Cloud Opportunities in India – a CIOs Perspective


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Cloud Opportunities in India – a CIOs Perspective

  1. 1. Cloud Opportunities in India – A CIOs Perspective Media Briefing 25th November, 2010This report is solely for the use of Zinnov client and Zinnov personnel. No part of it may be circulated,quoted, or reproduced for distribution outside the client organization without prior written approvalfrom Zinnov
  2. 2. Survey Demographics: Distribution by Vertical, Revenues, Staff using IT & Size of 2 Internal IT team Distribution by Vertical Distribution by Revenue IT/ ITeS 21% BFSI 14% Telecommunications 11% Not Disclosed Pharmaceuticals & Chemicals 7% More than 10000 Crore (13%) <50 Crore Media & Entertainment 5% (5%) (15%) Textile 5% 2500-10000 Crore 50-200 Crore Healthcare 4% (10%) (21%) Automobiles & Auto Components 4% 500-2500 Crore Electrical Machinery 4% (20%) 200-500 Crore Cement 3% (16%) Utilities 2% Steel 2% Food Industry 2% Tourism & Hospitality 2% Others 14% Distribution by Staff using IT Internal IT Team Size More than Not Disclosed 250-500 500 More than 10000 (8%) 100-250 (3%) (3%) (6%) 50-100 (6%) 2500-10000 Less than100 (7%) Less than 10 (8%) (26%) (34%) 30-50 750-2500 100-250 (15%) (18%) (12%) 250-750 10-30 (22%) (32%) Sample Size: 100Note: ZinnovSource: Zinnov’s Survey of 100 CIO 2010 Confidential
  3. 3. Domestic IT spend in India has been growing at a significant pace and is dominated 3 by BFSI, Telecom, Government, Manufacturing & Energy verticals Domestic IT-BPO Spend (Bn) 2009-2010 Vertical-wise Spend Of Software In 2010 IT-BPO Others 1.9% 2.9 5.7% Government 2.4 2.7 2% 9.4 2.0 Manufacturing Auto 8.4 44.5% 2.1% Telecom 4.2% 9.2 9.5 BFSI 12% Energy Hardware IT services BPO Software 26.7% FY2009 FY2010 Vertical-wise Spend Of Hardware In 2010 Vertical-wise Spend Of IT Services In 2010 Manufacturin Others Healthcare/ Manufacturing g 12.9% Pharma 39.1% Healthcare/ 24.7% Others 1.4% Pharma 5.7% IT-BPO 1% Auto BFSI 1.6% Telecom 1.4% 8.8% Government 6.4% 26.2% Auto Energy Telecom 18.4% BFSI 2.1% 9.7% 12.8% Energy Government 12.3% 15.4%Note: Public Sector Enterprises are spread across verticals other than Government ZinnovSource: NASSCOM Strategic Review 2010 Confidential
  4. 4. …and it is expected to grow going forward for majority of firms 4 Change in IT Budget From 2010 To 2011 Decrease less than 10% (4%) Will remain • Indian enterprises are starting to show nearly the 0-10% increase signs of steep recovery with respect to same (49%) their IT spending (34%) • Around 60% of the CIOs believe that their IT budget will be growing next year • While companies continue to invest on IT, OPEX models are increasingly being favored Cant Say (5%) More than 40% 20-40% 10-20% increase increase increase (2%) (2%) (4%) Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  5. 5. The findings highlighted that Cost of solution and brand of the technology provider 5 are key parameters for evaluation during the decision making process 56% Key Parameters for IT Decision Making • While Indian enterprises are cost conscious with respect to their IT purchase decisions, they would 42% prefer to go along with the “Best in Breed” solutions – Price value focus of large enterprises in India 29% 26% 21% 12% Cost Brand of IT Vendor/ Time to Flexibility & Scalability Existing relationship Support Infrastructure Best of Breed implementation with the IT vendor Solutions Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  6. 6. Better agility , flexibility and cost visibility offered by cloud solutions are synchronous 6 with the top priorities of a CIO 75% Current IT Goals of Enterprises Agility/ Flexibility …Can Cloud Reach and customer be the OPEX models enablement Answer? 51% Efficiency enhancement 38% 34% 33% Best of breed 14% 13% Aligning IT with Cost Control/ Developing New Improving IT Cultivating IT/ Redesigning Implementing New Business Goals/ Expense go-to-market Operations and Business Business Processes Systems & Driving Business Management Strategies & System Partnerships/ Architecture Innovation Technologies Performance Negotiating with IT Vendors Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  7. 