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NEXT WAVE OF
GROWTH IN INDIA
2019
CLOUD - NEXT WAVE OF GROWTH IN INDIA
About NASSCOM
NASSCOM is the industry association for the IT-BPM sector in India. A not-for-profit organization funded
by the industry, its objective is to build a growth led and sustainable technology and business services
sector in the country with over 2,500 members. NASSCOM Research is the in-house research and
analytics arm of NASSCOM generating insights and driving thought leadership for today’s business leaders
and entrepreneurs to strengthen India’s position as a hub for digital technologies and innovation.
Disclaimer
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available at the date of publication without any independent verification. The information contained in
this report is general in nature and is not intended to address any specific industry issue.
While Deloitte Touche Tohmatsu India LLP assisted in conducting the market research and analysis for
preparing this report, the study was commissioned by Google.
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CLOUD - NEXT WAVE OF GROWTH IN INDIA
FOREWORD
The National Association of Software and Services Companies is proud to present a Report on the subject
of ‘Cloud – Next Wave of growth in India’
The world is on the cusp of experiencing a massive transformation under the Industrial Revolution 4.0.
The domination of the information technology sector, and the myriad of applications across the various
areas of lives of consumers has led to the explosion of information, the urge to communicate and the
continuous stream of data.
Cloud Computing has emerged as the next wave in computing and has been increasingly adopted across
businesses as well as consumers. While Software-as-a-Service offerings have always been dominant,
Infrastructure-as-a-Service and Platform-as-a-Service are gaining steam with the rise of use-cases across
futuristic technologies such as Artificial Intelligence, Machine Learning, Advanced Analytics, Immersive
Media and so on.
It is critical to note that consumers of Cloud across Enterprises and the Digital Natives continue to
demand affordability, which in turn is leading to the innovations in the technology supporting Cloud
computing. For instance, Edge Computing, Efficient Cooling Systems, Converged & Hyper-Converged
Hardware Infrastructure are some of the innovations that are helping providers reduce the cost of services,
making adoption widespread.
India continues to remain a market that is thriving under the dual-opportunity of serving domestic and
international demand as well as enjoying higher consumption of data with the advent of high speed
mobile connectivity. With these factors in play, the opportunity to build the Cloud market in India is
significant and promising.
The Government has a significant role to play, as do other enablers. Specific regulatory directions will
act as the necessary catalyst to the growth of Cloud in India. Protection of Data and Privacy is slowly
becoming the mainstay of the policy makers focus, which we believe will enable faith in the potential
buyer of Cloud services.
We wish you gain insights from this report, and welcome your feedback on the same.
Thanks
Debjani Ghosh
President, NASSCOM
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CLOUD - NEXT WAVE OF GROWTH IN INDIA
ACKNOWLEDGEMENT
NASSCOM would like to acknowledge the support provided by Google in the making of this report.
We also acknowledge the support provided by Deloitte Touche Tohmatsu India LLP in conducting the
market research and analysis for preparing this report.
While the analysis has been conducted by Deloitte Touche Tohmatsu India LLP, the study was
commissioned by Google.
We would like to thank all our stakeholders– industry, government, research firms, etc. – for their valuable
contributions, without which this report would not have been possible.
We would also like to thank NASSCOM member organisations, who provided relevant data and insights
about various industry trends and developments.
Detailed list of participants have been listed in the appendix section.
3CLOUD - NEXT WAVE OF GROWTH IN INDIA
BACKGROUND, SCOPE &
OBJECTIVES
Background, Scope and Objectives of the current and future
addressable Cloud, Public IaaS and SaaS market in India
OBJECTIVES OF THE STUDY
To understand the key Cloud computing types,
NASSCOM is an
market size both globally and in India, Cloud
industry body of the
adoption levels across industry verticals, key
IT-BPM industry in
demand & supply side drivers for Cloud uptake and
India that works with
challenges faced by the demand side enterprises
diverse stakeholders to
in India
build focused initiatives
that enable the growth
of the sector through
policy advocacy, skill
building, research,
startup programs, To assess the IaaS Global and Domestic ecosystem
facilitate business and emerging trends, its global & India market
and increase industry projections, the supply ecosystem evolution, key
outreach demand side drivers and challenges for the future
growth of IaaS market in India
To analyze SaaS demand and adoption levels
across various industry verticals and the key
challenges impacting the SaaS uptake in India
NASSCOM wishes
to communicate the
present and the future
state of the India Cloud
market and identify
the major technology
trends, issues and To review the current regulatory scenario and
concerns of the industry Cloud policy framework in India, the proposed
Data Protection Bill 2018, and analyze its impact,
on the Cloud industry in India
4CLOUD - NEXT WAVE OF GROWTH IN INDIA
EXECUTIVE SUMMARY
Cloud Computing
Cloud computing refers to the provision of software, storage and computational power to customers
from remote data centers through the internet. The concept of Cloud has been around for two decades,
but has now become mainstream with the growing presence of “hyper scale” Cloud providers in big data,
analytics, artificial intelligence and IoT. The Indian Cloud market has a large opportunity for growth, as the
Cloud becomes more lucrative for the Indian SMEs, Enterprises and as the global demand for Cloud grows
providing India opportunity to emerge as a significant consumer and supplier, leveraging its cost and other
advantages.
Key characteristics include Global Cloud spending
on-demand self-service, estimated at USD 187 Bn.
multi-tenant business in 2018 and is projected to
model, digital network-based architecture, grow at 16.5% p.a. to reach
rapid elasticity, flexible, zero capex and USD 345 Bn. in 2022
measured pricing capabilities
Cloud spending in
Cloud spending in
India is estimated at
India is estimated
USD 2.5 Bn. in 2018
to grow at 30% p.a.
(Only 6% share of relevant IT
to reach USD 7.1 – 7.2 Bn.
spending compared to a global
in 2022.
average of 7.9% and average of
leading countries of 11.4%).
This growth is estimated on account of multiple factors (both demand
and supply) such as: Increased awareness of Cloud, consumerization of IT,
proliferation of start-up ecosystem, diverse landscape of supplier ecosystem,
increasing investments in infrastructure, talent, strategic partnerships and the
impetus from key digital-led Government programs.
