Why are Indian companies not venturing into next level of tech such as cloud storage, cyber security?

 In a country with the requisite expertise, it’s surprising that few have ventured into the next level of technology such as cloud storage, cyber security and software-defined networking.

But a few startups have bucked the trend and are profiting from it. Take for instance Lucidous Tech, founded by 23-year-old Saket Modi. The two-year-old company is one of the few Indian players in the cyber security space and works with companies like IBM, Microsoft and KPMG.

“The barrier to entry is very high. Even if you’re a worldclass hacker, organisations will not trust a startup,” said CEO Modi, who built credibility by giving seminars on ethical hacking and cyber forensics across India.

His cyber security firm in New Delhi works with about 415 enterprises to develop security products and hacks into their systems to detect vulnerabilities in codes. The company is soon going international and has tripled its revenue since last year.

“It’s very lucrative. Companies will pay a huge price for gaining momentum in this space,” said Ravi Gururaj, chairman of Nasscom Product Council.

With the internet of things becoming a global phenomenon, the security software makers have a chance to build software in uncharted territories. The market is pegged at $95.60 billion (.`5.8 lakh crore) in 2014 and will grow to $155.74 billion (. `9.5 lakh crore) by 2019, according to research firm MarketsandMarkets.

These core technologies power the next generation of computing and lay the foundation for enterprises. But the dearth of Indian companies is glaring.

“There are very few companies. This is the best kept secret in the industry ,” said Jay Pullur, founding member of software product thinktank iSpirt.

Pullur, also the CEO of Hyderabad-based Pramati Tehnologies, said iSpirt talks to global MNCs regularly and have been told that such companies are easy acquisition targets.

Also the market size and opportunity in these technologies have been more than validated.

Take software-defined networking as an example. In simple terms, SDN will do to networking, what cloud did to servers–eliminate physical data centres and virtualise the hardware aspects of networking, untying software from legacy hardware.

So why are there so few entrepreneurs? It is not the lack of expertise. Bangalore hosts the development centres of at least two Silicon Valley-based companies in SDN–Avni Networks and Versa Networks. “We aren’t using our India team for mundane development tasks, like maintenance and bug fixes–a big mistake of many larger companies in tech. Quite the opposite,” said Kumar Mehta, CEO of Silicon-Valley based Versa Networks. The twoyear-old company has received $14.4 million (Rs 87.5 crore) in funding from Sequoia till date.

“The India team is working on the core solution, writing code around the clock with their Silicon Valley peers,” said Mehta, a former employee of Juniper Networks.

Last year, research firm CB Insights said deal activity jumped 75% on the back of large acquisitions by Juniper Networks and VMWare. Between mid-2012 to 2013 to SDN-related startups have raised nearly $416 million (Rs 2,500 crore) across 35 deals.

Cloud storage is another largely unnoticed area.



Microsoft may become first MNC to set up cloud data centre in India

BANGALORE: Microsoft said it is considering setting up its first data centre in India – the fastest growing cloud markfor the software giant. The company will become the first multinational to set up a data centre in the country if the plans fructify.

“We are considering a data centre in India. There are a lot of different companies that are looking at cloud right now, in anticipation that Microsoft will somehow figure out how to get that work,” said Jim Dubois, corporate VP and CIO at Microsoft. Currently, the company offers cloud computing services to Indian customers through its global data centres.

However, RBI guidelines prohibit storing any customer data outside of India, which limits cloud adoption by financial services company. Cloud services are the fastest growing segment for Microsoft, though it contributes less than 5% to Microsoft’s overall revenue as of now. “It (cloud services) is growing double, triple digit every month, not every year,” Dubois said. According to Gartner, public cloud services market in India is expected to grow from $423 million ( Rs 2,550 crore) in 2013 to $1.3 billion ( Rs 7,800 crore) in 2017. Gartner expects India to be the fastest growing market for cloud adoption globally.

Despite this, none of the large cloud computing companies, including Amazon, Google and Microsoft, has so far built a local data centre. Microsoft has 13 data centres globally to serve its cloud services while Amazon has eight and Google 12. In Asia, all three companies have data centres in Singapore, but none in Mainland China or India.

Unpredictable power supply, patchy internet connectivity, limited bandwidth and unreliable optical fibre connectivity between different parts of the country have so far prevented these companies from setting up data centre in the country. However, with cloud adoption rapidly increasing, this is set to change.

“Over the last couple of years, the groundwork has been done in terms of Indian customers understanding nuances in public cloud. We are hearing about Amazon considering setting up a data centre in India but nothing has happened yet,” said Naveen Mishra, research director at Gartner.

Gartner believes that changes in political and economic scenario have triggered positive sentiment for making such investments in India. “With high optimism, everyone is of opinion that enterprises will invest more into expansion and they will have to leverage IT for growth,” Mishra said.

How does greater cloud-readiness translate into higher ROI?

Pop Quiz: If your company has conquered North America and Western Europe and is now looking for the next big market, where should you go? The no-thinking, because it’s obvious, answer is of course China. But if you want low cost of entry and a rapid return on investment you might want to aim a bit further South – to Australia.

While it isn’t as big a market as China (or even India) and may have a higher cost of living, which can make establishing a beachhead there expensive, Australia has significant enough similarities to the western world a well-educated populace, a high income citizenship and desire for new technologies and innovations to make success here far easier. And if you are doing ROI calculations around this decision, it has a key advantage over its Asian peers: higher acceptance of cloud services.

