Cloud Computing : The Next Big Wave in SME Market

The basic idea of cloud computing is quite simple. In general terms, cloud computing can be described as a web architecture that allows users to work and save information online. The aim is to move all of the applications installed on our computers to a remote location. In other words, to do away with a number of standard components, including operating systems and hard disks, and make them accessible through an online desktop accessed via a standard browser. 

Gartner defines cloud computing as a style of computing where massively scalable IT-enabled capabilities are delivered as a service to external customers using Internet technologies. One IT-related function can be a software application. If the software application is written in such a way that it is "massively scalable," then SaaS is considered a form of cloud computing (SaaS). 

Instead of data being stored on the PC, it is stored on a server on the Internet. User does not know, or care, where that server is located. in fact, the data might be scattered across a bunch of servers. It's all up in the sky someplace. Hence the term "cloud". 

Cloud computing transforms computer processing, data storage, and software applications, allowing them to be delivered as a utility. Just like people tap into existing infrastructure for water or power, companies can now tap into a variety of services - applications, platforms, raw computing power and storage - all via the Internet. 

Cloud Computing for SMEs

Small to medium sized enterprises (SMEs ) are the primary market for several channel partners. Even for an industry prone to hype, the buzz surrounding cloud computing is sky-high. There is no doubt that few sectors have generated more interest than cloud computing. The vendors are reinventing their technology strategies with cloud offerings. Cloud computing is being offered by such vendors as Google, Salesforce, HP, IBM, Microsoft, and many others. And cloud computing promises to be providing cost-cutting offerings that are strongly appealing to SMEs.  After all the more popular cloud computing gets, the less hardware SMEs will need to buy. 

According to the estimates by IDC, public cloud services will outpace traditional IT spending over the next five years, representing $$55 billion in 2014 by 2014. According to Gartner worldwide cloud services revenue would surpass $56.3 billion last year, a 21.3 percent increase over 2008 revenue of $46.4 billion. By 2013, Gartner forecasts the market will reach $150.1 billion.

There are 3.5 million SMEs out there in India. A growing number of SMEs in India are getting to grips with the cloud computing technology because of its ability to cut costs and reduce the need for capital equipment - both hardware and software.

"The adoption of cloud computing has certainly increased in India and is the fastest growing technology as coded by few analysts.   Cloud computing is the next logical stage in the adoption of virtualization and the transformation of IT," says Ganesan Arumugam, Director - Partners, VMware India & SAARC. VMware is the global leader in virtualization solutions from the desktop through the datacenter to the cloud. 

According to Cisco, cloud applications offer SMEs more than just peace of mind - they offer flexibility as well. This is a critical component of an overall growth strategy, as businesses often find themselves at a point where they need to spin up (or spin down) resources to match customer needs.

When it comes to the cloud, IBM immediately comes to mind. Its Smart Business Cloud services and solutions are the case in point. With its combination of services and systems, which comprises public and private clouds and cloud-based versions of some of IBM's most popular applications, IBM is looking to the cloud for everything from analytics and software and services delivery to services such as storage management and cloud-based e-mail, scheduling and contact information.

The India Software Lab team at IBM India, have set up a dedicated Cloud Centre, where they bring in partners, system integrators, clients and prospects to understand and better utilize the cloud offerings and its benefits.

With the rapidly evolving models of IT, HP is rapidly a ushering a new era in cloud computing across its portfolio of products. 

Faisal Paul, Head Marketing & Solution Alliances, HP Enterprise Servers, Storage and Networking (ESSN), HP India, says, "To deliver a cloud based service, you need a complete ecosystem that is built on principles of service centricity - from infrastructure that can be agile - scaling up and down based on business needs, to management that can automate provision or change services on the fly when a consumer wants it, to security that provides trust that my data is safe, and finally a delivery mechanism that enables service providers to offer businesses services on an outsourced basis and priced like utilities." 

HP has recently launched a number of initiatives to win sales in the small-to-medium-sized business (SMB) IT market in India. The company has adopted a micro-market strategy for SME business, whereby it plans to roll out cloud computing-based solutions around key verticals like healthcare, retail and education.

