Cloud adoption among SMEs to grow at 20%: Report

A younger workforce and increasing penetration of technology is expected to drive adoption of cloud services at small and medium enterprises, a report has said.

Indian SMEs are expected to increase cloud adoption at a CAGR of 20% by 2016, the report by EY and Assocham said.

The last few years have seen SMEs recognising technology as a key business driver, but adoption is still low compared to other countries with large SME setups, the report said.

"SMEs will play a leading role in the adoption of social, mobile, analytics, and cloud (SMAC) in India, given the huge opportunity it opens up, not only to grow revenues by increased marketing to new customers, but also by bringing in operational efficiency and customer experience," it added.

SMEs account for 45% of India's total manufacturing output and employ around 40% of its workforce. The sector's contribution to India's GDP is expected to increase to 22% in 2020 from 17% in 2011.

"Indian SMEs are expected to increase cloud adoption at a CAGR of 20% between 2012 and 2016. The demand for cloud services by SMEs is particularly high in the areas of disaster recovery, remote database management and e-mail hosting," the report said.

Factors like emergence of young middle class in India, penetration of technology and growth of social networks offer an attractive opportunity for SMEs to break traditional barriers and engage stakeholders across communities in a targeted manner.

"Indian SMEs finds themselves in a unique position to exploit these forces (SMAC). Intelligently and cohesively exploited these technologies will transform the way they compete with their larger competitors," EY Partner and Leader (IT Advisory Services) Samiron Ghoshal said.