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Cloud computing in India is set to explode

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For 32-year-old Indian resident Yogesh Shah, Founder & Director of iResearch Services, migrating to cloud computing was the best business decision he's made since starting his $2 million Pune-based research company six years ago.

His firm, which gathers business intelligence on industries for global clients like Forrester and IDC, initially struggled with crashed servers, missing emails and corrupted files – a nightmare for its 150-workforce dealing with data spanning 100 countries and in more than 30 languages.

"Email connectivity, VoIP, file sharing, web meetings and a robust IT infrastructure is the lifeblood of our business," said Shah.

Since the move into cloud, he has never looked back. "It has transformed my business and my work life. Productivity is up, costs down and iResearch Services is cruising," he said, noting that in-house fire-fighting time is down 20 percent and email storage and backup cost down 15 percent with cloud computing.

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For the 50 million or so startups and small businesses in India, much like Shah's, cloud computing is set to be a game changer.

The cloud – which essentially is a network of remote servers – enables companies to store, manage and process data and use programs through a web-based interface. Data and programs stored in the cloud can be accessed from anywhere through various devices with web connectivity, which is an advantage for small companies who don't have a huge IT budget.

"If I had to buy some of the cloud solutions like intranet, helpdesk, file sharing etc… from different vendors, I would have to shell out an extra $20,000 at least. Not to mention the headache of third-party support and time costs," Shah said.

According to IDC, the cloud market in India stood at $688 million in 2012, a figure that's expected to rise to $3.5 billion by 2016. An IDC survey of 473 respondents, 200 of which were small organizations, showed a huge willingness to adopt the cloud technology.

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"The eco-system is ready in terms of consumer awareness and the growth of digital mobility with smart phones, tablets and internet access. Going forward we see cloud computing growing rapidly "said Jaideep Mehta, country general manager of IDC India.

Already, the number of small businesses in India using Google Apps, a cloud hosting service, has grown 70 percent in the past year.

"Historically, small companies had poor tech choices – they could either use expensive software designed for large companies or inexpensive software lacking functionality. Today, cloud is leveling the playing field," said Ricky Kapur, managing director of Google Enterprise Asia.

The potential for India is huge, he added: "India is home to around 47 million small businesses, yet only 1 percent are online."

Google isn't alone in the opportunistic pursuit of India's cloud potential. Microsoft, an entrenched player in the Indian market, is using some innovative initiatives to tap the small business segment.

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Last month, the software giant announced a trade-in scheme for small enterprises to exchange their used personal computers for credits to use the company's cloud-based Azure platform.

"Our biggest advantage is that most businesses in India have grown up working on one or many Microsoft products and have a degree of comfort with us," said Meetul Patel, general manager at Microsoft India, noting that Microsoft has over 10,000 partners in 250 cities in close touch with businesses on the ground.

"We have been constantly upgrading our offerings in the Indian market," he added.

However, going forward challenges remain.

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The most important challenge is that of security, which has been exacerbated by recent global security breaches such as the heartbleed problem in the United States. Protecting sensitive information that sits on a public cloud remains a sticking point for cloud adoption.

Furthermore, there is a complicated supplier eco-system with local suppliers, resellers and partners as well as ambiguous service agreements that make the choices for cloud customers confusing.

But overall India's businesses have started warming up to the cloud.

"Spending on cloud services increased over the past two years, indicating even the mom and pop shops are ready to adopt the cloud," said Kavita Bhadauria, research manager at IDC."

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