Software-as-a-Service spending among Indian SMBs is set to grow 40%+ in 2011

Small and medium business (SMB) spending in India on Software-as-a-Service (SaaS), a key component of cloud computing, is anticipated to rise by a sizable 43% in 2011. More than 10% of Internet-owning India SMBs have shown interest in adopting cloud computing in the next year. This is one of the key findings from a recently completed study of SMBs and Cloud Computing in India, conducted by AMI across major as well as Tier II cities. Medium businesses (organizations with 100-999 full-time employees) have displayed significantly higher interest than their smaller counterparts.

“Among Indian Internet SMBs,” notes Kalyan Banga, Senior Research Analyst at AMI-India, “almost half have a mobile workforce and over one fifth provide telecommuting options to their employees. The need for anytime, anywhere data access is a key driver of cloud computing in India.”

Other enablers of cloud adoption have also reached significant usage levels within India Internet SMBs. “Mobility, telecommuting, notebooks, smart phones—all are playing an important role in cloud adoption. Hence, it is becoming increasingly evident that the entire ecosystem and the players within it are steadily gearing up for cloud adoption,” says Mr. Banga.

“There are other factors at play as well,” he continues, “that are triggering interest in cloud computing in India. In the aftermath of the economic downturn, cost-conscious India SMBs are tightening their purse strings. Cloud computing is appealing as it requires less of a financial burden through zero CAPEX and minimal OPEX.”

The study also notes that infrastructure is gradually falling into place to support greater cloud growth within India SMBs. The availability of affordable and quality broadband services (thanks to the efforts of key ISPs) is a major driver not only for cloud computing but all Internet-based technology adoption. The development of virtualisation is another key booster. Moreover, implementation of cloud-based solutions reduces the organisation's need and dependability on skilled IT personnel.

“The development of an appropriate ecosystem is another crucial factor that is boosting Cloud Computing deployment,” says Mr. Banga. This is true since major ecosystem players such as Telco/ISPs, ISVs, SIs, aggregators, web developers, content providers etc., have been developing their capabilities and technical infrastructure to be able to provide better and robust cloud computing services to end-users. Other than creating awareness, the partner community has a vital role in acting as the connecting link between cloud vendors and end-users. The success of cloud computing will depend on the last mile connectivity. Since Indian SMBs are geographically dispersed, heterogeneous in nature and challenging to tap, the role of the Channel Partner is particularly vital in the Indian SMB space.

“Choosing the right cloud partner is a critical component for ensuring a successful and long-term partnership,” says Mr. Banga. “It is necessary to ensure that the cloud provider is ready to support the Indian SMB and share in both its challenges and achievements.”

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