1. Executive Summary: Cloud Computing Landscape in India
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2. India IT & Cloud Market Landscape: Snapshot 1
Software Market in India, FY2010-FY2015E
Key Players in SaaS Market India
The Indian Cloud On-Premise, USD billion SaaS, USD million • Citrix
Computing & Cloud • Google
Services Market holds a • Microsoft
potential of USD 1 • Netsuite
Billion by 2012 • Oracle
• Ramco
• Rightnow
5.7 • Salesforce.com
• TCS
3.5
2.7 • Webex
• Zoho
FY2010 FY2013E FY2015E FY2010 FY2013E FY2015E
Hardware Market in India, FY2010-FY2015E Key Players in PaaS/ IaaS Market India
Hardware* Sales, USD billion PaaS, USD million IaaS, USD million • Amazon Web Services
14 13.0 • Cynapse
11.2 • Google App Engine
12
• Force.com
10 9.0 • IBM
8 • Netmagic Solutions
• Orangescape
6
• Rackspace
4 • Reliance Data Center
2 • VMWare
• Windows Azure
0 • Wolf Frameworks
FY2010 FY2013E FY2015E FY2010 FY2013E FY2015E FY2010 FY2013E FY2015E • Zenith Infotech
Note: *Hardware Includes Desktops, Notebooks, Printers, Servers, Storage & Security, Networking Equipments & Other Peripherals Zinnov
Source: NASSCOM Strategic Review, 2009-10 & 2010-11; IDC, Zinnov Analysis Confidential

3. SaaS: Landscape Snapshot
The domestic market for SaaS is estimated to be about USD 50 million and is currently 2
dominated by Collaborative Applications and CRM workloads
Workload-wise Distribution of SaaS Market in India, 2009 Indian SaaS Market: Customer & User Segmentation, 2009
Total Market: USD 50 - 56 million
100%
77% Customers
80% 69% Users
60%
40%
18% 19%
20% 11%
1% 2% 4%
0%
Micro SMB CMM Enterprise
Share of Competitors in the Indian SaaS market, 2009 Drivers & Constraints to SaaS Adoption in Indian Market
XXX XXX
x  Data Security Concerns  Improving IT & 
30%  Reliability Issue Communication
29%
 Lack of Customization Infrastructure
XXX  Resistance to Change  Increasing need for cost
XXX optimization
5%  Lack of Brand recognition
2%  Pricing & Support
XXX for new players
XXX XXX Innovation
16%  Lack of market reach
5% 2%  Development of Support
XXX  Lack of training & tech
4% XXX Ecosystem
XXX support
3%  Increasingly leveraging
4%  Broadband Penetration
Information masked for confidentiality reasons. reseller channel
Please contact Zinnov for more information
Note: Confidence Level for Market Size is 85 – 90 percent, * Collab. Applications – Collaborative Applications include web conferencing, productivity suites etc. Zinnov
Source: Zinnov analysis Confidential

4. India contributes only a small fraction of global revenues for Google, but offers one of the 3
fastest growing markets
Headcount • Google India is the largest outside of the US headquarters for Google (10.1%)
Google India 2000 • Hiring standards in India are same as that of the US and engineers in Bangalore have the freedom to move
to other Google R&D centers worldwide
Google HQ • Google engineers can rise to the level of a vice president based on technical accomplishments without
19,835
even owning a management degree
For other case studies and insights, please
Google India Revenues contact Zinnov for complete report
• Google India makes approx. USD XX million, less than 1% of the global revenues . But the revenues have been tripled over the last 2 years
• Majority of Google India revenues come from online advertising, whose market in India is about INR 1,250 Crore (5% of the total ad-spend in India) and 80%
of that market is drawn by Google
• The country is a top priority market at the board level, no significant revenue impact but the India business is regularly reviewed by the board
Google SMB Focus
• 4/5 top leading web properties in India are controlled by
Google (Orkut, Google search page, YouTube and Gmail)
• The 5th seat is captured by Rediff in India Product
• Lead product for Google in the SB segment is Google ad words. Not focusing on
pushing apps and believe that driven ad words adoption is the key to long term success
• Average Indian users spend about 30% of their online time on Marketing
Google sites – 3 times the world average • Google marketing the offering by providing Rs.2500/- worth of free ad words vouchers
for SB customers. Being distributed through multiple marketing channels like HSBC
Google India Share Bank, DELL, Airtel, TradeIndia.
Category Google Products
of Time Spent • Exploring marketing partnerships with Tally, Utilities services providers and India Post.
Search Google Sites 88.4% They have also looked to leverage DHL as a possible partner.
Sales
Social • Currently just one product marketing manager supported by a 50 Member tele-sales
Orkut 68.2%
Networking team from partner site. Tele-sales team does account training, activation and proactive
Maps Google Maps 63.9% support. Reactive support is driven by Google Hyderabad office
• Google has been trying to leverage the VAP channel to bundle ad words and sell the
Photos Picasa Network 16.2% same to their customers along with websites they develop. Channel partners are given
Blogs Blogger 47.6% 5% commission for this.
Payment options
Multimedia YouTube 82.8% • Google currently provides INR billing with internet banking, credit card and cheque
Email Gmail 46.8% payments
Zinnov
Source: Zinnov Interviews Confidential

