public cloud market landscape : india

1

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Sep, 2016

Public Cloud Market Landscape: India

Zinnov used multiple level of analysis backed by various sources of information to estimate market size

2

Current India IT and Cloud Market

2020 Projections of India IT and Cloud Market

Zinnov used multiple sources of information and analysis to estimate India’s IT and cloud market

Primary Interactions

1

• Interactions with industry experts across cloud applications, infrastructure services, and platform services

Secondary Sources

2

• Annual Reports• CXO Interviews• Analyst reports• Press releases by SIs, Tech

Vendors, Government Publications

Existing Database

3

• Digital SMB Report• IT Deal Database• Zinnov Reports • Zinnov Domestic IT Market

Zinnov Framework

4

• Zinnov framework which includes various macro and industry specific factors responsible for IT and cloud market growth

India represents a lucrative market for Global Technology MNCs

3Source: IMF, Ministry of Statistics-India, Press Releases, Zinnov Analysis

The 21st century will be the Indian century and will have technology at its

heart

“We are looking at India as a partner across segments, not just for any one

area”

India is uniquely positioned. They’re tremendous in software development

compared to other countries

If you innovate in India for India, you are going to be able to innovate for the

world and India then can become the entrepreneurial engine for the world

-Satya Nadella, CEO Microsoft

-Virginia Rometty, CEO IBM

-Tim Cook, CEO Apple

-Sundar Pichai, CEO Google

Indian Macro Economic Factors Overview-2016India has emerged as a favorite technology investment

destination for Global Technology MNCs

371 Mn Internet Users

1Bn Telecom subscribers

$ 2.2 Trillion

40% Tech Influenced SMBs

GDP(Nominal)

Cloud spending in India would exceed $10 Bn by 2020

4

2015

2016

2020

34-35

35-36 (E)

66-67 (E)

16-17% (E)CAGR

~6%YoY

Growth Drivers

Data Centre Establishment

Start-up accelerators &

incubators

Investments in developer ecosystem

Market penetration through channel

partners

10-10.5(E)

3-3.5 (E)

2-2.5

~30-35(E)%CAGR

~42-46%YoY

3,900-4,000 (E)

1,100-1,200 (E)

740-760

~34-38(E)%CAGR

~58-62%YoY

Source: Zinnov Analysis

Year

(Public+Private)

At $2.6-2.8 Bn, SaaS will continue to be the biggest segment within public cloud followed by IaaS & PaaS cumulatively accounting for ~$1.2 Bn by 2020

5

SaaS IaaS PaaS

2015

2016

2020

Cost-effective cloud workloads enabling enterprises and SMBs to optimize cost

Establishment of datacenters is enabling rapid adoption of IaaS

Investment in Developer ecosystem driving demand for PaaS solutions

($ Mn) ($ Mn) ($ Mn)

740-780

490-510

2,600-2,800

~55-60%

~36-40%

230-270

150-170

660-700

~51-55%

~28-32%

140-160

90-110

500-540

~58-62%

~34-38%CAGR

YoY YoY

CAGR


Year

CAGR

YoY

Other than the mature enterprise ecosystem, vibrant SMB/Start-up and Government initiatives are driving demand for public cloud services

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Public Cloud Ecosystem in India

Government

1

Large Enterprises

2

SMBs

3

ISV/Startups

4

$7.8 BnEstimated

Government expenditure on

IT in 2016

IT infrastructure refresh cycles

leading to adoption of

cloud services

53 Mn Small

& Medium Businesses

base in India

~4.5K+ tech

enabled startups as of

2016

System Integrators

2

Acquiring companies with niche

cloud capabilities

Cloud Partners

3

~1,600-1,800 public

cloud partners in India

Born in cloud Start-ups

4

~140-160 “Born in Cloud”

partners in India


Cloud Providers

1

Investment in establishment of datacentres

to cater to local markets including regulated verticals

E-Governance initiatives & Digital India program of Government would result in an uptake of public cloud services

7

eKranti(e-Education | e-

Healthcare | Tech for Planning/ Farmers / Security/ Justice/

Financial Inclusion)

eGovernance(Business Process Re-

engineering | Electronic DBs |

Workflow Automation | Public Grievance Redressal)

Public Internet Access

Programme(Common Service

Centres | PO)

Information for All

(Online doc hosting |

Engagement via Social Media etc.)

IT for Jobs

(Skilled workforce)

Electronics Manufacturing

(Net zero imports by 2020)

Early Harvest Programmes

(Biometric Attendance | Wi-Fi in Universities |

Secure email etc.)

