Cloud – The Way Forward
        Zinnov Management Consulting




                     Zinnov Management Consulting| 1
IT industry goes through periodic
         transformations
                                                               ...
Cloud computing is the 4th wave –
         a perfect storm

                                           Technology
        ...
Delivery model innovation: Cloud computing has enabled an entirely new delivery model for
software. Earlier companies had ...
Cloud computing has its sets of
          serious challenges

          x Data Security Concerns

                        ...
However, challenges would not be
         roadblocks for long

                                      From Past to
        ...
We are already starting to see success
         stories in the consumer world
                      Facebook Active Users ...
Cloud is now starting to expand its
          horizons
                  CIO Cloud Computing Survey                       ...
Every large tech company is now
         claiming to be a cloud company

                                               IB...
However, there are no clear leaders
         yet

               Mainframe           PC              Internet             ...
Cloud revolution can potential bring in
         new companies from India
                     Infosys Revenues ($ billion...
A few Indian companies have already
         been able to compete
          Inception Fundamental: A comprehensive offerin...
Many others are also evolving in this
         space

                     Wolf PaaS                                   Ora...
Indian cos. can potentially derive new
         use cases for cloud computing
                                            ...
Indian domestic market also provides
         ample opportunities

                      Fastest IT Spending Growth – 13.5...
India has a legacy of jumping the
            technology curve
              Wireline & Wireless Penetration
      600    ...
Retail industry can fundamentally
          transform with cloud technologies

                                           ...
The business model could be to get the money from the large FMCG players, or charge the
retailer as low as Rs.1/customer a...
Healthcare industry in India demands
         end to end innovations
                Current allocated expenditure for hea...
Banking industry presents a huge
         potential for cloud
                              Current banking penetration in...
Education system in India could also
         be transformed using cloud
                 Current allocated expenditure fo...
SMB sector would require low cost
         solutions to address unique needs
           Inception Fundamental: To create a...
Government will increasingly invest in
         cloud for better citizen services

         • Largest citizen          • T...
India has also been at the forefront of
          business models innovations
        Inception
      Fundamental:        ...
India has also been at the forefront of
         business models innovations
            Inception Fundamental: To provide...
India has also been at the forefront of
         business models innovations
                                             ...
India is well placed to witness rapid
         growth in the cloud space

               Large                    Developi...
Thank You
For more information please contact Zinnov at
info@zinnov.com


69 "Prathiba Complex", 4th 'A' Cross,
Koramangal...
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Cloud the way forward in India - the 4th wave of the IT Industry

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Cloud the way forward in India - the 4th wave of the IT Industry

