 "It's amazing how fast the cloud is being adapted here: Thomas Hansen")
Microsoft Corp has armed itself with a special mission for emerging markets: to educate SMEs in the region about the myriad benefits of technology adoption in running their businesses efficiently. Having spent a large chunk of his career in emerging markets, Thomas Hansen, V-P, SMB Worldwide, Microsoft Corp explains the Microsoft agenda to Devina Joshi, while also busting some popular myths about slow tech adoption - including of cloud services - by Indian SMEs. Edited excerpts:
In emerging markets like India, technology laggards among SMEs form a majority. What is the single biggest hurdle stopping Indian SMEs from adopting technology to further their businesses?
I think there are misperceptions around emerging markets. Such markets are quite sophisticated in their use of technology, and India is even more so. Look at the mobile technology here, it has leapfrogged from limited connectivity to 2G, 3G and 4G.
Perhaps the core challenge for Indian SMEs could be connectivity, including accessibility to broadband, and one of the ways to overcome it is to use mobile devices that support it. On a more generic note, SMEs face a challenge in understanding the value that cloud services can bring to them. IT today is a mystery for most SMEs. They don't have IT managers/specialists and their friends/family members with a bit of knowledge tend to become voluntary managers of technology. SMEs feel they have to invest a lot of capital in buying equipment. But with the arrival of the cloud, they won't need a 'voluntary' IT manager. They can, for instance, rely on Microsoft to run their IT function, while they focus on running their businesses.
What is Microsoft doing in terms of its partner programmes to educate Indian SMEs about the direct correlation between technology adoption and productivity?
We rely on our partner eco-system to reach out to SMEs. We have around 10,000 partners in India. At present, we are not looking at increasing this number, but we continue to invest in their training, not only to talk but also to demonstrate the value of the cloud and how technology can help SMEs run their businesses. When we think about partners, we think about the three Cs: we're 'committed' to our partners, we think about building their 'capacity' and enhancing their 'capability'. Microsoft believes there is significant value in trusted local partners. We continue to invest in events and workshops across different forums. We have some core distribution allies such as Redington who help us impart content and training to partners.
Labour in India is cheaper than in other parts of the world. How difficult is it to convince SMEs here to adopt expensive technology solutions that could replace labour?
Most SMEs in India are owner-manager-driven. They need to run scalable, profitable businesses and if they see an opportunity to reduce the working capital required for IT significantly, or to reduce their operating costs, they would choose to do so. As per a study we commissioned through Boston Consulting Group (BCG), the ability of SME technology leaders to accelerate job growth is two times faster than laggards. For India, specifically, if 30 per cent of technology laggards adopted technology to a higher extent, that alone would generate 1.1 million jobs in the country. Technology is not about replacing jobs; it is about creating jobs through greater productivity and growth of the business itself.
How can SMEs who do not have a full-time IT department or dedicated IT professionals benefit from cloud solutions?
The beauty is this: you don't need IT people to run cloud, unlike an on-premise set-up where you need someone to run a server, make sure the systems are working, etc. With cloud, you have actually managed to outsource your IT to a world-class solution run by, say, Microsoft. An SME will land up getting the same kind of infrastructure and support as a Fortune 500 company! One of the challenges is educating people what cloud is. People are concerned about the security of their data. I tell them, using LinkedIn, Facebook, and Hotmail is exactly like using the cloud! It is about data in the virtual world. This tends to settle the discussion pretty well.
How many SMEs out there keep a back-up of their data? What happens if there's a fire, a national disaster or burglary? Whereas if you have data in a cloud, it doesn't matter what device you use to connect to that data and this data is fully backed up in multiple databases.
If you were to compare technology adoption by SMEs in India and the US, what would be the key differences?
I think there are misconceptions around the ability, interest and willingness for technology adoption by SMEs in emerging markets. The growth rate that we are seeing in India, for example, is very much in line with what we have seen in North America. I see many of the same issues in the US as we see in India. SME owners have many of the same questions in both the markets. But it is amazing how fast the cloud is being adopted here and in many other countries. The cloud is not coming, it is here.
In emerging markets like India, technology laggards among SMEs form a majority. What is the single biggest hurdle stopping Indian SMEs from adopting technology to further their businesses?
I think there are misperceptions around emerging markets. Such markets are quite sophisticated in their use of technology, and India is even more so. Look at the mobile technology here, it has leapfrogged from limited connectivity to 2G, 3G and 4G.
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What is Microsoft doing in terms of its partner programmes to educate Indian SMEs about the direct correlation between technology adoption and productivity?
We rely on our partner eco-system to reach out to SMEs. We have around 10,000 partners in India. At present, we are not looking at increasing this number, but we continue to invest in their training, not only to talk but also to demonstrate the value of the cloud and how technology can help SMEs run their businesses. When we think about partners, we think about the three Cs: we're 'committed' to our partners, we think about building their 'capacity' and enhancing their 'capability'. Microsoft believes there is significant value in trusted local partners. We continue to invest in events and workshops across different forums. We have some core distribution allies such as Redington who help us impart content and training to partners.
Labour in India is cheaper than in other parts of the world. How difficult is it to convince SMEs here to adopt expensive technology solutions that could replace labour?
Most SMEs in India are owner-manager-driven. They need to run scalable, profitable businesses and if they see an opportunity to reduce the working capital required for IT significantly, or to reduce their operating costs, they would choose to do so. As per a study we commissioned through Boston Consulting Group (BCG), the ability of SME technology leaders to accelerate job growth is two times faster than laggards. For India, specifically, if 30 per cent of technology laggards adopted technology to a higher extent, that alone would generate 1.1 million jobs in the country. Technology is not about replacing jobs; it is about creating jobs through greater productivity and growth of the business itself.
How can SMEs who do not have a full-time IT department or dedicated IT professionals benefit from cloud solutions?
The beauty is this: you don't need IT people to run cloud, unlike an on-premise set-up where you need someone to run a server, make sure the systems are working, etc. With cloud, you have actually managed to outsource your IT to a world-class solution run by, say, Microsoft. An SME will land up getting the same kind of infrastructure and support as a Fortune 500 company! One of the challenges is educating people what cloud is. People are concerned about the security of their data. I tell them, using LinkedIn, Facebook, and Hotmail is exactly like using the cloud! It is about data in the virtual world. This tends to settle the discussion pretty well.
How many SMEs out there keep a back-up of their data? What happens if there's a fire, a national disaster or burglary? Whereas if you have data in a cloud, it doesn't matter what device you use to connect to that data and this data is fully backed up in multiple databases.
If you were to compare technology adoption by SMEs in India and the US, what would be the key differences?
I think there are misconceptions around the ability, interest and willingness for technology adoption by SMEs in emerging markets. The growth rate that we are seeing in India, for example, is very much in line with what we have seen in North America. I see many of the same issues in the US as we see in India. SME owners have many of the same questions in both the markets. But it is amazing how fast the cloud is being adopted here and in many other countries. The cloud is not coming, it is here.