India Public Cloud Computing to grow at 53% CAGR over 5 Yrs to touch Rs. 2,434 crore

Penetration of Cloud Services in India to grow to 6.8% by 2012

India moving from ‘license and use’ model to the ‘pay per use’ with SaaS market expected to touch Rs. 465 crore in 2011

TSPs and ISPs take steps to establish a firm foothold in the still nascent IaaS space

Bangalore / Gurgaon : According to market intelligence and advisory firm CMR’s India Cloud Computing Market Review 2011, May 2011 edition, the India Public Cloud Computing market was estimated to touch Rs. 2,434 crore in 2014 on the back of a compounded annual growth rate (CAGR) of 53% over the five-year period 2010-2014.

According to Kamal Vohra, Lead Analyst, India Software and IT Services Research, CyberMedia Research, “The advent of the cloud computing paradigm is witnessing widespread interest from the vendor-service provider-channel community on the one hand and business leaders and CIOs on the other. This is fuelled by the strong belief that the advent of cloud computing will allow a large number of SMB enterprises to adopt the same enterprise class software and technology solutions, which were earlier the exclusive preserve of large enterprises. This, in turn is expected to allow the market for software solutions to open up as large, upfront capital investments in IT infrastructure can be converted into smaller, manageable ‘pay-per-use’ annuity payments.”

“ICT vendors and service providers need to launch awareness and education programmes targeted at channel partners and customers. They also need to develop and bring-to-market innovative ‘cloud’ versions of their solutions to address the needs of diverse customer sets across a range of industry verticals, businesses and country- or region-specific statutory legal frameworks”, added Apalak Ghosh, Analyst, Emerging Technologies, India Software and IT Services Research, CyberMedia Research.

As per CMR’s India Cloud Computing Market Review 2011, May 2011 edition, a survey ‘users’ and ‘non-users’ of Cloud Computing showed that penetration amongst Indian enterprises was at 4% during 2010. This is expected to rise to 6.8% of all large and mid-size enterprises in the country by 2012.

Figure 1: Cloud Computing Penetration: ‘Users’ versus ‘Intenders’ and ‘Non-users’

Source: CyberMedia Research, 2011

“As the market matures and more industry vertical specific and business function specific applications become available, more users in India have taken to cloud computing solutions for enterprise workloads. Some of the key SaaS applications that showed high rates of growth in 2010 over 2009 include CRM solutions from players like Salesforce.com, Collaborative Applications such as Conferencing and Messaging, and Supply Chain Management solutions”, stated Kamal Vohra, Lead Analyst, India Software and IT Services Research, CyberMedia Research.

“The overall India SaaS market is expected to grow 50% over 2010 to touch Rs. 465 crore by end 2011. However, we are still a few years away from the time when we see mission critical enterprise applications running on cloud platforms”, Kamal further added.

Another development is the increasing realization amongst Indian telecom service providers (TSPs) and Internet Service Providers (ISPs) about the business opportunity offered by the new ‘cloud computing’ paradigm. TSPs and ISPs are in a vantage position to launch cloud computing services, primarily the cloud computing flavour ‘Infrastructure as a Service’ or ‘IaaS’. Indian Telcos such as Reliance Communications, Tata Communications and state-owned BSNL have already declared their intention to address this emerging opportunity. The growth of the India IaaS market is expected to be relatively slow in the 2010-2012 time-frame, but is expected to pick up thereafter. The overall CAGR for the India IaaS market during 2010-2014 is expected to be 49%.

“Telcos and ISPs are well positioned to offer cloud services with ease since they already have their data centers and bandwidth pipes in place, both of which play a pivotal role in delivering cloud services” stated Apalak Ghosh, Analyst, Emerging Technologies, India Software and IT Services Research, CyberMedia Research.

“The major focus of the IaaS marketing initiatives of service providers would be on the SMB enterprise segment. To increase and support adoption and market growth, these players will need to support their delivery mechanisms with a combination of experienced technical staff and cloud services that are relevant and appropriate to the Indian business environment”, Apalak concluded.

Figure 2. ‘Public Cloud’ versus ‘Private Cloud’: Key Differences

Source: CyberMedia Research, 2011