CloudServices

MarketsandKeyDriversStudy

IqbalKhan,July2015

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CONTENTS:•  CloudlandscapeinIndia

•  IndiakeydevelopmentsandTrends•  IndiaCloudReadiness•  IndiaLocalCloudProviders•  IndiaGlobalCloudServiceProviders•  IndiaKeyCoudDrivers,Barriers•  IndiaManagedServicesDriversandBarriers

•  KeyCustomersegmentsandsomesuccessstories•  Media•  Telecom•  Travel/Hospitality•  Manufacturing•  Healthcare

•  TheSMESegment•  CompePtors/TheirCustomersandsize/TheirOfferingsUSP•  CloudGlobalMarketLandscapeathighlevel•  SoluPonandValuesellingratherthanPrice-basedselling•  KeyCustomerChallengesandBenefits•  CloudDecisionMakingStakeholdersandtheirroles•  IntelligenPaLearningssofar•  RecommendaPonsandAcPonPlan–Howtomoveforward

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CONTENTS:•  CloudlandscapeinIndia

•  IndiakeydevelopmentsandTrends•  IndiaCloudReadiness•  IndiaLocalCloudProviders•  IndiaGlobalCloudServiceProviders•  IndiaKeyCoudDrivers,Barriers•  IndiaManagedServicesDriversandBarriers

•  KeyCustomersegmentsandsomesuccessstories•  Media•  Telecom•  Travel/Hospitality•  Manufacturing•  Healthcare

•  TheSMESegment•  CompePtors/TheirCustomersandsize/TheirOfferingsUSP•  CloudGlobalMarketLandscapeathighlevel•  SoluPonandValuesellingratherthanPrice-basedselling•  KeyCustomerChallengesandBenefits•  CloudDecisionMakingStakeholdersandtheirroles•  RecommendaPonsandAcPonPlan–Howtomoveforward

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CloudLandscapeInIndia

IndiaCloudCompuPngSpending

•  BMIesPmatestheoverallIndiancloudcompuPngmarketatatotalvalueofINR42.7bnandisforecasttogrowataCAGRof35.9%

•  2015-2019toreachINR194.3bninthefinalyearoftheforecast.

Source:BMI–IndiaInforma3onTechnologyReport

CloudAdopPonWillDrivetheGrowthIndia’sITMarket

•  AreportpublishedbyITresearchandadvisoryfirmGartneresPmatesthatinIndiaalonethemarketforcloud-basedserviceswillrisebyathirdto$557millionthisyear,andmorethantripleby2018.

•  TotalcloudmarketinIndiatogrowat45%CAGRto$14.8billion

•  CloudcontribuPontoITspendtoriseto17%ofoverallmarketby2020.

•  PubliccloudmarketinIndiais$700-800millionin2015andwillriseto$7.0-7.4billionin2020

•  PrivatecloudmarketinIndiais$1.6-1.8billionin2015andwillriseto$7.4-7.6billionin2020.

•  Government,BFSI,educaPon,healthcareandtelecomtobekeygrowthverPcals.

6~Zinnov

hhp://goo.gl/ctmc88

ImpactofServerVirtualizaPon

•  ServervirtualizaPonallowsformulPpleoperaPngsystemstoberunconcurrentlyonasinglecomputerandononephysicalserver,therebyhelpingsubstanPallycutoperaPngcosts.

•  InAugust2013itwasesPmatedthatservervirtualizaPoncouldhelpIndiancompaniessaveasmuchasUSD3.89bnby2020.

•  Oftheprojectedsavings,USD2.37bnwouldbederivedfromlowerspendonserversthemselves,USD666mnwouldbederivedfromlowercostsforpoweringandcoolingtheserversandUSD827mnwouldbederivedfromstaffandadministraPvecostsassociatedwithrunningtheservers.

AstudybyIDCen3tledVision2020

CloudServicesandpotenPaltargets

•  ISV(independentso1warevendor)isthedriverforcloudadopPon•  ISVsplayaverycriPcalroleandcurrentlythereisalotofinvestmentbeingdoneindeveloping

cloudexperPse.•  TheInherentadvantagesofflexibilityandriskmiPgaPon,cloudhasbecomeanessenPalpartof

ourserviceofferings.•  ISVsneedtodevelopexperPseincloudtechnologyifwewanttoretainandgrowourcustomer

base.•  Companiesthatareinterestedinadop8ngcloudlikeTataCommunica8ons,BajajAllianz.•  TheIndiancompaniesshouldtargettheSMEsandgovernmentbasedprojectsastheyare

goingtobekeydriversofrevenueinthefuture.

~SudhirMurthy,Manager-SeniorArchitectCloudServices,WiproIndia

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hhp://goo.gl/dLQPo4

IndiaKeyTrendsandDevelopment•  April2015itwasreportedthatMicroso1andIndia-basedZohowouldsetupdatacentersinIndiatocatertothehuge

demandforcloud-basedservicesinthecountry.•  ThestepwillhelpthemofferquickeraccesstodatafromlocalserversandalsomeetfutureregulaPonstohavelocal

serversfore-governanceiniPaPvesonthecloud.•  Microso1intendstoestablishthreedatacentersinthecountrybyend-2015toprovideAzureandOffice365services

fromlocaldatacenters.•  Zoho,ontheotherhand,isplanningtoinvestUSD1mninestablishingthedatacentreandaimstogrowitsdomesPc

andgovernmentbusinessesthroughit.•  Meanwhile,inMay2015IBMwasreportedtobeconsideringopeningitsseconddatacentreinIndia.Thedatacentre

willenablethecompanytoaddressthedemandfromvarioussectorssuchasgovernmentandfinancialservices.•  APACvendorsarealsotargePngIndia,forinstance,inApril2015NTTCommunica8ons(NTTCom)announcedits'India

BusinessStrategy',underwhichthecompanyplanstoconPnueitsinvestmentinandexpansionofhigh-qualitydatacentre/cloudservicesandinternaPonalnetworkservicesbasedonitsservicestrategy'GlobalCloudVision’.

•  AddiPonally,NTTComannounceditsintenPontoopenanewUSD100mndatacentreintheIndiancityofMumbaiwithaninvestmentofmorethanUSD100mn.TheconstrucPonofthecentrewillbeundertakenbyNTTCom'ssubsidiaryNetmagic.Thefacility,whichisscheduledtobecomeoperaPonalfromQ315,willbeNTTCom'sninthdatacentreinIndia.

