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.7.Indian cos. can potentially derive new use cases for cloud computingTraditionalOpportunitiesSaaS enablementManaged ServicesCloud Opening upNew Avenues ofGrowthPlatform BPONon-LinearOpportunities7.1Cloud Based IPsCloud computing in IndiaCloud has not just opened up opportunities for Indian ISVs but also opened upinteresting opportunities for large services companies both for traditionalservices and services that will drive non-linear growth. In terms of traditionalopportunities, it has helped Indian services companies to get into areas such asSaaS enablement. Here they work with both the global ISVs who are moving intoSaaS as well as with enterprises who want to SaaS enable their traditionalapplications. Cloud models have also helped strengthen the managed servicescompetency of the Indian companies. Indian companies were traditionally goodin remote infrastructure management and were not keen on buying out thedatacenters of their customers. The global companies who were willing to takeup datacenters had a big upside in competitive scenarios. When cloud modelsget adopted by large companies, it will put Indian managed services companiesin a level playing field with their global competitors.Large IT companies in India all have over 100,000 engineers. It is scary to eventhink that they need to add another 100,000 engineers each to double theirrevenues. This has resulted in these companies looking for non-linear revenuemodels. Cloud based services provide perfect opportunity for these companies.Many of the Indian companies run the back office functions for their globalcustomers. They will use the cloud model to get into platform based servicesCloud-The Way Forward12

.such as the payroll services for example. In this model, each of the process theysupport their customer with have the capability to scale without adding too manypeople. Many companies are already investing in platform BPO services. They arealso starting to build their own cloud based IP that their customers can use.The global opportunity that has opened up for Indian companies is exciting. Thenext few years will be a great journey for all the companies and industry observers.8.Not just global companies, Indian companies are investing in cloudWiproCloud consulting, migration and managementSMB focused cloud productsAirtelPartnership with thin client providersAspiration to become CIO on the cloud8kmilesVirtual development environment on cloudCloud sourcing to solve SMB IT problemsZohoSaaS solutions to almost all IT application workloads.Out innovating global companiesMany of the Indian companies are creating cloud specific strategies as they see it asthe next enabler of growth. Many of the large sized Indian companies such asWipro, TCS, Infosys, Airtel and many others are betting big on cloud services. Aplethora of smaller companies are also starting to focus aggressively on cloudtechnologies. Close to 16% of all software product companies are already sellingone or more cloud based products in the domestic as well as global markets. Andsince cloud offers a level playing field (as it is a nascent phenomenon and evolvingtechnology), Indian companies such as Zoho have been able to compete againstsome of the large sized global companies in terms of selling SaaS/ cloud basedproducts in the market.Cloud-The Way Forward13

.Enterprise level cloud adoption by some of the large companies in India hasadded to the enthusiasm of these cloud vendors. Companies such as MaxHealthcare, Redbus, Dabur, Delhi Public School and many others are starting toadopt cloud based products & technologies and expect these investments towitness further growth in the years to come.9.A few Indian companies have already been able to competeInception Fundamental: A comprehensive offering to compete againstestablished players in a market opportunity of tens of billions of dollars in future.Indian SaaS companyNo venture funding400,000Desktops WinAgainst Google10 member team in SiliconValley600 developers/technicians inIndia2 Million Paid & UnpaidSubscribers TodayHires people from local colleges& schoolsAn interesting example is Zoho. Zoho is an Indian company started with nofunding and a small team in US. The entire engineering organisation is based outof Chennai. The company doesn't hire from large technology companies, largecompanies don't hire from them as well. Zoho trains and teaches students fromeconomically poor background, taps them at school leaving stage and trainsthem in their own in-house university.Cloud-The Way Forward14