5. Over the years Google India has driven several localized initiatives targeted specifically for the 4
Indian user
 Through YouTube, Google has also ventured into the entertainment business. The IPL on YouTube was a
key moment. Not only was it a global board level decision, but also elevated the level of dialogue. It went
to 200 countries and is already the most viewed live event Google has done
Entertainment  The premium sponsors for the live online streaming of IPL matches are Royal Challengers, HSBC Bank and
Hewlett-Packard. Airtel, Coca-Cola and Samsung are also participating. Google has also struck up lucrative
deals with UTV, Rajshri Productions etc. for the YouTube
Key India  Google is planning to launch a “mini” version of the Nexus One phone in India that may not have all
Investments the features but it would certainly be less-expensive than the US model
Local Language  Google India’s R&D chief, Prasad Ram, claims that no more than 7% Indians are proficient in English. Google looks at the
Opportunity Indian language market as a huge opportunity and offers search in 9 local languages
 Google India’s biggest revenue contributor have been in search advertising in verticals like airlines, travel and banks.
New Growth However, education and auto has started to show signs of growth for Google. Google expects to grow in verticals such
Verticals
as FMCG, education and Government in 2010
 Internet penetration is increasing in small and medium enterprises that do not advertise in general.
However, the internet is a natural cost-effective way of connecting and partnering with these SMEs in
SMB Focus small towns
 Partnered with firms such as TradeIndia.com to offer Rs. 2,500 worth Google Ad campaign free for
subscribers
Zinnov
Source: Zinnov Interviews with Google Ex-Employees, Partners, Industry Analysts Confidential

6. Zoho has been focusing on providing free subscriptions with a limited number of users, to reach 5
a critical mass of user base
Solution India SaaS Market
Revenues Share
Product : Zoho CRM, Zoho Meeting, Zoho Project
CRM USD XX Mn XX% Management, Zoho Business Suite (email and office
Zoho
Business Suite USD X Mn suites)
For other case studies and insights, please
contact Zinnov for complete report
Sales Strategy :
• Zoho offers free versions of its applications to induce usage Customer & User Base Distribution
• Zoho has also run innovative advertising campaigns using auto
rickshaws as mobile billboards, having Zoho posters on them,
showcasing the different features available
Channel Partners :
• 4 active channel partners; Pegasys, Bennett, KVP Business Solutions
and SNR Technologies
Channel Partner Sales Strategy :
• Current focus on Zoho CRM Price Points: CRM
Incentives : Revenue Share/ margin Min: xxx Max: xxx
(Rs/User/Month)
Business Suite
Min: xxx Max: xxx
(Rs/User/Month)
Technical Support & Training : SaaS Product Sales Team : xxx
• Cost of support is included in the pricing
• Training costs are additional; negotiated on a case to case basis Indian Customers (Users) CRM: XX (XX)
Indian Customers (Users)
Business Suite : XX (XX)
Web Channel Delivery
Direct SEO
Marketing Partners Platforms
Zoho has not yet been able to capture a paid user-
base in a large quantum Datacenter : Own Weak Strong
Payment Modes Online
Zinnov
Source: Primary interviews with stakeholders; company website, Zinnov analysis Confidential

7. Market: Vertical focus for Cloud Opportunity
Telecom, IT-BPO and Retail have the highest spending on IT as a percentage of revenues, 6
however…
IT Spend as percentage of Revenue Across Verticals IT Purchasing budgets in 2010 vis-à-vis 2009
Telecom 2.2%
2.0%
20% to
IT-BPO 1.7%
1.5% 40% and 40%
above 38%
Retail 1.4% 15%
1.3%
5%
Spend
Substantially Spend nearly
Transport/ Logistics 1.2% 10%
1.3% less the same
32%
Spend slightly
Healthcare/ Pharma 0.9% less
0.9%
BFSI 0.6%
0.7%
Survey of 120 CIOs/ IT heads
Automotive 0.6%
0.6%
FY 2010
Manufacturing 0.8%
0.6% FY 2009
Energy 0.4%
0.4%
0% 1% 2% 3%
Zinnov
Confidential

