Emerging Markets Emerge Leaders in Cloud Computing Adoption – I
Even ignoring my love for alliterations (“emerging leaders emerge leaders”), there’s no denying that developing nations are taking to cloud computing with greater vigor than developed economies. A recent study by Indian IT consulting giant Tata Consultancy Services, a company that is doing groundbreaking work in this field (See: InstaCompute: Simple & Instant Cloud Computing) and featured prominently in an earlier article about the growth of cloud computing in India (See: Is India The Next Cloud Computing Superpower?), has revealed that companies in Latin America (LatAm) and Asia-Pacific (APAC) far outrun Europe and the US in cloud computing adaptation.
According to this study, while as many as 39% of the average LatAm company’s applications were on the cloud, with the average APAC company following at 28%, corresponding figures for the US and Europe were 19% and 12% respectively. However, all it not lost as the projected numbers for these last two in 2014 are 34% and 24% respectively. Expectedly, LatAm and APAC companies are not expected to stagnate, with the average company in both regions expected to have more than half of its applications cloud-based by 2014.
Now, the question is why are emerging markets the leaders in cloud computing adoption? Personally speaking, I believe it is due to the staying power of legacy applications in developed economies. It is difficult to argue with the logic of “if it’s working, why fix it?” Until, of course, the advantages of shifting to a more modern technology at the cost a large one-time investment outweigh the benefits of hanging on. In many ways, that would justify the use of old mainframe technologies in financial services.
This is a theme I had explored in an earlier article, drawing parallels with telecommunications. Here’s what I had written: “Ten years back, in contrast to the United States of 2000, few Indian households had a telephone landline. However, when mobile phones appeared, Indians were quick to adopt them, thereby hurdling one step in the chart of communications progression. In fact, today there are more mobile phones in India than in the US, and it’s currently the fastest growing market in the world. What does this show? Only that with the spread of technologies, less developed countries can sometimes adopt them faster than developed economies where legacy systems can still retain dominance for years.”
Another reason may be the preponderance of smaller firms in the emerging markets (although the TCS study focused on large companies). As I had written about in an earlier article, smaller firms do see disproportionately more advantages of going on the cloud than large enterprises (See: Which Type of Businesses Benefit Most from Cloud Computing?). With smaller firms dominating such economies, the adoption rate of cloud computing is expectedly higher than say in the US where enterprises, flush with stable cash flows and set in business practices, are reluctant to embrace change.
Part II follows…
By Sourya Biswas