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Outlook: cloudy ( and private)!
Indian opportunity in the Cloud, mostly private: Zinnov-EMC study

The Private Cloud in India will deliver up to 50% saving to Indian enterprises creating in the process, 100,000 additional jobs by 2015 finds a study for EMC, by Zinnov Management Consulting. The total cloud market in India, currently at US$ 400 million will grow ten fold, to reach a market value of US$ 4.5 billion by 2015; of which private cloud adoption will dominate and account for US$ 3.5 billion in revenues, growing at over 60 percent, adds the study entitled “Private Cloud Landscape in India”.

Cloud spend of IT is expected to grow from 1.4% in 2010 to 8.2% by 2015; IT/ITES, Telecom, BFSI, Manufacturing and Government to lead in spend. This in turn will create a need for re-skilling to create new opportunities for IT training vendors

According to the study, the cloud computing market growth is attributed to the increased maturity of Indian enterprises towards cloud computing and the CEO/ CIO mandate for an enterprise-wide cloud strategy. It adds that with the overall environment of cloud adoption fast evolving in India, cloud computing will account for a significant share in the total IT spend of the small, medium and large enterprises. 

Says  Pari Natarajan, CEO, Zinnov Management Consulting, “Cloud computing will reshape the Indian IT market by generating new opportunities for IT vendors and driving changes in traditional IT offerings. There is a high chance that companies that are not adopting IT today and don’t have major investments in data centres and server farms will directly move into the cloud model. There are ample opportunities in every industry. Be it retail, manufacturing, banking, education or government.”

According to Manoj Chugh, President, EMC India & SAARC, “This first-of-its-kind report has brought to attention a very important but unnoticed aspect of the cloud computing market in India – for cloud computing to deliver its promise, customers need human resources with cloud computing competencies, both as vendors or as internal resources.”

The study was commissioned by EMC and executed by Zinnov Management Consulting. The findings are based on a comprehensive survey of over 100 CIOs & IT decision makers in India across industry verticals conducted during Jan. 2011 to May 2011.
Executive summary and sector –wise findings:

Most Indian CIOs prefer to have data centres located in India and run by MNC service providers. Large enterprises, instead of using 3rd party data centres, are willing to use their own data centre to provide hosted services to employees & customers, or establish a private cloud. For them, private clouds work better because they are more reliable, with network uptime under the company’s control, and are more secure, because the security systems are managed by the company.

60 % of the CIOs surveyed in India indicate that data security and privacy are the two biggest challenges for a private cloud adoption. In a big boost to the CIO community, only 13 % said they feel a loss of control over IT is a challenge, and only 10 % feel there is a lack of maturity of cloud service providers.
Willingness of CIOs surveyed to use cloud services for SaaS increases from 38 % in 2011 to 58 % in 2015; and for IaaS and private cloud from 36 % in 2011 to 47 % in 2015; for Business Processes from 10% in 2011 to 19% in 2015; for PaaS from 4% in 2011 to 9% in 2015.

Insights on key verticals and cloud computing in India:

BFSI: Enterprises in the fast growing BFSI sector are exploring cloud storage and compute power to handle massive amounts of real time core/ non-core banking data and minimize outages.With the availability of solutions tailored to the needs of security and regulatory compliance in the BFSI industry, the adoption in the public sector banks will also increase in the future.Examples of adoption (Both Public & Private Cloud): Yes Bank, Mahindra Finance, India Infoline, ICICI Bank, Axis Bank.
Telecom: Telecom companies are witnessing rapid growth in the subscriber base and with 3G/ BWA roll out, the need for data services, data maintenance and data storage would increase multi-fold and would continue to leverage cloud benefits to support growth. Examples of adoption: BSNL, Airtel, Aircel, Tata Telecommunications, Reliance Communications, etc.
IT/ITES: Shrinking development cycles, need to support multiple platforms and focus on non-linear business models is mandating increased use of efficient and scalable infrastructure among IT/ITeS companies. Examples of adoption: Wipro, Infosys, TCS, HCL, Patni, Vembu Technologies, etc.
Manufacturing: Enterprise manufacturing firms already have significant investments in IT infrastructure. While their requirements for computing systems are likely to remain high, many firms are now aggressively focusing on streamlining and efficient IT. Virtualization and cloud enablement of existing infrastructure is expected in this sector.Upfront infrastructure investment is a big challenge for the vast base of SMB manufacturers and hence are considering cloud infrastructure to enhance competitiveness. Examples of adoption: L&T, Bajaj Electricals, Aditya Birla Group, Dabur, etc.
Others: Riding high on citizen services as part of the national e-governance program, Indian government is looking to set up various data centers across the country. Right to education, financial inclusion, right to information etc. will be forcing the government to invest into IT infrastructure that will support the efficient delivery of these services.The number of hospitals adopting e-health records and other digitized clinical systems is increasing rapidly in India. The provision of telemedicine to reach to even the most rural areas in India and medical tourism is further fueling the growth of IT infrastructure in India.

The student teacher ratio in India is abysmally low and most of the students do not receive quality education due to lack of personalized attention. Education institutions are increasingly looking at IT as an enabler to address this challenge. Cloud readiness is increasing in the typically an unorganized retail sector (95%) as enterprises move on to SaaS for business applications such as ERP and CRM. Mid-market retail firms are looking for cost optimization while increasing IT adoption. 
Link to  register for report:

July 20 2011