While cloud service providers are targeting the small and medium enterprises in India, costs have to fall and awareness has to increase for this segment to actually invest in these services, stress industry people.
SMEs contribute about 45 per cent of the industrial output, 40 per cent of exports and employ 42 million people, according to the SME Chamber of India Web site.
There are close to 35 million SMEs in India, according to a research report by advisory firm Zinnov Management Consulting. Cloud computing is going to be the fourth wave of the digital revolution, it said.
Expense factor
The market is huge and cloud service providers are targeting SMEs. “The market for cloud computing is growing by the day. Many SMEs are investing in cloud computing services. It is quite useful for them as it helps them improve their efficiency and reduce their overall operating costs,” said Ms Seema Ambastha, Director Systems Engineering and Technology at virtualisation company VMware India.
However, contrary to common perception, cloud computing services could be expensive for SMEs, according to research firm Gartner. “In order to ensure that most mid-market companies invest in cloud computing, vendors should revise their pricing and make it more affordable for these companies. We did a cost-benefit analysis and we found that it is cheaper for SMEs to stick to their traditional methods rather than shift to cloud computing,” said Mr Naveen Mishra, Principal Analyst, Gartner. Virtualisation seems to be the buzz word today. Top IT players such as Google, Apple, Amazon and Microsoft are constantly innovating services for the cloud.
Emerging markets such as BRICSS have shown tremendous growth in IT investments. More than 50 per cent of SMEs in India and China are looking to increase their IT investments by next year, according to Zinnov.
“Investing in cloud computing can help SMEs in many ways. Many SMEs are based in far-off locations where they don't get the right kind of access to modern technology. Cloud computing helps them get connected. Cloud computing can also help them convert their capital expenditure into operating expenditure,” said Mr Santanu Ghose, Country Head, Converge Infrastructure Solutions, HP.
“Most SMEs cannot afford to build a cloud of their own and therefore they subscribe to service providers. The service provider needs to have a strong data centre and good business communication links,” he added.
India will be ready to deploy client virtualisation solutions, optimised servers and infrastructure by 2014-15, said Mr Som Satsangi, Director, Enterprise servers, storage and networking, HP Enterprise Business.
Familiarisation
Some point out that many SMEs are still managed by the older generation, who are not comfortable with implementing new technologies. The Small & Medium Business Development Chamber of India regularly holds training programmes and IT summits to familiarise SME owners with the latest technology and marketing
Mr Mishra of Gartner said: “According to our estimates, SMEs will fully adopt cloud computing technology in the next three to five years. This growth will be slow, not accelerated.”