Home / Opinion / Views /  Accelerated cloud adoption can turn India into a technology hub

Over the last decade, as software has become increasingly central across industries, enterprises have been undergoing a transformation, specifically digital, to adjust to this shift. Three digital technologies—cloud computing, cybersecurity and big data analytics—are at the heart of this transformation. I focus on the importance of cloud computing to India, and how the country can carve itself a unique identity as a global hub for cloud solutions.

Cloud has moved from being a relatively back-end (storage) to a front-end (business facing) technology, enabling on-demand access to resources, flexibility in scaling, cost reduction and business continuity. It is not just a crucial innovation platform for companies and countries, it even helps address societal problems. According to Gartner, worldwide public cloud services spending is estimated to grow at 18% annually to over $360 billion by 2022, from about $258 billion in 2020. The covid pandemic has accelerated this cloud shift, with even conventional industries like education and manufacturing fast-tracking its adoption.

India’s story is similar, albeit of a much smaller scale. Its cloud market was about $2.5 billion in 2018, accounting for a less than 1% of the global cloud spend. In a conservative scenario, it can double over the next two years. However, there is potential to grow even more—to $7-9 billion. The pandemic has given us the thrust needed.

Here is how this can be achieved. If recent developments are anything to go by, cloud technology has become even more strategic in the current scenario: IBM has split into two companies, with one focusing on hybrid cloud and artificial intelligence, and the other on managed services. TCS has split its cloud business into five distinct units.

From an India perspective, Google has announced the setting up of its second cloud region in Delhi in 2021. The Indian government is emerging as an active participant; Niti Aayog, along with AWS, has announced the launch of the Frontier Technologies Cloud Innovation Centre, a public-private partnership to address societal challenges through digital innovation.

India is an emerging software-as-a-service (or SaaS) hub. It boasts of 1,000-plus SaaS companies, over 150 of which have annual recurring revenues of more than $1 million. The top-notchers are showing incredible valuations—almost 8-10 times their revenue figures. Recently, founder and chief executive officer of Zoho, Sridhar Vembu, claimed that Zoho is close to the one-million customer mark. That is a spectacular achievement.

India’s small & medium businesses (SMBs) present a huge untapped opportunity. A recent NASSCOM study indicates that while over 60% of this SMB survey’s respondents have adopted cloud, nearly 50% are still at a nascent stage and only about 15% are advanced users. Given the pandemic, SMBs will also fast-track cloud adoption, with many skipping the proof-of-concept stage.

India’s national and state governments are playing a critical role in promoting cloud adoption. Finance Minister Nirmala Sitharaman in her budget speech earlier this year provisioned for a policy to enable the private sector to build data centre parks. A 10-member task force set up by NASSCOM has submitted its recommendations. This is a great opportunity to roll out the policy framework. The state governments of Maharashtra and Tamil Nadu, among others, are also working on policies to attract data centre investments.

New cloud opportunities are emerging in areas like collaboration and contactless tools, security, artificial intelligence and analytics. These trends highlight the importance of cloud computing to any transformation story.

The national government’s Cloud Vision for India 2022 aims to establish India as a global hub for cloud computing, content hosting and delivery, as also data communication systems and services.

There is no better time than now to do what is necessary to achieve this vision. We have it in us to be a cloud-first nation, but we must get the building blocks right, i.e., talent, favourable policies, innovation capabilities, data strategy and government adoption.

We must grow our available future skills (digital ready) talent pool two-fold (from 1.7-1.8 million to 3.5-3.7 million by 2024). Even then, it is estimated that demand will outpace supply. Unmet demand is an opportunity wasted.

The government’s role in policy-making is critical. Two areas of immediate impact could be: An enabling champions platform for micro, small and medium enterprises (MSMEs) to become technology resource centres and an accelerated implementation of India’s digital MSME scheme.

The global data-sphere is growing at an unprecedented pace. With exponential growth in online transactions, both by businesses and consumers, India is emerging as a growing source of data. In the recent past, several multinational companies have announced the setting up of data centres and cloud solutions due to an increasing need for data storage in India. This, in turn, has the potential to unlock great data-driven value for the nation.

The industry has to create greater awareness of cloud computing and capacity building. This can be done by showcasing best-in-class success stories that communicate the benefits in terms of return-on-investment and other metrics. We also need structured multi-lingual training programmes that define the business-use case of cloud and various aspects of the adoption journey.

Fundamental to India as a technology hub is ‘trust’, one of NASSCOM’s strategic imperatives. Cybersecurity is at the heart of building this trust. There has been a 10% rise in cyberattacks since 2018, and these have grown after the pandemic’s outbreak. Even governments worldwide haven’t been spared. For customers, a secure environment is an important part of a frictionless digital experience. As more data moves to the cloud, user rights and access have to be well defined, leaving no room for ambiguity. Cybersecurity must be at the core of design principles and technology solutions.

Alongside this, we have to foster innovation by supporting startups and creating more centres of excellence. The government is building many digital platforms that can be leveraged by innovators to create cutting-edge solutions. It just needs many more innovators to take advantage of what already exists.

Finally, it’s all about execution. We know what should be done and we need inspirational leadership across all levels to take it to fruition with greater urgency. The pandemic has afforded a big opportunity for all stakeholders to work collaboratively and make this happen. It is now up to each one of us to make the most of it.

Debjani Ghosh is president of the National Association of Software & Services Companies (NASSCOM)

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