IndiaCloudReadiness

•  ThesignificantchallengesoftheIndiancloudcompuPngenvironmentarecapturedintheresultsofthe2014CloudReadinessIndex,inwhichIndiaonlyscoredaheadofVietnamandwasfarbehindtheregionalleaderssuchasJapan(seeaccompanyingchartbelow).

•  Indiascoredrela8velystronglyinthefreedomofinforma8onanddatasovereigntycategories,aproductofitspoliPcalandlegalsystem.Meanwhile,intermsofbusinesssophisPcaPon,thelargeoutsourcingindustry,aswellasfinancialservices,presentupsideforcloudvendors.

•  However,India'sscoreisheldbackbyconcernsthatBMIhashighlightedforseveralyears,namelythepoorqualityofbroadbandinfrastructureandinsufficientinternaPonalbandwidth.

•  IndiaisaregionallaggardintermsofbroadbandinfrastructureinvestmentandwedonotexpectIndiatoclosethegaptoitspeers,atleastinthemediumterm.

•  Thisnetworkinfrastructuredeficitwillpushupcloudcompu8ngcostsforvendorsandend-usersandactasadragonadopPonandmarketvaluegrowth.

•  Nonetheless,thesheersizeoftheIndianmarketandpoten8alforcloudadop8onwhereon-premisesdeploymentshavemuchlowerpenetraPon,hasbeensufficienttoahractvendorinterest.

CloudReadinessIndex

LocalCloudProvidersandISPsBSNL•  InMay2013,telecomsoperatorBSNLandDimensionDatalaunchedjointcloudservicesinIndia.TheserviceisbasedonDimension

Data'sManagedCloudPlaqormandBSNL'senterprisecloudservicesviaitsdatacentres.Theserviceisbasedonstandardisedarchitectureandisabletosupportpublic,privateandhybridcloudmodels.Thepartnershipalreadyhas15majorclientsandistargetedatlargeenterprises,SMEsandgovernment,withBSNLstaPngthatthepublic-privatepartnershipwillbesuitableforIaaSprovisionatstateandcentralgovernmentleveltostrengthene-governmentiniPaPves.

•  InlaunchingsixnewdatacentresatthesamePme,BSNLismakingaclearsteptowardsitsservices-centricstrategy.ThecompanyhasinvestedaroundINR2bninitsnewdatacentres,showingastrongcommitmenttodataservices.

•  ThesixdatacentresarelocatedinMumbai,Faridabad,Ahmedabad,Jaipur,LudhianaandGhaziabad.RelianceJioInfocomm•  InJune2014,RelianceJioInfocomm,asubsidiaryofIndia-basedRelianceIndustries,announcedplanstoestablish14datacentres

acrossIndia.•  Themoveisinlinewiththecompany'seffortstocreateacloudcompuPnginfrastructure,whichwillenabletheoperatortoservethe

healthcare,educa8onandentertainmentsectors.•  Thesedatacentreswillallowthecompanytoofferservices,includingdirect-tohometelevision,video-on-demand,mailingand

messagingservicesandvoiceoverinternettelephony.•  InaddiPon,thecentreswillaidthecompanyinsynergisingtheshoppingandcontentbusinessesofNetwork18.CtrlS•  DespiteincreasedcompePPonfromgloballeaders,investmentfromlocalvendorsconPnuedinH214,withIndia-baseddatacentre

providerCtrlSDataCentersannouncingplansinNovember2014toinjectINR6.26bn(USD101.23mn)intotheconstruc8onoftwonewdatacentresinChennaiandBengaluru.

Bhar8Airtel,Sify,TrimaxandNetMagicareinvesPnginbandwidthandfaciliPestosupportnewcloudserviceofferings.

ChallengesfacedbyLocalPlayers

•  However,smallerIndianproviderscouldul8matelybesqueezedouttothemarginsofthemarketasglobalgiantstargetmarketshareratherthanprofitability-atleastintheshort-to-mediumterm.

•  OnestrategyforlocalcloudvendorsistotargetlessahracPveopportuniPeswherecompePPonislessintense.

•  2ndopPonisfortheseplayerstogetacquiredbyGlobalplayers

GlobalCloudServiceProvidersAWS•  AWSplanstostartitsdatacenterinIndiainyear2016•  GlobalIaaSmarketleaderAmazonWebServices(AWS)wasalsoreportedtobeuppingitsfocusonIndiainH214.•  InOctober2014,CEOJeffBezosstatedthatAmazonmayestablishadatacentreinIndiaandthatthefirmwasevaluaPngtheviabilityofsuchastepthroughwhichit

aimstocapitaliseongrowingcloud-basedopportuniPesinIndia.•  ItwasreportedAWSisconsideringthemoveinresponsetotheinvestmentbyothercloudproviderrivalssuchasGoogle,IBMandMicroso1.•  AWS'strategybecameclearerinMarch2015whenitsignedadealforIndiantelecomsoperatorBhar8AirteltoprovideAWScloudcompu8ngservicesto

customersinIndia.•  Undertheagreement,customerswillreceiveadedicatedconnecPonbetweentheirpremisesandAWSdatacentres.AdirectconnecPontotheAWSdatacentreswill

lowernetworkcosts,offerhigherbandwidththroughputandprovideamoreconsistentnetworkexperience,whichwillhelpbusinessesofallsizesrapidlyexpandtheirorganisaPons.

Microso1•  MicrosorinNovember2014reportedplanstoinvestINR14bn(USD227mn)toestablishthreeclouddatacentresintheIndianciPesofMumbai,PuneandChennai-

withthethreecentresexpectedtobeoperaPonalbyYE15.•  MicrosorintendstocapturetheIndiancloudmarket,especiallyinthebankingandtelecomindustriesthroughitsdomesPcdatacentredeploymentproject.•  Thedecisionforofferingcloudservicesfromlocaldatacentrescamearerthecompanyrecordeda100%riseinitscloudbusinessinthecountryduring2013,according

toCEOSatyaNadella.MicrosorregisteredrevenuesofINR22.61bn(USD366.75mn)fromIndianoperaPonsinFY2013/14.•  Microso1hasabroadcloudstrategyinIndia,butisalsotargePngspecificopportuniPeswithtailorediniPaPves.InMay2015,MicrosorintroducedEdu-Cloud,a

cloud-basedsoluPonthatcombinesadigitallearningplaqormforteachersandstudentsandsorwaresoluPonsforK-12schoolsinIndia.•  ThecompanysignedadealwithSriChaitanyaSchools,achainofeducaPonalinsPtuPonswithnetworksintheIndianstatesofAndhraPradeshandTelangana,forthe

offering.Edu-Cloudwillprovideenterpriseresourceplanning,SISsolu8onsandadigitallibraryserviceoncloudfortheins8tute,inaddiPontovirtuallearningplaqormandteachertraining.Microsor'sgrowthtargetistoreach1,500insPtuPonsand6,000,000studentswithEdu-CloudinIndiabyYE16.

