Why The Indian Cloud Story Could Look Very, Very Different From Now On…

Why The Indian Cloud Story Could Look Very, Very Different From Now On…

By | November 12th, 2015
No Comments on Why The Indian Cloud Story Could Look Very, Very Different From Now On…

The vendors seem to have realized Indian market is unique in many ways.

Here is what they have realized…


														
							

Every market is different. Yet, few vendors get this simple truth till they try importing a model that has worked elsewhere—and is familiar—and fail. The India cloud market was no exception. Yet, developments in the last few months make one hopeful that the solution providers have finally figured out the peculiarities of Indian market. If that observation is right, we should see a rapid growth in cloud deployment in the days to come.

So, what are those unique factors and how could they possibly impact cloud take off in India?

First and foremost is the profile of customers. Globally, it is corporate and SMEs—the two ends of the business users market—that have driven cloud deployment. In India, it could be start-ups and government.

India has the second most vibrant start-up environment in the world. Interestingly, many of these start-ups—though in diverse areas such as retail, healthcare, financial services and transportation—have been founded or funded (or both) by people who have come from a technology background. So, they exactly know what they need. This is very different from the story of traditional SMEs in developed markets, who are struggling to keep pace with the leaders and are willing to buy cloud as a poor man’s on-premise. Indian start-ups see themselves as tomorrow’s leaders and a low-cost story will often repel them rather than entice them. They want to use technology to leapfrog and catch up with today’s leaders. Cloud provided them a way to do that. Though cost is a factor, they will not go to build their own infrastructure if it costs a little less—unlike a traditional SME. They know the value of quicker rollouts, hassle free management and up-to-date technology. The storyline for them has to be completely different. Interestingly, most of the large cloud players such as IBM and Microsoft have become quite sensitized to this fact. The big local data center establishment announcements of both these companies were accompanied by some program targeted at start-ups.

Government—and the public sector—in India are beginning to invest heavily into technology. So far, they had not made major investments into cloud because for most of them, it is a regulatory requirement that the data should be stored in India. So far, few of the large non-Indian cloud players had data centers in India. Realization of this requirement has made most major players—including IBM, Microsoft, AWS—to open their data centers in India. All of them have, quite unequivocally, admitted to this.

Secondly, there is availability of talent. India has no dearth of any tech talent, cloud technologies included. That will lower services cost drastically if the entire delivery is made out of India. It could also mean that for specific customer segments—such as start-ups—the cloud providers may provide a bit of extra services. For the lack of any other names, call them cloud-plus providers. These will be data center/cloud infrastructure providers with a bit of additional services—or those who will challenge the traditional IT services providers coming from the other side. This is already happening in some cases. Watch this space for a bigger story.

Third—and arguably the most important reason that forced local sales team to do a rethink—difference is the reasons behind cloud deployment by large enterprises in India. They are not the same as those that have been sold in other markets. As this article by CIO & Leader, Against the Tide: Where Traditional Arguments for Cloud Do Not Cut Ice, pointed out converting capex to opex is not an incentive (in fact, often a disincentive) for many large enterprises in India. So, the big cloud argument that the vendors have been singing so far is nullified. They have to be sold on strength of technology and delivery superiority rather than financial models. That means two basic differences in approach: one, the vendors start selling on their capability and not on a generic idea, right from day one; and two, they have to sell that to CIO in the first place, instead of hoping to pull strings from behind showing the CFOs and the board a big dream.

These peculiarities of Indian market are not something which happened yesterday. But from the action of the vendors—such as reorganizing their sales organization and setting up local data centers—it seems they now have an India strategy in place. The story may look very different from now on.

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Nash David
Nash David is passionate about technology and mobile devices. He closely follows the smartphone, and tablet platform market. He also leads editorial efforts for devworx. You may send him tweets @nashpd or email editor@devworx.in
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