Friday, 3 May 2013

Cloud Computing to Dominate SME's ICT Spend




At a time when overall business growth in world has slowed significantly and the national GDP shows only a marginal rise the India small and medium business segment (SMEs, 1-999 employees) can be viewed as a beacon of hope. India SMEs show a 14 percent year-on-year rise in Information and Communication Technology (ICT) expenditures and their adoption of technology is likely to continue to increase.


This is a direct result of their need to utilize ICT tools to overcome nagging business challenges. An analysis of these markets reveals that small businesses are likely to marginally overtake their medium business compatriots vis-à-vis annual ICT spending growth rate. These findings have emerged from the 2013 India SME ICT & Cloud Services Tracker Overview study by New York-based Access Markets International (AMI) Partners, Inc.           






India SMEs have been a lucrative segment when it comes to ICT spends. With increased transparency and reach to the masses SMEs are looking at solutions to enhance their market share and get an edge over competition. Today an event organiser in a tier 2 city can effectively use the social media and technology to promote his brand and get more visibility. He can have a SCM and a CRM on a much smaller scale and leverage technology to escalate his business and workforce. Basic computing and networking hardware dominates the IT spending portfolio of India SMEs. This is especially true for the small business segment which is gradually enhancing their ICT backbone serving as a platform for future adoption of higher-end technology solutions”, said Dev Chakravarty, Research Manager at AMIIndia.

This is where Cloud computing has brought about a paradigm change in the ICT adoption pattern of SMEs worldwide. India SMEs are no exception to this statement. "Using AMI’s Global Market Forecast Model, the SME market sizing tool, AMI has found that expenditures on cloud-computing within India SME ICT portfolio are on the rise. These expenditures comprise almost 10 percent currently and are predicted to increase by a CAGR of 23 percent over the next five years”, added Chakravarty. It may not be an exaggeration to term cloud computing as a key future growth-enhancer in terms of India SME ICT adoption since cloud-based ICT solutions display greater future growth-trends compared to their on-premise cousins. 

There are many questions regarding cloud computing usage by India SMEs; e.g. - What are the larger spend components within the cloud? Which cloud categories will grow faster? AMI analysis finds that the top two spend-components within the SME cloud-portfolio are for website-related expenditures and Remotely Managed IT Services (RMITS). These SMEs have become much more aware of the benefits of hosting their own websites since it provides them multiple benefits such as better brand-building and cost-effective marketing to mention just two. A number of web-hosting firms have emerged to assist India SMEs in this endeavour. As mentioned RMITS is also an up and coming trend for these companies. Many India SMEs are indicating a greater preference for this alternative, sometimes in conjunction with the age-old on-premise service options. In the near future, IaaS and SaaS-based solutions such as Productivity, CRM and Business Intelligence are forecast to show considerable growth.  








Proprietors, dealers, SOHO, financial groups - fast adopter. Cloud computing has been instrumental in alleviating many problems that India SMEs face during ICT adoption - specifically those related to a lack of funds and non-availability of a dedicated ICT-workforce.  It has proven a boon to small businesses, for which it hits a particularly sweet spot. With cloud services, small businesses reap the benefits of not having to deploy physical infrastructure like file and e-mail servers, storage systems or shrink-wrapped software. Plus, the "anywhere, anytime" availability of these solutions, means hassle-free collaboration among business partners and employees using the ubiquitous browser. In fact a lot of today's small business technology needs can be fulfilled almost completely with cloud-based offerings through a single mobile device.

In cases of small financial groups like agents and consultants lot of applications and tools are offered by the larger players and there is a basic ICT setup requirement which an SME does not want to invest and get locked into. This is where service providers come into play and through their cloud offerings can make the services available at various pay packages mutually suitable.

No Cloud without Rain

Of course, cloud computing raises concerns about security, stability, and data ownership. Cloud computing adoption rates have been steadily increasing since 2009; however, there are concerns over efficiently managing disparate cloud services. No technology investment is fool proof; they are subject to outages that are beyond a business' control.

There have been numerous cases of complete breakdowns and such downtime stories serve as a sobering reminder that trusting your data and technology services to an off-site third-party places you at the mercy of that third-party's uptime reliability. Many businesses are countering that complete dependency by going with hybrid cloud solutions. For instance, companies will replicate data stored locally on a hard drive or NAS to their cloud services, offering SMBs the best of both worlds: local control and access to data and peace of mind that the data is backed up to the cloud. No one glove fits all. Depending on the nature of the business and service offerings one needs to make a calculated decision on the cloud solution and the best way it will enhance the business performance and become a revenue model too as they go ahead.

IBM CEO predicts three ways technology will transform the future of business

With cloud, mobile, social and big data advances all happening at once and at lightning speed, how will shifts in technology impact the way businesses are run? According to Ginni Rometty, the first female CEO of IBM, it will change everything. Ginni Rometty predicted that data will be the basis of competitive advantage going forward, calling it the "the next natural resource." She believes it will change how decisions are made, how value is created and how value is delivered. Here’s a look at what the future may hold.





Data analytics will revolutionise decision-making

"Many more decisions will be based on predictive elements versus gut instincts,"Rometty said. Even in the most scientifically oriented fields, she noted that decisions are still being made based on anchoring biases. In other words, leaders and managers interpret information through the lens of their subjective perspective and set of experiences. However, with the incoming “tsunami of information,” Rometty believes that those companies that are able to use data to their advantage will make better, more objective calls.

As an example, she cited IBM’s use of software analytics in its CRUSH (Criminal Reduction Utilizing Statistical History) initiative with the Memphis Police Department. Finding a correlation between rapes and outdoor pay phones, they decided to move the phones indoors, which ultimately contributed to a 30% reduction in crime.

Still, Rometty said that just because the technology exists and will become increasingly accurate, the shift will require new ways of thinking. “At the end of the day, it’s about mindset and culture,” she said.

The social network will drive value

“The social network will be the new production line in a company,” Rometty predicted. The primary benefit of new social platforms, she said, is that today’s knowledge workers have access to each other. In the near future, she believes “your value will not be what you know, but what you share.”
This social sharing shift will change the way businesses hire, who they hire and how they compensate workers, said Rometty. Employees will be rated by bosses, colleagues and even customers on the value of the information they create, she said, which could impact compensation.

A one-star rating would result in a one-star compensation range, just as a five-star rating would ensure five-star compensation. Like data analytics, more and varied input on each employee’s performance may create more objective pay models.







Consumer segments will cede to the individual

Technology shifts will also change the way businesses deliver value. “What you will see with rapid data and social sharing is the death of the average and the era of you,” Rometty said. Rather than meeting the needs of different consumer segments—geographic, age or income segmentation, for example—businesses will be able to truly serve the individual. "If you have a call center, it’s no longer about a script,” she said. "It’s about a dialogue.” What Rometty calls “the third wave of technology” may contribute to this individualized approach. In the first era of computing, computers counted. In the second, they could be programmed to perform instructions. In the next era, computers will learn by themselves, she said.







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