Small businesses drawing power from cloud

If your business is small in size and you can’t afford to spend large amounts of money on maintaining IT infrastructure then you should head for the ‘cloud’.

In other words, instead of spending money in creating your own IT infrastructure, you rent infrastructure hosted by others in the world wide web.

It will equip you for better business at an extremely low cost to begin with, yet offer you the option to scale up according to your business growth. Going on the cloud means getting your enterprise data processed and reports generated on a hosted server managed and operated by a data hosting company.

When the CTO (chief technical officer) of Apeejay Group (which owns Oxford Bookstore) in Kolkata, Subhasish Saha, had opted for TCS iON, the 80-year-old bookstore used different applications for online store and offline store connected by day-end process and the books’ database in the store’s inventory had little information of seasonal and topical trends. The motive in implementing cloud was to reduce shipping time by 50 per cent and build up a loyalty point programme that customers would get on the basis of their shopping.

“We rolled out Gems, a loyalty points gateway that helped broaden the customer base of Oxford Bookstore. Many organisations rewarded employees with Oxford Gems that would then get redeemed with books sold at oxfordbookstore.com and to add to that the delivery time has come down immensely,” says Saha.

Of late, there have been some path-breaking developments in how IT infrastructure works, leading to the drop in costs of IT-as-a-service (ITaaS). The biggest among them is the emergence of cloud computing and companies like TCS, Wipro, Cisco, Google and HCL Infosystems have entered the market to make the most of the situation.

Started in 2011, TCS iOn is an example of ITaaS, an innovative service model delivering a bouquet of products and services on-demand. Hyderabad-based Razi Healthcare Private Limited, which was expanding its network of primary healthcare clinics in Andhra Pradesh, partnered with iON to use its cloud computing and grow in the process.

Another company which is big in cloud services is Google. In November 2011, it had launched ‘India Get Your Business Online’, an initiative in collaboration with Hostgator to provide free hosting and website building to small businesses. However, from the second year, the user has to pay for the services rendered.

Through this project, Google plans to bring almost 500,000 SMBs into the Internet space trying to propel better business for them and till date, around 50,000 SMBs have registered for the service. Google’s initiative makes it easy to create one’s own website and also get the site hosted for a hassle-free access by the users. Even those who do not have much knowledge about internet can create their website using simple and step-by-step templates.

There are many who expanded their business using Google. Usha Mudukutore from Bangalore, for example, began her soft furnishing company Srianvi Interiors in 2004 but had very few buyers as she had a tough time explaining to people what kind of goods she sold. Though people understood the concept of selling curtains and other home accessories, they wanted to see samples.

In 2012 Usha created her website through Google’s initiative for displaying samples and taking orders. She now happily says, “My business has grown 30 to 40 per cent in a few months and people can now see what I sell, just by logging on to my site.”

Though the global internet giant at present does not make money from this service, it is hopeful that once the users get to know the benefits of a website they will buy ad space on Google yielding revenue, says Google India spokesperson Gaurav Bhaskar.
The company is also investing in print ads and roadshows to promote this initiative.

Huge potential

According to industry statistics, out of 8 million, there are only 400,000 small businesses that have internet presence and this is the market Google is targeting.

Meanwhile, another player Cisco, apart from delivering products, solutions and services to organisations and service providers to build their own clouds, enables service providers to deliver secure cloud solutions and services like collaboration cloud, video delivery, infrastructure as a service to their customers including SMBs.

Cisco India & SAARC Senior Vice-President (Data Centre and Cloud) Rajesh Rege says that there has been a clear change in the mindset of SMBs who now view IT investment as a strategic decision enabling them to fulfil their business needs.

Rege agrees that the ‘pay-as-you go’ model offered through cloud is fast becoming a preferred consumption model as they get charged on basis of their consumption. Another IT giant Wipro has cloud offerings which can be broadly divided into IT-as-a-Service and Software-as-a-Service.

Since its inception in 2009, the company has seen a good response from SMBs. The value proposition for cloud also enables Wipro to retain and enhance footprint with existing customers.

Wipro Infotech Head (Cloud Computing Services and Data Centre Services) Vinay Dwarakanath believes that key drivers for cloud services are the accrued financial benefits to SMBs in terms of cash flow without any significant upfront investment in capital expenditure.

The company is definitely focusing on generating volume to be price competitive in the market as the cloud business model thrives on volumes and it is a win-win for the service provider as well as customer. In addition to this, cloud computing can also enable them to scale quickly for surging demand and help them launch new operations quickly with little to no up-front investment. 

In India, with 8 million small and medium businesses, the scope for cloud adoption looks enormous. Cloud services help small businesses not only to reduce technology expenses but also to access services from anywhere. However, the catch still remains pay-per-usage which means that you can upscale or downscale your cloud investment according to your business need.

Many large organisations have to maintain a system administrator, but with cloud services, the provider manages all hassles, remotely too. In July 2010, HCL Infosystems had launched HCL O’zone, to cater its cloud-based services to enterprises, mid-sized organisations (SMBs) with the flexibility to have technology landscape monitored remotely on a regular basis while maintaining full use of tools hosted in a secure environment.

“In the SMB space, we have been able to make much headway, especially in the medium businesses segment. Also in the last few quarters we have seen definite uptake of our IaaS (Infrastructure-as-a-Service) cloud offerings,” says HCL Infosystems COO (Enterprise Business), Rajeev Asija.

One can thus say that the cloud services are just beginning to see traction with SMBs and this market is still at its early stage of development. Many SMBs, however, are concerned about data security and wary of possible data theft from cloud hosting as against having complete control on information in one’s own set-up. Surely, companies offering cloud services will have to address these concerns to win confidence.