Indian IT: This 'cloud' has a golden lining! - Views on News from Equitymaster

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Indian IT: This 'cloud' has a golden lining!

Jun 22, 2010

Cloud computing is one of the new tech industry buzzwords. And, it has taken our Indian players literally by storm. But what do these two words put together mean, and what potential does it have in India?

A walk in the clouds: Understanding cloud computing
The whole world is moving to low-cost models. From no frills airlines to self-service restaurants and now to pay-as-you go computing. Cloud computing users avoid heavy capital expenditure by renting its usage from a third-party provider. It's similar to buying electricity from the grid rather than producing your own!

In simple terms, cloud computing is an easy and cost effective way to access data and applications via the internet. One doesn't need to drag around a heavy briefcase or even load ones email inbox with attachments. Data required can be accessed through a web browser. Both data and software are securely stored on a remotely on a server. Resources are accessed based on dynamic needs and the payment is only made for services used. For the IT industry, this model helps increase capacity without investing in new infrastructure, training, or software licensing.

What's in it for India?
According to a study by Zinnov Research, over 300,000 jobs will be available in India by 2015 in the cloud services sector. This currently equals the total number of employees in both TCS and Infosys! Steve Ballmer, Microsoft's CEO believes that India will lead the way both in terms of consumption and implementation of these services. Microsoft Azure, the company's venture in this space is gaining traction with Indian companies like Wipro, Infosys, TCS, HCL Technologies, and NIIT. So far, the most enrollments for these cloud services came from, guess where? India.

The new model will even save marketing and travel costs plus increase visibility for our major tech companies. Earlier one had to physically go to meet clients and conduct software demonstrations. Soon, all one needs to do is write software code and upload it in a 'cloud'. If a client is interested in it, he just needs to click a button and test the application. He doesn't need to download or install it, preventing unauthorized use or piracy. If the client is interested, he can purchase the software online. This is similar to if you had to test drive a car. Except, you can do it virtually.

Case study: TCS is banking the unbanked
According to our deputy RBI governor, K C Chakrabarty all villages will have banking services by 2015. TCS has subscribed to this vision by introducing a concept called 'banking in a box'. Until recently, small banks did not have customised banking solutions. They mostly have large networks in semi urban or rural areas with inadequately trained staff. Far flung locations, lack of connectivity, and multiple languages also added to the unfavorable mix.

TCS used cloud technologies to develop a specialised service. Thus is based on its central cloud platform. It is now running in over 2,000 branches across India. A number of banks were able to take advantage of shared infrastructure and resources. High fixed costs were eliminated and maintenance costs reduced by sharing application services. TCS, manages the whole infrastructure and updates it regularly for a monthly fee.

Public sector banks have often been criticized for their outdated technology and inefficiency. This solution can however increase efficiency, provide greater compliance, risk management, and increase customer satisfaction. New services like ATMs, SMS and internet banking can also be implemented. Around 52% of India's population comes in the unbanked category. This platform will enable financial inclusion of this large population and save them from the clutches of moneylenders.

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3 Responses to "Indian IT: This 'cloud' has a golden lining!"

raova

Jun 24, 2010

Recently concluded spectrum auction has made broadband costly as per Mr Sunil Mittal, Bharathi CMD anyway, so we need to how this cloud computing reaches this unbanked population.

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smile

Jun 23, 2010

So, to conclude, the most essential ingrediants for the development of our villages are 'cloud' and '3G'.

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Sankar

Jun 22, 2010

All this talk about cloud computing and its advantages seems to miss the point of lack of "last mile solution" in villages.

If all services are available using a "web" like interface, we still need "web" access at every access point and India is still a long way from getting it.

Unless 3G picks up to the extent where anyone can do "web" on their mobile, this is still a far cry from what we really need. - Access to banks - physical or virtual.

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