Government's mulling policy framework on cloud computing; What does it mean for SMEs?

6 Jul, 2012

The Indian government is looking to script a new policy framework for Cloud computing to address apprehensions over security and to drive adoption of the platform in the country. The move will expand market opportunity for Cloud services start-ups, while reducing cost of IT operations for SMEs across sectors.

Minister for Communications and IT, Kapil Sibal, said the government would collaborate with the industry and academia to develop a secure and progressive ecosystem for the Cloud.

The government expects the new policy to specially benefit SMEs in reducing their IT infrastructure costs to a large extent. "The focus could be on SMEs and the starting point and vision," said Sibal without giving any details of the proposed norms. He was speaking at a conference organized by the Confederation of Indian Industry.


Infosys CEO and MD Shibulal said, "Today, most of us do not realize when we are using the Cloud, but it has already become part of our everyday life. Cloud is an opportunity for both the government and SMEs, the true driver of the Indian economy, to improve productivity and economies of scale as well as to cut costs and boost employment."

Industry experts say Cloud as a platform is poised for take-off and a policy framework would boost adoption and provide fresh opportunity for venture capital investors.

Praveen Bhadada, director-Market Expansion, Zinnov Management Consulting, said, the new policy would mean a lot for the IT industry. "The Cloud has evolved a lot from just a concept to reality in the last two years. Investors are largely looking at Cloud startups and are very much excited about it. Vendors, too, are trying to make their products and services cheaper and better to increase adoption rate among SMEs in the country."


Bhadada, however, added: "Connectivity is a major hurdle in the smooth journey of Cloud computing in India. I think India will eliminate all these hurdles as Cloud as a platform matures."

The major impediments of Cloud adoption are linked to concerns related to compliance, privacy and security. In most of the cases, provider does not own up issues like data theft and the companies themselves have no control also. Adequate legislation to put the onus on providers is also not in place.

Sahil Parikh, founder and CEO, Synage Software, a SaaS solution provider, said: "There will always be security concerns. It is probably part of the due diligence process. Anyway, Cloud is perfect for cost-conscious India. People will pay a small monthly fee as opposed to spending huge sums on software and infrastructure. We will see many more successful startups from India in the coming years. Ten years from now, cloud SaaS will be the standard in delivering software."


Last year, former CIO of the US government, Vivek Kundra (now with Cloud computing firm Salesforce.com, more on that here had come up with Cloud computing strategy which said an estimated $20 billion of the Federal government's $80 billion in IT spending is a potential target for migration to cloud computing solutions.

Others like Mani Doraisamy, co-founder and CTO of Chennai-based Platform as a Service (PaaS ) provider OrangeScape, also backed the proposed policy framework, "Cloud is an end-to-end model that includes ongoing maintenance and support. So, we have huge cost advantage. Cloud relies on delivery model of the Web. So, proximity with customers is becoming less important and it puts Indian Cloud vendors in a level-playing field with their Western counterparts."

For Anand Deshpande, founder and MD, Persistent Systems, cloud computing is the technology that would allow SMEs to access technology at a cheaper cost, improve returns and to tap increased data and research. "More importantly, it will change the way businesses look at using IT, making them substantially revise their existing business models."


Other industry bigwigs say if there was a thriving eco-system of increased applications, industry would not hesitate in shifting to the Cloud.

Bhaskar Pramanik, Chairman, Microsoft India, said it was necessary that a consensus was reached among all states, the centre and other institutions. "This would ensure standardization, leading to lower costs and improved efficiencies and higher growth."

(Edited by Prem Udayabhanu)