Cloud adoption among Indian SMBs to increase

Cloud computing

Cloud computing is said to transform the enterprise landscape and has a huge potential especially in the mid-market segment. Globally and especially in the mature markets, SMBs have already shown a significant level of adoption of this technology. A recent study titled: “2013 India SMB ICT & Cloud Services Tracker Overview” by GTM strategy consulting firm AMI-Partners India reveals that in India too SMBs are optimistic about adopting cloud computing. Evidently, over the next one year, cloud computing expenditure in this segment is anticipated to rise considerably.

In an exclusive interaction with CXOtoday, Dev Chakravarty, Research Manager at AMI–Partners India, explains the relevance of cloud computing to the Indian SMBs and their areas of spending as far as the technology is concerned. Quoting from the study, Chakravarty mentions that cloud expenses currently comprise almost 10 per cent of their total ICT spends and this is predicted to increase by a CAGR of 23 per cent over the next five years. According to him, it would not be an exaggeration to term cloud computing as a key future growth-enhancer in terms of India SMB ICT adoption since cloud-based  solutions display greater future growth-trends compared to their on-premise counterparts.

The cloud advantage

The AMI study states that cloud computing has been instrumental in alleviating many problems that India SMBs face during IT adoption – specifically those related to a lack of funds and non-availability of a dedicated IT workforce. Other key advantages of the cloud that appeal to SMBs include automatic updates, flexibility and scalability.

The increased demand is prompting the cloud service providers including ISPs and Telcos to invest in creating adequate bandwidth infrastructure to support companies migrate to the cloud. A lot of traditional IT vendors and channel partners are also tapping the SMB segment with an impressive new set of cloud portfolio to further attract this segment. This in turn will increase versatility as well as competition in the cloud computing space.

The top two spend-components within the SMB cloud-portfolio are website-related expenditures and Remotely Managed IT Services (RMITS).
-Dev Chakravarty, Research Manager at AMI–Partners India

Areas of spending

Cloud computing adoption will follow certain unique patterns, according to Chakravarty. He  mentions that the top two spend-components within the SMB cloud-portfolio are website-related expenditures and Remotely Managed IT Services (RMITS).

“The smaller players are becoming more aware of the benefits of hosting their own websites since it provides them multiple benefits such as better brand-building and cost-effective marketing to mention just two,” he says. In this regard, he mentions that a number of web-hosting firms have emerged to assist India SMBs in this endeavor.

The other area where the analyst firm sees a greater momentum is RMITS and this trend has a lot of growth potential. “Many Indian SMBs are indicating a greater preference for this alternative, sometimes in conjunction with the traditional on-premise service options,” he mentions.

Speaking about the fastest growing categories in the cloud computing segment, Chakravarty mentions, in the near future, IaaS and SaaS-based solutions such as productivity, CRM and business intelligence are forecast to show considerable growth. “The penetration of IaaS within SMBs is a little less than 3 per cent of PC-owning SMBs at present, but IaaS has substantial growth-potential in future,” believes Chakravarty.

According to Chakravarty, Indian SMBs are showing a 14 per cent year-on-year rise in their ICT expenditures and their adoption of emerging technologies such as cloud is likely to increase in the coming quarters.

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