5CLOUD - NEXT WAVE OF GROWTH IN INDIA
Infrastructure-as-a-Service (IaaS)
With the advent of advanced solutions and computing, it is imperative to note that IaaS is showing excellent
potential growth
Tier II and rural markets in
India remain untapped due
to lack of access to quality
broadband, reliable power supply, stringent
land regulations and cumbersome permissions
procedures, etc.
India now has a globally Improved infrastructure
competitive IaaS supply facilities, economic benefits,
ecosystem, led by significant expansion increased innovation, vibrant start up
since 2015 (Large global IaaS players - AWS, Google ecosystem and connected ecosystem are
Cloud and Microsoft now operating IaaS Facilities driving IaaS uptake in India
out of India)
Indian IaaS
spending is estimated
Global IaaS spending
at only USD 1 Bn. (2018),
is estimated at
forecasted to grow at 25% p.a. to
USD 41 Bn. (2018) and
reach USD 2.3 – 2.4 Bn. in 2022
projected to grow at 25.5% p.a. to
reach USD 102 Bn. in 2022
6CLOUD - NEXT WAVE OF GROWTH IN INDIA
Software-as-a-Service (SaaS)
There exists an opportunity for India to emerge as a significant player globally, as both Indian and global
demand grow
Re-skilling for
Lower cost of
advancements, Investing
workforce, abundant
in newer technologies and
talent availability, mature
partnering to bring advanced capabilities by
inside sales ecosystem, adoption of
SaaS Industry players can accelerate growth
futuristic technologies like AI, ML to
build world-class products, increased
investments in SaaS start-ups is enabling
India to become a global supplier
Recent adoption and growth of
Indian to become the computing and a digital ecosystem,
global supplier for SaaS better product fit, opportunity
products; SaaS exports from India in SME sector, increasing adoption by
are estimated to reach USD 19 – 20 Bn. Start-ups are driving SaaS demand in the
By 2022, contributing ~15% of the total global domestic market
demand
Indian software
Global Software & Services market is
& Services market is forecasted to reach
forecasted to reach USD 1.7 Tn. USD 37 Bn by 2022 from the current 28
by 2022 from the current 1.3 Tn. Bn (2018), SaaS Market expected to
(2018), SaaS market is expected contribute USD 3.3 – 3.4 Bn. by 2022
to contribute USD 129 Bn. (7%) (growth rate of 36% p.a)
by 2022
7CLOUD - NEXT WAVE OF GROWTH IN INDIA
Cloud Growth – Strategic Direction & Policy considerations
Right strategic direction and policy initiatives coupled with required industry actions can accelerate the
growth of Cloud Industry in India
A sharper focus on the
multitude of other critical infrastructural
and operational factors (reliable power,
sustainable land regulations, high-speed
connectivity) driving Cloud growth in India will
lead to an expedited growth in the country
Indian Government
released a draft Data
The Government of India is required Protection Bill. The bill focusses on
to take a balanced view of industry multitude of areas like processing of
impact, economic impact, and impact on personal data, rights of the Data Principal,
data privacy and security as it evaluates data Transparency and accountability of data
localization. collected by the organizations, etc.
To set a strategic GoI through NDCP
direction for the Cloud, 2018 states the vision
the GoI may set out tangible for Cloud as ‘Establish
time-bound targets for Cloud like % India as a global hub for Cloud
of Government IT Spends on Cloud , % computing’ and has taken multiple
of India’s share of Global outsourcing steps for its growth
market
Additionally, action by industry players such as driving enterprise awareness on
Cloud, building custom-made solutions for SMEs, re-strategizing by IT players
to align with changing landscape, and forging partnerships & alliances to build
advanced skill-sets will help forge a sustainable Cloud growth in India.
8CLOUD - NEXT WAVE OF GROWTH IN INDIA
TABLE OF CONTENTS
Section I. Cloud Computing 11
Section Summary 12
Technology Evolution 13
Cloud Computing: Key Characteristics 15
Cloud Computing: Deployment Models 16
Cloud Computing: Service Types 17
Global: Key Trends 18
Global: Market Size 23
India: Adoption Trends 28
India: Market Forecast 30
India: Focus Areas 32
India: Challenges 33
India: Recommendations 34
Cloud Ecosystem: Global & India 35
Section II. Infrastructure as a Service - IaaS 43
Section Summary 44
Data Center: Building Blocks 45
Data Center: Deployment Models 46
Data Center: Key Technology Trends 47
Global: Market Size 48
India: IaaS Penetration 49
India: IaaS Evolution 50
India: IaaS Current State 51
India: Key Growth Levers 53
India: Adoption Trends 54
India: Market Forecast 56
India: Challenges 57
India: Recommendations 58
9CLOUD - NEXT WAVE OF GROWTH IN INDIA
Section III. Software as a Service - SaaS 59
Section Summary 60
SaaS Evolution 61
Global: Key Trends 63
Global: Market Size 64
Global: SaaS Penetration 65
India: SaaS Adoption 66
India: Market Size 74
India: SaaS Exports 75
India: Factors Driving SaaS Exports 76
SaaS: Challenges 79
Section IV. Cloud Growth – Strategic Direction & Policy considerations 81
Section Summary 82
Global: Ecosystem Development Measures 83
India: Ecosystem Development Measures 84
Data localization : Overview & Impact 85
India: Recommendations 86
10CLOUD - NEXT WAVE OF GROWTH IN INDIA
Section I
CLOUD COMPUTING
11CLOUD - NEXT WAVE OF GROWTH IN INDIA
SECTION SUMMARY
Cloud computing evolution, growth, key trends, market size, drivers,
challenges & recommendations
01 The concept of Cloud Computing has been around since late 1990s and has now
evolved significantly to an estimated size of USD ~187 Bn+ globally (2018)
02 Global Cloud Computing is 8% of the global relevant IT spend in 2018 and estimated
to grow at a CAGR of 16.5% p.a. to reach USD 345 Bn by 2022
03
Indian Cloud Computing market is USD 2.5 Bn (2018), dominated by SaaS (39%) and
IaaS (39%), and has significant scope for growth (estimated to grow at 30% CAGR to
become USD 7.1 - 7.2 Bn by 2022)
04
Emerging technology, commercial & consumer trends like Edge computing, Machine
learning, on-demand models, Immersive experiences and XaaS will further drive
adoption and innovative use cases
05
New age companies, those incorporated in the last decade (Born in the Cloud era) are
driving Cloud adoption by adopting Cloud first strategy and setting example for others
to follow
06
In India, Cloud adoption levels are high for few industry verticals e.g. IT/ITeS,
Communications, Media & Internet enabled companies. However, Banking, Healthcare
& Retail are still in the early stages of adoption
07
Cloud computing demand drivers in India : Growing opportunities from world
IT outsourcing market, increased awareness of Cloud computing benefits,
consumerization of IT, requirement of agile IT spending, proliferation of start-up
ecosystem, and emerging technologies in India
08
Cloud computing supply drivers in India : Presence of diverse of service providers,
availability of skilled talent with deep domain knowledge, cost advantages in platform
/ product build out, mature customer service and Government initiatives that are
driving Cloud Growth in India
09 Challenges for Cloud Ecosystem Growth in India include data security & privacy,
interoperability, loss of control, vendor ecosystem lock-in, Quality of Service, cost