  1. 1. Cloud – The Way Forward Zinnov Management Consulting Zinnov Management Consulting| 1
  2. 2. IT industry goes through periodic transformations 3 Internet Revolution 2 PC ~0.4 billion ~1.8 billion Revolution Internet Users Internet Users 1 ~1.5 ~1.5 billion PCs/ Mainframe million PCs Laptops Revolution A few ~10,000 hundreds Mainframes 1960 1970 1980 1990 2000 2010 The pace of innovation in the IT industry is always been faster compared to other industries and has resulted in the industry going through a series of transformations over the last 50 years. It started with mainframe computers than moved on to minicomputers, PCs and the web. Take the PC revolution for example. It put the power of computing in the hands of people. The smaller form factor and easy availability/usability of software led to the explosion in the number of PCs from 1.5 million PCs in 1980s to over 1.5 billion PCs and net books in 2010. The internet had the same effect. The huge global information network helped create new use cases for IT in terms of Search, Collaboration, User-created content and entertainment. There were about 1. 4 billion new internet users added just in the matter of last 10 years. Zinnov Management Consulting| 2
  3. 3. Cloud computing is the 4th wave – a perfect storm Technology innovation Delivery Model Business Model innovation innovation The next wave of transformation in the IT industry is cloud computing. This is a perfect storm. The only difference is this storm is destructive only to companies who not willing to change. It is a huge opportunity for others. Let us understand why it is a perfect storm. Technology innovation: Virtualization and Service oriented architecture/Web services are 2 key technology innovations of the last 10 years. Virtualization technologies pioneered by companies such as VMware has helped abstract the computing resources from the hardware. This has removed the historical constraint of one server per application model and provided the ability to run multiple virtual machines on a single physical machine. This abstraction has allowed companies to increase the through put of datacenters and forms an integral part of cloud computing. Service oriented architecture/Web services help organizations access independent building blocks over the internet for performing specific functions. This is independent of platforms and programming languages. If a company doesn’t like their existing business analytics tool they should be able to link up to another tool on the cloud for better results rather than spend a lot of time and money for integration and implementation. This again forms the integral part of cloud computing Zinnov Management Consulting| 3
  4. 4. Delivery model innovation: Cloud computing has enabled an entirely new delivery model for software. Earlier companies had to invest millions of dollars in hardware infrastructure, software license and additionally for implementation. This made it prohibitive for small and medium sized companies to leverage IT effectively. The cost of IT also made large companies continue to use inefficient legacy technology. Cloud computing has changed all of this. It is today possible even for a small retail shop to access complex business analytics tools that were only available for large companies, for example. In some way, the delivery model innovation brought in by cloud computing has created a business leveller between medium and large companies in certain industries. Business model innovation: Cloud computing has also opened up a lot of possibilities in terms of business model. It is identical to the shampoo sachet model to IT that will allow customers to pay for services and features that they use and also base it on time or number of transactions and other similar models. Cloud computing has also allowed access of smaller ISVs to customers that they never had through the use of market places. This has allowed smaller ISVs to be based on cloud platforms (Such as Azure, App Engine etc.) and make themselves available to global customers thereby significantly reducing their cost of sales. This has also increased the flexibility for end customers and increased the choice of products and services. There are very few times in history such transformations happened. Many analysts have compared this to industrial revolution which helped improve productivity and standard of living more than any other time in history. Zinnov Management Consulting| 4
  5. 5. Cloud computing has its sets of serious challenges x Data Security Concerns x Reliability Issue x Lack of Customization x Compliance Related Issues x Resistance to Change However there are a few concerns with the adoption of cloud computing as well. Data security is a serious concern for CIOs, for example. They are concerned about critical data residing outside of their network. The CIOs are also concerned about the lack of control on their IT environment. Some of the recent outages in Amazon and other cloud services have also raised concern on the reliability of cloud environment. The perception of lack of control actually heightens the reliability concerns. CIOs are used to high level of customization and worry about the level of customization possibilities with cloud services. They have been in some level dependent on the system integration companies. Compliance regulations such as HIPPA has stringent controls on security, transparency etc. It is still not clear on the level of control the cloud providers will give the enterprises. For example, the cloud provider might prohibit their customer from running a vulnerability scan on their deployment on the cloud. So it is clear that like any transformational initiative, adoption of cloud also faces internal resistance to change as it fundamentally alters the makeup of the IT organization. It changes how IT departments buy or develop, deploy, maintain and support applications. It changes the way they interact with the business users. Cloud in some level allows the business units to make independent decisions for point IT solutions. Zinnov Management Consulting| 5
