Cloud opportunities in India are growing significantly. A survey of 100 CIOs found that most CIOs plan to increase their IT budgets over the next year, with 49% planning a 0-10% increase. While concerns over data security remain, many CIOs are evaluating cloud services like SaaS, IaaS, and PaaS. By 2015, over half of CIOs plan to use SaaS, showing growing acceptance of cloud. The cloud market in India has potential to reach billions of dollars as more applications and government projects adopt cloud technologies.

1. Cloud Opportunities in India – A CIOs Perspective
Media Briefing
25th November, 2010
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2. Survey Demographics: Distribution by Vertical, Revenues, Staff using IT & Size of
2
Internal IT team
Distribution by Vertical Distribution by Revenue
IT/ ITeS 21%
BFSI 14%
Telecommunications 11% Not Disclosed
Pharmaceuticals & Chemicals 7% More than 10000 Crore (13%) <50 Crore
Media & Entertainment 5% (5%) (15%)
Textile 5% 2500-10000 Crore
50-200 Crore
Healthcare 4% (10%)
(21%)
Automobiles & Auto Components 4%
500-2500 Crore
Electrical Machinery 4% (20%) 200-500 Crore
Cement 3% (16%)
Utilities 2%
Steel 2%
Food Industry 2%
Tourism & Hospitality 2%
Others 14%
Distribution by Staff using IT Internal IT Team Size
More than
Not Disclosed 250-500 500
More than 10000 (8%) 100-250 (3%) (3%)
(6%) 50-100 (6%)
2500-10000 Less than100 (7%) Less than 10
(8%) (26%) (34%)
30-50
750-2500 100-250 (15%)
(18%) (12%)
250-750 10-30
(22%) (32%)
Sample Size: 100
Note: Zinnov
Source: Zinnov’s Survey of 100 CIO 2010 Confidential

3. Domestic IT spend in India has been growing at a significant pace and is dominated
3
by BFSI, Telecom, Government, Manufacturing & Energy verticals
Domestic IT-BPO Spend (Bn) 2009-2010 Vertical-wise Spend Of Software In 2010
IT-BPO
Others 1.9%
2.9 5.7% Government
2.4 2.7 2%
9.4 2.0 Manufacturing Auto
8.4 44.5% 2.1%
Telecom
4.2%
9.2 9.5
BFSI
12%
Energy
Hardware IT services BPO Software 26.7%
FY2009 FY2010
Vertical-wise Spend Of Hardware In 2010 Vertical-wise Spend Of IT Services In 2010
Manufacturin
Others Healthcare/ Manufacturing
g
12.9% Pharma 39.1% Healthcare/
24.7% Others
1.4% Pharma
5.7%
IT-BPO 1%
Auto
BFSI 1.6% Telecom 1.4%
8.8%
Government 6.4%
26.2%
Auto Energy
Telecom 18.4% BFSI
2.1%
9.7% 12.8%
Energy
Government
12.3% 15.4%
Note: Public Sector Enterprises are spread across verticals other than Government Zinnov
Source: NASSCOM Strategic Review 2010 Confidential

4. …and it is expected to grow going forward for majority of firms
4
Change in IT Budget From 2010 To 2011
Decrease less
than 10%
(4%)
Will remain
• Indian enterprises are starting to show
nearly the 0-10% increase signs of steep recovery with respect to
same (49%) their IT spending
(34%)
• Around 60% of the CIOs believe that
their IT budget will be growing next year
• While companies continue to invest on
IT, OPEX models are increasingly being
favored
Cant' Say
(5%)
More than 40% 20-40% 10-20%
increase increase increase
(2%) (2%) (4%)
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

5. The findings highlighted that Cost of solution and brand of the technology provider
5
are key parameters for evaluation during the decision making process
56% Key Parameters for IT Decision Making
• While Indian enterprises are cost conscious with
respect to their IT purchase decisions, they would
42% prefer to go along with the “Best in Breed” solutions –
Price value focus of large enterprises in India
29%
26%
21%
12%
Cost Brand of IT Vendor/ Time to Flexibility & Scalability Existing relationship Support Infrastructure
Best of Breed implementation with the IT vendor
Solutions
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