8. Market: Vertical focus for Cloud Opportunity
…Government, Telecom and BFSI are highly mature with their IT adoption and show higher 7
potential towards cloud adoption going forward
IT Maturity of various verticals in India FY2009 Potential for Adoption of Emerging Technologies
Cloud/ SOA/
Virtualization
Telecom: New pricing changes, number portability, per second billing, new entrants and
expansion of circle by existing players
Government: Estimated spend of $ 9 billion on Government to consumer (G2C) projects
(state/ central level) including hardware infrastructure and public services (Department
of posts, railways etc.)
Banking: Implementing and maintaining core banking solutions (esp. by public sector
banks, mobile/ net banking, reduce transaction cost, compliance
Insurance: Claims management, policy administration, underwriting and sales/ CRM,
premium payments/ renewals
Retail: Supply chain automation/ management, warehouse management, inventory
audit/ loss prevention, online retailing, BI and networking
Healthcare/ Pharma: Servers and Data center for hospital upgrades, HIS, Electronic
records, image archiving, data storage/ mining, telemedicine, remote diagnostics, etc
Based on the IT Maturity, Vertical-wise IT spend and Adoption Potential Government, Telecom, BFSI and Manufacturing emerge as the top
verticals for further analysis
Note: Public Sector Enterprises are spread across verticals other than Government Zinnov
Source: NASSCOM Strategic Review 2010, Zinnov Analysis Confidential

9. India Landscape
Macro trends suggest a significant increase in overall IT adoption is impending in India (1/2) 8
PC and Mobile Penetration in India, Millions
1,000 Absence of legacy systems will allow market to
PC install base
800
826.9 jump technology curve and results in first mover
Mobile subscribers
advantage
520.6 Million
600
Subscribers
400 600 • ~15 million mobile subscribers
added per month in India, 8
200 million new mobile shipments
42.1 100.1 per month
500 • App store
0 • Access to 3G
2009 2015E • ~25% of all phones sold in India • Low cost smart
are smart phones phones
400 Mobile (India)
• MVAS related revenues to
Internet and 3G Subscribers in India, Millions account for 20% of operator
revenue, a 2 fold increase since Wireline (India)
300
2006 in India
400 2009 2015E
Mobile (US)
292.3
300 200
Wireline (US)
200
129.5
100
100 58.1 66.4
8.0 1.5
0 0
Active Internet Broadband 3G Subscribers 2001 2003 2005 2007 2009 2010
Users* Subscribers**
Note: *Includes all devices; **Bandwidth of 256+ Kbps, includes Broadband Wireless Access; ***Micro, Small, and Medium Enterprises Zinnov
Source: Telecom Regulatory Authority of India (TRAI); Union Budget FY2010-11Transcript; IDC; FICCI BDA Report “3G and BWA”; Gartner; Data monitor; NASSCOM Strategic Review, 2009-
10 & 2010-11; Zinnov Analysis Confidential

10. India Landscape
India witnessed a surge of almost 40 percent in its mobile internet traffic from Q4 2009 to Q1 9
2010, leading to the highest mobile internet traffic in Asia
Active Mobile Internet Users Ad Requests** by Country, 1Q 2010, In millions
In March 2010, Asia
Mobile Subscriber Base contributed to 25% of the
3000 2,838
total mobile internet traffic
2500 globally
471 Million* 1,872
2000
1500 The top 3 countries, India,
1000 655 650 Indonesia and Australia
Mobile Phones 404 generated over 74% of traffic
500 298 161 in the region in Q1 2010
Capable of Accessing 185 133
Internet 0
India Indonesia Australia Philippines Vietnam Singapore Hong Kong Malaysia Thailand
27% of Total = 127 Wireless data subscribers in
Million India increased from 101
million in QE Dec 2008 to 149
Operating System Share of Smartphones in India million in QE Dec 2009
Used Mobile
Internet in Last Surged by the total number
one Year 100%
of additions in mobile
80% subscribers in India over the
~ 12 Million quarter the mobile internet
60%
traffic is soaring
91% 89% 91% 93%
40%
20%
Active Users In March 2010, smartphone
= ~2 million 0%
traffic share of mobile internet
Dec-09 Jan-10 Feb-10 Mar-10 traffic in India was 26%
Symbian OS iPhone OS Windows Mobile OS Other
Note: *As of Sep 09; **AdMob serves ads for more than 18,000 mobile Web sites and applications around the world and provides metrics based on this data Zinnov
Source: AdMob, TRAI, I-cube Confidential