GlobalCloudServiceProvidersIBM•  IBMreportedamorebullishoutlookforcloudservicegrowthinMarch2014.IBMseesanupwardtrendforadopPonofcloudcompuPnginIndia•  EstablisheditsfirstclouddatacentreinAiroli,ontheoutskirtsofMumbai,inthestateofMaharashtra,India.Thenewfacilitywillbededicatedtowardsprivate

cloudservicescateringtoenterprisesandsmallandmediumbusinesses.Google•  InApril2015,GooglesignedapartnershipdealwithUK-basedconsulPngfirmPricewaterhouseCoopers(PwC)fortheDigitalIndiainiPaPveandlarge

enterprisedealsinIndia.TheIndianpartnershipisanextensionofaglobaldealsignedinOctober2014.•  Withtheagreement,Googleaimstopushitselfintolargee-governanceprojectsandimprovesalesforitscloudservicesintheAsiancountry.InaddiPonto

opportuniPesderivedfromgovernmentandpublicsectorcompanies,GoogleandPwCaretargePngindustryverPcalsincludingfinancialservices,retail,pharmaceu8calsandhealthcare.

VMWare•  InMarch2015USvendorVMwareannouncedtheintroducPonofthehyper-convergedEVO:RAIL•  infrastructureapplianceforIndia.TheaimoftheinfrastructureapplianceistohelpITfirmsstreamlineanddramaPcallysimplifyinstallaPonandscaling-outof

sorware-definedITinfrastructure.•  VMwarejoinedhandswithFujitsu,HitachiDataSystemsandNetAppforEVO:RAIL.BT•  UK-basedtelecomsoperatorBTannouncedthelaunchofitsCloudComputerserviceinIndiainFebruary2014.•  TheinformaPonmanagementserviceoffersbusinessesa'payasyougo'cloudsoluPonwithhighqualityandsecuritythatpromisescostsavingsofupto40%.•  BT'sCloudComputeserviceiscurrentlyavailablein17countriesacrossfourconPnents.NTTCom•  APACvendorsarealsotargePngIndia,forinstance,inApril2015NTTCommunicaPons(NTTCom)announcedits'IndiaBusinessStrategy',underwhichthe

companyplanstoconPnueitsinvestmentinandexpansionofhigh-qualitydatacentre/cloudservicesandinternaPonalnetworkservicesbasedonitsservicestrategy'GlobalCloudVision'.

•  AddiPonally,NTTComannounceditsintenPontoopenanewUSD100mndatacentreintheIndiancityofMumbaiwithaninvestmentofmorethanUSD100mn.TheconstrucPonofthecentrewillbeundertakenbyNTTCom'ssubsidiaryNetmagic.

•  Thefacility,whichisscheduledtobecomeoperaPonalfromQ315,willbeNTTCom'sninthdatacentreinIndia.

GlobalMarketShareandGrowthRate

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•  AWS’exactmarketshareisputat27%bySynergy,gaininggroundarerwhattheresearchfirmcalleda“relaPvelysor”Q2.

•  WhilethegraphshowsMicrosorhavingbyfarthehighestpercentagegrowth,it’sallrelaPve:AWSrevenuegrowthoverthepastfourquartersisgreaterthanMicrosor’stotalcloudinfrastructurerevenue.

•  Thesecondquarteranalysiscanbefoundhere,withAWS’percentagegrowthat49%comparedwithMicroso1’s164%andIBM’s86%.BackthentheheadlinestorywasGoogle’scomparaPvelackofgrowth,at‘just’47%.

Source:SynergyResearchGroup

AZUREVSAWSMicroso1Azure AmazonWebServices(AWS)

AvailableRegions AzureRegions AWSGlobalInfrastructureComputeServices VirtualMachines(VMs) ElasPcComputeCloud(EC2)

CloudServices AmazonElasPcBeanstalkAzureVisualStudioOnline NoneAzureWebsitesandApps None

ContainerSupport DockerVirtualMachineExtension(howto)

EC2ContainerService(Preview)

ScalingOp8ons AzureAutoscale(howto) AutoScalingAnaly8cs/HadoopOp8ons HDInsight(Hadoop) ElasPcMapReduce(EMR)

GovernmentServices AzureGovernment AWSGovCloudApp/DesktopServices AzureRemoteApp AmazonWorkSpaces

AmazonAppStreamStorageOp8ons AzureStorage(Blobs,Tables,Queues,

Files)AmazonSimplgeStorage(S3)

BlockStorage AzureBlobStorage(howto) AmazonElasPcBlockStorage(EBS)HybridCloudStorage StorSimple None

BackupOp8ons AzureBackup AmazonGlacierStorageServices AzureImportExport(howto) AmazonImport/Export

AzureFileStorage(howto) AWSStorageGatewayAzureSiteRecovery None

ContentDeliveryNetwork(CDN)

AzureCDN AmazonCloudFront

DatabaseOp8ons AzureSQLDatabase AmazonRelaPonalDatabaseService(RDS)AmazonRedshir

NoSQLDatabaseOp8ons AzureDocumentDB AmazonDynamoDBAzureManagedCache(RedisCache) AmazonElasPcCache

DataOrchestra8on AzureDataFactory AWSDataPipelineNetworkingOp8ons AzureVirtualNetwork AmazonVPC

AzureExpressRoute AWSDirectConnectAzureTrafficManager AmazonRoute53

LoadBalancing LoadBalancingforAzure(howto) ElasPcLoadBalancingAdministra8on&Security AzureAcPveDirectory AWSDirectoryService

AWSIdenPtyandAccessManagement(IAM)

