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Cloud Computing and SMEs in India: Marketing the ‘Myth’ out

Getting Rid Of Myths Against Cloud

Ever since its arrival, cloud has been changing quite a few things around the world, particularly when it comes to empowering the enterprises in managing their computing capabilities and data. Apart from increasing the efficiency of an organization, which remains a principal focal point in any endeavor, cloud has also helped companies cut down their costs drastically. Various solution providers, ranging from hallowed industry giants to the new age startups, have been going gaga about this technology, which has indeed caused some serious disruption throughout the world of computing and data management, across the globe.

As far as market stats are concerned, according to various research consultancies, worldwide spending on public cloud services clocked an aggregate of US $ 70 Billion and it is expected to grow at a CAGR of 19.4 % to hit US $ 141 Billion. The spending on public cloud services in India in 2015 was around US $ 731 Million according to a Gartner report. It is expected that by 2019, the spending on public cloud services will hit a figure of around US $ 2 Billion in India. In the year gone by, SaaS and IaaS spending grew by 33% and 25 % respectively over 2014 while that on cloud Data Management & Security grew by around 37 %. This is expected to remain the main propeller of growth in the year to come as well, as a report from International Trade Administration, Department of Commerce, USA suggests.

As the fastest growing major economy in the world, India has to look after its Small and Medium Enterprises in order to ensure sustained growth. It is also of utmost importance that the economy is able extract the most out of the MSME sector that contributes to 37 % of India’s GDP and employs over 45% of its workforce, as per a report from SMEstreet.in. To achieve this it is absolutely essential to improve the efficiency of SMEs in India and empower them with better data management and computing services that in turn might help them put more efficient processes in place.

When it comes to the future of cloud computing in India, a huge segment of customers exist in the form of SMEs. There has always been ‘hope’ around the SMEs using cloud services to leverage it to their advantage in order to increase profits through an efficient system of value chain and processes that come with better data management and computing services. However, it must be understood that there are some reservations and challenges for a marketer in this front. Nonetheless, these challenges can be overcome by communicating the values that one reaps out of cloud services. It remains important to break the stereotype thinking around cloud, especially when it comes to SMEs.

So, what are the myths about cloud related to SMEs? Well, there are quite a few. Here is a look at some of the  various misconceptions that marketers have to face while taking their offerings to the potential customer:

Myth 1. Cloud is nothing but ASP, the new generation ASP.

Truth: Cloud and ASP are two completely different things. While ASPs (Application Service Provider) are third party offerings, a given software application developed by a vendor for a customer wherein the application as well as the data is hosted locally on the customer’s infrastructure/ hardware; cloud is a web based offering of the entire gamut of computing services wherein everything starting from application, environment as well as the data is hosted on web and on the service providers’ infrastructure. More often than not, the service provider here is only the developer of the applications. Moreover, it is just not a software application but entire basket of computing services like Platform (Web Based OS), Infrastructure (Databases and Servers) and Data Security services on offer. Additionally, cloud has an advantage that it comes with a multi-tenant architecture which allows for more than one subscriber from the same customer to use the same application by providing a single license for a given no of users. Application Service Providers on the other hand, would install the application on one system and then again separately on another system, if one requires another instance of it to run. ASP is more of a legacy product.

Myth 2. Cloud increases the IT spending.

Truth: Characterized by limited budgets and funds, SMEs often tend to think so. However, the truth is that cloud in fact, reduces the IT spending as it eliminates the need of dedicated infrastructure for application, environment and data hosting and all this, is maintained over the vendor’s infrastructure who leases it out to its customers. Giants businesses and corporations like SAP, Oracle and Microsoft etc. have come up with the best possible, highly reliable and economical solutions with cloud for their customers.

Myth 3. Cloud poses security threats to data security.

Truth: Well, in an age wherein companies are focused upon being  cost centers and are desperately trying to cut down on spending and are also allowing employees to work from anywhere, anytime and on the go, it is to be understood that things like BYOD and cloud have to come to stay. The crux lies in enforcing the strict IT / Data Security Policy and being vigilant. Moreover, most vendors and developers across the industry offer various solutions and packages of cloud services that have different features for different employees depending upon the nature of their job and designation. So a CXO would always have more rights and more access to information than an employee at the very tactical or operational level.

Myth 4: Cloud is rigid, ASP has an advantage of Customization.

Truth: While it is a truth that mass customization is not exactly a cloud thing as it is being used by possibly  millions around the world, it is to be noted that cloud gives you a flexibility of ‘pay as you use’ or ‘pay as you go’ which then allows you to use as many features and applications offered by the vendor/ developer that you want and you have to pay only for the applications that you have actually used. ASP does provide the advantage of mass customization, but once installed it cannot be used as flexibly as cloud.

Myth 5: Having Cloud will solve all our data problems.

Truth: No it doesn’t. Ultimately it is a human issue. The discipline and the responsibility with which the user has to use  cloud services will always play a major role. It is also to be understood, that the need of change management doesn’t vanish with cloud. At some level, some kind of training or acclimatization would be needed for sure. To address these problems vendors like AWS (Amazon Web Services), provide their customers with a demo log in, to their services on offer.

Apart from the above stated myths and challenges, it is important to understand that most of the (M)SME sector in India is unorganized and poses different challenges like understanding of technology and lack of exposure which might prove to be a hindrance. Nonetheless, if a marketer can break out of the myths as stated above, the market is sure to boom and opportunities with cloud particularly in SMEs are potentially endless.