  6. 6. However, challenges would not be roadblocks for long From Past to Present Money stored in-house for security reasons Banking Comfortable keeping it in bank and even transacting online Generate own power to run Electricity the machines Power became a utility and is being delivered through a network However, these challenges will get resolved in the future. Let us look at couple of examples from the history. People used to keep their money and gold at their houses (sometimes hidden inside the walls too). Everyone, at least the wealthy, had a heavy safe in their house to store cash and jewellery in spite of the availability of banks. But over a period of time the trust on the banks increased and people are now very comfortable with the concept. The same was the case with electricity - factory owned generators dominated electricity production a few centuries ago. Now the large, centralized utilities create majority of the power. The customers pay for power per unit and use it when they require. In India we still run our generators a few hours a day due to power cuts. Our electricity usage is still not pure play cloud but in a “software plus services” model. The key is that the cloud related challenges will eventually get resolved through better technology, transparency, cost, regulations and changes in mind set of the customer Zinnov Management Consulting| 6
  7. 7. We are already starting to see success stories in the consumer world Facebook Active Users Since 500 Inception (millions) Started in 2004, Facebook today has more than… 400 400+ 400 Million active users in 300 2010 200 3 Billion photos uploaded every month 100 ~1 19+ 5 Billion pieces of content 0 shared every day 2004 2006 2010 We have already seen the success of cloud computing in the consumer world. It has helped revolutionize how people communicate and collaborate with each other. Companies such as Facebook have grown over the last 5 years to reach over 400 million active users. Over 5 billion pieces of content are shared over Facebook every day. The next generation is using Facebook as the only way to communicate using computer and email for them is like snail mail to us. Moreover, Facebook not only allowed their users better way to socialize but also created opportunities for ISVs to build applications on Facebook platform and monetize the applications. The company is today valued at more than USD 15 billion dollars. The growth, revenue and the market valuation was only possible by using all the three corner stone’s of cloud computing – technology innovation, delivery model innovation and business model innovation. There is no reason why a company like Facebook cannot from an India or an Africa. Cloud computing has brought this leveller across global markets. Evidences suggest that the consumers are fast to adapt to any new idea or technology as compared to enterprises. While cloud has slowly started to penetrate the mindsets of consumers, enterprises are also fast catching up. Zinnov Management Consulting| 7
  8. 8. Cloud is now starting to expand its horizons CIO Cloud Computing Survey Cloud Benefits (n=240 CIOs) Reduced IT Reduced Total Cost 27% Staffing/ of Ownership Administration Cost Better IT and Line Increased Flexibility 73% of Business & On Demand Alignment Scalability Frequent Software Better Productivity Favoring Cloud Adoption Updates Not on Technology Road Map Despite challenges and concerns, CIOs are also getting excited about the opportunities and benefits of cloud computing and related business models. In a recent survey done across 240 CIOs, more than 70% have said to favour cloud computing and will adopt it in the near future. The reasons for this paradigm shift are obvious. Cloud computing brings in a host of benefits to the CIOs. It reduces the capital investment required for IT deployment and provides scalability and flexibility to the CIOs. It also reduces the IT staff requirements to support and manage the infrastructure. It also makes it easier for CIOs to view outsourcing a lot more strategically rather than piece meal outsourcing of application development, maintenance etc. The business units also have better access to new features and industry best practices as and when they are available rather than waiting for the release of new versions of the product. Zinnov Management Consulting| 8
