Public Cloud Service Market In India Will Grow From $838 Million In 2015 To $1.9 Billion By 2018 [REPORT]

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The booming startup culture and the need for unrestricted data access round the clock have helped cloud service market in India to record an unprecedented growth. Between 2014 and 2018, the public cloud service market in India will grow by 300% from $632 million in 2014 to $1.9 billion, estimates research firm Gartner. The growth would primarily be driven by the key the high growth in key market segments, cloud infrastructure as a service (IaaS), cloud management and security service cloud application infrastructure as a service (PaaS).

The market is estimated to generate $838 million in revenue by the end of 2015, an annual increase of almost 33 percent. IaaS will make the largest contribution as the spending is estimated t soar to $104.8 million, an increase of 38 percent compared to the last year. On the other hand, spending on cloud management/security and PaaS is estimated to grow at 35.4 percent to $56.7 million and $84.6 million respectively this year.

“Organizations in India seeking IT outsourcing services are increasingly turning to public cloud services as an alternative to traditional ITO offerings,” said Ed Anderson, research vice president at Gartner. “In fact, cloud services are not only being used for low-value or transient workloads but also increasingly for production workloads, including some mission-critical initiatives.”

The growing competition in the market has forced the medium and large companies to lower their spending on infrastructure but improve their offerings & services. While startups are already betting big time on cloud infrastructure for all their requirements, SMBs are also turning towards cloud-based model where don’t have to make any huge upfront investment. Besides Google, Amazon and Salesforce – key global players in the cloud service industry – regional players have started making foray into this space keeping an eye on the exploding demand for the cloud infrastructure. TCS, Wipro, Zenith Infotech, Synapse India, Ozonetel and many other It players have already joined the bandwagon. Recently, tech giant Microsoft has announced to make an investment of $233 million in three cloud base data centres in the country. These data centres would be located in Mumbai, Pune and Chennai.

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The latest cloud adoption survey from Gartner also highlights the growing culture of cloud infrastructure in the country. 54 percent of companies who participated in the survey claim they already using cloud infrastructure while another 43 percent indicate that they will go on cloud in 2015. Definitely, the figure portrays a big opportunity window for all those companies offering cloud-based services.

“Business process as a service (BPaaS) is expected to grow from $130 million in 2014 to $351 million in 2018. SaaS is expected to grow from $246 million in 2014 to $707 million in 2018,” said Fred Ng, senior research analyst at Gartner. “The growth of cloud services varies by country and specific cloud service type. The Indian market is unique in that demand is consistently high for all types of cloud services.”

The improving Internet infrastructure has played a key role in developing confidence among companies to go on cloud. Nearly 300 million people in India are actively using the Internet and penetration of 3G and 4G services is on the rise. Despite, the not-so-encouraging network infrastructure improvement rate is still keeping people away from implementing cloud service in their key processes and business units. India stands at number 115 position with an average internet speed of 2.0 Mbps, trailing behind much smaller economies such as Indonesia, Vietnam and Philippines. Data security is the another key challenge; only 1 in ten cloud apps are secured enough for enterprise use, according to a report from cloud expert Netskope. Surprisingly, by 2016 more cheap hacking tools would be available for hackers making the cloud infrastructure more vulnerable.

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