Tuesday, December 15, 2009

Cloud Computing, SaaS to drive India SMB market

Cloud Computing and On Demand Software (Software as a Service - SaaS) is creating waves across the world. Players like Microsoft with its Azure platform, Amazon with its EC2 platform and Google with its own cloud offering are pushing the envelopes on cloud computing.

My thoughts were funneled through into the Indian SMB market. Close to 40% of business is India still happens in the SMB market. This is also the same market that has least benefited from IT for business transformation and optimization. Reasons abound.
  1. Market to fragmented
  2. Long tail of demands and customization requirements
  3. Affordability an issue
Connecting these two seemingly divergent thoughts, I think we are on the cusp of witnessing a radical change in the Indian SMB market over the next decade.

Cloud Computing and SaaS, both IT trends that started off to address issues Total Cost of Ownership among large enterprises might find itself just rightly positioned to address the huge Indian SMB market. Software that is available as a service and on demand and hardware power (Storage, Processing power, etc) that is also available on demand via cloud computing will cause a dramatic shift in the way software and hardware are sold to customers. Pricing strategies will undergo a rethink and price points will get aggressively lower and lower. Customization of software to address the long tail of a fragmented market will be possible because of multi-tenancy abilities of SaaS. This, my friend, is exactly what the Indian SMB market is eager to lap up.

One of the most creative SMB markets in the world, affordability and lack of customization were at the root of their not embracing the benefits of IT. That should see a sea change going forward.

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