Indian cloud computing market nears billion-dollar mark

July 6, 2012

Cloud computing has begun to take off in one of the world's most populous nations. Nearly $1 billion is spent on the cloud in India, according to a study from Zinnov Management Consulting.

The study found that the cloud market reached between $860 million and $921 million in 2011, with between 78 and 80 percent based in the private cloud. Public cloud spending totaled between $160 million and $192 million, a number that Zinnov believes indicates that the technology will take off in the near future as the public cloud reaches its inflection point.

SMB adoption
One indication of the cloud's rise in the Indian business landscape is growing adoption of the technology in smaller organizations. According to SME Times, small and medium-sized businesses (SMBs) have increasingly turned to cloud computing, as many of the challenges that once hindered adoption have begun to be washed away.

Although issues like the availability of bandwidth remain, data security in cloud computing is at a different level than it was in the past, industry experts told SME Times. As more providers take the burden of security off of their customers, adopting the cloud becomes a more plausible move for SMBs. Because of that, the benefits are transferred further on down to their customers as well.

"The use of cloud computing has just started," Nitin Khanapurkar, a partner at KPMG India, told SME Times. "For example, the Customer Relationship Management [CRM] management applications were earlier prerogative only to big organizations. It used to take several months and required huge investments. But today the entire enable infrastructure and applications are provided to you."

Public cloud
Growth anticipated in the Indian public cloud market looks largely to be thanks to the increased SMB interest in the products. According to the Zinnov study, the market is expected to grow at a 55 percent compound annual growth rate.

"[Public cloud computing] will become a default choice for new IT investments, especially in the SMB segment," Zinnov's director of market expansion, Praveen Bhadada, said. "We will not be surprised if cloud takes up more than 20 percent of the total Indian IT spend in the next couple of years."

Cloud security slows down early adoption of public cloud services, though companies may move over once they are more confident in the cloud's data protection capabilities. One of the early signs of a move to the public cloud in India has been the growth of the as-a-Service market. Platform and Infrastructure-as-a-Service both show annual growth rates well above 70 percent.

-McAfee Cloud Security