“Third largest contributor to public cloud market, India is now open to new investment sectors for cloud vendors”

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Since 1950 till now, cloud computing has gone through a remarkable evolution and expansion, both globally and in India, so much so that by end of 2018, 75% of Indian developer teams will include cloud based cognitive or Artificial Intelligence (AI) functionalities in one or more services, as observed by International Data Corporation (IDC).

According to Rishu Sharma, Associate Research Manager, IDC India, every time she interacts with cloud service providers in India, all they want to know is about India’s potential in cloud market and the challenges they would have to face in building their market strategy. Here are some of the highlights she shared with Sreemoyee Chatterjee from OSFY to enable the cloud service providers take informed decision on their marketing strategies. Excerpts below:

Where does India stand in the list of cloud adopting regions?

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 As per IDC Worldwide Semiannual Public Cloud Services Tracker, 2017H1, India is the third largest contributing country in Asia-Pacific excluding Japan (APeJ) Public Cloud market. The Public Cloud market in India reached about $658 million in the first half of the financial year 2017 – a very positive sign for cloud vendors to invest in this field.

Which sectors make maximum use and are most promising for cloud computing market in India?

Telecom, Banking and Discrete Manufacturing lead the pack in spending on public cloud services as they look for greater scalability, higher performance and faster access to new technologies. Among these Telecom leads in terms of public cloud spending in India. Apart from their spend on infrastructure including the server, storage and networking components, these industries are now looking at cloud for Saas compounds like collaborative applications, Customer Relationship Management (CRM), Enterprise Risk Management (ERM) to name a few.

Apart from telecom, banking and discrete manufacturing, what are the other areas gradually adopting cloud computing in the country and have got wide scope of investment?

 Professional services, security services, investment services as well as insurance sector are among other areas adopting cloud computing in India. We are also seeing high adoption of cloud in non-conventional sectors like media industry. Across all these new sectors making use of cloud computing functionalities, cloud based platforms have enabled them reduce manual effort in several not so important segments thereby empowering them to invest more manual strength for higher value added tasks. Hence these sectors are evolving to be promising cloud computing sectors in near future.

What new upgradations are likely to hit cloud computing functionalities in India? How will that impact the cloud service providers?

 Several enterprise software companies in India have already adopted cognitive /Artificial Intelligence (AI) components and functionalities to provide predictions, assistance, recommendations and guidance on tasks within software. India will soon see a new era of cloud computing functionalities with upgradations and upcoming versions of software that will include machine learning analytic techniques or much broader cognitive/AI functionality indicating that the cloud service providers in the country will have to upgrade their service providing platforms in alignment with cognitive/AI components and functionalities.

What are the major challenges faced by cloud service providers in India?

 Challenges faced by the cloud service providers in Indian market are many, one of the major concerns being security issues. Other challenges include regulatory or compliance issues in accordance to RBI guidelines regarding data hostage in India. Vendor and price lock-ins serve as another hindrance for the service providers.

Also, bringing about upgradation and providing solutions that allow for multi-cloud set up and meeting its growing demand is yet another issue that cloud service providers are facing at present.  Apart from these technical and regulatory issues, penetration into government sector is another major concern for the cloud vendors. Despite Modi’s ‘Digital India’ program it is still difficult for the foreign vendors to make an entry in the public sector.

Out of the existing cloud vendors in India, how many of them are India based? Is it an adequate share? If not, why not?

 As per reports of public cloud tracker, top seven cloud vendors or cloud service providers are multinational companies (MNCs) like Amazon, Microsoft, Google and more. Compared to them, India based vendors have minimal share in the country’s cloud market mostly because it becomes difficult for India based companies to compete with the widespread operational scale of these MNCs.

How profitable is Indian cloud market for the cloud vendors?

Profitability depends on scale of operation and the top three to four cloud vendors see a very profitable business in India. As the end users have already realized that cloud is the way forward and has immense benefit, the profitability of cloud vendors will also increase.

What role do cloud service providers play in terms of providing AI/IoT based solutions?

 All top cloud vendors in the country have begun launching solutions having cognitive and Artificial Intelligence (AI) components. Cloud and AI definitely go hand in hand. Due to increasing demands from the users, vendors are talking about having an IoT solution connected to cloud enabling users generate real time data across the globe.

Is there any blue ocean space in cloud computing area in the country?

 Not exactly blue ocean space but multi-cloud management is an area that requires more attention at present. Given that multi-cloud set up will be the way forward, the vendors need to understand end to end management for multi-cloud platform and ways of utilising the infrastructure to maximum capability. It is estimated that by 2020, over 90% of global enterprises will adopt multi-cloud platform.

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