Why cloud services in India are growing rapidly

Infosys Cloud Radar estimates enterprises to be able to gain $414 billion in new net profits annually through effective cloud adoption

A global surge in the adoption of cloud services following the coronavirus pandemic spells good news for India, where revenue from some segments in the sector soared to $3.6 billion for 2020.

According to data provided by the International Data Corp. (IDC) Worldwide Semiannual Public Cloud Services Tracker, the Indian public cloud services (PCS) market – including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS) – revenue totaled $3.6 billion for 2020. The overall Indian public cloud services market is expected to reach $9.5 billion by 2025, growing at a compound annual growth rate (CAGR) of 21.5% for 2020-2025.

“Public clouds played a critical role for organizations in 2020, driven by business continuity, flexibility, and agility. The coming times will see enterprise objectives directed towards digital resiliency, and cloud will be the foundation to it all. Cloud will become crucial as organizations expedite the development process and deployment of business applications to meet the changing work and business environment,” said Rishu Sharma, Principal Analyst, Cloud and Artificial Intelligence, IDC India.

Revealing data from NASSCOM

Yet another study by NASSCOM pegs the current Indian cloud computing market at $2.2 billion – forecasting it to grow at 30 per cent (year-on-year) to reach $7.1 billion by 2022.

The scope for tremendous growth can be gauged from the fact that while the current global market for cloud and private cloud is estimated at $213 billion, this pales in comparison to the worldwide IT spending of $3.8 trillion.

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Which is the reason why the Infosys Cloud Radar 2021 unveiled earlier this week, revealed that enterprises in the regions surveyed can add up to $414 billion in net new profits, annually, through effective cloud adoption.

The Cloud Radar 2021 survey was conducted by the Infosys Knowledge Institute (IKI), a research arm of Infosys, with over 2,500 respondents from companies across US, UK, France, Germany, Australia, and New Zealand. It covered a range of business performance goals related to cloud and found specific links to competencies such as speed to market and capabilities. A strong profit link was identified when using cloud to rapidly bring new solutions and services to market. These investments provide a foundation to leverage AI & automation and build cloud based new sources of revenue.

Cloud and business profit growth

The study found specific links between business profit growth and the use of cloud to rapidly develop and launch new solutions and bring new functionality to market. Cloud's ability to generate new value from data and discover new revenue sources also links to profit growth.

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According to the survey, cloud-fueled profit boosts can be attained by companies in any region or industry. However, they only kick in when businesses have at least 60 percent of their systems in the cloud.

To benefit from AI on cloud, the bar is even higher. Businesses must have at least 80 percent of their business functions – such as cross domain business applications – in the cloud for AI to boost profit growth.

In the case of India, enterprises are keen to boost performances with cost optimisation and security. Large Indian companies who wanted everything hosted on their premises before the pandemic must now seek all the tech services to be available on cloud. With that optimistic outlook, companies in the sector and entrepreneurs planning to leverage the strength of the Indian tech industry can certainly look forward to sunny days ahead for the cloud computing industry in India.

BOX: MAKING THE MOST OF CLOUD SERVICES IN INDIA

The highest performing businesses in India had annual profits growth that correlated with using cloud in six smart ways, according to the IDC:

1. Speed up how they develop and launch new solutions

2. Add new functions to software in use

3. Expand processing capacity

4. Foster collaboration

5. Unlock value from data via AI

6. Discover new revenue sources