Brand Awareness Of CtrlS and Analysis of Market Potential for

Cloud Products

Presented by Vineeth R Tengse, 12DM-169

PGDM, IMT Ghaziabad

1st August, 2013

Acknowledgements

• I wish to thank the following people for their guidance and assistance before, during and after my internship:

• Mr Sandeep Khanna, Regional Head• Mr Abhinav Misra, Head-Channel Sales North• Mr Vipul Dubey, Manager• Mr Vaibhav Maheshwari, Assistant Manager• Mr Kiran Reddy, Manager-Marketing and all staff of CtrlS

Datacenters Ltd., New Delhi• Dr Poonam Garg, Professor, IMT Ghaziabad• My fellow interns in CtrlS Datacenters Ltd

Agenda• About CtrlS Datacenters• CtrlS Offerings• Brand Awareness• Data Collection• Respondent Profile• Results and Insights about Brand Awareness study• What leading consultancies are saying about Cloud Computing• Methodology to calculate Market Potential• Assumptions• Calculation of Market Potential• Conclusion• References

About CtrlS Datacenters• Founded in 2007 by Rs. 7500 million Pioneer Group and

$24 Billion Och-Ziff Capital• Pioneer Group is a pioneer in the IT Infrastructure sector

since 1992• CtrlS owns and operates India’s first Tier-IV certified data

center in Hyderabad• The availability has been 100% since operations started

• Second Tier-IV data center brought on-line in Mumbai in 2011

• Third data center brought online in San Jose in 2012• Fourth Tier-IV data center planned in Noida to be

operational by end of 2013

CtrlS Offerings• Dedicated Server Hosting

• Dedicated Servers to host websites, database servers, application servers, heavy traffic forums and social media platforms

• Virtual Private Server Hosting• Virtual Servers to host websites or applications that are not

resource intensive

• Colocation Services• Customer brings in the hardware, CtrlS provides power,

connectivity, cooling and security

• Disaster Recovery Services• Recovery or continuation of technology infrastructure vital to

organisation after a natural or human induced disaster

CtrlS Offerings (cont.)• Online backup Services

• Periodic back up of data from customer’s storage to CtrlS

• Hosted Exchange• Fully managed mailing solutions

• Cloud Computing• Public Cloud

• Services are rendered over a network that is open for public use

• Private Cloud• Infrastructure is hosted for use of a sole organisation

• Cloud CDN• Content Delivery Network solutions based on the cloud architecture

• Cloud SaaS• Various applications such as CRM, SCM, etc. hosted on cloud

infrastructure

Brand Awareness• Brand Awareness refers to respondents ability to

recognise and recall a brand under different conditions and respond to the brand name, logo, etc., linking them to certain associations in memory

• Brand Awareness is critical because if the target customers don’t know the brand, they will not consider buying it

Types of Brand Awareness• There are three types of Brand Awareness

• Top of the Mind Recall• Strategic Awareness• Aided Awareness

• Top of the Mind Recall: This occurs when the brand name pops into the mind of the consumer when asked to name the brands in a particular category

• Strategic Awareness: This occurs when there is not only Top of Mind awareness, but the consumer is able to identify distinctive qualities that set apart the brand from others in the market

• Aided Awareness: This occurs when the consumer expresses familiarity with the brand when he reads a list of brands or any other type of visual or audio aide

Data Collection• Interviews were carried out with CIO/CTO/IT Heads of

companies across Noida, New Delhi and Gurgaon. If an organisation did not have a CIO, the decision maker such as MD or CEO was interviewed

• Questionnaires were created by the CtrlS Marketing Team, which gauged the adoption of technologies such as Virtualisation, Cloud Computing, BYOD, Disaster Recovery and Data Backup policies

• The respondents were asked to respond to questionnaires, any extra information gathered was kept for additional analysis

Respondent Profile

Noida47%

Gurgaon31%

New Delhi21%

Others1%

Respondent Location

Manufactur-ing

29%

IT/ITES43%

Electronics7%

Real Estate5%

Financial Services

4%

Consulting4%

Retail3%

Others6%

Respondent Industry

Total no. of respondents: 147

Are you aware of CtrlS?

