Impact of Cloud Opportunities in India

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Impact of Cloud Opportunities in India

Sneha Sharma

@snsharma

August 26, 2022

Cloud Computing

813

The Covid pandemic brought in new ways of working in all sectors and enterprises. Remote working became the new normal leading to increased adoption of cloud. The pandemic acted as a catalyst for cloud services. According to the International Data Corporation (IDC), the Indian public cloud services market is expected to touch $13.5 billion by 2026 from $4.6 billion in 2021, growing at a Compounded Annual Growth Rate (CAGR) of 24% in five years.

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The adoption of cloud would also directly impact the GDP of India. According to NASSCOM’s ‘Future of Cloud and Its Economic Impact: Opportunity for India’ Report, the value add from cloud has the potential to contribute US $310-380 billion to India’s GDP in 2026, accounting for ~8% of GDP*. In the recent past, enterprises have started setting up their data centres or expanded on their existing ones to match the growing demand in India.

Apart from GDP, cloud will also majorly impact the employment. It has potential to create ~14.0 million direct and indirect employment opportunities in 2026*. At 44% CAGR (2016-2021E)*, the Indian cloud market has outpaced the global market in terms of growth rate. Parameters like growing digital population, inflow of investments, digitization of enterprises and favourable government policies, are aiding India’s cloud growth.

Cloud has been the foundation for innovation and collaboration. PaaS models are known to allow for rapid deployment of applications enabling innovation and agility in large organizations. Cloud also supports start-ups and SMBs by providing access to same high-end technologies as larger organizations without the burden of high investments. Indian Start-up Ecosystem has been growing majorly between 2015-2021. India surpassed UK to become the 3rd largest unicorn hub in the world, with Indian Unicorn valuation exceeding US$280 billion as of 2021*. With 42 unicorns added in the year 2021 alone, the start-up ecosystem in India is scaling aggressively and cloud is an important enabler to incubate and accelerate their journey.

Cloud adoption will enable India in building technology capabilities required for India’s digital transformation journey as well as become a global hub for cloud services and talent. India cloud services supply to the global market will benefit from economies of scale and position itself to become a low-cost, high-quality provider of cloud services.

India is also building data centre capacity across levels by government initiatives as well as private investments. With global infrastructure players coming in, the rise in competition is likely to generate offerings at more competitive pricing. Indian companies are also increasingly investing to expand global footprint and enhance their global delivery centres. SaaS will be a key driver of export from India as it is projected that share of global revenue for SaaS companies will increase from 70% to up to 85% in the next five years*. With other economies rapidly scaling on cloud, the first movers of cloud computing may capture significant share of the export market. Hence, timely development of cloud supply in India would be crucial.

The cloud services sector is incredibly enormous. With the potential that it offers, we haven’t uncovered most of its benefits yet. Soon enough cloud services will be fully integrated into every solution worldwide.

Sources:

#cloud #cloudcomputing #cloudinIndia #PaaS #SaaS #futureofcloud

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Sneha Sharma

Analyst

Current Focus Areas: IT Services, AIOps, 5G, Cloud, Project Management. Also specialises in Application Rationalization, Cost Optimization, Benchmarking, Report writing, and Market Research.