For this, HP has partnered with 150 Indian software companies and has already developed 8-10 critical applications.

Microsoft and Oracle have shown fastness in offering their cloud servcices. Microsoft's Dynamics has been getting the maximum number of customers in the hosted solution space. Oracle has its hosted solution CRM-on-Demand.

Recently Cisco and Salesforce.com have come together to deliver a complete contact centre in the cloud. The Customer Interaction Cloud combines Salesforce.com's Service Cloud 2 CRM system with Cisco's unified communications system.

This allows customers to use the salesforce.com CRM application as their primary agent desktop while retaining full Cisco Unified Contact Center capabilities to operate a customer care or support centre in any industry.

According to the companies, the move addresses an increasing demand for cloud computing-based customer service solutions in the SME segment.

Trend Micro has linked up with Wipro Technologies to develop next-generation virtualisation security systems for data centre users, most notably those operating in public or private cloud networks. According to Trend Micro, the linkup will allow major companies and operators to create cloud computing systems that are highly secure, but as cost-efficient as possible. Trend Micro says it will work with Wipro to provide joint virtualised data centre security, as well as data centre consolidation technologies based on its own products, as well as those of third parties.

"The benefits of cloud computing - improved business agility, the convenience of self-service and reduced equipment costs - are well documented, but they can only be reached with a comprehensive management strategy that reduces risk and drives compliance," says Rajesh Janey, President NetApp India & SAARC. "NetApp has worked closely with leading technology vendors to provide customers with the solutions and infrastructure they need to enable the cloud."

Keeping in mind the increasing demand for cloud computing, especially in the SME sector, NetApp enhanced its cloud portfolio, by adding storage capability. Taking a step in the direction, the company entered into an agreement with Tata Communications to offer NetApp-based cloud service to the customer.

The company expects a positive growth in the SME market space. About ten per cent of its revenues come from this segment, and the c company expects a quantum growth in coming years. 

The company joined hands with Tata Communications to build cloud infrastructure on NetApp platform and also introduce it to their cloud-based services. Tata will soon start implementing new offering like Data ONTAP 8.

Advantages for SMEs

One of the benefits of the cloud computing model for SMEs is its low barrier to entry. Risks are limited because contracts with service providers are generally covered by service level agreements. These contracts can be cancelled at any time.

For the channel community this means only more opportunities, as the cloud will increase the penetrations of IT services in the country. The market opportunity will be huge and no single vendor would be able to address it. Channels can themselves look to become cloud computing service providers for SMB's and niche verticals partnering with ISV's who can then deliver specific applications on the cloud. 

"We see a clear opportunity for channels here. There is however the need to make the right technology investments and strategy around. What will ultimately differentiate one provider from the other is the Brand Trust that the company and its products enjoy," says Paul

Proponents of cloud computing are of the firm belief that the cloud technology has the potential of simplifying business processes for SMEs. Coupled with that, the technology adds value to software applications and lowers costs by moving the focus of IT applications outside the limits of traditional businesses.

Cloud computing is expected to help SMEs offer more cost-effective services to their customers, improving efficiencies in the process.

Cloud Services and Channel Partners

It is incumbent upon the channel partners to be aware of the ins and outs of cloud computing in order to offer knowledgeable advice about use. 

There are a number of myths about potential drawbacks of cloud computing. One of the myths related to Cloud Computing is how secure Cloud Computing is. This is a debate that has been raging for long and like other myths would not be an impediment to the growth of Cloud Computing. If companies choose their vendors wisely and strategically implement cloud services, there are no drawbacks.  Security, reliability and scalability are all concerns in the cloud model, so customers need to evaluate who they work with carefully. 

Finally ....

SMEs have been the most aggressive segment to adopt cloud services. Since their IT needs are less complex and they have fewer legacy applications, and less IT support compared to those of big enterprises, SMES are often willing to outsource the delivery and operation of IT to third parties, ensuring that they focus on running their businesses. According to a research by McKinsey that SMEs with fewer than 250 employees are more than twice as likely as big enterprises to adopt cloud services.

For more contact :
Deepak Singh
edit@varindia.com