Broadband Highways

(Rural | Urban | National Information Infra)

HighLow

Propensity to use cloud

Platform to accelerate delivery of e-services in the country

GI - Cloud

Secure dedicated personal electronic space for storing docs

Digital Storage

Cloud solution combining machine intelligence and crowd sourcing model

for document processing

Digitization Platform

Repository of productized apps, components & web services hosted on

cloud

Gov App Store

A

B

C

D

Other E-governance Initiatives of Govt. of India


Universal Access to Phones

(Mobile Connectivity)

Propensity to use Public Cloud

Propensity to use Public Cloud

Mature enterprise ecosystem and huge base of SMBs are driving the demand for public cloud services


8 Companies in

7 Unicorn Start-ups

8

~380 Companies

> Bn Revenue

$7.8 Bn

Government’s IT Expenditure in 2016

Small & Medium Businesses

51-53 Mn

40% Tech enabled

SMBs

~4.5 K+

Tech Start-ups

India presents an abundant opportunity for public cloud services across different business streams

VerticalsAdoption

RateKey Workloads

HRMS, Backup/Disaster Recovery, Productivity,

Collaboration

ERP, HRM, CRM, Marketingtools, Analytics

CRM, Analytics, Salesforce Management, HRMS

Reporting, Collaboration, F&A, Web Portal Hosting

CRM, Email, HRM, Billing Systems

Backup/Disaster Recovery, SCM, Email, Marketing tools

Public cloud adoption is gaining momentum across leading verticals

9

Faster time to market and focus on reducing operations cost is driving demand for public cloud services

IT/ITeS

Manufacturing

BFSI

Healthcare

Telecom

Retail

Manufacturing companies will greatly leverage SaaS solutions to increase product awareness and augment customer outreach

Opening of Datacenters in India in compliance with RBI regulations will drive the adoption of public cloud services

EMR, EHR and Genomics expected to drive demand for data storage in cloud. Healthcare analytics is witnessing traction in the market

Big Data analytics is being leveraged for customer segmentation

Tech savviness of start-ups coupled with the adoption of Big Data analytics is driving the adoption of cloud services

Key Trends

HighLowSource: Zinnov Analysis

IT/ITeS and Manufacturing verticals contribute over 50% of total public cloud spend

10

35-45%15-20% 5-10% 4-8% ~5% ~5% <5%

10-20% 100%

Others Total

IT/ITeS Manufacturing M&E E-Commerce Retail BFSI Telecom

Split of Public Cloud Market by Key Verticals: 2016 (E)

Note1: Large companies have been shortlisted on the basis of revenue in FY16Source: Zinnov Analysis

0

10

20

30

40

50

100250

Pu

blic

Clo

ud

Sp

end

($

Mn

)

50 75

Public Cloud Spend by 100 Large Indian Companies1

Investing in a cloud based productivity suite

for entire group & subsidiaries

HRMS and learning management system is deployed on public

cloud

Key account portal, telematics, etc. on

public cloud

1 2 3

$ 500-600 Mn

Number of Companies

Cloud providers are investing across 3 key avenues to cater to Indian market

Infrastructure Talent Partnerships

Global reseller partnership for SAP Hybrid Cloud solutions

Provide infrastructure services for SAP HANA Enterprise Cloud (HEC)

Tata Communications’ IZO Private platform will connect its customers to the CRM solutions of Salesforce

Opened their public cloud datacenter in Chennai

Opened 3 Datacenters in Mumbai, Chennai & Pune

Datacenters in 5 locations in Mumbai

Building 2 new datacenters & expanding capacity to 1.3Mn Sqft

Opening a Tier-3 Datacenter in Gandhinagar

Hiring 200 cloud professionals for Digital sales hub in India

Planning to add 1,000 people across functions in India by 2020

Key Investment Themes

Focus on establishing Datacenters to target IaaS market

Focus on talent development for cloud & digital services

Joint GTM for various cloud solutions

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Setting up a CoE in Vishakhapatnam as a part of its “Digital Inclusion” drive

Jointly launched “Connexion” – a private connection for enterprisesBuilding a datacenter in Chennai

Training 25K people on AWS platform in partnership with NIELIT

Source: Zinnov Analysis, Press Releases

Over 1,600 partners are fulfilling public cloud demand in the Indian market

1,600-1,800

Born in Cloud Partners (2016)

Total Public Cloud Channel Partners in India (2016)

140-160

20-25 % North

25-30 % West 35-40 %

South

5-10 %East

Cloud Partners Split by Location

Illustrative list of “Born in Cloud” partners

12

Partner Split by Category

45-50%

30-35%15-20%

<5%

Cloud Partners Landscape

~20%Partners having HQ

outside India

~15%Partners focusing only

on cloud solutions

100%

Resellers SI/ Consulting partners

Technology partners

Distributors Total

Source: Zinnov Analysis, Press Releases

Cloud providers need to alter their sales approach to cater to the new-age enterprises

The decision making on cloud investments is no longer being controlled by the IT department and is involving a lot many stakeholders from the Business, Marketing, Product & Technology groups, among others

13Source: Zinnov Analysis

Traditional Enterprises

CIO

Cloud Migration

New-Age Enterprises

Technology Adoption

CTO

Evolution of Sales Motion for Public Cloud Services

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