Cloud has huge potential in India's SMBs

India's large number of small and midsize businesses and platform's low cost, high operational efficiency and scalability will drive cloud use there, say Nasscom members.
Written by Swati Prasad, Contributor

INDIA--The country's small and midsize businesses (SMBs) can benefit from cloud computing, which would also provide computing to the next billion IT users, said delegates at Nasscom's third EmergeOut Conclave.

Kishore Madhyam, CEO of ImpelCRM said: "The Indian market for cloud computing is huge." There are 8 million SMBs in India with around 35 million employees and 10 million potential users of cloud computing, he said during a session at the Indian IT trade association's conclave held Friday in New Delhi.

"And this is only the urban market. I have not even touched rural India," said Madhyam of the Bangalore-based company that deals in on-demand CRM (customer relationship management) products.

Since entering India's market 15 months ago, the company now has a base of 6,000 users, of which 1,100 are paid users. Its clients include large businesses as well as small companies.

The session's moderator, chief editor Ibrahim Ahmed of Dataquest, Cyber Media group, said: "The origin of cloud computing is Indian."

According to Ahmed, the earliest academic usage of the term cloud computing is associated with Prof. Ramnath Chellappa of the Goizueta Business School, Emory University, who originally defined it as "a computing paradigm where the boundaries of computing will be determined by economic rationale rather than technical limits".

Sridhar Vembu, CEO, Zoho Corp said at another session: "Over the next decade, we will see Indian consumers move to cloud computing in the same way as they shifted from wireline to mobile phones."

The fact that today, a whole generation lives online only goes to prove that the future is in the cloud, he said.

"Today, the Internet is not only massive, but also mature," said Vembu of the company that provides enterprise IT, networking and telecom customers, with a range of business application suites including online productivity, CRM and custom applications.

Low costs driving growth
Sharad Sanghi, CEO and founder of NetMagic Solutions, said four factors--low cost, high operational efficiency, elasticity and scalability--are driving cloud computing in India.

"As long as companies "budget="" sufficiently="" for="" cloud,="" saas="" user="" warns="" --="" wednesday,="" may="" 27,="" 2009"="" class="c-regularLink" target="_blank" rel="noopener nofollow">plan their capacity well, cloud will surely work for them," said Sanghi of the managed IT service provider specializing in Internet data centers, managed hosting, remote infrastructure monitoring and management, mail and messaging services, and application hosting services.

"The low-cost systems integration itself justifies the move to the cloud," proclaimed Zoho's Vembu. "Many companies will skip the desktop stage and move to the cloud directly through access devices."

Quoting an IDC study, Sanghi said spend on cloud-computing services is expected to grow almost threefold, reaching US$42 billion by 2012. More importantly, spending on cloud computing will account for 25 percent of IT spending growth in 2012.

Patrick K., North and East regional manager for SaaS (software-as-a-service) at Ramco Systems, said the SaaS model has made ERP (enterprise resource planning) software a commodity today.

"We launched Ramco OnDemand ERP in February 2008 and today we are present in almost all verticals," Patrick added. According to him, maximum benefits of on-demand ERP can be enjoyed by multiple location manufacturing firms.

There is money in the cloud
Speaking during the session on Small is Big: Re-inventing business models which will work for India, moderator Rajdeep Sehrawat and vice president Nasscom, said contrary to popular belief, there is money to be made in cloud computing services.

One company, Affordable Business Solutions (ABS), addresses multiple industry verticals through the SaaS model.

Its CEO Srikanth Rao, said at the event: "The fact that we met our 61st monthly payroll is proof enough that there is money to be made in the cloud." ABS does not have the backing of any venture capitalist fund or private equity firm and has been in existence for five years.

"Today, we have 54 customers across 11 industry verticals," Rao said, adding that his clients range from a company run by a three-member team with a turnover of US$51,377 (2.5 million rupees) to a large company with a turnover of US$175 million (8.5 billion rupees).

In the past, ERP took 12 to 18 months to implement, but "today, we don't implement, but replicate. And replications take only 45 days", Rao said.

"If we want to provide computing to the next billion users, we will have to bring the computer in the realm of a mobile device," Alok Singh, CEO of Novatium, said at the session as he justified the company's "desktop utility delivery model" that provides computing as a service by making computing simple and affordable.

Customers under a Novatium scheme can buy a used computer terminal for around US$103 (5,000 rupees) and then install the operating system and applications of their choice. Novatium charges a monthly fee of US$6 to US$8 (300 to 400 rupees).

Internet cafes and share trading outlets are among the company's customers, with 60 percent of customers being home users, Singh said. "We provide obsolescence-proof machines. While these are dumped terminals, if they are good for you, why wouldn't you go for them?"

Swati Prasad is a freelance IT writer based in India.

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