savings uncertainty and regulatory uncertainty
In order to set a strategic direction for the Cloud, we recommend that GoI setup
10
tangible targets for Cloud e.g. % of Govt. IT spends on Cloud, % of India’s share of
Global outsourcing market. In order to boost the overall implementation, rollout and
adoption of Cloud, basic infrastructure such as reliable and high quality power for
Data Centers, Affordable data plans for consumers on high speed & reliable internet
are a must-have
Source : Gartner Cloud Forecast 2018Q1, Industry reports, Deloitte Analysis
Source : Deloitte Analysis
12CLOUD - NEXT WAVE OF GROWTH IN INDIA
TECHNOLOGY EVOLUTION
Technology has seen rapid evolution since 1960s – From
mainframes to Cloud computing and beyond
Cloud Computing 2018:
• Edge computing Cloud computing
used by over 90%
• XaaS of Fortune 500
• Distributed systems companies
• Machine learning
2012:
Worldwide public
Cloud services 2018
spending ~ USD 100
Bn
Growth in Computing & Change in Form Factor
2003:
AWS platform was 2010’s
launched
Desktop 2000’s 2010:
Computers with
Google &
Microchips
Microsoft
First 1990’s launched their
Commercial Internet Cloud business
Computer mass
adoption
1970’s
Portable
1940-
1960’s Computers
50’s
Mainframe
Computers
Time
Source : International journal of Novel Research, Deloitte Analysis
13CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD EVOLUTION
Cloud computing finds its evolution in the last 18 years, with future
technology evolution driving potential adoption
Data center • Major player Open Source • Cloud
growth was Google Cloud acceptance
highest in launches Movement grows further
the wake of Cloud services takes hold • Applications
the Dot-com • Part of the as UC-Santa grow beyond
boom Technology Barbara SaaS with
market (AWS) and IaaS and
disagrees with Rackspace (w/ PaaS taking
the concept of Nasa) launch firm grip
public Cloud Open Source
Cloud
2000-05 2006 2007-08 2008-09 2009-10 2009-12 2012-18 2018
onwards
Amazon enters With data • Cloud • 90% Fortune
the Cloud security computing 500 using
market with concerns, gains Cloud
the launch of players like acceptance in • Focus on
Amazon Web Microsoft and enterprises Next-gen
Services (AWS) Rackspace • Major players Cloud (XaaS)
veer towards like Netflix, • Growth of
private Cloud NASA join Cloud led by
establishment Cloud Future Tech.
• Hybrid Cloud (AI, ML etc.)
is born • Edge
Computing
taking firm
shape
14CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD COMPUTING:
KEY CHARACTERISTICS
Cloud Computing is a model for enabling ubiquitous, convenient,
on-demand network access to a shared pool of configurable
computing resources
Self-Service
Creating
environments,
enhancing
capabilities,
adding capacity
with minimal
effort and lower
lead times
Dynamic
On-Demand Multi-Business
Provisioning. The Cloud computing
ability to add delivers shared
capability and capacity across
capacity as rapidly business lines,
as business reducing
requires duplicate
environments
Scalable
React quickly
to increased Digital-Based
business demand, Architecture
acquisitions, or Cloud
new business architectures
models without are based on
large Capex virtualized
expenditures environments
and increased long Flexible Pricing defined by
run-off periods facilitates better their use not by
visibility and cost hardware
control
allowing
enterprises to
spend in
other areas as
business demands
fluctuates
15CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD COMPUTING :
DEPLOYMENT MODELS
Enterprises looking to private Clouds for their core assets whilst still
moving to public/hybrid Cloud environments
Cloud Deployment Types
Private Cloud Hybrid Cloud Public Cloud
The Cloud infrastructure is It is a composition of two The Cloud infrastructure
dedicated to an organization or more Clouds (private on is made available to the
which may be managed by premise / off premise, or general public or enterprises
the organization itself or a public) that remain unique while it is owned by a
third party and may exist on entities but are bound by third-party Cloud services
premise or off premise standardized or proprietary provider
technology that enables
data and application
portability
Considerations supporting Considerations supporting a Considerations supporting
continued importance Hybrid approach total Public Cloud adoption
of On-Prem
Risk averse
As organisations look
Capitalised enterprise organisations look to
to reduce complexity
software and associated keep mission critical
the adoption of
depreciation cycles may apps in house, leading
Public Cloud offers a
impact the ability of the to slow uptake due to
tenable platform for
organisation to justify ‘perceived’ (and not
streamlining processes
further investment to it’s real) fear of security and
and update cycles
shareholders data regulation issues
For businesses with CIOs report fear
extremely high compute of vendor lock-in
Ability to procure ‘best
processing volumes to infrastructure
in class’ for all apps/
the economics of as a concern when
technologies on a
outsourced data center considering transitioning
consistent platform
infrastructure many not core workloads to the
deliver cost efficiencies Public Cloud
16CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD COMPUTING :
SERVICE TYPES
Cloud Enables breaking down the traditional IT services into
components and roll out each or combination as a specialized
service
Application Middleware and Mgmt
Facilities / Monitoring / Support
Public Off-premises
Application Host and Run
Operating System
Servers / Storage
Virtualization
Applications
Networking
Services
Integrated public
Hybrid
& private service
Private On-premises
Software-as- Platform-as- Infrastructure-as-
a-Service a-Service a-Service
Software that Ready-to- Horizontally and vertically
provides a use scalable, scalable compute, storage
purpose built integrated app and networking delivered to
business service to & data hosting an application on-demand
the client
*The organizations featured in this report are only illustrative and not exhaustive
17CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL : KEY TRENDS
Cloud computing is no longer about servers & storage; emerging
trends are transforming it as a business technology must have
Technology Customer
• Edge computing • Immersive experiences
• Server less computing • Hyper Personalized
• Containerization • IoT - Data eruption
• Low latency connectivity Cu • Cloud managed services
y
og
• Machine learning st
om
ol
hn
• Real time analytics er
c
Te
• Distributed systems
Trends impacting Cloud
computing
Bu
c
si
Se
ne
fo
ss
In
m
&
od
a
at
el
D
Business model Data & InfoSec
• Consumption based models • Emphasis on data
• Accelerated innovation security/privacy
• XaaS – Everything as a • Regulations on data
service localization
*The organizations featured in this report are only illustrative and not exhaustive
18CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL : KEY TRENDS |
TECHNOLOGY
Key technology trends – Drivers & opportunities for Cloud adoption
Low to High
Drivers Opportunity for Cloud adoption
• With proliferation of IoT use • Edge computing leading to
cases, newer and larger data emergence of innovative
sets like video, voice etc. are • Use cases e.g. HD video on
in demand. These require demand, gaming etc.
