SMEs make up 22% of the IT market, and is one of the fastest growing segments in India. We held a Q&A session with Rao to get his opinion on the trends in PC and Cloud adoption by SMEs. Here are the excerpts:
Why should small businesses invest aggressively into IT infrastructure?
I have 4 key reasons for them:
1. When a business becomes bigger and better to be able to coordinate, drive and manage it, having an IT infrastructure becomes essential. As you scale up, you need efficiency in your business, and for that IT is critical.
2. Huge amounts of data are generated by businesses, and they need to learn from this data to grow. Handling such large amounts of data is extremely difficult for small enterprises. IT helps organize such data and extract useful patterns from it.
3. Businesses that have to link up globally or nationally need IT to communicate in real time. Any company interacting outside of its own local territory cannot conduct business nowadays without IT solutions.
4. Use of social media, online platforms allow businesses the cheapest way to advertise themselves.
Why are cloud services not picking up steam amongs SMEs?
If you look at the worldwide trend in cloud adoption, SMEs in developed countries were the first to move to the cloud, before big enterprises moved. However, there are some challenges, especially concerns about security and data getting lost. But these concerns are lesser for an SME than for a big organization. Having said that, SMEs in India haven't yet adopted other solutions apart from e-commerce. Thus, cloud adoption in India by SMEs is still at a nascent stage. One of the biggest challenges in cloud adoption is that the end-to-end model has not even been figured out by the cloud providers and the SMEs yet. In the past, the typical definition of a channel partner was one who would take your IT product and sell it to an end customer. So the end customer was owned by the channel partner. Now with the cloud, once an application has been sold to an end customer, he is owned by the original application provider. What is the royalty mechanism now for the channel partner? How confident is the channel partner about promoting the cloud service? All these issues have to fall into place to create a cloud ecosystem that works.
What fears do SMEs have in adopting cloud services?
They don't fear their data being in a remote location, but they do fear for the security of data and its ownership. Also, in the absence of native control over their data, if something goes wrong with a customer, their capability to control the situation vanishes. Most SMEs also fear that their customer base is going to somebody else if they put their database on the cloud. They ask questions like “What's the guarantee my cloud provider is not going to share information with competitors?” As the pervasiveness of cloud services increases, SMEs will overcome these fears and adopt more cloud solutions.