Microso1Azure AmazonWebServices(AWS)Mul8-Factor

Authen8ca8onAzureMulP-FactorAuthenPcaPon AWSMulP-FactorAuthenPcaPon

Monitoring AzureOperaPonalInsights AmazonCloudTrailAzureApplicaPonInsights AmazonCloudWatchAzureEventHubs NoneAzureNoPficaPonHubs AmazonSimpleNoPficaPonService(SNS)AzureKeyVault(Preview) AWSKeyManagementService

Compliance AzureTrustCenter AWSCLoudHSMManagementServices&

Op8onsAzureResourceManager AmazonCloudFormaPon

APIManagement AzureAPIManagement NoneAutoma8on AzureAutomaPon AWSOpsWorks

AzureBatch AmazonSimpleQueueService(SQS)AzureServiceBus AmazonSimpleWorkflow(SWF)None AWSCodeDeployAzureScheduler NoneAzureSearch AmazonCloudSearch

Analy8cs AzureStreamAnalyPcs AmazonKinesisEmailServices AzureBizTalkServices AmazonSimpleEmailServices(SES)MediaServices AzureMediaServices AmazonElasPcTranscoder

AmazonMobileAnalyPcsAmazonCognitor

OtherServices&Integra8ons

AzureMachineLearning(Preview) None

None AWSLambda(Preview)None AWSConfig(Preview)

NecktoneckmatchingintermsofIaaSfeatures,InaddiPonMShasSaaSfeatures

KeyDriversforcloudIaaSintheIndianmarket

•  SMBsegment:ThesizeoftheIndianSMBmarketexceedsthatofanyothercountryintheAsia-Pacificregion.CloudIaaSservicesgiveSMBsaccesstotechnologiestheywouldotherwisenotbeabletoafford.ThelowleadPmeofcloudIaaStodeploymentandscalabilityalsonegatestechnologybarrierstogrowth.ForvendorsofferingIaaS,theIndianSMBmarketprovidesauniqueopportunitytoenterandgrowthissegment.

•  Low profitability of third-party data center service providers: Third-party data centers currently operate at extremely thin margins, provide co-location and raw hardware capacity services. IaaS vendors have opportunity to provide more value added services

•  ISPtelecomoperators:TelecomISPshaveinvestedsubstan8allyinbandwidthcrea8on,andcurrently,themarkethasexcessbandwidthcapacity.IntroducingcloudIaaSservicestotheircurrentporqoliowillhelpISPsincreasebandwidthusageandincreasecustomers’switchingcosts.

•  Enterprise data center expenditure: With significant power and electricity overheads, enterprise data centers are a major drain on enterprise IT budgets in India. The cost structure of an average data center is illustrated below. As a result of under-utilization, the overhead cost of under-utilized infrastructure tends to be a significant cost driver.

18AsperEYreport–CloudAdop3oninIndia

KeyBarriersforCloudAdopPon

CloudAdapPoninIndiahasbeenontherisespeciallyinthenewageeconomyandStart-ups,CustomersarewakinguptoquesPonsaroundScalability,Infracost,TCOetc.Majorhindranceandroadblocks•  DataSecurityandPrivacy,IntegraPonwithexisPngOnPremiseSystemsandSecurity•  LackofverPcal/sectorExperPse•  Legalandregulatorycompliance•  DataCenters(AWS)residingoutofthecountry,whichlimitsadopPoninBFSI,ResistanceinFinancialSector•  EcosystemMaturityTheIndiaIaaSecosystemissPllinnascentstages–Thisisanopportunityaswell,wehaveblue

oceans•  Customerawareness-CustomersNotawareofitsoverallimpactandthereturnoninvestment(ROI)thatadopPng

suchtechnologiescanyield.AlsoNotawareofthespecificservicesthatvendorsinthisspaceoffer.•  ConnecPvity:PoorconnecPvitymayprovetobeasignificantbarriertoadopPon.LowinternetandPCpenetraPon

(lessthan1%inurbanareas,31PCsper1,000,accordingtoNASSCOM’sreport,PerspecPve2020)arediscouraging

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KeyDriversforManagedServicesProviders

•  Needtocontrolcosts.CostpressuresaredrivingtheadopPonofmanagedanddatacenterservices.Thedemandwillgrowatahigherrateassmallandmedium-sizedfirmsalsorealizethebenefitofuPlizingITsystemsonanopexmodel.

•  Focusoncorebusiness.DuetotheincreasedcompePPonandwithITinfrastructurebecomingmorecomplexanddemanding,manyorganizaPonsarefindingitdifficulttomanagetheirinfrastructurethemselves,andarethusoutsourcingthetasktovariousmanagedserviceproviders(MSPs),helpingthemfocusontheircorebusinessinsteadofworryingaboutIT.

•  Growthofhos8ngproviders.DuetoastrongfocusofnewtelecomserviceprovidersonthedeliveryofhosPngservices,parPcularlyforthehosPngofapplicaPonssuchasenterpriseresourceplanning(ERP),customerrelaPonshipmanagement(CRM),andothers,therewouldbeopportuniPesforITservicesvendorsintheareasofprovidingwhite-labeledservicestothetelecomserviceproviders.

•  Riskmi8ga8ons.Managedservicesprovidersdonotprovidesupportonlyintheeventofanemergencyorrecoverybutalsoprovidemonitoring,whichcanbeinvaluableinpreven8ngproblemsbeforetheycanhaveanimpactonthebusiness.ProacPveandremotemonitoringleadstotheearlyidenPficaPonofanyissuesandcanfixthemorenbeforeweevenknowthereisaproblem.AutomaPctriggersthatrangefromlowtonercartridgestodwindlingdiskspacetoapotenPalserverfailurearesetuptoidenPfyanyproblembeforeitaffectsourbusiness.

20IDC:IndiaManagedServices2013MarketAnalysisand2014–2018Forecast

KeyInhibitorsforManagedServicesProviders

•  InternalResistancebytheITmanagers•  Lossofcontrol.ITmanagershaveclearconcernsabouthandingovertheirsystemsandapplicaPonstoathirdparty,whichmaynot

necessarilyhaveadeepunderstandingoftheirsystems.AcommonbeliefamongorganizaPonsisthatoncetheirsystemsareoutsourced,theydonothavecontroloverthem.

