A Cloudy Potential

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    Narmin Tartila

    Mahmud looked at a table titled ‘current status’ on the Sirvoy software interface. There were 16 check-ins vs. 10 check-outs and the occupancy rate was at around 80%. He quickly changed the view to check what the split of the guests were by nationality. Then he jumped to another page to view room allocation. The yellow and green rows showed him the sources of the booking. A significant portion of business was driven through Agoda. Mahmud made a note to step up promotion on the hotel booking site.
    As Operations Director of Richmond Hotel and Suites, Mahmud’s key responsibilities include increasing sales and ensuring a seamless staying experience for all guests. The cloud-based software at 60USD a month seemed to be well worth the investment. It’s quite intuitive. Not only can he access important analytics easily but he can also take informed decisions pertaining to business strategy.
    What is Cloud Computing:
    Cloud computing is a computing technology that allows remote consumption of computing resources. From a consumer’s perspective, take Hotmail and Gmail for instance; or Dropbox and Googledrive for that matter. You don’t really need your own gadget to access contents. Rather you can access them from any part of the globe from any machine. From an enterprise’s perspective, cloud computing constitutes subscribing to a software and logging in to the system remotely. A collection of servers and softwares networked together allows easy consumption of software services. For a company like Richmond Hotel and Suites, this basically means avoiding a hefty investment in on-premise hardware, software, licensing and paying an IT guy for maintenance. All Richmond Hotel and Suites has to do is to subscribe to the Software as a Service (SaaS) and consume its IT requirement, on demand.
    A study commissioned by SAP and conducted by IDC, estimates that the cloud ecosystem in Asia Pacific will grow at a compound annual growth rate (CAGR) of 67.9% by 201812. According to IDC the worldwide public cloud services reached a total market size of $45.7 billion. This market is expected to experience a robust growth rate of 23% on a CAGR basis until 20183.
    The cloud market loosely consists of three models – Software as a Service or SaaS – where businesses subscribe to an application that it can access over the internet; Platform as a Service or PaaS – where a business can create its own custom applications for its employees; and Infrastructure as a Service or IaaS – where companies can actually rent out a backbone structure from players like Amazon and Google1. The SaaS market accounting for 72% of the total public cloud services market is forecasted to grow at a 20% CAGR; PaaS accounted for 14% of the market in 2013 with a forecast CAGR of 27%; IaaS market drove $3.6 billion in 2013 spending and is projected to grow at a 31% CAGR through 20183.
    Cloud in the Asia Pacific Region:
    Small and medium businesses (SMBs) in Asia-Pacific will spend US$19.8 billion on cloud in 2015 which poses a very lucrative opportunity for cloud service providers4.
    In neighboring India, SaaS adoption by SMBs is growing at a CAGR of over 25% and is projected to reach USD 370 million by 2018. According to a study by Nasscom and Frost & Sullivan, SMBs are expected to spend about $18.5 billion on information technology by 2018. Software giant, Microsoft, will allow 10,000 channel partners in India to offer its Azure cloud platform to enterprises5.
    The Indonesia cloud computing market grew by 43% in 2012, to revenue of $31.4 million6. This opportunity didn’t go unnoticed and many local data center service providers and telecoms have entered the market either via partnering with international cloud service providers or with their own offerings. In a separate report, Frost & Sullivan projected that the cloud computing market in Indonesia would reach more than $120 million by 20177.
    Cloud Computing Adoption:
    While companies in developed countries exercise precaution in migrating to cloud due to issues such data privacy, security concerns8 and regulatory mandates, companies in developing countries pose a list of different stumbling blocks to cloud adoption. Lack of knowledge and skills to manage cloud resources, lack of awareness of what cloud computing actually involves, inadequate infrastructure (lack of reliable power and broadband connectivity), lack of adequate legal and regulatory frameworks for e-commerce – are only to name a few9. Moreover, as far as drivers are concerned, developed markets adopt cloud computing to lower costs while developing economies are doing so to increase productivity.10
    Bangladesh and the Cloud Market:
    Richmond Hotel and Suites, by definition of Bangladesh Bank, is a small enterprise. (The Bangladesh Bank defines a small (service) enterprise as one that has fixed asset other than land and building between Tk. 50,000-50,00,000, and employs less than 50 people11). Given its CRM investment on cloud computing, Richmond Hotel and Suites is using less than 1% of its annual revenue on IT.
    Provided internet and computer access were not deterrents to adoption, the 79,754 SMEs in Bangladesh which made 741 billion taka in 2003, making up about a quarter of the country’s GDP at that time, does provide a significant opportunity for cloud players and channel members to tap into. Bangladesh is a green field of opportunities. The earliest birds swooping in to make things cloudy will surely brew up quite a storm!
     
     
    Sources:
    1 http://www.pcmag.com/article2/0,2817,2372163,00.asp
    2 http://www.idc.com/getdoc.jsp?containerId=245084
    3 http://www.idc.com/getdoc.jsp?containerId=prUS24977214
    4 http://www.zdnet.com/article/apac-smb-cloud-market-to-hit-19-8b/
    5 http://www.thehindu.com/business/Industry/microsoft-bets-big-on-sme-segment-with-azure/article6335112.ece
    6 http://www.frost.com/sublib/display-market-insight.do?id=284156497
    7 http://www.thejakartapost.com/news/2014/04/29/cloud-computing-set-dominate-corporate-internet-services.html#sthash.9PA85jpf.dpuf
    8 https://www.kpmg.com/SG/en/IssuesAndInsights/ArticlesPublications/Documents/Advisory-ICE-Breaking-through-the-Cloud-Adoption-Barriers-Glob.pdf
    9 http://cloudtweaks.com/2014/06/cloud-computing-adoption-developing-countries/
    10 http://www.cisco.com/web/about/ac79/re/Social-Whitepaper/index.html
    11 http://www.bb.org.bd/sme/smepolicye.pdf
    12 http://www.datacenterdynamics.com/focus/archive/2014/10/asia-pacific-cloud-growth-surpass-north-america

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    Narmin Tartila is a Lecturer at the North South University. She is also the CMO and Co-founder of Fashion2go, an online startup. Before returning to Bangladesh, she served as a Pre-search & Planning Consultant at SAP Asia Pacific Japan, in Singapore. She also worked as a Brand Manager in Reckitt Benckiser Bangladesh Ltd.

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      Bijon Islam

      Great read Narmin — I always like the real life examples you use to build the case 🙂

    • Kashif Choudhury
      Kashif Choudhury

      This is indeed a very informative article on cloud based ERP software. Excited about the opportunities ahead as the majority of enterprises in Bangladesh are classified as Small & Medium.

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