  9. 9. Every large tech company is now claiming to be a cloud company IBM EMC Cisco “We are SAP Cloud RedHat Focused” Oracle Microsoft CA During any major market transition and transformational change, the market opens up for a certain period and results in activities that can be compared to gold rush. The high interest among CIOs and enterprises has pushed the IT companies to go full fledged and adopt to cloud computing. Every large IT company across any part of the value chain, be it networking companies, storage providers, Operating systems vendors, middle ware providers or business application vendors – everyone has a point of view on cloud computing. They want everyone to believe that their strategy statements have cloud in it. Many of them have aggressively invested behind their cloud strategy and have done massive acquisitions. This has also resulted in long term partners starting to compete with each other and vice versa. A few of the recent announcements by large companies are a strong proof of the same: Cisco’s entry into the server market to compete with HP directly • In response, HP has acquired 3COM and compete with Cisco • Microsoft’s multi-billion dollar investments in R&D related to cloud • CISCO/EMC/VMware partnership for cloud infrastructure It is evident that for most of these companies there is no looking back. They are betting their entire companies on cloud.These changes will also impact the ISVs. If a few large IT companies start running the IT infrastructure for Fortune 500, then whom should the ISVs sell their products to. Will they be forced to sell mainly to the large IT companies? It remains to be seen. Zinnov Management Consulting| 9
  10. 10. However, there are no clear leaders yet Mainframe PC Internet Cloud Revolution Revolution Revolution Revolution IBM Microsoft Microsoft Microsoft IBM Yahoo Salesforce.com Dell Cisco --- Oracle Amazon --- SAP Google 1985 1995 2005 2009 $140.0 $6.0 $39.7 $58.4 Mn Bn Bn Bn It is interesting to note that during every major transformation, a few new companies were formed. Only the companies who realized the benefits early and made major bets are the ones who have survived and grown. Companies such as Microsoft, IBM have made major changes to their R&D investments and business models to come out in top of each of these transformations. Many of the companies who were not willing to change and did not see it coming have disappeared through bankruptcy or acquisitions. Companies such as Dec who were makers of UNIX workstations disappeared with the on slot of PCs. The same can be expected to happen in the world of cloud transformations. Each time there have also been new companies that are created due to the transformations. Companies such as Dell came up during the PC revolution. Companies such as Amazon, Google, and Yahoo came up during the internet revolution. We have already seen billion dollar companies such as VMware, Salesforce.com being created due to cloud based technology and business models. This is just the starting and we can expect to see many more companies come up in the next few years Zinnov Management Consulting| 10
  11. 11. Cloud revolution can potential bring in new companies from India Infosys Revenues ($ billion) 5.0 4.8 1. Y2K and the Internet 4.2 revolution gave birth to 4.0 global delivery models 3.0 2. Rise of multi billion dollar Indian IT service providers 2.0 such as Infosys, TCS, Wipro 1.0 3. MNCs such as Accenture. 1 IBM, etc. looked at service 0.4 0.5 0.2 delivery from India 0.0 2000 2001 2002 2004 2008 2009 India was a silent spectator during the Mainframe and PC revolutions. We had a few local companies got created during those periods but none had major impact. However, it was not the case during the internet revolution. Riding on the back of the global internet infrastructure built during the dot com era, Indian companies who were focusing on sending consultants to work at the customer site in US on work visas realized that they can do a large part of the work from their offices in India. They invented the global delivery model and the rest is history. Infosys became a 5 billion dollar company in the span of 10 years. This not only created a new business model but also forced existing IT consulting companies to follow suit. The same could happen with cloud. Cloud computing and the related business models will become a leveller for Indian ISVs. There are no current market leaders in cloud, the sales and marketing models for cloud are still evolving. More companies are starting to use social media, online advertisement and telesales more to reach to their customers. Most of these could be done out of India. We are already starting to see signals of Indian start ups competing globally. Zinnov Management Consulting| 11
  12. 12. A few Indian companies have already been able to compete Inception Fundamental: A comprehensive offering to compete against established players in a market opportunity of tens of billions of dollars in future Indian SaaS company 400,000 Desktops Win No venture funding Against Google 10 member team in Silicon Valley 600 developers/ technicians 2 Million Paid & Unpaid in India Subscribers Today Hires people from local colleges & schools An interesting example is Zoho. Zoho is an Indian company started with no funding and a small team in US. The entire engineering organization is based out of Chennai. The company doesn’t hire from large technology companies, large companies don’t hire from them as well. Zoho trains and teaches students from economically poor background, taps them at school leaving stage and trains them in their own in-house university. Zoho not only offers products that match the large companies feature to feature but 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 more than 2 million users and most of its customers are SMBs with employees between 40 to 200 employees. Recently GE evaluated various cloud application providers and selected Zoho over 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 contract from 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 role in building Indian services companies. This might happen again with cloud based ISVs. Zinnov Management Consulting| 12
