india flag 520x245 300x141 The State of Cloud Computing Around the World: IndiaIn a recent report titled the India Cloud Market Overview, the International Data Corporation (IDC) stated that the Indian cloud market has grown by 70 percent last year (2012), and is expected to exhibit a 50 percent growth rate for the next three more years. It is said that the Indian cloud market is rapidly maturing and seeing new entrants and investors, even though public cloud still lags way behind the private cloud due to a number of factors.

Factors Affecting Public Cloud Adoption in India

Like with any emerging market, the biggest challenge for public cloud computing in India is the lack of dependable infrastructure. In some areas of the country, the grid is still subject to intermittent power outages, which means data center operators will have to contend with downtimes and possible loss of service and data, or be forced to rely on diesel fuel to run backup generators, which can be very impractical when it comes to operational costs.

Another challenge that’s slowing down the rate of public cloud adoption in India is disparity between urban and rural residents, between uneducated and educated people, and between people who don’t have access to technology and people who do. It’s true that cloud computing offers advantages or benefits that extend beyond the context of businesses, but until people who don’t really have much to do with technology start to feel its benefits, the adoption of public cloud will remain limited to large businesses who have faith in the technology.

One of the cloud’s key benefits also end up having an unintended side effect in India, as its ability to boost the growth of an organization has helped widen the gap between large businesses and SMEs – with large businesses being more savvy and able to adopt the cloud for their operations, while small enterprises are unable to adopt the cloud and remain stagnant.

The future looks bright, nonetheless, as some of the more progressive companies in the country have used the problems with infrastructure as an encouragement to spur new innovation. For example, IBM’s Bangalore office has solved problems with the inconsistent power grid and the high cost of diesel-based generators by installing rooftop solar panels that provide direct current power to their own data centers. In a lot of established markets, solar installations may not be worth their upkeep costs at such low volumes but in India, where diesel power is on the increase and solar power is subsidized, the solar system ends up paying for itself in as little as four years.

Other companies also become creative in avoiding or solving the increased cost of cloud computing brought forth by a weak infrastructure, such as the IIIT Delhi University, which uses the idle capacity of their school’s computer lab as a private cloud.

Cloud Computing in Businesses

Cloud computing is embraced by India’s large businesses, primarily because they have already solved most of the infrastructure challenges. Due to their large scales and the presence of an existing IT department, it’s very easy for these businesses to adopt the cloud and enjoy all the cost savings and efficiencies that it delivers.

The market for cloud computing within the country has already doubled between 2009 to 2012, thanks to large businesses making up the bulk of Indian cloud computing growth. Additionally, since these large businesses don’t have legacy infrastructure to transform, they are more agile and can adopt new strategies as they come.

Experts are concerned about small to medium enterprises in India, as they either don’t have existing IT systems or have ones that lack experience, and as such, are more averse to adopting the cloud for their use. What’s worse is that SME’s are the backbone of India’s economy, as they are responsible for almost half of India’s industrial output and private employment. According to HP’s Innovations for the Next Billion Customers Lab, less than 1 percent of these SMEs use any type of automation, and rely heavily on paper documentation. The owners of many businesses from this segment tend to be unaware about the benefits of technology. One of the reasons is that there’s an overabundance of cheap labor in the country, making automation unnecessary and sometimes even uneconomical. However, this can change in the future as the cloud becomes cheaper due to the fact that manual labor doesn’t scale.

For SMEs to embrace the cloud, they need to first realize that a cloud-based architecture has a lot more benefits than automation, such as the reduction of capital expenses, maintenance, and required knowledge for IT. According to HP, the key is getting them to realize the financial value of a more efficient system provided by the cloud. A large number of SME owners have traditional measurements for value, so if you want to show them its value, you need to show it in terms of money: how much more they can earn, or how much they can save.

The Indian Government Cloud

Like with any technology, a country’s government’s plans for cloud technology are very important as it is one of the key entities in a country that can really invest and support technology at a huge scale. In India’s case, the cloud has been embraced by the government, perhaps as much as any other country.

One of the most ambitious examples of how governments can take advantage of cloud computing is India’s Unique Identification (UID) project. The UID aims to provide a positive change to the lives of the people at the bottom rung of the economic pyramid simply by providing a real time service for the verification of the identity of any Indian resident through biometrics or demographic information. The UID’s advantage is that it’s a generalized online service that is accessible by a wide variety of national, state, and local government authorized agencies as well as private businesses. The previous e-governance systems were limited in comparison, having been dependent on individual ministries and lacked standardization.

Currently, India’s UID Authority has already collected the biometric and demographic information from over 200M people, and several government agencies are starting to use it for their systems. The future success of the UID may act as the herald of public cloud computing’s success in the country, offering truly affordable, scalable, and sustainable solutions to an emerging market with acute public needs.

Business Priorities and Cloud Opportunities

The recent global economic downturn has prompted many Indian companies to change their outlook towards IT. They are now looking at it as a new strategic tool that can help them grow faster. Additionally, the economic difficulties worked as a way of weeding the chaff, so to speak, with many mature companies that adopted careful planning and focused on business/operational efficiency have floated to the top and become industry leaders. These companies are aggressively searching out various disruptive technologies that will help their IT become flexible and agile enough to meet their organizational needs. Cloud technology certainly fits the bill, and cloud providers may want to target this part of the market.

In order to successfully target this market, cloud providers will want to bolster their capabilities to understand the business requirements of the organizations and devise appropriate value propositions. Providers who want to be successful in India may want to learn how to act as partners for the organizations, and should not be averse to assessing the prospective clients’ cloud readiness, in case the organization is not yet ready for seamless integration of the IT infrastructure to the cloud. Basically, providers need to have robust cloud consulting capabilities if they want to penetrate the Indian market.

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