1. Cloud computing will help SME growth in India, over-regulation may hurt growth

Cloud computing will help SME growth in India, over-regulation may hurt growth

Crashed servers, corrupted files, missing emails… There is no dearth of issues that give nightmares to India’s SME businesses.

Updated: October 16, 2016 6:19 PM
A robust and scaleable IT infrastructure to that host major applications, provide 24x7 email connectivity, web meetings, file sharing, is essential for the smooth functioning of any business with guaranteed level of service. (Representative Image: Reuters) A robust and scaleable IT infrastructure to that host major applications, provide 24×7 email connectivity, web meetings, file sharing, is essential for the smooth functioning of any business with guaranteed level of service. (Representative Image: Reuters)

Crashed servers, corrupted files, missing emails… There is no dearth of issues that give nightmares to India’s SME businesses. Though India has around 47 million small businesses, only one percent are online mainly because of the huger upfront initial investment required to setup the IT infrastructure. That brings us to the wonder called cloud computing, which holds great potential in the Indian ecosystem. A robust and scaleable IT infrastructure to that host major applications, provide 24×7 email connectivity, web meetings, file sharing, is essential for the smooth functioning of any business with guaranteed level of service. And cloud can be the way forward.

What is Cloud?

It is essentially a network of remote servers, which enables companies to store, manage and process data and use programs using a web-based interface. Data and programs stored in the cloud can be accessed from anywhere through different devices with web connectivity, which is advantageous for small firms without a heavy IT budget.

It is heartening to see that India’s businesses have begun warming up to the Cloud. There has been a perceptible increase in spending on cloud services during the last two years.
A common misconception with regard to Cloud is that only big businesses can afford to use the Cloud. The fact is, however, it is meant for SMEs as it provides affordable IT services on a monthly basis as opposed to huge upfront investment in the past when Cloud services were not available.

Cloud computing comes with myriad benefits with its various as-a-service models and hence it makes immense business to move their IT infrastructure to cloud. However, many IT admins worry about the security related issues when they move to the Cloud as they will be very little control. .

Cloud computing can reduce the downtime of the IT infrastructure including email and data storage and backup with much reduced cost than the traditional on premise model.

First of all cloud computing helps save substantial capital costs without spending on in-house server storage and application needs. By eschewing on-premise infrastructure, companies can do away with related operational costs such as for power, air conditioning and other costs including administration costs. Pay for what you are using without worrying about the IT capital.

Another major advantage of cloud is reliability. Cloud computing is more reliable and consistent than in-house IT infrastructure. Most providers offer a Service Level Agreement which guarantees 24×7 and 99.99% availability. Your business can benefit from a large pool of IT resources, as well as quick failover mechanism; imagine a server develops technical snag, hosted applications and services can easily be transferred to any of the available servers.

Business can enjoy a simple web-based user interface for accessing software, applications and services – without ever having to worry about installation of complex IT infrastructure and application. Cloud computing helps business forget about technology and focus on their key business areas and objectives. It also helps them cut down the time required to market newer applications and services as demanded by the business.

Why cloud?
An IDC survey has found that an overwhelming majority of Indian businesses is willing to adopt and move to the Cloud technology. Last year cloud computing accounted for about 33% of the total IT expenditure across the world. In India, the overall cloud computing market reached $1.08 billion by 2015-end. It is pertinent to note that IT/ITeS, telecom, manufacturing and government sectors were the major sectors to have used Cloud.
India today is at the vanguard of using Cloud-based solutions in a major way. Indian businesses are increasingly looking at Cloud technology to reduce costs. With more than 200 million connected mobile users (100 million on social media) India businesses are well poised to embrace cloud in a major way.

The government’s ‘Digital India’ drive will further increase the adoption rate of the Cloud.

Regulation, really?

It is in this context that we should explore the recent TRAI’s consultation on cloud computing. The consultation paper, which was put out on June 10, covers a broad range of issues, including defining policies for Cloud computing, systems and processes for information governance framework in cloud from the perspectives of lawful interception.
The question is: is over-regulating the growing Cloud space tenable in the current circumstances? The overwhelming feeling is that in the nascent phase of Cloud computing development in the country, adopting a blatant approach to regulate the Cloud computing industry does not bode well for the Cloud space. At this point in time, a regulatory approach will be awkward and have the disastrous consequence of inhibiting growth.
Industry bodies are of the opinion that the existing laws are enough in the present scenario to govern Cloud service providers. Current laws like IT Act and Companies Act 1956 are applicable to cloud service providers and cloud service customers.

The author is Suresh Venkatachari, Chairman, 8K Miles Software Services Ltd

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