•  Lackofver8cal/sectorexper8se.IndiaorganizaPons—specificallyinsectorsthatdealwithintensivedatavolumeandhavecomplexbusinessprocesses(suchastransportaPon,uPliPes,andothers)—believethatserviceproviderslackver8calexper8seandfailtounderstandthecomplicatedbusinessprocessesandapplica8onsrunningtheseprocesses,whichisessenPal.Thepartners'lackofunderstandingofsuchapplicaPonslimitstheengagementscope.OrganizaPonshavestartedadopPngan80:20modelwhenitcomestooutsourcingthemanagementofapplicaPons,whichessenPallymeans80%ofthenoncriPcalapplicaPonsareoutsourcedand20%ofthebusiness-criPcalapplicaPonsaremanagedin-house.

•  Datasecurity.Thelackoftrustthatanorganiza8onwilllosecontroloveritsdataandsystemishinderingthegrowthofmanagedservices.FearaboutlosingconfidenPaldataisamajorconcernamongorganizaPonscontemplaPngtoadoptmanagedservices.

•  Cloudservicesadop8on.ThoughtheimpactofthisinhibitoristhusfarlimitedinIndia,itisexpectedtobecomemorepronouncedinthenextfewyears.Asorganiza8onsbecomecomfortablewithandmoreeducatedaboutcloudtechnology,adop8onwillincrease.Insomecases,organizaPonsare"leapfrogging"managedservicesdirectlytoacloudengagement.ThisisespeciallyevidentintheSMBsegment,wheretherearemanyeconomicalcloudtoolssuchasGmailandDropboxbeingused.IDCexpectsthatsuchtoolswillgaintracPoninthelargeenterprisesegmentaswell.SaaSwill,forexample,takemarketsharefromhostedapplicaPonmanagementservices

21IDC:IndiaManagedServices2013MarketAnalysisand2014–2018Forecast

KeyTakeawaysfromMarketOverview

•  HugeopportunityintheIndiamarket,goodpotenPalintheSMBSegment•  ShoulduPlizetheKeyDriversandOvercometheBarriersinOurValue

ProposiPoni.eEducatethecustomerson–  Cloud,itsbenefits,CapextoOpexetc–  UsecaseswithROI–  DataPrivacyandSecurity–  TransparencyofInfrausage–  Hybridinfrastructuremodels–  Legalcompliances

•  DevelopverPcalexperPsee.ginMediaorHealthcare•  TargettosupportCloudservicesprovidersinthisorder

1.  AWS2.  MSAzure3.  IBMCloud4.  GoogleCloud

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CloudMajorCustomerSegments

CloudManagedServicesMarketSegmentsCloudManagedServicesmarketissegmentedby:

•  Type:•  BusinessServices•  DataCentreServices•  NetworkServices•  MobilityServices•  SecurityServices

•  Ver8cals:Banking•  FinancialServicesandInsurance(BFSI)•  Telecom&IT•  Retail•  Government&PublicSector•  Healthcare•  Manufacturing•  Energy&uPliPes•  Others(EducaPon,Media&Entertainment,Travel&

Hospitality,TransportaPonandLogisPcs)

24hhp://goo.gl/rRRr8C(GartneridenPfiesadopPonofcloudcompuPnginIndia)

•  BasedonSize•  SME•  Enterprise

•  BasedonRegions:•  NorthAmerica•  APAC•  Europe•  LaPnAmerica•  MEA

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IndustryVerPcals

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MediaIndustry

FeaturesofMediaCompanies

•  AsmediacompanieslookatwaystoreducetheirITexpenditureandmaximizetheirreturnsoninvestmentsrela8ngtoIT,cloudcompuPngadopPonisgainingtracPonascompaniesrecognizethemulPtudeofbenefitsthatitcanpotenPallyoffer.

•  Inordertosource,deliver,andmanagegrowingvolumesofinformaPonandreducetheirinfrastructureandsorwarelicensecosts,mediacompaniessuchascableandbroadcastfirms,andproducPoncompaniesareconPnuouslylookingtoadopttheon-demandcloudservicesmodel.Asaresult,52%,48%,and48%ofmediacompaniesareplanningtoinvestinSaaS,IaaS,andPaaSrespec8vely,throughtotheendof2015

•  Hybridcloudisincreasinglypreferredinmediacompanies,asitfacilitatesthebestofbothpublicandprivatecloud,therebygivingcompaniesmuchneededflexibilityinhosPngtheirhugeandvariedcontentandworkloads.

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CloudcompuPng–vendormindshareamongmediacompanies

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•  Googlehasthehighestvendormindshareof39%,closelyfollowedbyMicrosor,as32%ofrespondentsareselecPngthiscompanyasoneoftheleadingplayersinthecloudcompuPngdomain.

•  MediacompaniescanbenefitfromGoogleCloudDataflow,whichanalyzeslivedata,poten8allygivinguserstheabilitytoviewtrendsandkeepthemalertedtoeventsastheyhappen,therebyprovidingreal-8mebusinessanalysis.

•  MicrosorofferingsincludeWindowsServerwithHyper-V,SystemCenter,WindowsAzure,andOffice365.

•  WindowsAzureMediaServices,acloud-basedPaaSsoluPonthatenablesmediacompaniestobuildanddelivermediasoluPonstocustomersefficiently.

•  Microsorhasbuiltvarietyofcustom-buildservicesthatenablesthespeedieradop8on,encoding,format-conversion,storage,contentprotec8on,andstreamingofbothliveandon-demandvideo.Thecompanyhasacquiredthecloud-compuPngcompanyGreenBuhon,whichallowsmediafirmsthatrequirehugeamountsofcompuPngpowertouseexisPngintegraPonswithcloudandrunperformance-intensiveworkloads.

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Travel/Hospitality

CaseStudy:redBus

•  redBusisanIndiantravelagencythatspecializesinbustravelthroughoutIndiabysellingbusPcketsthroughoutthecountry.Ticketsarepurchasedthroughthecompany’sWebsiteorthroughtheWebservicesofitsagentsandpartners.

•  Thecompanyalsooffersso1ware,onaSo1wareasaService(SaaS)basis,whichgivesbusoperatorstheopPonofhandlingtheirownPckePngandmanagingtheirowninventories.

•  Thebiggestproblemwasthattheinfrastructurecouldnoteffec8velyhandleprocessingfluctua8ons,whichhadanegaPveimpactonproducPvity.AddiPonally,theprocurementofserversorupgradingtheserverconfiguraPonwasanextremelyPme-consumingendeavor.

•  A1ertes8ngtheAWSsolu8ononasmallapplica8onforseveralmonths,thetravelagencydeterminedthatitwasveryworkableandconvenient.