Edge computing resources closer
computing to the end consumer
• Higher computing • Machine learning and
capabilities allows to autonomous systems will
derive insights and acquire drive adoption of Cloud
capabilities to forecast computing resources
Machine future actions • Use case : Self driving
Learning
vehicles
• Increased computing • Cloud systems are obvious
capabilities allows analysis choice for handling large
of large quantities of data quantities of data thereby
driving adoption
Real time • Use case : Real time vehicle
Analytics tracking etc.
• 5G leverages small cell • Improved access to Cloud
architecture to deliver low applications by consumers
Low latency latency high bandwidth driving adoption
connectivity
• Emergence of newer use
(5G)
cases e.g. surveillance
• Distributed systems are • Distributed systems leading
challenging the authority to higher demand for low/
and inefficiencies of medium capacity Cloud
centralized systems computing resources
Distributed • Use case : Distributed ledger,
systems crypto currency etc.
19CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL : KEY TRENDS |
BUSINESS MODEL
Key Business model trends – Drivers & opportunities for Cloud
adoption
Low to High
Drivers Opportunity for Cloud adoption
• Allows businesses to • Flexibility to cater to
acquire resources based on seasonal demand spike will
actual requirement drive adoption
• Allows flexibility to • Significant savings compared
increase/decrease to On premise solutions will
resources as required drive adoption
• Reduced cost of access
provides ability to
On-Demand
experiment and test before
access to
scaling
latest tech
• Allows businesses to • XaaS allows businesses the
acquire all the required IT required agility to launch
resources on demand required solutions
Driving -- Database-as-a-Service • Cost optimization
business -- Computing-as-a-Service opportunities to businesses
agility -- Security-as-a-Service by reducing the overheads
• Cloud ecosystem provides • Getting teams to focus on
businesses the required value adding projects, rather
agility to conceptualize, test than managing ‘keeping
& launch products lights on’ projects and/or
• Save on maintenance technology
time & cost hence more • Ease of implementation
innovative products and maintenance will allow
more number of use cases/
Accelerated workloads e.g. analytics, non
innovation critical apps etc.
20CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL : KEY TRENDS |
CUSTOMER
Key Customer trends – Drivers & opportunities for Cloud adoption
Low to High
Drivers Opportunity for Cloud adoption
• Ability to experience • Compute & storage
standard media in a multi- requirement to power
dimensional realm experiences will drive demand
• Technologies include • Visual processing equires
-- Augmented Reality (AR) higher capacity graphics
processing capability which
-- Virtual Reality (VR)
are easily available over Cloud
Immersive -- Mixed Reality (MR)
• Use case: Education,
experiences Simulation etc.
• Increasing consumer • Cloud solutions are
requirements for anytime, well-suited to fulfil this
anywhere access to requirement
products and services
(device/platform agnostic,
Anytime, anytime and everywhere
anywhere access)
access
• Technological advances • Data generated by
have led to emergence connected devices will be
of multiple IoT based processed by Cloud and will
solutions drive demand
• Large quantities of data will • IoT platform offerings
be generated by connected from vendors will drive
devices new products/ solutions
e.g. Home automation,
IoT - Data Manufacturing automation
eruption etc.
• Enterprises’ need to optimize
• Provides the required ROI, reduce budgets, and
resources & skillsets cope with scarcity of Cloud
to manage Cloud experts drives spending on
deployments managed Cloud services(e.g.
Cloud
managed • Managed SPs can free up security as a service etc.)
services scarce internal IT resources
21CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL : KEY TRENDS |
DATA & INFOSEC
Key Data & InfoSec trends – Drivers & opportunities for Cloud
adoption
Drivers Opportunity for Cloud adoption
• Ever growing complexity • Companies have to either
of threat vectors for build secured Cloud
enterprises to deal with capabilities in-house or
• Changing regulation trust Cloud service providers
and compliance policy or leverage best-in-class
Emphasis landscape across countries security and compliance
on data making it tough for tools from Cloud services
security/ enterprises to operate providers
privacy business across the globe • Higher demand for managed
• Hyper scale Cloud security services for Cloud
providers provide world- solutions
class security tools,
controls, and engineering
that are unavailable in-
house
22CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL: MARKET SIZE
Driven by the positive impact of trends, Cloud spend is catching up
fast on traditional IT across the globe
x% Represents Cloud spend proportion of total IT spend
x% Represents 18’-22’ CAGR of total IT spend In USD (Bn.)
