Kapil Makhija, Vice President -Technology Cloud, Oracle India in an interaction with the CIO Tech Outlook, shares his insights on public cloud offerings, cloud adoption, and more.

The global cloud computing market size was valued at USD 368.97 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 15.7% from 2022 to 2030. How do you see this market evolving in India? What are the major factors driving the growth of this market?

Cloud has become a preferred choice to accelerate businesses’ digitization agenda during the last few years especially. The pandemic has reiterated the importance of business continuity which in return brought a spotlight on cloud solutions globally. Enterprises now aim to be able to protect their business against any unforeseeable threat. In this endeavour, Indian businesses too are embracing a cloud-first world where they are able to innovate at an unprecedented pace while staying true to their overall cloud budget. IDC’s recent study supports this and finds that the overall Indian public cloud services market is expected to reach $10.8 billion by 2025, growing at a CAGR of 24.1% for 2020-25. The primary propeller of the cloud movement in India is the pool of opportunities that opens up for an enterprise as they start to accept the cloud. This is especially true for businesses who want to grow faster but at lower costs. Cloud allows organisations to scale, provides security and at the same time focus on their key offerings instead of managing IT.

Cloud also allows organisations to leverage and innovate with emerging technology like AI/ML, blockchain amongst others to achieve their business goals. Another driver of India’s cloud movement is the role that it plays in leveraging the most valuable currency - data. As organisations understand the value of the quintals of data generated, the rise in cloud adoption will be imminent. As for Oracle, we have witnessed exceptional growth within the country and the wide acceptance amongst Indian customers has today made us one of the preferred cloud partners in the country. Our MeitY empanelled cloud regions in Mumbai and Hyderabad have proven to be an additional benefit to our customers in regulated sectors and those who want their DR to be in different seismic zones. As India moves towards a more cloud inclusive environment, we constantly aim to add additional benefits to our solutions for the ease of over 15000 customers in India that we serve.

Even though COVID-19 has disrupted SMEs, it has also opened new opportunities for them to adapt and transform through relevant digitization, of which cloud adoption has been a key ingredient. How will the SMEs who stay invested in public cloud offerings will most certainly get to reinvent their businesses and make themselves more competitive and be future-ready?

MSMEs have been an integral part of the country’s economy and they contribute to nearly 30% of India’s GDP. It is imperative for these businesses to future-proof themselves with the right digitization tools and to also streamline their business growth in the most effective manner for the country’s economic growth. As they aim to do that, cloud becomes a go-to business choice for them. Cloud’s innumerable benefits including lower costs, better scalability and faster innovation are leveraged by SMBs in order to further their digitization agenda.

Also, as smaller businesses make a move towards cloud, optimising costs becomes their primary target along with technological advancement and cloud essentially helps these businesses to ensure just that. As the SMB space becomes more and more competitive, cloud brings with it a unique edge to and helps businesses differentiate themselves from others in the space. Leveraging AI/ML, blockchain amongst other emerging technologies for better performance becomes a key differentiator for businesses and a catalyst for efficient growth.

SMBs are a majority of our customers in India and globally too, out of the four lakh customers, over three lakh are SMBs. Therefore we understand the core requirements of these businesses. With an aim to help them grow, we assist in adding efficiency, getting better security and at the same time reducing costs. Also, we have a dedicated business unit - Oracle Digital Sales Team which helps our SMB customers on their cloud journey. Also, with our constant belief in cloud economics, we let our customers pay only for what they use.

The SME segment in India’s cloud market grapples with a unique combination of technical and business challenges, additionally exacerbated by the COVID-19 crisis. As per a NASSCOM Survey 2, hidden (and non-transparent) cloud costs (37%), vendors inability to offer custom services (33%) and employee resistance to digitization (29%) were the key barriers to scaling cloud adoption. How can organizations overcome these hurdles?