6. Better agility , flexibility and cost visibility offered by cloud solutions are synchronous
6
with the top priorities of a CIO
75% Current IT Goals of Enterprises
Agility/ Flexibility
…Can Cloud
Reach and customer be the
OPEX models enablement Answer?
51%
Efficiency enhancement
38%
34% 33%
Best of breed
14% 13%
Aligning IT with Cost Control/ Developing New Improving IT Cultivating IT/ Redesigning Implementing New
Business Goals/ Expense go-to-market Operations and Business Business Processes Systems &
Driving Business Management Strategies & System Partnerships/ Architecture
Innovation Technologies Performance Negotiating with IT
Vendors
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

7. A significant number of CIOs are now willing to leverage Cloud services and have
7
already started evaluating it…
Willingness to Use Cloud Services (2011)
39%
38%
• While cloud as trend is gaining attraction, many
CIOs are currently in a wait and watch situation
29% • Some of the CIOs have already started running
pilots for some of the non-core applications
• However for some of the core applications, CIOs
are currently considering to adopt private cloud
scenarios
10%
7%
4%
Software as a Service Infrastructure as a Business Process Private Cloud Platform as a Service Can't Say
(SaaS) Service (IaaS) (PaaS)
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

8. …and the trend is only going to increase by 2015
8
Willingness to Use Cloud Services (2015)
58% • More and more CIOs would be investing in cloud technologies
through 2015
• SaaS adoption would continue to grow at a rapid pace in India
over the next 5 years; Business process as a service to grow
rapidly as well in the SMB segment
37%
• CIOs might take a cautious approach towards private cloud
adoption; 3rd party datacenters may become a preferred option
21%
19%
9% 9%
Software as a Service Infrastructure as a Business Process Private Cloud Platform as a Service Can't Say
(SaaS) Service (IaaS) (PaaS)
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

9. Data security continues to be one of the key concerns with respect to adoption of
9
Cloud technology among Indian CIOs
Current Perception About Using Cloud Technology
60%
• Data security and privacy still continue to be the key
challenge towards cloud adoption in India
• Complexity of integration of cloud based systems with
legacy investments is also a major cause of concern
23%
20%
13%
10% 9%
8% 7% 6% 6%
4%
Data Integration SLA, Loss of Lack of Lack of Lack of Legal/ Lack of None Can’t Say
Security or with legacy Reliability & control on Maturity of standards trained regulatory Features &
Privacy systems business IT cloud manpower constraints functionality
continuity service
providers
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

10. Most of Indian CIOs would prefer to have the data centers located in India and run by
10
MNC service providers
Preference of Cloud Provider
Can't Say
MNC with datacenter 7%
outside India
7%
Domestic company
MNC with datacenter
with datacenter in
in India
India
50%
8%
My own datacenter
28%
Sample Size: 100
Note: Zinnov
Source: Zinnov CIO Survey 2010 Confidential

11. The Cloud Computing market (including private cloud) in India holds a multi Billion
11
Dollar potential
Domestic IT Market in India (Billion) Key Drivers for the Indian Cloud
FY’10 to FY’15 Computing Market
• CIOs will look towards cloud computing to reduce the
ever increasing IT budgets
• Verticals such as BFSI, education, healthcare, retail will
increasingly rely upon cloud computing for better reach
• Governments’ continued focus on e-governance will
drive significant adoption of cloud pan India
Total Cloud • ISVs and IT services/ BPO companies in India will look at
Market is less cloud computing for non-linear and rapid growth
than 0.5% of total
Domestic IT
Spending
Total Cloud Spend will increase to around 5% of the
FY 2010 FY 2015 total Domestic IT Spending with the following
distributions:
Note: Zinnov
Source: NASSCOM Strategic Review, 2009-10 & 2010-11; Zinnov Analysis Confidential

12. Other government projects also hold huge potential for Cloud technologies
12
IRCTC
• Around 300,000 bookings are done on IRCTC everyday
• The traffic on the site fluctuates with the time of the day, highest being in the morning hours
Financial Inclusion
• The government has committed itself to provide banking services by using information and
communication technology to 73000 rural habitation in the country having population of
over 2000 by March 2012
• Much stress is being given to the use of over 500 million mobile phone connections present
in India to extend financial inclusion across rural and remote regions
Right To Information
• Increasing awareness regarding Right to Information in the public is compelling the
government to digitize its databases and make more and more information available to the
public domain
The government will require huge processing power capabilities for projects of such large magnitude and
fluctuating demands. This in turn will favor the adoption of cloud for cost effectiveness and faster implementation
Zinnov
Confidential

13. 13
Cloud Computing is here to stay!!!!
Zinnov
Confidential