More small and midsize businesses (SMBs) in India are heading toward cloud services as the workforce drops in age and companies increasingly turn to technology.
According to a report by EY and Assocham, the number of Indian SMBs adopting cloud computing is expected to climb at a compound annual growth rate (CAGR) of 20 percent between 2012 and 2016, reported The Times of India. Smaller enterprises in the country were beginning to embrace technology as a business driver, but adoption had remained low compared to other nations with larger SMBs.
The report noted: "SMBs will play a leading role in the adoption of social, mobile, analytics, and cloud (SMAC) in India, given the huge opportunity it opens up, not only to grow revenues by increased marketing to new customers, but also by bringing in operational efficiency and customer experience.
It added that demand for cloud services by these companies was particularly high in the areas of disaster recovery, remote database management, and e-mail hosting.
SMBs account for 45 percent of India's total manufacturing output and hire some 40 percent of its workforce. This market segment is expected to increase its contribution to the country's GDP to 22 percent in 2020, up from 17 percent in 2011.
The report further stated that the rise of India's young middle class, as well as increasing adoption of technology and social media, provide new opportunities for SMBs to outpace other market players.
"Indian SMBs finds themselves in a unique position to exploit these [SMAC] forces. Intelligently and cohesively exploited these technologies will transform the way they compete with their larger competitors," Samiron Ghoshal, a partner and leader of IT advisory services at EY, said in the report.