7. A significant number of CIOs are now willing to leverage Cloud services and have 7 already started evaluating it… Willingness to Use Cloud Services (2011) 39% 38% • While cloud as trend is gaining attraction, many CIOs are currently in a wait and watch situation 29% • Some of the CIOs have already started running pilots for some of the non-core applications • However for some of the core applications, CIOs are currently considering to adopt private cloud scenarios 10% 7% 4% Software as a Service Infrastructure as a Business Process Private Cloud Platform as a Service Cant Say (SaaS) Service (IaaS) (PaaS) Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  8. 8. …and the trend is only going to increase by 2015 8 Willingness to Use Cloud Services (2015) 58% • More and more CIOs would be investing in cloud technologies through 2015 • SaaS adoption would continue to grow at a rapid pace in India over the next 5 years; Business process as a service to grow rapidly as well in the SMB segment 37% • CIOs might take a cautious approach towards private cloud adoption; 3rd party datacenters may become a preferred option 21% 19% 9% 9% Software as a Service Infrastructure as a Business Process Private Cloud Platform as a Service Cant Say (SaaS) Service (IaaS) (PaaS) Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  9. 9. Data security continues to be one of the key concerns with respect to adoption of 9 Cloud technology among Indian CIOs Current Perception About Using Cloud Technology 60% • Data security and privacy still continue to be the key challenge towards cloud adoption in India • Complexity of integration of cloud based systems with legacy investments is also a major cause of concern 23% 20% 13% 10% 9% 8% 7% 6% 6% 4% Data Integration SLA, Loss of Lack of Lack of Lack of Legal/ Lack of None Can’t Say Security or with legacy Reliability & control on Maturity of standards trained regulatory Features & Privacy systems business IT cloud manpower constraints functionality continuity service providers Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  10. 10. Most of Indian CIOs would prefer to have the data centers located in India and run by 10 MNC service providers Preference of Cloud Provider Cant Say MNC with datacenter 7% outside India 7% Domestic company MNC with datacenter with datacenter in in India India 50% 8% My own datacenter 28% Sample Size: 100Note: ZinnovSource: Zinnov CIO Survey 2010 Confidential
  11. 11. The Cloud Computing market (including private cloud) in India holds a multi Billion 11 Dollar potential Domestic IT Market in India (Billion) Key Drivers for the Indian Cloud FY’10 to FY’15 Computing Market • CIOs will look towards cloud computing to reduce the ever increasing IT budgets • Verticals such as BFSI, education, healthcare, retail will increasingly rely upon cloud computing for better reach • Governments’ continued focus on e-governance will drive significant adoption of cloud pan India Total Cloud • ISVs and IT services/ BPO companies in India will look at Market is less cloud computing for non-linear and rapid growth than 0.5% of total Domestic IT Spending Total Cloud Spend will increase to around 5% of the FY 2010 FY 2015 total Domestic IT Spending with the following distributions:Note: ZinnovSource: NASSCOM Strategic Review, 2009-10 & 2010-11; Zinnov Analysis Confidential
  12. 12. Other government projects also hold huge potential for Cloud technologies 12 IRCTC • Around 300,000 bookings are done on IRCTC everyday • The traffic on the site fluctuates with the time of the day, highest being in the morning hours Financial Inclusion • The government has committed itself to provide banking services by using information and communication technology to 73000 rural habitation in the country having population of over 2000 by March 2012 • Much stress is being given to the use of over 500 million mobile phone connections present in India to extend financial inclusion across rural and remote regions Right To Information • Increasing awareness regarding Right to Information in the public is compelling the government to digitize its databases and make more and more information available to the public domain The government will require huge processing power capabilities for projects of such large magnitude and fluctuating demands. This in turn will favor the adoption of cloud for cost effectiveness and faster implementation Zinnov Confidential
  13. 13. 13Cloud Computing is here to stay!!!! Zinnov Confidential