Analysing Cloud Opportunity for Big4

January 2011

Agenda

Industry overview

Indian Context

Opportunities

Industry Overview

Cloud will be the next big thing which business will adopt to get more flexibility…

Gartner IT Outlook

2014:

“Cloud Computing” tops

among the four trends that

will support change in IT.

“…It will fundamentally

change the relationship

between buyers and providers

of IT Services...”

Source: McKinsey Global Survey Result, Nov 2010

Industry Overview

Economic condition and technology innovations helping Cloud..

• Plan for Peak• 1:1 ratio for server per application

• Low server utilization• Huge Capex• Custom Solution, not user friendly

• Low Agility• No Broadband

• Effective broadband• SOA, Web Service• Lightweight SMB apps

• SaaS / IaaS / PaaS

• Super Broadband

• SMB mindset• Economy• Netbooks/tablets

• Telcos as a channel

Agenda

Industry overview

Indian Context

Opportunities

Indian context

The Indian SMBs will jump the technology curve to move directly to Cloud..

“India has a legacy of jumping

technology curves e.g. in the telecom

sector, and it is expected that cloud

would also show the similar behavior.

The companies that are currently not

adopting IT and don\'t have major

investments in datacenters and server

farms are expected to shift directly to

the cloud model. Verticals such as

retail, manufacturing, banking,

education, and healthcare will rely

upon cloud services for better reach.” – Zinnov Management Consulting

“India will move directly

to the cloud, much like

it bypassed the landline

revolution that never

happened and leapt to

mobile phones…”

-Ballmer, CEO Microsoft

Indian context

Indian business organizations

show similar characteristics as its

global peers on advantages and

challenges of cloud…

Indian context

Preferred channels for cloud services for Indian SMBs..

The IT service providers has pivotal role to play in bringing the

ecosystem together in the supply side to select the right cloud solution

for an organization, as well as improving the organizational maturity in

terms of how IT function works in the cloud environment.

IT Service Providers or System Integrators 46%

Data Centre Service Providers 46%

Hardware and software vendors 8%

Indian context

Cloud adoption trends by SMBs..

Cloud adoption will be

determined by the following

factors-

Interdependency between

applications

Integration needs

Facilitating business

transactions

Achieving efficiency and

competitive edge

Ease of deployment

Indian context

Collaborative Apps, CRM and ERP dominates the market..

38%

32%

10%

3%

17%

Workload wise distribution of SaaS market in India, 2009

Collab apps

CRM

ERP

Security

Others

Workload USD

Collab Apps

20 Mn

CRM 16 Mn

ERP 4.5 Mn

Security 1.6 Mn

Others 7-10 Mn

Total Market size is USD 50-60 Mn with 30-40% CAGR

Source: Zinnov Management consulting

Agenda

Industry overview

Indian Context

Opportunities

Opportunity

Broad spectrum of possibilities.. Alternatives

Description Cloud Model

Provider Example

Big4 Capability/ Methodology

Rehost Redeploying applications to a different hardware environment

HIaaS / SIaaS

Amazon EC2, Rackspace, VMWare

NA

Refactor Running application (web apps) on could provider’s infrastructure , or making changing application code /configuration to use cloud infrastructure service

SIaaS / SaaS

Windows Azure

Enhance and Integrate

Revise Modernize legacy application and then rehost or refactor options to deploy to cloud

HIaaS, PaaS (SIaaS)

As above Enhance and Migrate

Rebuild Rebuild a solution on a provider’s application platform

PaaS Force.com, Google App Engine

Build and Migrate

Replace Discard existing application and user commercial software delivered as aaS, migrate data to SaaS environemnt

SaaS Salesforce CRM, SugarCRM, Zoho, Workday HR, Lotus Live, Microsoft Office Live, Google Docs

Strategize and Implement

New

Sys

tem

sE

xist

ing

Sys

tem

s

Opportunity

Possible cloud offerings from EAI..1. Cloud Strategy 2. CRM on-

demand3. ERP on-demand

4. Develop 5. Provide cloud solution

Opportunity Combine Cloud strategy with EA offering in the SMB sector. Entry route for Big4, which can be followed by implementations.

