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Public Cloud Market Landscape : India

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India presents a lucrative market for Global Technology MNCs and spend would touch USD 10 Bn by 2020

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Public Cloud Market Landscape : India

  1. 1. 1 This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov Sep, 2016 Public Cloud Market Landscape: India
  2. 2. Zinnov used multiple level of analysis backed by various sources of information to estimate market size 2 Current India IT and Cloud Market 2020 Projections of India IT and Cloud Market Zinnov used multiple sources of information and analysis to estimate India’s IT and cloud market Primary Interactions 1 • Interactions with industry experts across cloud applications, infrastructure services, and platform services Secondary Sources 2 • Annual Reports • CXO Interviews • Analyst reports • Press releases by SIs, Tech Vendors, Government Publications Existing Database 3 • Digital SMB Report • IT Deal Database • Zinnov Reports • Zinnov Domestic IT Market Zinnov Framework 4 • Zinnov framework which includes various macro and industry specific factors responsible for IT and cloud market growth
  3. 3. India represents a lucrative market for Global Technology MNCs 3Source: IMF, Ministry of Statistics-India, Press Releases, Zinnov Analysis The 21st century will be the Indian century and will have technology at its heart “We are looking at India as a partner across segments, not just for any one area” India is uniquely positioned. They’re tremendous in software development compared to other countries If you innovate in India for India, you are going to be able to innovate for the world and India then can become the entrepreneurial engine for the world -Satya Nadella, CEO Microsoft -Virginia Rometty, CEO IBM -Tim Cook, CEO Apple -Sundar Pichai, CEO Google Indian Macro Economic Factors Overview-2016 India has emerged as a favorite technology investment destination for Global Technology MNCs 371 Mn Internet Users 1Bn Telecom subscribers $ 2.2 Trillion 40% Tech Influenced SMBs GDP (Nominal)
  4. 4. Cloud spending in India would exceed $10 Bn by 2020 4 2015 2016 2020 34-35 35-36 (E) 66-67 (E) 16-17% (E) CAGR ~6% YoY Growth Drivers Data Centre Establishment Start-up accelerators & incubators Investments in developer ecosystem Market penetration through channel partners 10-10.5(E) 3-3.5 (E) 2-2.5 ~30-35(E)% CAGR ~42-46% YoY 3,900-4,000 (E) 1,100-1,200 (E) 740-760 ~34-38(E)% CAGR ~58-62% YoY Source: Zinnov Analysis Year (Public+Private)
  5. 5. At $2.6-2.8 Bn, SaaS will continue to be the biggest segment within public cloud followed by IaaS & PaaS cumulatively accounting for ~$1.2 Bn by 2020 5 SaaS IaaS PaaS 2015 2016 2020 Cost-effective cloud workloads enabling enterprises and SMBs to optimize cost Establishment of datacenters is enabling rapid adoption of IaaS Investment in Developer ecosystem driving demand for PaaS solutions ($ Mn) ($ Mn) ($ Mn) 740-780 490-510 2,600-2,800 ~55-60% ~36-40% 230-270 150-170 660-700 ~51-55% ~28-32% 140-160 90-110 500-540 ~58-62% ~34-38% CAGR YoY YoY CAGR Source: Zinnov Analysis Year CAGR YoY
  6. 6. Other than the mature enterprise ecosystem, vibrant SMB/Start-up and Government initiatives are driving demand for public cloud services 6 Public Cloud Ecosystem in India Government 1 Large Enterprises 2 SMBs 3 ISV/Startups 4 $7.8 Bn Estimated Government expenditure on IT in 2016 IT infrastructure refresh cycles leading to adoption of cloud services 53 Mn Small & Medium Businesses base in India ~4.5K+ tech enabled startups as of 2016 System Integrators 2 Acquiring companies with niche cloud capabilities Cloud Partners 3 ~1,600- 1,800 public cloud partners in India Born in cloud Start-ups 4 ~140-160 “Born in Cloud” partners in India Source: Zinnov Analysis Cloud Providers 1 Investment in establishment of datacentres to cater to local markets including regulated verticals
  7. 7. E-Governance initiatives & Digital India program of Government would result in an uptake of public cloud services 7 eKranti (e-Education | e- Healthcare | Tech for Planning/ Farmers / Security/ Justice/ Financial Inclusion) eGovernance (Business Process Re- engineering | Electronic DBs | Workflow Automation | Public Grievance Redressal) Public Internet Access Programme (Common Service Centres | PO) Information for All (Online doc hosting | Engagement via Social Media etc.) IT for Jobs (Skilled workforce) Electronics Manufacturing (Net zero imports by 2020) Early Harvest Programmes (Biometric Attendance | Wi-Fi in Universities | Secure email etc.) Broadband Highways (Rural | Urban | National Information Infra) HighLow Propensity to use cloud Platform to accelerate delivery of e-services in the country GI - Cloud Secure dedicated personal electronic space for storing docs Digital Storage Cloud solution combining machine intelligence and crowd sourcing model for document processing Digitization Platform Repository of productized apps, components & web services hosted on cloud Gov App Store A B C D Other E-governance Initiatives of Govt. of India Source: Zinnov Analysis Universal Access to Phones (Mobile Connectivity) Propensity to use Public Cloud Propensity to use Public Cloud