11. India Landscape
In order to leverage on the huge telecom subscriber base and to compensate for the low rates 10
of basic call tariffs, telecom players in India are increasing focused on the applications space
Telecom Service Providers App Stores Indian App Companies
• Bharti Airtel launched their own app store, Airtel App Central earlier this • Sourcebits is one of the most successful
year Indian companies in the space, having
developed over a 100 applications for the
• Airtel App Central provides 1250 applications across 25 different categories iPhone, iPad, Android, Blackberry etc and
including games, business, social networking etc as well as India-specific nets USD 3 million* per annum
religious applications
• The cost of the applications is either added to the subscriber’s bill or
deducted from the available talk-time, with the applications costs starting • iRemedi is also a major player in the
as low as INR 5 market having sold more than 200 Amar
Chitra Katha comics for the iPhone and
the iPad
• Reliance Communications has a total subscriber base of 100 million across • Robosoft Technologies, a software
its GSM & CDMA networks company, sells its game apps as well as
utility & productivity apps for iPhone,
• It has entered into a deal with GetJar to provide access of 65,000+ free
Android and Nokia phones. The company
applications to all its 100 million subscribers via its VAS platform R-World
which sells apps under the brand name
• GetJar offers applications that work with almost all handsets and OS’ Global Delight hopes to make USD 9
including Symbian, Blackberry, Windows Mobile, Java & Android million from the apps alone.
• Rocke Talk a free app that allows users to
create their own voice, photo, video
There are an estimated content and share it, has a subscriber
• Vodafone has launched its application store for 50 Indian companies base of 1.5 million users
Indian customers with 800 applications employing 1000
available currently, of which 25 percent are free developers engaged in
• The paid applications have been reasonably applications • Rapidsoft, Spiel Studio, Interchain
priced between INR 5 and INR 30 development across solutions and Nexmoo are some of the
platforms other Indian companies
Note: *Assuming 1 USD = 50 INR Zinnov
Source: Company Websites and News releases, Zinnov Analysis Confidential

12. Drivers for Adoption of Cloud Services
Flexibility in terms of on-Demand scale up/ down with no upfront capital investment makes the 11
cloud offering highly attractive for the enterprises
Drivers for Cloud Solutions in India “ This will help to meet customer expectation
very effectively”
“ Easy Exit for customers in case of failures” Sukanta K Nayak, AVP, IT, Usha
International
Vikas Prabhu, CIO, The MobileStore
Top 5 CIO’s Investment Priorities for 2009-10*
90%
69% 68% 64%
45%
Software- Business Unified Virtualisation Open Source
as-a- Intelligence Communications
Service and Data-
(SaaS) warehousing
“It has potential. As the capex dollars are diminished, IT “Its an innovative business technology with significant benefits
management is going to look for on-demand models for keeping coming from the absence of the client/server software
the costs down” installation or maintenance”
Prashant Cherukuri, CIO, Aditya Birla Minacs N. Varadarajan, GM, IT, Madras Cement
Source: *IDC India’s “Identifying Opportunities in the Current Economic Scenario” report (March 2009), dqindia.ciol.com, BizTech2.com, expresscomputers.com, networkcomputing.com, Zinnov
Zinnov Analysis Confidential

13. Constraints to Adoption of Cloud Services
Data Security and Lack of customization are reported as the biggest challenge in the adoption of 12
Cloud computing in India
"Security is the biggest concern. Barring core applications, other “We faced challenges in terms of training the users to the new
productivity applications such as CRM and email can take technology”
advantage of this technology,“
Venkat Iyer, director, business technology, Pfizer India
Ajay M Patil, the vice president of IT at Bharti AXALife
Top 4 Challenges with Cloud Computing*
Challenges
Reported by CIO’s
Need for
with Cloud Compliance &
Computing Internal Training
Governance
25%
Concerns on Data 20% 18%
Security Costlier in 14%
Risk of longer run
Apprehensions on Vendor Lock in
SLAs and Reliability Data Performance Data Transfer Data Lock-in
confidentiality Unpredictability Bottlenecks
Poor and auditability
Lack of Connectivity
Customization Existing
Legacy Systems
“For large organizations, the Value for Price model is
yet to emerge”
Upal Chakraborty, CIO, DLF
“CIOs need to keep in mind levels of complexities of his business “Security, uptime and SLA will be the important aspects
processes as well as customization required, since the SaaS of the deliverables”
model may not permit too much customization”
J Ramesh, CIO, MIRC Electronics
N. Varadarajan, GM, IT, Madras Cements
Zinnov
Source: *Saltmarch survey of 1100 Indian Business Technology professionals ‘2009, dqindia.ciol.com , BizTech2.com, expresscomputers.com, networkcomputing.com, Zinnov Analysis Confidential

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