2,900
CAGR(F)
2,692 18’-22’
2,700
2,363 2,445 13% 345 3.3%
2,500 2,226 221
8% 187 10%
152 16.5%
7%
2,300
1,900
2,176 2,224 2,347
2,074
2,100
1,700
1,500
2017 2018e 2019f 2022f
Non Cloud (Bn USD) Cloud (Bn USD)
• Cloud spending at USD 152 Bn. In 2017, and estimated at USD 187 Bn. by end of 2018
• Growing at 16.5% (CAGR), Cloud spending expected to touch USD 345 Bn. by 2022
1 2 3
• Globally, Cloud is • Trends show large • Large Enterprises
expected to contribute number of enterprises are likely to move
increasing proportion showing Cloud- workloads away
of total IT spending by first tendencies as a from traditional
enterprises way of maintaining and virtualized
competitive advantage environments toward
and relevance in the the Cloud at a relatively
business environment faster rate than prior
Cloud adoption waves
IT Spending/.Spend refers to spending by enterprises on Data center systems, Devices (excluding Mobile phones), Software,
IT Services, and Communication Services (excluding consumer communication)
Source : Gartner Market Databook 1Q18, Gartner Cloud Forecast 2018Q1, Deloitte Analysis
23CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL: MARKET SIZE
SaaS is the largest service type with a market share of 39% reaching
to USD 129 Bn by 2022
In USD (Bn.) Spending (USD Bn) & Growth (%) Share of Total Cloud (%)
• SaaS is the largest
component of the
SaaS –1 5.5%
CAGR Cloud market share
at 39%
39% 38% • SaaS is expected to
129.4
grow at 16% (CAGR)
72.7
SaaS service and reach USD 129
spending 2018e 2022f 2018e 2022f Bn. By 2022
• SaaS share in Cloud
spending is driven
by a multitude
laaS of Cloud-based
– 25.4% software offerings
CAGR
as well as IT
22% 30% spending shifts
102.5 towards lower-
41.4
IaaS service cost solutions by
spending 2018e 2022f 2018e 2022f Startups, Large
and Medium-Small
enterprises
• IaaS is expected to
PaaS have largest growth
(25.4% CAGR), with
%
– 20.7 Top-3 players in
CAGR 8% 9% Cloud introducing
32.3 to offer Hybrid
PaaS service 15.2 Cloud offerings to
spending 2018e 2022f 2018e 2022f consumer. IaaS
growth is expected
to be driven by data
security & safety
measures provided
by CSP
Other • PaaS is expected to
grow at a CAGR of
– 8.7%
CAGR 20.7% to reach ~USD
31% 23% 32 Bn in 2022
80.3 • Other services e.g.
BPaaS & Cloud 57.6
Management Cloud management
2018e 2022f 2018e 2022f etc. will grow at a
moderate CAGR of
8.7% to reach ~ USD
80 Bn in 2022
Source : Gartner Cloud Forecast 2018Q1, Deloitte Analysis
24CLOUD - NEXT WAVE OF GROWTH IN INDIA
GLOBAL: CLOUD PENETRATION
Current state of Cloud penetration across countries indicate
significant opportunity for growth in India
Total GDP Total IT Total IT
IT spend1 as a % of total Public Cloud spend as a %
spend spend1 spend1
USD Bn USD Bn
GDP spend (2018)
USD Bn
of total IT spend1 (2018)
UK 2,622 137 5.2% 137 11.4%
USA 19,391 911 4.7% 911 11.4%
Canada 1,653 63 3.8% 63 11.3%
Australia 1,323 48 3.6% 48 7.7%
World 80,000 2,362 3.0% 2,362 7.9%
Germany 3,677 103 2.8% 103 6.9%
Brazil 2,056 40 1.9% 40 7.9%
India 2,597 42 1.6% 42 6.0%
China 12,238 172 1.4% 172 2.7%
Russia 1,578 15 1.0% 15 2.9%
• IT spending as a % of its India’s GDP for 2018 is only 1.6%, which is almost half the global average
of 3.0%
• India’s Cloud adoption is currently placed at 6.0%, which is lagging behind global average of
7.9% and is almost half the US, UK adoption levels of 11.4%
• The current global trend suggest that the IT spend and Cloud adoption in India is at a nascent
stage and there is a significant scope for growth, both in terms of IT spending and adoption of
Cloud in India in the near future
Source : World Bank, Gartner Market Databook 1Q18, Gartner Cloud Forecast 2018Q1, Deloitte Analysis
25CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: KEY DRIVERS & TRENDS
Key drivers for growth of Cloud uptake in India
Consumerization of
Information Technology 01
02 Increased awareness of Cloud computing
benefits
Growing worldwide Cloud market 03
04 Presence of diverse landscape of
suppliers
Availability of skilled talent with deep
domain knowledge; mature customer
service 05
06 Cost advantage in platform/product
build out
Government initiatives in support of
Cloud computing 07
08 Emerging technologies such as
AI/ML enabling Cloud growth
Proliferation of start-up ecosystem in
India 09
Requirement of Agile IT
10 spending-”Fail Fast” thinking
26CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: MARKET SIZE
Cloud computing in India is currently estimated to be USD 2.5 Bn,
dominated by IaaS & SaaS
In USD (Bn.)