  13. 13. Many others are also evolving in this space Wolf PaaS OrangeScape Cloud Inception fundamental: Inception fundamental: Need of reducing time and cost There will be a flurry of micro-ISVs for developing tailor made who would want to kick off their customized applications business in short duration No venture funding with 8 50 member team in Chennai & the member developer team only Indian company to make it to the top ten PaaS providers globally Clients include Wipro, Kreeo, Clients include Ford, Pfizer, eCounting, GMR, Delhi Freight AstraZeneca, Citigroup, Sify, Carriers, PeopleLogic, EMR Unilever WOLF is a browser based On Demand Platform-as-a-Service (PaaS) for rapidly designing and delivering database driven multi-tenant Software-as-a-Service (SaaS) applications. They help both the IT consulting companies and internal IT teams of large enterprises use the power of cloud. They are self funded with only 8 developers. They already have 3000+ developers who use the platform and Wolf has many solution providers as partners, spanning 7 countries OrangeScape is another interesting company. It provides cloud middleware for developing portable SaaS applications across verticals. They have 50 employees working out of Chennai. Their 5-year goal is to have 100 to 300k active accounts. It is the first Indian company to be listed in as top 10 PaaS players globally. It has already signed up large companies as customers that include Unilever, AstraZeneca, Citibank, and many others. These are just a few Indian examples, there are a lot of companies working on truly innovative products for the global markets and have the potential to emerge as market leaders in the years to come. Zinnov Management Consulting| 13
  14. 14. Indian cos. can potentially derive new use cases for cloud computing SaaS Traditional enablement Opportunities Managed Services Cloud Opening up New Avenues of Growth Platform Non-Linear BPO Opportunities Cloud Based IPs Cloud has not just opened up opportunities for Indian ISVs but also opened up interesting opportunities for large services companies both for traditional services and services that will drive non-linear growth. In terms of traditional opportunities, it has helped Indian services companies to get into areas such as SaaS enablement. Here they work with both the global ISVs who are moving into SaaS as well as with enterprises who want to SaaS enable their traditional applications. Cloud models have also helped strengthen the managed services competency of the Indian companies. Indian companies were traditionally good in remote infrastructure management and were not keen on buying out the datacenters of their customers. Large IT companies in India all have over 100,000 engineers. It is scary to even think that they need to add another 100,000 engineers each to double their revenues. This has resulted in these companies looking for non-linear revenue models. Cloud based services provide perfect opportunity for these companies. Many of the Indian companies run the back office functions for their global customers. They will use the cloud model to get into platform based services such as the payroll services for example. In this model, each of the process they support their customer with have the capability to scale without adding too many people. Many companies are already investing in platform BPO services. They are also 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. The next few years will be a great journey for all the companies and industry observers. Zinnov Management Consulting| 14
  15. 15. Indian domestic market also provides ample opportunities Fastest IT Spending Growth – 13.5% (2010), China 11.5% Fastest growing mobile markets – 20 Mn additions per month 500 million people in middle class range earning in the range of $10,000 to $57,000 per year SMBs account for 45% of manufacturing output and 47% of the total workforce India market is equally exciting if not more. The growth in IT spending is one of the fastest in the world. It is expected to be higher than China in 2010. India is the world’s fastest growing mobile market with over 20 million subscribers added every month. Mobile is going to be a key access device for cloud based products and services. The money companies invested for 3G services showcased the belief the large telecom providers have on data services in the India market. Over 500 million people are the middle class in India. The products and services consumed by them are relevant to other emerging markets as well. Most of the manufacturing output (about 45%) comes from SMBs in India. This suggests that Indian customers are ideal for cloud offerings. Indian SMBs in specific lack budgets, want business improvement, lack management bandwidth required to manage internal IT and all are looking for rapid growth in the next few years. Zinnov Management Consulting| 15
  16. 16. India has a legacy of jumping the technology curve Wireline & Wireless Penetration 600 DTH Subscribers in India (in Million) 557 45 450 410 Mn 341 300 520 17 30% 158 281 Mn 150 9 Mn 16% 183 55 13 129 Share of DTH in total pay 42 37 5 0 Mn 10% TV market volumes in India 2003 2003 2009 2009 5% (US) (India) (US) (India) Wireline Wireless 2007 2008 2009 2014 India has a legacy of jumping the technology curves, precedent exists in the telecom sector and now DTH is also witnessing transformation. We anticipate that cloud would show similar behaviour. Let us take the Telecom sector as an example, in early 2000s, the wireline subscriber base was a significant chunk in the total subscriber base, whereas the US, the trend was the movement to wireless mode of communication. However the actual growth in the telecom industry in India happened in 2005 onwards and subscribers did not go through the typical adoption of wireline first and 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’t have major investments in datacenters and server farms will directly move into the cloud model. There are ample opportunities in every industry. Be it retail, manufacturing, banking, education or government. The key themes for most of the opportunities are cloud, mobile, market place, price discovery, collaboration and analytics. The other key is to look at the ecosystem as a whole and partner with various providers to address the opportunities rather than try to address it independently. Zinnov Management Consulting| 16