Fastest adoption in the cloud, if we don’t do it somebody else will do. High potential market.

Great opportunity for EAI to move into ERP space, barring the big vendors there are few good Indian providers e.g. Ramco

Developing in the cloud platform or integrating legacy apps with cloud, important for us to get bigger mind share in the cloud market

Offering some SaaS based solution to our customers e.g. enabling nForce as SaaS.

Value proposition

IT cost reduction, Transform IT, can target 10-15% IT cost reduction

Business efficiency, low TCO

Business efficiency, low TCO

Business flexibility

Lower TCO

Key considerations

Partnering with cloud service providers

Align with SaaS providers

Align with SaaS ERP providers

None Need to find hosting options

Value/size 5-10 lakhs 10-30 lakhs plus markup on the tool*

10-30 lakhs plus markup on the tool*

NA NA

Investments Need to acquire Infrastructure related skill

Has existing skills Need to acquire skills

Need to acquire / develop skill

Need to redesign application for cloud

Go to market Timeframe

Immediate Immediate Short to medium term

Medium to long term

Long term

* Already in talk with different vendors and trying to understand the revenue model for us and also typical project value

Opportunity

Cloud Strategy can be aligned with our EA offering ..

Application Portfolio

Management

Legacy Modernizat

ion

Application Platform Strategy

Buy, Build, Borrow or

Rent?

Cloud Adoption Strategy

Application Cloud

Migration

Application consolidation, Cost-

benefit analysis

Implementation Strategy, Roadmap,

ROI analysis

Evaluating cloud service provider, supply side and demand driven

analysis

Evaluating type of cloud service and platform based on

organization’s overall architectural standpoint

Short listing candidates for

migration based on interdependency and

complexity

Ref: Cloud Adopting Steps by Gartner

Opportunity

Possible Partner Alignment strategy..Cloud Service Key Players Partner Strategy Big4 Advantage/

Disadvantage

CRM SalesforceSugar CRMZohoImpel

Become channel partner

We have existing skills on SugarCRM, we can directly tie up with these players or tie up with TataComm which already offers SugarCRM as their SaaS offering

ERP, HRMS RamcoiWebK-ServeHRMantra

Become channel partner

These are Indian cloud providers and already has good market, they already have channel partner strategy.

Infrastructure Tata CommRelianceNetMagicSify

Joint go to market TataComm among them has more wider spectrum of aaS including IaaS and SaaS

Collaborative Apps GoogleMicrosoft Office LiveLotus Live

N.A. Not very attractive from Big4 point of view

Platform Google App EngineMicrosoft AzureAmazon EC2

N.A. Will take time for industry to adopt this

Hig

h P

riori

ty

Note: Player with strong India presence are considered here, Oracle and MS are not considered for ERP.

Opportunity

Possible SMB Industry focus for cloud..

Industry Overview CRM ERP Collaborative Apps

Infrastructure

Platform

Manufacturing

Comparatively lower IT maturity, low IT spending (<1% of revenue)

Yes Yes Yes Yes

Healthcare Growth stage of IT maturity, compliance and regulatory aspect is pivotal in cloud decisions

Yes Yes (HRMS)

Yes Yes

Education Nascent stage in IT maturity, good opportunity for cloud

Yes Yes (HRMS)

Yes Yes Yes

Retail, Consumer goods

Higher spending in IT, SMB sector will move to cloud faster than larger counterpart

Yes Yes Yes Yes

Media Nascent stage in IT maturity, good opportunity for cloud

Yes Yes Yes Yes

17

Thank You

This is a market analysis done at an individual capacity level and and view of an individual and not a property or view of any organization.