7.1- 7.2
47%
4.4 - 4.5
43%
2.5 33%
39%
36%
39%
20%
21%
22%
2018e 2020f 2020f
Others IaaS SaaS
• Share of SaaS as a % of Total Cloud spend is expected to increase from 39% in 2018 to 47% by
2022
• IaaS growth is expected to remain, but share is expected to shrink to 33% in 2022 from 39% in
2018
• SaaS is expected to show strong growth driven by Cost-effective and Larger number of SaaS
offerings for large, medium and small enterprises
• While expected outcome is the strong leadership of SaaS in the overall Cloud offerings, the rate
of Cloud Adoption may change subject to multiple drivers and factors
IT Spending/.Spend refers to spending by enterprises on Data center systems, Devices (excluding
Mobile phones), Software, IT Services, and Communication Services (excluding consumer
communication)
Source : Gartner Cloud Forecast 2018Q1, Deloitte Analysis
27CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: ADOPTION TRENDS
Cloud adoption levels are high for few industry verticals e.g. IT/ITes,
Communications, Media & Internet enabled companies…(1/2)
Industry Industry share Cloud Adoption Industry share
Verticals (%) of Total IT Level (%) of Total • Despite being a lower
spend in (Scale of 1-5, Cloud spend spender in IT (as % of Total
India (2018) 5 being the highest) in India (2018) IT Spend in India), IT/
– USD 41.6 Bn – USD 2.5 Bn ITeS sector is the highest
spender in Cloud (~25% )
IT/ITES
• Manufacturing has a
lower spend % in Cloud at
10% ~20% as % of Total Cloud
1 2 3 4 5 22% - 27% Spending
• General Trends show
E-Commerce that technology and
technology-based
industry sectors such as
4% - 6%
IT/ITeS, e-Commerce have
2% 1 2 3 4 5 a higher propensity to
spend on Cloud
• This is led by the ability
Communication to scale, savings in costs
& Media and agility in innovation
offered by Cloud
8% - 12% deployments
4% 1 2 3 4 5
• Most IT & e-Commerce
businesses have emerged
out of a Born-on-Cloud
Telecom jump start, and others are
slowly emerging to follow
a Cloud-only strategy in
terms of their IT spends
9% 1 2 3 4 5
7% - 10% • Verticals with high levels
of Cloud adoption are
shifting new and existing
Manufacturing workloads over Cloud,
however verticals
with lower adoption
18% - 22% are shifting only new
1 2 3 4 5 workloads which are easy
18% to implement over Cloud
e.g. Analytics
Source : Gartner Verticals_Forecast_WW_2018Q1, Deloitte Analysis
28CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: ADOPTION TRENDS
Cloud adoption levels are high for few industry verticals e.g. IT/ITes,
Communications, Media & Internet enabled companies …(2/2)
Industry Industry share Cloud Adoption Industry share
Verticals (%) of Total IT Level (%) of Total • Sectors such as Transport
spend in (Scale of 1-5, Cloud spend & Logistics, BFSI, Retail lag
India (2018) 5 being the highest) in India (2018) at a mere ~4% of the total
– USD 41.6 Bn – USD 2.5 Bn Cloud spending coming
from each
Government
15% • In highly regulated sectors
such as BFSI, Telecom,
1 2 3 4 5 12% - 15% Cloud adoption has been
relatively lower owing
to specific directives as
Transport & well as apprehension over
Logistics Cloud-security
5% • Traditional industry
sectors such as brick-and-
1 2 3 4 5 3% - 5% mortar retail (unorganized)
and Transport & Logistics
have shown little or no
adoption of Cloud
Retail
(ex
e-commerce)
4% - 6%
1 2 3 4 5
4%
BFSI
23%
1 2 3 4 5 4% - 6%
Others
8%
1 2 3 4 5
8% - 10%
Source : Gartner Verticals_Forecast_WW_2018Q1, Deloitte Analysis
29CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: MARKET FORECAST
Driven by high adoption levels, the India Cloud market is poised to
grow ~3X to USD 7.1 Bn by 2022
In USD (Bn.)
9.3 - 9.4
R= 30%
CAG
7.1 - 7.2
5.6 - 5.7
5.1 - 5.2
4.4 - 4.5
3.9 - 4.0
2.5
2018E 2020F 2022F
Conservative Base Aggressive
• At an expected growth rate ~30%, India Cloud market is expected to touch USD 7 Bn.+ i.e.
3-times of current levels
• Cloud spending in India expected to touch USD 2.5 Bn. by end of 2018, and only 1.3% of global Cloud
spending
• Additionally, in 2018, Cloud spending is expected to be ~6% of the total IT Spending
• Growth rate of Cloud spending in India is 2nd highest in the World at 40.2% (CAGR) over 2016-18,
second only to China
• Over 13% of India’s workloads are expected to be moved to Cloud driving up the adoption of Cloud
Key Assumptions
• Penetration considered as Cloud Spend as % of Total IT Spend
• To arrive at the aforementioned growth rates, Cloud penetration growth trends
were compared and evaluated across both developed and developing economies
• Conservative case : India to emulate developing economies in Cloud penetration
and reach ~10% penetration in 2022
• Base case : India will reach the Global Average of Cloud Adoption by 2022 and
reach ~13% penetration in 2022
• Aggressive case : India to emulate developed economies in Cloud penetration and
reach ~17% penetration in 2022
Source : Gartner Cloud Forecast 2018Q1, Deloitte Analysis
30CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA : EXPORTS
In addition to domestic demand, significant opportunity exists for
Indian IT companies to capture global demand in Cloud Computing
Contribution of India exports against Global demand
In USD (Bn.)
IT 600 65 10%
Services
Packaged
420 25 6%
Software
BPM 163 26 14%
Global demand India Exports
• The IT Exports market of • Emergence of BPM products • Key segments identified for
India is expected to be and services for the overseas growth of Indian IT Exports
buoyed by the consistent clients of Indian IT Export remain Cloud (and software
growth of Cloud adoption firms, such as Robotics driven infrastructure)
globally Process Automation, • Transition of on-premise
• Sectors such as SaaS are Chat Bots, Analytics etc. to on-Cloud solutions as a
already driving the fastest have created a surge in means for enhancing value-
growth in Packaged Software Cloud-based Solutioning added delivery to overseas
(Growth at 7.7%) as a preferred delivery enterprises
mechanism
Source : NASSCOM, Gartner, Deloitte Analysis
31CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: FOCUS AREAS
Providers focus areas for strategic investments to drive growth in
India
Infrastructure Talent
With increased demand for Cloud services in CSPs are driving investments in talent building
emerging markets, such as India, global and to cater to increasing demand and technological
domestic CSPs are driving investments in R&D, advancements.
Data Center Setup in focus areas etc.
Google Netmagic Freshdesk Providing Setting up Google
establishes a launches launches APN Partner a CoE in Reskilling
Cloud region in data centers new India technical, Vishakhapatnam India Program
Mumbai in 2017 in Bengaluru, data center in marketing, and as a part of to reach and
Mumbai Mumbai go-to-market its ‘Digital help 2 million
support to build inclusion’ drive developers in
a successful India acquire
business on sought-after
AWS. technology
skills
Partnerships Investments for Cloud Growth
CSPs are rapidly investing in strategic Investments in the sectors such as SaaS are
partnerships to acquire next-gen digital leading to the hyper-rated growth of the
capabilities creating a focused COE and companies, backed by a strong offering and
invocation hubs customer base
Portfolio Customer Web-Testing Payment
Engagement Platform Subscription
Software Billing
Paytm Walmart HSBC signs
Investment USD 100 Mn. USD 50 Mn. USD 18.5 Mn.