  17. 17. Retail industry can fundamentally transform with cloud technologies 1 2 TSP Customer Provides Order goods Hosted using CRM mobile Revenue Enhanced customer Mobile sharing experience and based between better inventory payments participants management 4 3 Let us take Retail for example. India has over 15 million retail shops. Many of them are mom and pop shops in some rural or sub-urban areas. Many don’t have any computer or don’t feel that there is a need for a computer at their shops. Many of them are struggling with the advent of large retail shops and low margins. They also face challenges with payments from customers as it is a normal practice in India to give credit to their customers. The large FMCG companies who supply to them don’t give more than 15 to 30 days credit. IT can play a significant role in solving the retail problem. Imagine a cloud solution like this: Microsoft provides hosted CRM solution in partnership with Airtel and the solution is made available to users on mobile. The regular consumers to a small retail shop can make their purchase through the mobile phone. The payment can be routed through mChek who already have partnership with Airtel and their software ships with all Airtel SIM cards. The customer buying pattern and profile is captured by Microsoft/Airtel on the cloud. They can use the information to provide complex analytics and consumer insights to the customer. They can also link the information to the large FMCG players who currently use expensive on-field market research to collect consumer data. The large FMCG companies will have a better idea on what to push through the retailers and the retailers will have a better idea on their customer needs. It also solves the collection problem faced by the retailer. Zinnov Management Consulting| 17
  18. 18. The business model could be to get the money from the large FMCG players, or charge the retailer as low as Rs.1/customer and compliment it with ad revenue. This is technically possible today except for a few banking regulations that needs to be ironed out. The solution like this will require the ecosystem to work together – Cloud provider, Telecom services provider, Device manufacturer and the payment gateway. There could a number of similar innovative ideas possible to make the retail chains more effective and cloud has the potential to deliver these. Zinnov Management Consulting| 18
  19. 19. Healthcare industry in India demands end to end innovations Current allocated expenditure for healthcare is ~5.2% of the GDP Healthcare expenditure to 50% population with no increase 5 folds to match access to primary healthcare global standards Huge Base Industry needs fundamental innovations to Huge Cost suffice needs – cloud can potentially help Patient Hospital Telemedicine Records Productivity Let 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. If India has to provide health care to the global standards, it would have to spend 5 times more than the current spend. Even US spends only 16% of the GDP on healthcare. So the current model of providing healthcare is just not going to scale to suffice the need to provide universal healthcare in India. The industry needs to look at fundamental ground up innovations to reduce the cost of healthcare. The innovation needs to happen in a number of areas starting from medical education, medical devices etc. IT can play a key role in some parts of the value chain such as hospital productivity, telemedicine and patient records. Already companies such as Wipro have created India specific healthcare IT solutions. Zinnov Management Consulting| 19
  20. 20. Banking industry presents a huge potential for cloud Current banking penetration in India is 35% Financial inclusion to enable 75+ banks with 80,000 increased access to the branches and 400 Mn currently excluded accounts population Huge Base SME banks can leverage cloud technologies Huge Cost to deliver better banking services Internet Mobile Micro Banking Banking Finance The current banking penetration in India is only 35%. The large public and private banks are growing rapidly. Large banks such as ICICI bank already have best-in-class IT deployments. In many cases they have built their own applications to solve India specific problems. Government is increasing their focus on financial inclusion. Corporate banks and the local chit funds also make up a key part of the banking ecosystem in India. Even for the large banks, the cost of reaching the Bottom of the Pyramid is prohibitively high and are partnering with Microfinance institutions to reach them. The smaller banks are still to Internet enable their services; Mobile banking is still a tip in the iceberg. Microfinance is an interesting model as it is based on self-help groups where people for each of the group should be in physical proximity. Can social/medial and collaboration models made possible by cloud solutions create new disruptions in the microfinance models and thereby improve financial inclusion in India. It will be an interesting opportunity for a start up company to explore! Zinnov Management Consulting| 20