.Zoho not only offers products that match the large companies feature to featurebut also at a very low cost as their operating costs are lower than the MNCs,though the MNCs also have development centres in India. Today Zoho has morethan 2 million users and most of its customers are SMBs with employeesbetween 40 to 200 employees.Recently GE evaluated various cloud application providers and selected Zohoover companies such as Google and deployed Zoho on over 400,000 desktops.This is a great example of how a small Indian company was able to win a contractfrom one of the largest companies in the world using the power of cloud.We all know that GE along with companies such as Citibank played a critical rolein building Indian services companies. This might happen again with cloud basedISVs.10.10.1Cloud computing is going to be about a lot more than just costsavingsOpportunities for Indian MarketThe Indian market is equally exciting if not more. The growth in IT spending isone of the fastest in the world. India is the world's fastest growing mobile market with over 20 millionsubscribers added every month. Mobile is going to be a key access devicefor cloud based products and services. The money companies invested for3G services showcased the belief that the large telecom providers have ondata services in the Indian market. Over 500 million people belong to the middle class in India. The productsand services consumed by them are relevant to other emerging marketsas well. This suggests that Indian customers are ideal for cloud offerings. Most of the manufacturing output (about 45%) comes from SMBs in India.Indian SMBs in specific lack budgets, want business improvement, lackmanagement bandwidth required to manage internal IT and all arelooking for rapid growth in the next few years.Cloud-The Way Forward15

.# of companies in Forbes 2000increasing by 23% every yearand will reach 162 by 2015Fastest growing mobile markets-20 mn additions per month500 million people in middleclass range earning in the rangeof 10,000 to 57,000 per yearSMBs account for 45% ofmanufacturing output and 47%of the total workforce11.India has a legacy of jumping the technology curveWireline & Wireless Penetration (in Million)600450300158281520150183134202003 (US)2003 (India)Wireline1292009 (US)372009 (India)WirelessCloud-The Way Forward16

.DTH Subscribers in India45Mn17Mn9Mn5Mn16%30%Share of DTH in total pay TVmarket volumes in India10%5%2007200820092014India has a legacy of jumping the technology curves, precedent exists in thetelecom sector and now DTH is also witnessing transformation. We anticipatethat cloud would show similar behaviour.Let us take the telecom sector as an example, in early 2000s, the wirelinesubscriber base was a significant chunk in the total subscriber base, whereasthe US, the trend was the movement to wireless mode of communication.However the actual growth in the telecom industry in India happened in 2005onwards and subscribers did not go through the typical adoption of wireline firstand then move to wireless, instead they straight away started with wireless.There is a high chance that companies that are not adopting IT today and don'thave major investments in datacenters and server farms will directly move intothe cloud model. There are ample opportunities in every industry. Be it retail,manufacturing, banking, education or government. The key themes for most ofthe opportunities are cloud, mobile, market place, price discovery, collaborationand analytics.Cloud-The Way Forward17

.The other key is to look at the ecosystem as a whole and partner with variousproviders to address the opportunities rather than try to address itindependently.12.Banking industry presents a huge potential for cloudCurrent banking penetration in India is 35%75 banks with 80,000 branchesand 400 Mn accountsFinancial inclusion to enableincreased access to the currentlyexcluded populationHuge CostHuge BaseSME banks can leverage cloud technologies todeliver better banking servicesInternet BankingMobile BankingMicro FinanceThe current banking penetration in India is only 35%. The large public andprivate banks are growing rapidly. Large banks such as ICICI bank already havebest-in-class IT deployments. In many cases they have built their ownapplications to solve India specific problems. Government is increasing theirfocus on financial inclusion. Corporate banks and the local chit funds also makeup a key part of the banking ecosystem in India.Even for the large banks, the cost of reaching to the "Bottom of the Pyramid" isprohibitively high and are partnering with Microfinance institutions to reachthem. The smaller banks are still to enable their services on the internet, Mobilebanking is still a tip in the iceberg.Microfinance is an interesting model as it is based on self-help groups wherepeople from each of the group should be in physical proximity. Can social mediaand collaboration models made possible by cloud solutions create newdisruptions in the microfinance models and thereby improve financial inclusionin India. It will be an interesting opportunity for a start up company to explore!Cloud-The Way Forward18