How does greater cloud-readiness translate into higher ROI? Because your company can leverage cloud-based services to reach and serve Australian customers faster, cheaper, and with a better economic model that maximizes the profitability of crossing shores. And in our latest Forrester report, we show you how Australian companies are using the cloud and achieving success through this activity.

We all know that cloud computing enables new service agility and continuous customer experience improvement. Further we know that by taking advantage of pay-per-use economics we can optimize the efficiency, performance and location of the services we build in the cloud to maximize profits. And in the past two years the major multinational cloud service providers have opened Asian and Australian data centers so you can serve this market with very low latency. But it’s the readiness and hunger of the Australian consumer and business market that makes this country so attractive.

And you can see this in the use of cloud services by Australian enterprises, as shown in this report. The key factors:

A tech-forward culture – Australians were fast to jump on smart phones, SaaS and now cloud platforms. And they want their mobile moments satisfied whether from on-continent or off solutions.

A fast follower mentality – Australia has high affinities to the US and the UK but isn’t blind to its distance from these countries. But it isn’t willing to let distance be an excuse for being late to the party. On key technology trends, Australia has been very quick to move from experimentation to full-market adoption. And that pattern is playing out today with cloud services.

A highly educated citizenry – You can’t be tech savvy, especially in B2B without being able to quickly grasp the technologies that enable business innovation and Australians are all over the cloud. In fact, in our interviews with Australian cloud leaders we found a stronger understanding of the realities of cloud services that take many of their peers even in the US and Europe much longer to understand.

Several key vertical markets are the most cloud-forward and thus good immediate opportunities for partnership, early success and strong growth:

Retail banking – where investment banking has led could adoption in most markets, retail is the strongest in Australia. Credit the Age of the Customer down under as Australian citizens are very mobile-forward and open to banking this way.

Media & entertainment – a clear leader in cloud adoption in most markets, it’s no different here. A strongly competitive market facing its own digital disruption is moving quickly to leverage cloud adoption here.

Travel – If you travel the world and have’t run into Australians nearly everywhere you go, then you need to get out more. Australians take full advantage of their time off and thus local tools that help them plan the next great experience are highly sought. Qantas has embraced this trend by creating internal startups to capitalize on these opportunities leveraging cloud services.

eRetailing, local government and many others – In fact the examples of cloud-moves being taken by Australian businesses and companies reaching out to Australian consumers actually surprised us during our research.

Bottom line: If you haven’t prioritized the Australian market and incorporated the use of cloud services to reach and serve it, you may be missing out on a fast and profitable business opportunity. Other Asian countries are harder and more costly to penetrate. While you can’t just pickup your US marketing plan, drop it on Rackspace Cloud and success will follow, you can succeed by thinking local but acting cloud.


How different cloud services are competing, pushing up usage

Consumers are already using the cloud widely, even if a lot of them don’t know it. Approximately 90% of global internet users are already on the cloud in some manner, and that number will remain steady as internet usage spreads globally.

But mobile has led to explosive growth in cloud usage. Mobile consumers leverage the cloud to store and consume media, and sync their apps, files, and data across devices. BI Intelligence estimates traffic to the cloud from mobile devices will grow at a compound annual rate of 63% between 2013 and 2018.

Even as cloud usage is exploding, though, consumers remained confused about the cloud, and services specifically aimed at cloud storage still only reach a small share of U.S. internet users. That means companies like Dropbox and Google Drive have a big opportunity to grab users. To do so, they’re slashing prices and upping storage space.

The new report, provides an exclusive comparison of how the different cloud storage companies are stacking up in terms of pricing and offerings. We put this in the context of cloud adoption and traffic, and also look at how well consumers understand the cloud. There’s a big opportunity for cloud storage services that can help internet users understand the benefits of using the cloud, and create seamless services that allow people to easily access their files from any device.

Here are the key points from the report about how consumers are using the cloud:

  • Usage of services that employ cloud computing is already a mature mass market.Approximately 90% of global internet users are already on the cloud, and that number will remain steady as internet usage spreads globally.
  • Consumer cloud computing is already a mature mass market and mobile has led to explosive growth in cloud usage. Mobile consumers leverage the cloud to store and consume media, and sync their apps, files, and data across devices. We estimate traffic to the cloud from mobile devices will grow at a compound annual rate of 63% between 2013 and 2018, which is significantly faster than the 22% growth rate for overall cloud traffic.
  • Yet despite so much usage, consumer awareness of cloud services remains low.Even though most online consumers use cloud-based sites and apps, survey data shows that they’re confused about cloud computing and its value in helping organize digital services.
  • There are growing opportunities for wider penetration and usage for consumer cloud-based services. For example, consumer adoption of cloud storage apps, like Dropbox and Google Drive, remains low.
  • There is no clear worldwide leader in the consumer cloud space – yet. Apple’s iCloud held an early edge in markets where the iPhone is popular, but suites of cloud-based services from Google, Amazon, and Microsoft are catching up worldwide. More specialized cloud services like Dropbox and Evernote are trying to become platforms in their own right.

In full, the report:

  • Forecasts the total audience for cloud computing services over the next five years.
  • Quantifies the amount of global traffic to the cloud from desktop and mobile devices.
  • Compares consumer cloud awareness to current consumer adoption and usage rates.
  • Surveys the opportunity for cloud-based service companies like Google, Apple, Microsoft, Amazon, and Dropbox.
  • Analyzes which cloud-based service companies are leading the space.