  21. 21. Education system in India could also be transformed using cloud Current allocated expenditure for healthcare is ~4% of the GDP $400/ student in India as Right to education act to compared to $10,000 in US ensure education to all Low Spend Cloud can potentially help revolutionize the Huge Cost education system in India Online Teacher Pupil School Education Enablement Management Education industry can also be transformed using cloud solutions. India currently spends $400/student compared to the $10,000/student in the US. We spend around 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 on education. Similar to healthcare, the current model will become cost prohibitive. There are tremendous opportunities for IT in education in India in terms of online education, teacher training/enablement and school management. A few companies are starting to work on some of these areas and have already started to see success. SchoolMATE [School Management AT Ease] is a CRM (Customer Relationship Management) + ERP (Enterprise Resource Planning) software for Educational Institutions. SchoolMATE helps schools in continuously updating parents about their child’s status and his performance at school over their mobile phones through text messages (SMS) and also through e-mail and Web using a secure mechanism. 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 is someone in the school who needs to enter the information into the computer and it was difficult for the school to train the teachers to be able to do this. So along with the software, schoolmate provides the data entry provider. This way the teachers don’t have to change their current way of working. The business model is to charge the parents and not the school. The parents are willing 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 program. Zinnov Management Consulting| 21
  22. 22. SMB sector would require low cost solutions to address unique needs Inception Fundamental: To create a “NANO” in IT ITaaS Stack Driven By Ratan Tata Value Proposition Business Intelligence Custom Applications Customer Behavior- Complexity of IT Reach Business Applications Email, Office Apps Business Model Networking Equip. Impact Hardware 45% of the manufacturing output in India is from SMBs. The existing ERP solutions designed for large companies don’t work for SMBs. They are difficult to use, are not customized 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 SMB opportunity. It is believed that Ratan Tata wanted to create an IT Nano for the SMBs in India. The TCS team went into action and met with many SMBs across India to understand the pain points and requirements. They found out that many of the SMBs had bought some solution but are not using them as they were not solving their pain area. Many found that they don’t need all the complex features and the products were unnecessarily complicating their processes. TCS invested in a large team to build a solution specifically focused on SMBs and provide the entire stack as a cloud service. The SMBs have to pay only for the solutions that they enable and based on the size and growth of the SMB, they can add additional layers to the product. This was launched last year. Zinnov Management Consulting| 22
  23. 23. Government will increasingly invest in cloud for better citizen services • Largest citizen • Timely response • 55,000 rail database in the to citizen tickets booked world (10 times requests for per day, about the 2nd largest) government 20 Mn per year information UID RTI IRCTC Massive infrastructure required to deliver these citizen services And finally, the opportunities with the government are as huge as one’s imagination. UID is one of the most ambitious IT projects in the world. It will be the largest citizen database in the world. It is at least 10 times compared to the second largest database. UID project is to provide an Rs 15,000-20,000 crore opportunity to computing, database, smartcard and storage vendors, besides systems integrators. It also opens up possibilities for hundreds and thousands of applications. It will revolutionize Indian IT market, attracting not only domestic IT player but Global players as well. This will also create many new ventures as well, by providing indirect business. The only limit to the application possibilities would be the creativity and imagination of the companies. The opportunities are clearly very large in the Indian market. We expect not just product innovations but a number of business model innovations that will be triggered by the cloud opportunity in India. Even though India doesn’t have many large product companies or product innovation across various industries, we have contributed heavily to the business model innovations and currently exporting a number of them to other locations. Zinnov Management Consulting| 23
