Small and Medium sized enterprises contribute to approximately 90% of all businesses in Asia and employ around 1billion people thereby contributing almost USD10-USD11 trillion to the overall regional economy.
No wonder they are also one of the highest spenders in ICT industry so as to become more competitive I terms of communication, trust , availability and service orientation.
Many studies put the 2014-15 spend by SMEs on cloud to be around USD2b in this region (including Australia & Japan) with a 40-50% growth rate year on year
However not all is great in the SMB sector. Especially if you look at a country like India which has more SMEs than even China, and which employs over 100 million people has a miniscule 6.2% contribution towards GDP.
One of the reasons for the low contribution of SME revenues towards GDP could be a restricted scale of operations due to which SMEs are restricting their sale in domestic market and do not have access to export market. Due to this the SMEs in India are restricted to sell low value items in domestic market only.
Now to increase their scale as well as charge a better premium for their product the Indian SME will have to adopt cloud someday. Because deploying cloud will impact the infrastructure and thought-process/philosophy of the SME.
So while SME contribution in India is low, but it clearly has a huge potential both in terms of volumes as well as the necessity to evolve to cloud or perish.
Cloud vendors also need to pitch Cloud solutions on the following fronts:
- Save Money – As we can see Indian SMEs are the 3rd largest employers and yet enough value is not being generated. Cloud can help them do more work with less people
- Make Money: The cloud computing investment opens up doors to newer business models or upgrading their offerings thereby expanding monetization models
- On Demand Buy- No need to invest whole hog now, cloud grows as the SME grows. So no huge capital cost or training costs
The above recommendations also become pertinent if we look at the growth drivers for India and other countries.
In India the growth drivers are- costs, monthly payments and remote access. Remote access can help SMEs in India do away with excess or irrelevant employment and also open up new business models, while monthly payments will erase the friction of adoption of cloud and reduced cost anyways is a major by-product of cloud adoption.
Government and Vendors together can push the cloud agenda with the above recommendations in India to garner a better gdp contribution and more cloud adoption simultaneosuly
Source of charts: Asia Cloud Computing Association