Benefits•  WithfeatureslikeElas8cLoadBalancingandmul8pleavailabilityzones,AWSprovidestherequiredinfrastructuretobuildforredundancy

andauto-failover.Whenyouincorporatetheseinyoursystem/applicaPondesign,youcanachievehighreliabilityandscale.•  Byscalingupanddowndynamicallybasedontheload,wemaintainperformanceaswellasminimizecost.WiththePmesavingsthatthe

ITanddevelopmentstaffsobtainfromtheAWSsoluPon,AWSgivesusanoverallcostbenefitofabout30-40%•  Abilitytoinstantlyreplicatethewholesetupondemandfortes8ngbycrea8nganddestroyinginstancesondemandfor

experimenta8on,therebyreducingthe8metomarket•  SincejoiningforceswithAWS,redBushasgainedthefreedomtoexperimentonnewsolu8onsandapplica8onsatminimalcost,increased

theefficiencyofitsoperaPons,andimproveditsprofitability.

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HealthcareVerPcal

HealthcareSectorPrimaryCloudUsage•  Tradi8onallyskep8calaboutadopPngcloudcompuPngbecauseofstrictprivacyandsecurityrules(HIPAAcompliance)•  Costpressuresandadvancementinprivacyandsecuritystandardsleadingtocloudadop8on•  CloudadopPonmainlyinthestoragesegment•  Majorusageofcloudfor

–  medicalimagearchiving.–  email–  medicalrecordsystems–  personalhealthrecords–  HIEs(HealthInformaPonExchange)–  Portals–  Enterprisecontentmanagement(ECM)–  ClinicalcollaboraPon–  Mobilityofdevicesandremotepa8entcare

•  HealthcarepayersorganizaPons,whilelesscauPousaroundcloud-basedsoluPons,arefindinganeedto–  managetheamountofcontentacrosslargeorganizaPons.–  ECMsystemsareanimperaPveneedfororganizaPonsuchasUnitedHealthcarewiththeamountofcontentalongwithneedto

managedataacrossaconsolidatedhealthcarepayerorganizaPon.

32

33

ManufacturingIndustry

PrioriPesforManufacturingBusiness

34

•  Costreduc8onandfinancialresults—Reducingenterprisecostsandimprovingmarginsrankprominently

•  Opera8onalResultsareontopofthemindofCxOs•  InnovaPon—ThegreateremphasisoncreaPngnewproductsand

enterprisedevelopmentisasignificantfeatureofthismarket•  ProcessorientaPon-includingtheassemblyline,totalquality

management,leanmanufacturingandSixSigma,theseindustriesconPnuetovaluebusinessprocessimprovement

WhyCloudMakesSenseforManufacturingCompanies?

•  Higheremphasisoncost–  BecauseofrelaPvelyhighercostsforenergy,plant,andequipmentandmaintenance.Thisspending"crowdsout"

discrePonaryITspending–  Furthermore,andperhapsbecauseofthisuniquecoststructure,arelaPvelyhighpercentageofCIOsinMNRreportto

CFOs.ThisresultsincostmanagementpracPceshavingastrongerinfluenceand/orgreaterhurdlestojus8fyingROI.

•  RealizingvaluefromTradi8onalITtakeslongerthanbusinessescanafford–Thelengthynatureofsystemdesign,development,deploymentandvaluecapturedfromtradiPonalinhouseITisorenseenasdetrimentaltothelargerbusinessobjecPves–Cloudcanhelphere

•  Revisingprocess-orientedITsystemsisdifficult–TradiPonalITsystemsdonotmatchconPnuousimprovementandprocessopPmizaPon,soITisorenviewedasaninhibitortoprocesschange.

•  LargenumberofLegacySolu8ons-ManufacturingfirmshavelonglegaciesoflocalITsystemsdeveloped.Thislegacycanpreventcompaniesfrommakinglargeinvestmentstostandardizeand/ortransformtheirbusiness.Asaresult,companieso1enpursuemanysmallchanges,ratherthanambi8ousandlarge-scaleITprograms.

35

ITSoluPonsMapforManufacturingIndustry

36

TypicalManufacturingapplica8ons•  ProductLifeCycleManagementPLMApplicaPon

SaaS•  ERPforManufacturingOperaPonSaaS•  BPaaSe.gWarrantyClaims

TakeawaysfromIndustryVerPcals

•  Thereareuniqueneedsofeveryindustry–  Storage,mediaconversions,streaming,hybridcloudforMediaindustry–  EHR,Storage,MobilitysoluPonsforHealthcare–  DRandbackupforManufacturing

•  Whenweapproachanycompanyfromthesetargetedindustries,weneedto–  Checkthecompaniesbackground–  CheckthepotenPalneedofthecompany–  UseaCloudCaseStudyandprepareacasebasedonCustomer’sLatentneed–  ShowthebenefitsofCloudasperthecustomersneed–  Createtheneed,ratherthanaskingfortheneed

•  DevelopverPcalexperPseinsegmentslikeMediaandHealthcare.AWShasaseparatehealthcarecompetency

37

38

TheSMESegment

India’sSMESegment

•  HugeSMEsector-Studiessuggestthatthereareatleast7.5mnSMEsinIndia.•  Sector’scontribuPontothecountry’sGDPisexpectedtoincreaseto22%in2020from17%in2011.•  Small&MediumEnterprises(SMEs)accountfor45%ofIndia’stotalmanufacturingoutputandemployaround40%ofitsworkforce•  IndianSMEsareexpectedtoincreasecloudadopPonatCAGRof20%between2012and2016•  SMEcloudopportunitywasworthINR16.9bn,ofwhichINR9.2bnwasaccountedforbySaaSandINR7.7bnbyIaaS.•  SomesmallerIndiancompaniessuchasIndiagames,Rediff.com,HungamaDigitalMediaand8KMileshavestartedtouPlisecloud

compuPngtechnologytoboostservicedelivery.•  Theearliestdemandcamefromsuppliersinindustriessuchasautopartsandancillaries,wheresmallerfirmswereobligedtoimplement

e-commercesystemstosynchronizewiththeirlargercustomers.•  ThedemandforcloudservicesbySMEsisparPcularlyhighintheareasof

–  DisasterRecovery–  RemotedatabasemanagementandStorage–  e-mailhosPng.

