A recently conducted study has shown that cloud computing is driving growth among Small & Medium Businessess in India. India is home to around 50 million SMB’s which contributes about 30 per cent to its GDP and employs over 117 million people.Their productivity and profitability is limited due to restricted access to resources and technology. There sensitivity towards adoption of new technology has been the biggest factor obstructing its growth.
According to a study on the ‘Socio-Economic Impact of Cloud Adoption by SMBs in India’, reduction in the investment cost on technology can help lower entry barriers for SMBs in accessing technology.The widespread adoption of cloud elsewhere is driving down the cost of cloud,therefore lowering the barrier to entry for the SMB’s. The study was conducted by the Thought Arbitrage Research Institute (TARI) in association with Microsoft. The survey was conducted among 275 MDs/CEOs of SMBs, across manufacturing, retail, IT/ITeS, ecommerce, education, health and hospitality sectors, across 11 cities (Bangalore, Chennai, Chandigarh, Coimbatore, Hyderabad, Kolkata, Lucknow, Mumbai, Mysore, NCR, Pune).
The study says that productivity gains afforded by the cloud get strongly reflected in business metrics like improvement in operating expenses and better cash flow from business operations.
Gains that have been quantified using statistical analysis of the study include: SMBs showing a multiplier effect of 1.5 times in improvement of productivity metrics when they move from low to medium cloud usage; profitability indicators (reduction in operating expenses) showing a multiplier effect of 3 times once SMBs move from low to medium cloud usage. Further, the study revealed that 96% of SMBs find positive impact on their operating expense within two years of high cloud usage (and this remains stable with time, demonstrating that the gains are sustainable). Also, SMBs’ ability to improve products and reduce launch time improves 100% when they move to high cloud usage from medium cloud usage.
Further, the study revealed that 96% of SMBs find positive impact on their operating expense within two years of high cloud usage (and this remains stable with time, demonstrating that the gains are sustainable). Also, SMBs’ ability to improve products and reduce launch time improves 100% when they move to high cloud usage from medium cloud usage. Improvements in productivity and profitability, as brought out in the survey, are asset utilization increases only 17% on low cloud adoption, but 52% on moderate and 66% on high.
Employee productivity increases only 21% on low cloud adoption as compared to 51% on moderate and 81% on high. Further, operating expenses reduce only by 13% on low cloud adoption, but a considerable 47% on moderate and 68% on high. Cash flow also increases only 13% on low cloud adoption, and 33% on moderate and 53% on high.
The survey results were compared with SMBs that do not use the cloud at all. On comparison, it was found that profit improvement and cost reduction metrics improve by 30% for SMBs using medium cloud as compared to 10% for SMEs on the government database. Similarly, employee productivity metrics improve 50% for SMBs using medium cloud whereas it improves 20% for SMEs on government database. Asset utilization metrics improve 50% for SMBs using medium cloud whereas it improves marginally for SMEs on government database.
Title: Cloud Computing is driving growth in India among SMB’s
Reviewed by Team Cloudirec
Summary: Cloud Adoption among SMB’s in India is on the rise
Description: Although slow but the adoption rate of cloud among SMB’s in India is growing as per the study conducted by TARI in association with Microsoft.