  8. 8. Mature enterprise ecosystem and huge base of SMBs are driving the demand for public cloud services Source: Zinnov Analysis 8 Companies in 7 Unicorn Start-ups 8 ~380 Companies > Bn Revenue $7.8 Bn Government’s IT Expenditure in 2016 Small & Medium Businesses 51-53 Mn 40% Tech enabled SMBs ~4.5 K+ Tech Start-ups India presents an abundant opportunity for public cloud services across different business streams
  9. 9. Verticals Adoption Rate Key Workloads HRMS, Backup/Disaster Recovery, Productivity, Collaboration ERP, HRM, CRM, Marketing tools, Analytics CRM, Analytics, Salesforce Management, HRMS Reporting, Collaboration, F&A, Web Portal Hosting CRM, Email, HRM, Billing Systems Backup/Disaster Recovery, SCM, Email, Marketing tools Public cloud adoption is gaining momentum across leading verticals 9 Faster time to market and focus on reducing operations cost is driving demand for public cloud services IT/ITeS Manufacturing BFSI Healthcare Telecom Retail Manufacturing companies will greatly leverage SaaS solutions to increase product awareness and augment customer outreach Opening of Datacenters in India in compliance with RBI regulations will drive the adoption of public cloud services EMR, EHR and Genomics expected to drive demand for data storage in cloud. Healthcare analytics is witnessing traction in the market Big Data analytics is being leveraged for customer segmentation Tech savviness of start-ups coupled with the adoption of Big Data analytics is driving the adoption of cloud services Key Trends HighLow Source: Zinnov Analysis
  10. 10. IT/ITeS and Manufacturing verticals contribute over 50% of total public cloud spend 10 35-45% 15-20% 5-10% 4-8% ~5% ~5% <5% 10-20% 100% Others Total IT/ITeS Manufacturing M&E E-Commerce Retail BFSI Telecom Split of Public Cloud Market by Key Verticals: 2016 (E) Note1: Large companies have been shortlisted on the basis of revenue in FY16 Source: Zinnov Analysis 0 10 20 30 40 50 100250 PublicCloudSpend($Mn) 50 75 Public Cloud Spend by 100 Large Indian Companies1 Investing in a cloud based productivity suite for entire group & subsidiaries HRMS and learning management system is deployed on public cloud Key account portal, telematics, etc. on public cloud 1 2 3 $ 500-600 Mn Number of Companies
  11. 11. Cloud providers are investing across 3 key avenues to cater to Indian market Infrastructure Talent Partnerships Global reseller partnership for SAP Hybrid Cloud solutions Provide infrastructure services for SAP HANA Enterprise Cloud (HEC) Tata Communications’ IZO Private platform will connect its customers to the CRM solutions of Salesforce Opened their public cloud datacenter in Chennai Opened 3 Datacenters in Mumbai, Chennai & Pune Datacenters in 5 locations in Mumbai Building 2 new datacenters & expanding capacity to 1.3Mn Sqft Opening a Tier-3 Datacenter in Gandhinagar Hiring 200 cloud professionals for Digital sales hub in India Planning to add 1,000 people across functions in India by 2020 Key Investment Themes Focus on establishing Datacenters to target IaaS market Focus on talent development for cloud & digital services Joint GTM for various cloud solutions 11 Setting up a CoE in Vishakhapatnam as a part of its “Digital Inclusion” drive Jointly launched “Connexion” – a private connection for enterprisesBuilding a datacenter in Chennai Training 25K people on AWS platform in partnership with NIELIT Source: Zinnov Analysis, Press Releases
  12. 12. Over 1,600 partners are fulfilling public cloud demand in the Indian market 1,600-1,800 Born in Cloud Partners (2016) Total Public Cloud Channel Partners in India (2016) 140-160 20-25 % North 25-30 % West 35-40 % South 5-10 % East Cloud Partners Split by Location Illustrative list of “Born in Cloud” partners 12 Partner Split by Category 45-50% 30-35% 15-20% <5% Cloud Partners Landscape ~20% Partners having HQ outside India ~15% Partners focusing only on cloud solutions 100% Resellers SI/ Consulting partners Technology partners Distributors Total Source: Zinnov Analysis, Press Releases
  13. 13. Cloud providers need to alter their sales approach to cater to the new-age enterprises The decision making on cloud investments is no longer being controlled by the IT department and is involving a lot many stakeholders from the Business, Marketing, Product & Technology groups, among others 13Source: Zinnov Analysis Traditional Enterprises CIO Cloud Migration New-Age Enterprises Technology Adoption CTO Evolution of Sales Motion for Public Cloud Services
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