Source:EY

India’sSMESegmentKeyCharacterisPcs

•  PriceisanimportantconsideraPoninthesector•  SlowTechAdopPonbecauseof

–  Lackofunderstandingofbusinessbenefitstechnology.ItisesPmatedthataround60%ofIndianSMEssPllusepaper-basedsystems,butanincreasingnumberarenowtryingtoconverttodigital

–  LackofguidanceontheinherentabiliPesoftechnologiesandhowthesecanbeintegratedandinsPtuPonalizedintheirbusinesses

–  Resistancetoincurringupfrontinvestment-relatedcoststoimplementtechnology–  Lackofskilledmanpowertomanagetechnologysetups

•  Firmsinsectorssuchastransportnowhaveagreaterawarenessaboutthepoten8albenefitsoftechnologyuPlizaPon.

•  So1wareapplica8onvendorswhoprovidepackagedbusinesssuites,suchasCustomerRela8onshipManagement(CRM),payroll,HR,enterpriseresourceplanning(ERP)andcollabora8veapplica8onsareexpectedtooutpacetradi8onalso1warelicensingvendorsbynearly800%inIndia

CloudusageinIndiaissPlllimitedtoadhocpilotprojects,withsmallbusinesseshavingahigherpercentage.

SourceIDC 41

Findings§  Whileallrespondentssaidthattheyusecloudservices,prominentusage(43%respondents)ofcloudisattheadhoclevelandfocusedprimarilyonpilotprojects.§  Smallbusinesseshaveahigherpercentageofadhocprojects(51%)whencomparedwithmedium-sizedandlargeenterprises(41–43%);“op8mized"usageofcloudishigherinlarge

andmedium-sizedenterprises(15%)whencomparedwithsmallbusinesses(6%).

Insights/Recommenda8ons

§  Usersshouldunderstandthetechnology,itsbenefits,andserviceproviders;andtransiPonpilotstoproducPonforservicesthatmaximizeefficiency.§  TheyshouldevaluatevendorandtechnologyopPonsforcloudandbeginpilotsforspecificusecases.

0 5 10 15 20 25 30 35 40 45 50

Optimized — Have broadly implemented a cloud-first strategy that is proactively managed

Managed — Currently widespread use of cloud supported by proactive business and IT leadership

Repeatable — Currently using cloud computing which is consistent effort made to reuse best practices and resources

Opportunistic — Currently using cloud computing which are driven by the business needs of individual workgroups and departments

Ad hoc — Focuses primarily on pilot projects

(%)

KeyTakeawaysfromtheSMESegment

•  SME’shaveahugepotenPal•  MicroandSmallcompaniesaresPllinad-hocphase•  ShouldtargetMediumsizecompanies500-1000employees,10Cr+revenue•  NeedtoeducatethesecompanieswiththeUseCasesandpotenPalbenefitsoftheCloud

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43

CloudLandscapeAndMajorMarketsGlobal

CloudasaService–GlobalView

However,European,AsianandLaPnAmericancloud‘asaservice’marketswillgainstrengthduetothefollowingfactors:§ Regionalcloudserviceprovidersofferlocalizedservicesintermsofmarketfocus,supportandfuncPonality.§LocalprovidersalsobenefitfromprivacylawsapplicabletodatajurisdicPon.

NorthAmericatoconPnueleadingthewayintermsofgeographicrevenueandvendorlocaPon(headquarters).

Source:the451Research

CloudCompuPngAsaService:VerPcalRevenue

45

•  ServiceproviderswithverPcal-specific/segment-specificexperPseandacustomer-centric

approachtoservicedeliverywillwintheheartsandmindsofcustomers.•  Expectincreaseswithintheretail,e-commerceandhealthcareindustries.

451ResearchMarketMonitor

CloudMarketRevenues

46

-

10,000

20,000

30,000

40,000

50,000

60,000

2012 2013 2014 2015 2016 2017 2018

SorwareasaService(SaaS)

PlaqormasaService(PaaS)

InfrastructureasaService(IaaS)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2012201320142015201620172018

SorwareasaService(SaaS)

PlaqormasaService(PaaS)

InfrastructureasaService(IaaS)

USA APAC

IDC:CloudMarketOverview

IaaSMarketRevenuesAPAC

47

-

200

400

600

800

1,000

1,200

1,400

1,600

2012 2013 2014 2015 2016 2017 2018

Australia

China

HongKong

India

Indonesia

Japan

Korea

Malaysia

NewZealand

Philippines

Singapore

Taiwan

Thailand

Vietnam

$m

IDC:CloudMarketOverview

GlobalCloudManagedServicesMarket

•  TheglobalCloudManagedServicesmarketisexpectedtogrowfrom$52.23Billionin2015to

$118.43Billionby2020,ataCAGRof15.5%from2015to2020.•  MajorplayersintheCloudManagedServicesmarket:

-AccenturePLC-Alcatel-Lucent-AtosSE-CiscoSystems,Inc.

-ComputerSciencesCorporaPon-Ericsson

-Fujitsu-Hewleh-PackardCompany-IBMCorporaPon

-NTTDataCorporaPon

48hhp://goo.gl/rRRr8C

KeyTakeawaysfromGlobalMarket

•  NorthAmericatoconPnueleadingthewayintermsofgeographicrevenueandvendorlocaPon

•  Emergingmarketsareexpectedtosignificantlyincreasetheircloudspendingoverthenextthreeyearsascomparedwithmorematuremarkets.In2015,India,BrazilandMexicowillbedrivingthisdemand

•  USAandAustraliaarequiteagoodbetforinternaPonalexpansion

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50

KeyCustomerChallengesandBenefits

Customer Technical Challenges for Cloud Adoption

51AsperEYreport–CloudAdop3oninIndia

•  DatasecurityandprivacyisamajorconcernforenterprisesconsideringimplemenPngcloudIaaSservices.CloudIaaSisadistributedcompuPngmodelwithinherentambiguityaroundwherethedataresides.ThisdistributedmodelleadstoapercepPonofhigherriskandsecuritychallenges.

•  AcloudserviceprovidercanmiPgatetheserisksbyestablishinganeffecPvesecurityandcontrolsframeworkinthefollowingareas:

•  IdenPtyandriskmanagement•  Complianceandaudit•  ApplicaPonlevelsecurity•  Databackupandrecovery•  LegalCompliance

Customer Business Challenges for Cloud Adoption

52AsperEYreport–CloudAdop3oninIndia

•  Vendorlock-inisperceivedasasignificantchallengetotheadopPonofcloudcompuPng.

