Industry body Nasscom said that small and medium businesses (SMBs) in India can contribute 30 per cent of the cloud market by 2025.

In a survey of 1,000 SMBs in India, Nasscom found that 60 per cent are already using cloud, though almost half are at early stages of adoption, according to the report findings.

SMBs that have an online presence have shown greater resilience and are expected to see short-term revenue gain, the report added.

While technology-first segments (e-Commerce, IT-BPM firms) lead in cloud adoption followed by BFSI, media & entertainment, retail, automotive, healthcare and manufacturing are emerging verticals for adoption, the report said.

Further, SMBs that adopted cloud have been able to drive 25-30 per cent productivity improvement and 15-20 per cent reduction in operational costs, Nasscom said.

Debjani Ghosh, President, Nasscom, said, “As India aims to become a cloud-first nation and with the government’s push for cloud adoption by MSMEs, it will be crucial for SMBs in India to think of themselves as Digital Enterprises.”

Key constraints

However, more than 50 per cent of respondents cited lack of management support, talent and capital as key constraints for cloud adoption.

The Covid-19 pandemic has severely impacted the SMB segment and they have struggled with liquidity crunch, lack of demand and lack of an alternative operational model.

In FY2019, the SMB sector accounted for $952 billion in revenue which translated to 34 per cent share in GDP and employed 110 million people.

Enabling business continuity, improved collaboration, a shift from offline to online as the primary channel of engagement with clients, cost-effectiveness, managing security with the increase in cyber-attacks especially during remote working are the leading drivers of cloud adoption by SMBs, the report stated.