.13.Education system in India could also be transformed using cloudCurrent allocated expenditure for education is 4% of the GDP 400/ student in India ascompared to 10,000 in USRight to education act to ensureeducation to allHuge CostLow SpendCloud can potentially help revolutionise theeducation system in IndiaOnline EducationTeacher PupilEnablementSchoolManagementEducation industry can also be transformed using cloud solutions. India currentlyspends 400/student compared to the 10,000/student in the US. We spendaround 4% of the GDP on education services. With the right to Education Bill,there will be a lot of pressure on the government to increase the expenditure oneducation. Similar to healthcare, the current model will become cost prohibitive.There are tremendous opportunities for IT in education in India in terms of onlineeducation, teacher training/enablement and school management. A fewcompanies are starting to work on some of these areas and have already startedto see success.SchoolMATE [School Management AT Ease] is a CRM (Customer RelationshipManagement) ERP (Enterprise Resource Planning) software for EducationalInstitutions. SchoolMATE helps schools in continuously updating parents abouttheir child's status and his performance at school over their mobile phonesthrough text messages (SMS) and also through e-mail and Web using a securemechanism.Cloud-The Way Forward19

.The innovation from SchoolMate is to provide the entire product as a service.They figured out that even if they provide the solution on the cloud, there issomeone in the school who needs to enter the information into the computer andit was difficult for the school to train the teachers to be able to do this. So alongwith the software, SchoolMate provides the data entry provider. This way theteachers don't have to change their current way of working.The business model is to charge the parents and not the school. The parents arewilling to pay for this service as they get to know about their children in real time.Today SchoolMATE has over 70,000 parents enrolled into this programme.14.Healthcare industry in India demands end to end innovationsCurrent allocated expenditure for healthcare is 5.2% of the GDP50% population with no access toprimary healthcareHealthcare expenditure toincrease 5 folds to match globalstandardsHuge CostHuge BaseIndustry needs fundamental innovations to sufficeneeds-cloud can potentially helpTelemedicinePatient RecordsHospitalProductivityLet us look at Healthcare. India spends around 5.2% of the GDP on healthcare.Even at this level of spending 50% of the people don't have access to healthcare. IfIndia has to provide health care in terms of global standards, it would have tospend 5 times more than the current spend. Even US spends only 16% of the GDPon healthcare. So the current model of providing healthcare is just not going toscale to suffice the need to provide universal healthcare in India. The industryneeds to look at fundamental ground up innovations to reduce the cost ofhealthcare. The innovation needs to happen in a number of areas starting frommedical education, medical devices etc. IT can play a key role in some parts of thevalue chain such as hospital productivity, telemedicine and patient records. Alreadycompanies such as Wipro have created India specific healthcare IT solutions.Cloud-The Way Forward20

.15.SMB sector would require low cost solutions to address uniqueneedsInception Fundamental: To create a "NANO" in ITDriven By Ratan TataValue PropositionCustomer BehaviorComplexity of ITReachBusiness ModelImpactITaaS StackBusiness IntelligenceCustom ApplicationsBusiness ApplicationsEmail, Office AppsNetworking EquipHardwareCloud-The Way Forward21

.45% of the manufacturing output in India is from SMBs. The existing ERPsolutions designed for large companies don't work for SMBs. They are difficult touse, are not customised for the SMBs needs and are cost prohibitive to buy,deploy and maintain.An interesting example is TCS who were aggressive enough to leverage the SMBopportunity. It is believed that Ratan Tata wanted to create an IT Nano for theSMBs in India. The TCS team went into action and met with many SMBs acrossIndia to understand the pain points and requirements. They found out that manyof the SMBs had bought some solution but are not using them as they were notsolving their pain area. Many found that they don't need all the complex featuresand the products were unnecessarily complicating their processes.TCS invested in a large team to build a solution specifically focused on SMBs a

Cloud-The Way Forward 7. 3. Defining the cloud. Delivery Models in Cloud Computing . Public Cloud. Private Cloud. Hybrid Cloud · The cloud infrastructure is made available to the general public or a large industry group and is owned by a