•  Vendorscancurrentlymi8gatethisconcernbymakingtheirservicesmoretransparentsothatcustomerscanunderstandhowtheirresourcesarebeingmanaged.

•  Enterprisesarealsounsureofthecostsavingsthatcloudcompu8ngcanhelpthemachieve.

•  Vendorsneedtodevelopcomprehensivefinancialmodelsdetailingthecomparisonofin-houseinfrastructurewithcloudIaaStohelpfirmses8matetheROI.

•  Usage-basedpricingmodelswithmonthlyorhourlybillingscanbeusedtocomparecostswiththecurrentdatacentercostsandesPmatetheROI.

PerceivedoperaPonalandbusinessbenefits

53AsperEYreport–CloudAdop3oninIndia

Vendorassessmentcriteria

54

•  DatasecurityandprivacyagainshinesthroughasthetopdifferenPaPngfactorfortheenterprise.

•  SLACompliance,CostCompePvenessandPortability-Interoperabilityto

avoidvendorlock-inarethekeyassessmentcrietrias

•  WithcloudIaaSservicesbeinganewbusinessandoperaPonalmodel,ahighdegreeofcustomerinterac8onduringthesalescycleandastrongsupportframeworkwillassistcustomersinadop8ngthetechnologyseamlessly

AsperEYreport–CloudAdop3oninIndia

PreferredPricingModels

55

•  Atruepay-as-you-usemodelbasedontheuseofresourcessuchasperhourusageorCPUcyclesconsumedwillbeaqrac8vetotheSMBsegment.

•  MoreflexiblemodelsintegraPngthefeaturesofusage-andcontract-basedpricingcanbedeveloped,whereserverinstancescanbechargedonadailyormonthlybasisinsteadofhourly.

•  Reservedinstanceswithdiscountsonhourlyratescanbemorecost-effec8veforlargerenterpriseswithvisibilityondemand.ReservedinstancesarelikelytohelplargeenterprisesbeheresPmateandplantheircloudIaaSneeds.

AsperEYreport–CloudAdop3oninIndia

KeyTakeawaysfromCustomerChallenges

•  Communicatewithbuyersonthepercep8onofcloudbenefitsandchallenges:ThepercepPonofthesebenefitsandchallengesneedtobefactoredintocommunicaPonstrategies,serviceofferingsandSLAstructures.

–  DatasecurityandprivacyisthetopmostconcernforcloudadopPon,followedbylatencyandresourceupPme–  Vendorlock-inandnotsureabouttheROIaremainbusinesschallenges–  Scalability,highupPmeandreducedriskoftechnologyobsolencearethemaintechnicalperceivedbenefits–  FocusoncoreacPviPes,payforusageandnocapitalexpenditurearethemainbusinessperceivedbenefits

•  DataSecurity,SLAcomplianceandCostcompe88venessarethemainparametersforvendorselecPon–AddressalloftheseconcernsinthecommunicaPon

•  DeveloppricingmodelsandROIexpecta8ons:Enterprisesareexpectedtobenefitfromdetailedfinancialmodelsbenchmarkingin-housedatacentercostswiththeinvestmentandrunningcostsassociatedwiththecloudIaaSmodel,usingdifferentpricingmodelstohelpesPmatetheROI.

•  Setuptestlabs:Shouldsetuptestareas,whichcustomerscanaccessonanexperimentalbasis.ThiswillallowenterprisestoexperiencethetechnologybeforefullscaleadopPon.

56AsperEYreport–CloudAdop3oninIndia

57

CloudDecisionMaking

KeyRolesandPosiPonsinCloudServicesPurchasing

•  Influencers—BusinessexecuPvesandmanagers,seniorITleaders(excludingtheCIO)andnon-CIOITfuncPonalroleshavethebiggestinfluenceovercloud-relatedbudgets.

•  Decisionmakers—However,theprimarycloudbudgetdecisionmakertendstobetheC-levelexecuPves,includingCEOs,CIOsandtoalesserextent,otherC-levelexecuPvesandseniorITleaders.

•  Budgetcontrollers—Controlofcloud-relatedbudgetsistypicallyheldbytheCFO,butinsomecasesdelegatedtothefuncPonalroles.

DecisionMakersbyRoles,AcrossRegions

•  CEOsandCIOss8llretainthelargestcontrolovercloudbudgetdecisionsfornow.Acrossgeographies

•  CEOsinAsia/PacificandCIOsinNorthAmericahavethebiggestroleindecidingcloudspending.

•  CFOsdidnothavethebiggestsayinclouddecisionmaking,theyhadthemostcontrolinbudgetcontrol.

•  Asinfluencersofcloudspending,seniorITleaderswhoreportintotheCIOshavethemostimpact.

KeyTakeawaysfromCloudDecisionMaking

•  NeedtohaveGoodcontactwithCEOandCIOsofthecompanieswearetargePng.

•  MaintainmindshareintheITdepartment,andalsoincreaseyoursphereofinfluenceandaccesstotheC-level.HelporganizaPonsconnectinternally(ITandbusinessunits)withyoursoluPonsandseeallsidesofthebenefitstocloudsoluPons.

60

ConsultaPveSelling

BothenterprisesandserviceprovidersarelikelytobenefitfromaconsultaPveapproachandin-depthdiscussionswithcloudIaaSserviceprovidersinthefollowingareas:•  Thedifferen8a8ngbenefitsofcloudIaaSservices•  UseCases,Pricingstructures,financialmodelsandreturnoninvestment(ROI)thatacloud

adoptercanexpectfrommovingtothecloud•  Guidelinesandbenchmarkstohelpenterprisesselectapplica8onsthataremostsuitablefor

adopPngeithertheprivateorthepubliccloudmodels•  AddressingsecurityanddataprivacyissuessaPsfactorily•Extendingcustomersupporttoadoptersofthetechnology

61AsperEYreport–CloudAdop3oninIndia

62

AcPonPlan,HowtoMoveForwards

RecommendaPonsandAcPonPlan

•  TargettheRightSegment,SizeoftheFirm,SectoroftheFirm•  PrepareDetailedusecasesrelevantfortheTargetCustomers•  PrepareTestLabsofthecommonusecases•  InterfacewithRightStakeholders

63

ThankYou

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