My article appeared on Moneycontrol.com’s SME Mentor section on Oct 16, 2012
It might alarm the weatherman but ‘increasing Cloud cover’ is a term that’s bringing cheer to the SME space. And it’s important to understand why? Eventually, almost all software will be delivered via the Cloud. No, there’s no escaping it - this will be the standard.
I have spent 6 years in the Cloud space and most of our customers are from North America. However, in recent times, an increasing number of small business customers from India have been signing up to use our products. In fact, in the last couple of years, there has been an explosion in the Indian start-up ecosytem. With Amazon and Rackspace hosting Cloud services, anyone, anywhere can build anything, really inexpensively. So if you have a good idea, there’s no excuse to not implement it over the Cloud.
This technology provides a great opportunity for Indian businesses as well customers, who will not be buying software off the shelf any more. So no longer will your vendor arrive at your office with a briefcase of CDs to install or upgrade your software. You simply sign up for it on the Web.
The Cloud is a new model by which software is developed, hosted and delivered. It refers to software that is accessed via a Web browser on a subscription basis (monthly or annually). Different from the traditional model where a customer buys a license to software and assumes ownership for its maintenance and installation, Cloud presents significant advantages to the customer.
Inexpensive: Let’s face it, we are a cost-concsious society. We love the utility-driven model. We pay for a host of services on a monthly basis, such as electricity, newspapers and mobile services, with the option to cancel them any time. And why own when you can rent? Isn’t it easier to shell out Rs 500 for a world-class piece of software than to pay a few lakh rupees? The beauty of the Cloud is that there are no hardware, implementation or acquisition costs to run the applications. It is the responsibility of the Cloud vendor to manage and run the application with utmost security, performance and reliability.
Free: Wow, who doesn’t like that? There are plenty of Cloud software that have a free plan, where you can use them till you need more power or features. For instance, take Google Apps for business. You can set up your company email, and share docs and spreadsheets in minutes. If you need more users or space, you pay for it.
Pay As You Go: This is great for small companies and start-ups, which usually don’t want to shell out a lot of cash upfront. It’s sort of like EMI, where you break down the cost into smaller components. In addition, you have immediate access to new features and functionality. Unlike traditional software, where upgrades happen once a year or once in 6 months, the Cloud vendor continuously pushes new updates and customers can access them immediately. It’s sort of like logging into Gmail tomorrow and seeing new features that Google has released.
After-Sales Service: Since the software application is delivered over the Cloud, it is important for the Cloud vendor to focus on customer service and experience. Since this is a subscription model, the vendor is judged on a month-month basis and the pressure to innovate or risk losing business is greater. Hence, after-sales service with Cloud vendors is exceptional. I wish this extended to other types of businesses in India!
In India, there are millions of small businesses that still don’t use any software at all. SMEs are less tied down by historical investments in technology infrastructure, and organisational obstacles to adoption. Here’s a huge opportunity for Cloud vendors to create web-designed software products for the Indian SME market.
Build something awesome and let SMEs lap it up!