  24. 24. India has also been at the forefront of business models innovations Inception Fundamental: Tower IT Software/ Infrastructure Hardware/ To make airtime as (Bharti Infratel Services a perishable & Indus) (IBM) commodity and increase network Network & capacity utilization Customer Base Station Support Airtel (Ericsson and (IBM Daksh) NSN) Minutes Factory Airtel indulges in sales & marketing and observes customer behavior and collects usage statistics. Airtel is now planning to export the same model to Africa Let us take the example of Airtel. In the early days of their business it figured out that it needs varied types of competency and all of them at the best-in-class ability to scale their business. Or else it will not be able to rapidly scale to meet the needs of the Indian customers. It then took the concept of outsourcing to the extreme and outsourced all aspects of their business except for customer insights and sales/marketing. It essentially redefined what is core to a telecom service provider. This allowed them to leverage the specialist firms for different parts of their business. They also realized that their partners should also have stakes in the business for them to be able to continuously innovate and keep up with Airtel and its customer’s requirements. So they structured many of the contracts with revenue sharing model. This brought in efficiency across the value chain. The companies in the value chain such as Nokia Siemens, IBM realized that this is a viable model for customers in other locations and have exported the model to other developed countries. Airtel is also taking this model to compete in the highly competitive African market. Zinnov Management Consulting| 24
  25. 25. India has also been at the forefront of business models innovations Inception Fundamental: To provide low cost solutions to the hugely untapped but price sensitive Indian market Manufacturers in China, Cricket and Film Industry for Taiwan and South Korea Marketing Leveraging the neighboring ecosystem Effective Sales & Marketing in India Planned R&D Focus on Small Towns and center in China Slow Ramp up to Cities Micromax sells more than 1 million mobile phones per month and already has 10% market share in the Indian handset market The same is the case of Micromax. The Indian mobile market a few years ago was completely dominated by the global players. In came companies such as Micromax, Spice over the last couple of years. They soon realized that many Indians like the idea of dual-sim as they can use one of them as a permanent number and use the other as per the pre-paid deals announced by various service providers and use it for making calls. The Indian companies also realized that they don’t have the capability to build these phones in India. They partnered with the firms in Taiwan, China and are able to bring new models to the Indian market faster than the global companies who have their own manufacturing firms in India Zinnov Management Consulting| 25
  26. 26. India has also been at the forefront of business models innovations Inception Fundamental: Percent of Patients Hospital must provide services to the rich and poor alike, yet be financially self-supporting • Separate facilities for paying and non- Fee for paying customers, however, the same Service doctors rotate to deal with both set of 35% patients Free/ Subsidized • Leverages community partners and eye Service camps to access the poor 65% • Volumes achieved helped become a Aravind treats 2 million eye training center for professionals patients per year, 65% free The last example is that of Aravind hospital. A small hospital in Madurai decided to take the Freemium model known in the IT industry to the healthcare industry. They charged only the patients who can afford to pay for the eye surgery and they did eye surgery free of cost for the rest of the people. To be able to do this, they had to optimize the entire healthcare value chain and increase the productivity of the doctors. The founder of Aravind hospital said that he got the inspiration after looking at McDonalds speed and efficiency of service and yet low cost. He applied that model to healthcare in performing complex surgeries. We believe a number of new business models will come out of the cloud revolution in India and will get exported to other emerging countries and developed countries and generate a wave of what GE calls as reverse innovation from India. Zinnov Management Consulting| 26
  27. 27. India is well placed to witness rapid growth in the cloud space Large Developing Business Model Opportunities Ecosystem Innovation India Value Proposition There is no doubt that cloud is opening up new windows of opportunities for the Indian companies, both from a global as well as domestic opportunity stand point. Having realized the immense opportunities, it will be imperative for the companies to come together and enable collaborative innovation to address both India and global market needs. The ecosystem comprising of ISVs, platform providers, system integrators and end users is also starting to evolve. With increased focus and evangelism about cloud related opportunities the ecosystem would look at incubating the next generation entrepreneurs who can create the next generation Facebook, salesforce.com and VMware from India. Key focus should now be on developing the ecosystem. It should include developing the talent for cloud development, connecting start up ISVs with large System integrators, enabling the start ups on the cloud market places and finally influencing government policies to make them cloud friendly. The collaborative ecosystem clubbed with the Indian capabilities of exporting business models will provide the right mix to leverage the immense opportunities created by cloud in the near future and it will be exciting to be part of that rapid growth journey for all of us. Zinnov Management Consulting| 27
  28. 28. Thank You For more information please contact Zinnov at info@zinnov.com 69 "Prathiba Complex", 4th 'A' Cross, Koramangala Ind. Layout, 5th Block, Koramangala, Bangalore – 560095 Phone: +91-80-41127925/6 Vatika Business Centre, 2nd Floor, Block B, 1st India Place, M.G Road, Gurgaon – 122002 Phone: +91-124- 4028888 575 N. Pastoria Ave Suite J Sunnyvale CA – 94085 Phone: +1-408-716-8432 21, Waterway Ave, Suite 300 The Woodlands TX – 77380 Phone: +1-281-362-2773 Zinnov Management Consulting| 28

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