launches enters into a agreement with
AI Cloud in partnership Google Cloud
Investors Sequioa, Accel India, Accel
partnership with Microsoft for its “Cloud Accel partners Accel Growth Partners,
with Alibaba for wider first strategy” Tiger Global
use of Cloud
and artificial
intelligence
Source : Deloitte Analysis
*The organizations featured in this report are only illustrative and not exhaustive
32CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: CHALLENGES
While the outlook is largely positive, there are a few challenges to
surmount for increasing Cloud adoption
Data Security Interoperability
Data security is a major concern Necessity for Large Enterprises
for companies managing sensitive to have capability to integrate
customer and business information. smoothly with existing
India ranks 4th when it comes to deployments, in addition to cost
online security breaches benefits
Loss of Control
Regulatory Compliance Perceived concerns around
potential loss of governance
National and international at an infrastructure level,
laws on data sovereignty and where enterprises lose direct
data privacy, industry specific oversight of data, servers
regulatory compliances and and security protocols
jurisdictions are the top
considerations for enterprises Key
Challenges Vendor Ecosystem Lock-in
Potential loss of flexibility of
migrating in and out of the
Cloud vendor ecosystem, they
also lose out on access to
better products and pricing
available with other Cloud
vendors
Re-Architecture of Processes &
Systems Cost Savings Uncertainty
Migration to Cloud infrastructure Visibility of cost savings tend to
and offerings tends to have a shrink in the longer run, and is a
cascade down impact on the challenge to businesses as most
existing processes and systems, Cloud service providers have
which need to be re-engineered complex pricing models which
may also include hidden charges
in their offerings
33CLOUD - NEXT WAVE OF GROWTH IN INDIA
INDIA: RECOMMENDATIONS
Key recommendations for growth of Cloud ecosystem in India
Recommendations for Growth of Cloud Ecosystem in India
1
Drive awareness of
enterprises on advantages of 2
Cloud
Consider impact of Data
3 localization
Build custom-made solutions
for SMEs 4
5 Strict enforcement of Data
Protection Bill
Ensure strict compliance
with data privacy and
confidentiality laws 6
7 Continue/augment efforts
on broadband, power
improvements
Large incumbent IT players to
align strategies with changing 8
landscape
9 Incentivize MSMEs for
Cloud adoption; Cloud
First Guideline
Drive advanced skill
development 10
Enable ease of operations
for data center set-up,
incl. taxes and subsidies
34CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : GLOBAL
& INDIA
Cloud ecosystem comprises Service providers, Cloud consumers &
Cloud enablers
Cloud Providers Cloud Consumers
Global MNCs Indian companies Enterprise
SaaS
PaaS
IaaS
Digital Natives
System integrators/Consultants
Enablers
Government/ Industry bodies
• Cloud Providers: Organisations that provide Cloud services across the various Cloud Services such as
SaaS, PaaS, IaaS, and cover organisations with Global Presence as well as those organisations which
are of Indian origin and may have global interests/focus
• Cloud Consumers: Organisations of either Enterprise-pattern/needs for Cloud Services, or Digital
Native-oriented organisations which power mobile/portable device consumption of data
• Enablers: Technology System Integrators, Consultants as well as Bodies of the Government and
Industry Organisations that play a critical role in ensuring the overall successful deployment of Cloud
solutions (Integrators), as well as drive growth of Cloud Computing through Policy, Regulations and
Directives
*The organizations featured in this report are only illustrative and not exhaustive
35CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : GLOBAL
PLAYERS
Cloud Ecosystem | Global players
Cloud Service Provider Service Geographical Key Offerings
Offering Focus
SaaS Worldwide Key Products of Google Cloud
Platform:
• Compute
• Networking
Google Cloud offers enterprises IaaS • Security
Cloud computing solutions which
• Storage
includes Google Cloud Platform
• Analytics
and GSuite. Their technology
PaaS • Machine Learning APIs
is built on Google’s private
• GSuite
network and is the product of
• App Engine
nearly 20 years of innovation in
• Apigee
security, network architecture,
collaboration, artificial
intelligence, and open source
software.
SaaS Worldwide Key products of AWS:
• Cloud Compute, Elastic Storage,
Databases,
• Analytics
Amazon Web Services (AWS) IaaS • Networking,
is a subsidiary of Amazon.
• Developer tools
com that provides on-demand
• Management tools
Cloud computing platforms
PaaS • IoT
to individuals, companies
• Security
and governments, on a paid
• Enterprise applications
subscription basis
SaaS Worldwide Over 600 Services:
• Compute, Mobile, Storage services
• Data management,
IaaS • Messaging, Media services, CDN
Microsoft Azure is a Cloud
• Machine learning & IoT.
computing service created by
Microsoft for building, testing, Key Products:
deploying, and managing PaaS • Virtual machines,
applications and services through • Database: Azure SQL, Azure Cosmos
a global network of Microsoft- DB,
managed data centers • Azure Kubernetes service (AKS)
• Block chain workbench etc.
*The organizations featured in this report are only illustrative and not exhaustive
36CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : INDIA
MAJOR IT PLAYERS
Cloud Ecosystem | India Major IT players
IT Player Service Geographical Key Offerings
Offering Focus
SaaS Worldwide Key Solutions:
• Advisory: Bus. Process, Tech.
Readiness etc.
• Development
A dominant player in the India IaaS -- Lift & Shift Cloud Migration
IT/ITeS sector, Infosys has
-- Modernization
created a suite of offerings in the
-- Readiness Engineering
Cloud domain across Advisory,
PaaS -- Native Cloud Development
Development and Co-evolution
• Co-evolution
-- New & Future Tech.
-- Utilization, Performance & Cost
Analysis
SaaS Worldwide Key Solutions
• Advisory
• Migration
• Native
Wipro empowers the continuous IaaS • Testing
transformation journey of
• Security
enterprises by providing full
• Engineering
stack Cloud services – Edge to
PaaS • Integration
Cloud across domains delivered
• Operate
through industrialized solutions
SaaS Worldwide Key Products & Solutions
• CHybrid Cloud
• Advisory Services
IaaS • Cloud Architecture Services
TCS is a dominant player in
• Containerization of Services
the IT/ITeS Industry, with
• Dev-Ops Services
specific product and services
• Managed Services
offerings in the Cloud domain. PaaS
These solutions span Cloud
Infrastructure and Cloud
Applications as well as advisory
*The organizations featured in this report are only illustrative and not exhaustive
37CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : INDIA
EMERGING PLAYERS
Cloud Ecosystem | India emerging Players
IT Player Service Geographical Key Offerings
Offering Focus
SaaS India Key Offerings:
• Payment Gateway Integration to
small, medium and large scale
businesses
BuildaBazaar is India’s largest IaaS • e-commerce
SAAS based E-commerce
• Online store building
platform. This platform is
• Customer service
currently utilized by several
PaaS • e-commerce consulting
industry giants for their
e-commerce stores
SaaS India Key Solutions
• Hardware-as-a-Service
• Colocation-as-a-Service
• Disaster Recovery
RackBank Data centers Pvt. IaaS • Data Center Services
Ltd is Central India’s first Data
• Backup Services
center located in Indore, India.