SMEs or any other organisation have a lot to consider in order to make the right cloud choice. In most cases, businesses don’t have an advanced understanding of the hidden costs or the egress costs therefore it comes as an unplanned budgetary constraint for them. This can be easily addressed by choosing the right cloud vendor which acts as a partner in the enterprise’s cloud journey and has a transparent cost structure. At Oracle, we offer outbound data transfer for free for the first 10TB per month for each tenancy to ease SMBs and every other business’ costs. Even to address issues like vendor’s inability to offer custom services, it is again important that the right cloud provider is chosen. Enterprises must seek a cloud provider who considers the enterprise’s success as their key priority. Also, they must be focussed on investing in and educating their partners to upskill them with the right technologies so that they can address any business’ issue effectively. To understand which vendor is right for an enterprise, they can try the multi cloud strategy and tap into the strengths of various providers. Or enterprises can also initiate a phase-wise move to cloud through models like hybrid cloud.

To address issues relating to employee hesitance, businesses must try to make digitization a learning process for them instead instilling a sudden change that might come as a threat to them. Also, a gradual move to cloud will help inculcate better understanding of the technology amongst employees. Enterprise leaders too must look at cloud as an enabler and be certain in their cloud decisions to help develop confidence in the rest of employees.

As businesses recalibrate to next normal, it is imperative for SMEs to move away from considering IT enablement as an afterthought. Why do cloud-based solutions deserve special focus as part of the journey for organizations in embracing the right technology to scale business outcomes?

Cloud has been able to reserve a special place in every successful organisation’s growth plans. As enterprises today devise unique plans on how they foresee technological advancement supporting their business goals, cloud remains their top priority. This is especially true for SMBs who want to grow and have a continual success path towards meeting their business goals. Beyond its benefits like security, faster innovation and cost benefits, cloud plays a very important role in ensuring business continuity. An effective BCP has proven to be critical especially in the recent years where many businesses have struggled to ensure continuity. Now, in recent times, as the market demand increases, businesses are focusing on scalability which is another unique offering of cloud. Beyond its many offerings and benefits, SMBs in every sector today must ensure a successful cloud strategy to ensure continuity and then gradually scalability too.

Cloud computing has clear, measurable advantages for companies such as facilitating flexible and rapid IT development, infrastructure and upgrade costs and also simplifying IT management requirements. Yet SMEs in particular have strong reservations about using cloud services. How can Cloud solution providers make SMEs understand the benefits of adopting cloud solutions?

We have witnessed that many SMBs and some of the other businesses too have reservations about leveraging cloud owing to reasons like lack of awareness, security concerns and lack of skills within the organisation to nurture a cloud environment. However, it is now imperative for SMBs to understand that cloud migration is a global reality and they must pivot and embrace cloud.

Beyond the enterprise, a cloud provider too can play a crucial role in helping SMBs migrate smoothly. At Oracle, we believe, it is our responsibility to ensure smooth migration and therefore we have dedicated teams to address customer queries. Our customers are embracing a cloud first strategy especially SMBs and they are even able to improve performance while reducing costs by at least 40%. We understand that a cloud provider must act as a partner to every customer they cater to in order to smoothen their cloud journey therefore we have strong post sales support as well for customers to ensure they fully leverage the benefits of their cloud journey.

Where do you see the market for Cloud solutions in the near future?

With the pace that enterprises are embracing cloud, one can easily predict that cloud adoption is only going to increase in years to come. To support this, NASSCOM’s research suggests that India's cloud market is estimated to reach USD 5.6 billion by 2022, a 26 per cent year-on-year growth. With this, we can also estimate the growing demand for cloud professionals, CIOs, engineers amongst other professionals who are further going to develop a better understanding amongst businesses and further accelerate the shift towards a cloud-first world.

Especially in India, we are witnessing many cloud-first startups who are embracing various cloud strategies including multi cloud and hybrid cloud to accelerate their growth. Bigger enterprises in extremely regulated spaces too are open to phase-wise move to cloud as they comply with many regulations. Every sector is realising the importance of an effective cloud strategy and is developing an understanding of the technology to further make best of use of it.