Why Indian businesses are going to lap up Cloud Software?

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!

Thoughts on the Amazon Cloud downtime — one step back, two steps forward.

Today, what happened with Amazon Cloud was I would say a big hiccup. “Amazon Cloud Failure” doesn’t happen often and incidents like these should not mean the “death of the cloud” or “the Cloud is not ready for the enterprise”. These events are learning to a successful Cloud future. We won’t learn if we don’t fail every now and then.

This reminds me of an interesting analogy — a bank robberry. This does not mean that “banking” has not evolved and you would stop putting your money in the bank. The robbed bank will learn from the problem, hopefully innovate, fix loopholes and spring back up to a better performing institution.

Similarly, Cloud providers will educate themselves from hiccups. From what Amazon has given the world, a few hours of downtime is not that much of a show stopper.

Chill out.

Cloud Opportunities in Emerging Markets [Speaker]

As part of the R&D Globalization Council (3.0) initiative, Zinnov hosted a networking Meet in Bangalore last week@ The Chancery Pavilion.

I was happy to be a part of a panel discussion on Cloud Opportunities in Emerging Markets” with Karthik Anand (Director, Zinnov), Rahul Kulkarni (Product Manager, Google) and Anand Ramakrishnan (General Manager & Head — Cloud Computing Services, Wipro Infotech).

The audience was mostly comprised technical folks from large enterprises (McAfee, Cisco, IBM, Manhattan Associates, Intel etc.) who wanted to see if there was an opportunity in the Cloud (from India) and if so, then how big.

The points we discussed (and that I remember) were…

There is a huge opportunity in the Cloud today. Businesses can operate efficiently by not owning the software but by renting it out. Capital expenses can be converted into operational expenses. Emerging markets are rapidly growing and need to do more with less resources.

Speed for Cloud services is a huge factor. Google tests it’s app’s latency and the overall experience it delivers to the end users.

Marketing to the Indian customer is much different. Deriving value from a non-tanglible source (software) is a tough sell.

Companies need to deliver the product to their customers faster. Act like a startup and get your product out there before your competitor does.

Democratization of IT. Anyone in your company can try and recommend a Cloud service. Earlier, the key decision makers were the tech guys. Today, Cloud service providers need to learn to sell to the business team.

Bandwidth and Internet penetration has improved in India. Things are just going to get better.

Data security is a battle every Cloud/SaaS vendor is going to go through. Your data is much more secure with the SaaS/Cloud vendor than your office.

India is a huge market for mobile-driven Cloud services.

In order to compete agility will count more than how big you are.

Key partnerships with SI’s, ISV’s will be crucial in succeeding in these markets — especially to cover the last mile.

Gmail’s Fiasco — It is not Cloud Computing to blame

Google’s latest fiasco of disabling/ resetting 150,000 Gmail accounts over the last week has once again started a barrage of trash-talking articles on cloud computing and how putting your data out there is not a good way to run a business. I completely disagree. In the tech world, like it or not, SHIT HAPPENS! It used to happen before when you would get the Blue Screen of Death (courtesy Microsoft Windows Family) but all you could do is to cry alone in your misery. You then would have to go running around like a headless-chicken to find someone who could fix your computer and salvage any data that could be retrieved. With the Cloud, at least that is shifted to the vendor who is more of an expert than you are at restoring your computer/ server.

The problems in technology are similar. You just hear about it more today because of social media and a lot of chatter online.

More importantly, it is important to see how fast the service provider (in this case Google) addressed and fixed the problem. Here is the official announcement from Google — Gmail back soon for everyone — it is timely and shows how they are working on to restore the affected accounts. Here is the latest update on the Apps Status Dashboard which keeps you up to date with the restore process.

So, the next time you sign up for a Cloud service, remember, SHIT WILL HAPPEN.

On a side, I am assuming Cloud Backup services are going to have high conversion rates this week as they play on the fear mentality of consumers.