Rackbank currently has a data
center in Indore; with data PaaS
centers in Mumbai and Chennai
being planned
SaaS India, Middle • Retail (inclusive Apparels &
East Fashion): enhance consumer
experience across websites, apps,
IaaS offline stores, e-commerce market
Capillary Technologies is a
place etc.
software product company,
• Provides AI powered retail CRM
which provides Cloud-based
solutions, e-commerce and loyalty
Omni channel Customer PaaS software
Engagement, e-commerce
• Provided B2B solutions such
platform and related services for
as digitizing clients business
retailers and brands.
to strengthen the distribution
channels, increase in retail
penetration and inventory ratio;
boost returns on promotions
*The organizations featured in this report are only illustrative and not exhaustive
38CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : INDIA
START-UPS
Cloud Ecosystem | India Start-ups
• India’s startup ecosystem has evolved to become the 3rd largest in
the world and currently boasts of 10 Unicorn start-ups
Start-up ecosystem
in India • India is house to ~5,200 technology start-ups and is witnessing a
rapid rise in the business to business start-ups focused on verticals
like health-tech, fintech, e-commerce and aggregators
• Industry focused solutions and the associated cost savings by
moving from a CAPEX based IT spending model to an optimized
OPEX model
Start-ups Adopting
• Ability to reach global markets with relative ease at an affordable
Cloud Services
cost, fueling business expansion plans
• Keeping pace with technology trends and latest innovations to play
a vital role in achieving sustained growth
• Emergence of trends to adopt SaaS and PaaS solutions by
businesses across the world leading to larger technology/IT
Start-ups Providing start-ups offering Cloud-based products
Cloud Services • Demand origination from Developed economies as well as captive
demand from Indian industry leading the growth of Cloud-start-ups
across SaaS, IaaS, PaaS
Source : Deloitte Analysis
39CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : INDIA
START-UPS
Cloud Ecosystem | India Start-ups (Cloud service providers)
Cloud Service Provider Service Geographical Key Offerings
Offering Focus
SaaS Worldwide Key Offerings
• Analytics
Practo is the leading healthcare • Databases
platform that connects millions • Networking
IaaS • Appointment Booking
of patients with healthcare
providers across the world • Online doctor consultation
• Ordering medicines.
Founded & HQ: 2008, Bangalore, PaaS
India
SaaS Southeast Asia, Key Offerings:
South Asia, • Virtual Receptionist
and the Middle • Superfax
East • SmartIVR
Knowlarity Communications is a IaaS • Hosted PBX
Cloud telephony and AI company
• IVR, Toll Free Numbers
which provides Cloud-based
• Virtual Numbers, Conferencing
customer service and sales call
• API
handling solutions to businesses PaaS
• Cloud
in Southeast Asia, South Asia,
and the Middle East.
Founded & HQ: 2009, Singapore
SaaS Worldwide Key Offerings:
• Customer support service
• Multi-channel support
IaaS • Analytics
Freshdesk is Cloud-based
• Customer queries
customer support software
company. It focusses on cross-
functional team collaboration PaaS
to deliver exceptional customer
support.
Founded & HQ: 2010; Chennai,
India
*The organizations featured in this report are only illustrative and not exhaustive
40CLOUD - NEXT WAVE OF GROWTH IN INDIA
CLOUD ECOSYSTEM : INDIA
START-UPS
Cloud Ecosystem | India Start-ups (Cloud service providers)
Cloud Service Provider Service Geographical Key Offerings
Offering Focus
SaaS Worldwide Key offerings:
• Data management-as-a-service
solution
• Cloud applications
Druva is currently one of the IaaS • Data protection
leading companies in Cloud data
• Security
protection and management
• Analytics
operating across 6 countries
PaaS • Server
It’s customers include over
4,000 global organizations, and
protects over 40 PB of data.
Founded & HQ: April 2008;
California, USA
SaaS India, China Key offerings:
and US • Predictive intelligence
• Process automation tools
• AI
Pentation Analytics is an IaaS • Analytics
insurtech company which
• Enterprise applications
helps enable insurers and
intermediaries to better engage
with policy holders PaaS
Founded & HQ: 2015; Hartford,
Connecticut
*The organizations featured in this report are only illustrative and not exhaustive
41CLOUD - NEXT WAVE OF GROWTH IN INDIA 42
CLOUD - NEXT WAVE OF GROWTH IN INDIA
Section II
INFRASTRUCTURE AS
A SERVICE - IAAS
43CLOUD - NEXT WAVE OF GROWTH IN INDIA
SECTION SUMMARY
IaaS evolution, growth, trends, market size, drivers, challenges &
recommendations
01 Global IaaS market is estimated at 18% of the global IT infrastructure spend in 2018
and is forecasted to grow at a CAGR of 25% to become USD 102 Bn. by 2022
02
India’s IaaS market contributes to 21% of its IT infrastructure spend, and has an
estimated market size of USD 956 Mn. (2018). It is estimated to grow at a CAGR of
25% reaching USD 2.3 - 2.4 Bn. by 2022
03
IaaS demand drivers in India : economic benefits to enterprises and start-ups
choice with customized product offerings and flexible pricing models, and the
governments push towards a connected ecosystem
04
IaaS supply drivers in India : Improved infrastructure facilities (Submarine landing
stations and affordable power), government’s commitments towards data center
investments and availability of a large talent pool
05
The data center supply ecosystem in India has expanded exponentially in the last
four years with all the large global IaaS players (AWS, Google Cloud, IBM, Azure etc.)
and established domestic players (Tata Communications, ESDS, CtrlS, Netmagic etc.)
now operating in India
06
Lack of access to quality broadband (pipe), reliable power supply, stringent land
(place) regulations and cumbersome permission procedures are some of the
challenges faced by IaaS players
Source : Gartner Cloud Forecast 2018Q1, Industry reports, Deloitte Analysis
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