyramid Consulting, a Fortune 500 company, "I feel in the coming years everything would be on cloud and I foresee good growth potential from cloud solutions. For instance, Microsoft has started offering e-mail on the cloud at a fee of Rs 100. Similarly Microsoft BPOS which is essentially MS Exchange is also offered on the cloud. Being an MS partner, this is a business opportunity for us."

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