Indian SMBs Benefit Greatly From High Cloud Adoption- Study

It is important to note the steep upward differential in gains
when there is a medium to high cloud adoption vis-à-vis by merely using the
cloud services to effect email, file storage etc.

As per the recent survey data, India has over 50 million SMB’s
which contribute to over 30% of the country’s GDP employing over 117 million
people. However they face a lot of challenges like

  1. Limited access to resources and technology
    affecting productivity and profitability
  2. Asymmetry between SMB’s & Large
    Enterprises can be as much as 7 to 8 times.

Helping them to address these challenges could significantly
improve their growth ratio contributing significantly to the country’s socio
economic growth.

According to a study on the ‘Socio-Economic Impact
of Cloud Adoption by SMBs in India’ conducted by the Thought Arbitrage Research
Institute (TARI) in association with Microsoft, reduction in the investment
cost (capital expenditure) on technology can lower entry barriers for SMBs for
accessing technology, which then creates a positive multiplier effect.
Productivity gains afforded by the cloud are strongly reflected in business
metrics, such as improvement in operating expenses and better cash flow from
business operations. The gains have been quantified using statistical analysis,
some of which are as follows:

• SMBs show 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) show a multiplier
effect of 3x once SMBs move from low to medium cloud usage.

96% of SMBs find a 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).
• SMBs’ ability to improve products and reduce launch time improves 100% when
they move to high cloud usage from medium cloud usage.

In addition, the survey results have been compared with
SMBs that do not use the cloud at all. SMEs on the database of the government
of India have been used as reference for SMBs not using cloud. On comparison,
it has been found that profit improvement and cost reduction metrics improve
30% for SMBs using medium cloud, whereas this metric improves 10% for SMEs on
the government database; 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. The asset base of SMBs is
more effectively utilized by employees through cloud computing as it allows
multiple users to access software related business applications, from any
location, at any time.

computing technologies are not only advanced but also affordable and easy to
deploy and use. This opportunity is widely opening up for SMB’s to bring a
great shift in the technology use thereby improving productivity in operations
and increasing competitiveness and profitability at large. With the internet
connectivity reaching the length and breadth of India and a mature channel
partner ecosystem in place, it is the right time for the SMB’s to leverage
cloud technologies and drive growth.

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