YES20%

NO80%

AWARE 22%

NOT AWARE

78%NOT

AWARE100%

AWARE30%

NOT AWARE

70%

Location wise awareness of CtrlS

Noida Gurgaon Nehru PlaceNew Delhi

Industry wise awareness of CtrlS

Man

ufac

turin

g

IT/IT

ES

Elect

roni

cs

Real E

stat

e

Finan

cial S

ervic

es

Consu

lting

Retai

l

Other

s

9 114

0 1 3 2 0

33

52

6 7 5 3 29

AWARE NOT AWARE

Some insights about Brand Awareness of CtrlS

• There seemed to be a general lack of awareness of CtrlS and its services amongst the surveyed companies

• Only companies who had done business with CtrlS in the recent past or who had considered CtrlS for a requirement recently were aware of the company and the services offered

• 20 companies which were aware of CtrlS were large scale companies (>500 employees)

• Amongst the Small Scale Enterprises, there was complete unawareness of CtrlS

Where is Cloud Computing in Hype Cycle?

Please see the note section

Cisco’s Cloud Readiness Index shows that India is still an emerging cloud computing market

Cloud Computing – What reports say• Global cloud computing sector is growing at a rate of 28% and cloud-

generated IT innovations could produce US$1.1trn annually in new business revenues by 2015 – Asia Cloud Computing Association (ACCA)

• By 2016, Asia-Pacific will gain top spot (1.5 zettabytes), followed by North America (1.1 zettabytes) and Western Europe (1 zettabytes) in Cloud traffic - Cisco's Global Cloud Index, 2012

• India ranks 9th in APAC region on ACCA’s Cloud Readiness Index 2012. The main factors dragging down the rankings are: Broadband Quality, Power Grid and Data Center Index

• India ranks 29th out of 30 countries in Cushman & Wakefield’s Data Center Risk Index 2013. Factors for this ranking include: difficulty in doing business, high corporate taxes and low energy security

• “However, despite these challenges, the perspective remains that in the long-term India will be an attractive investment opportunity” - Cushman & Wakefield’s Data Center Risk Index 2013

Cloud Computing – What reports say• “The cloud computing market in India is expected to cross the

$1 billion mark by 2014, growing at a CAGR of 32% between 2011 and 2015” - Cloud computing adoption – Large Enterprises in India, a report by Research and Markets, Inc.

• Indian National Telecom Policy 2012 emphasises “Promoting synergies between roll out of broadband and various government schemes such as AADHAR, MGNREGA, etc. The synergies can be created through Cloud Computing to enhance e-Governance initiatives”

• According to Symantec State of the Cloud Survey 2012, • 11-19% respondents have implemented cloud• 34-50% respondents in trials/implementing cloud• 19-20% respondents in discussion/planning mode cloud• 19-25% respondents are not considering cloud

Methodology to calculate market size• According to MaRS DD, a consulting firm in Canada,

Market Size calculation involves the following steps• Step 1: Define the target customer• Step 2: Estimate number of target customers• Step 3: Determine the penetration rate• Step 4: Calculate the market size volume and value

• Market volume=Number of target customers × Penetration rate• Market value=Market volume × Average value

Assumptions• Gartner’s report says the market for Cloud Computing in India is forecast to

grow to $443 million in 2013, with an annual growth of 70% over 2012, with SaaS forming 36% of the market

• Based on Hype Cycle 2012 and Cisco’s Cloud Readiness Index, Cloud Computing in India is set to take off in a spectacular way in 2 years. However, at the current point of time, adoption of cloud computing is not high on the surveyed companies priorities

• Economic conditions also have to be taken into consideration. With Indian GDP set to grow at 6% in 2013-14 and recovery slow in USA and Europe, companies are postponing significant investments in IT infrastructure if the RoI (Return On Investment) is not particularly high

• CtrlS North India region had revenues of Rs. 11 Crore in 2012-13, of which 23% came from Cloud Computing services. The total market for firms providing services similar to CtrlS in Delhi was Rs. 60 Crore

• There were 10 customers, the average order size works out to 25.3 Lakhs

Assumptions (cont.)• Assumption is that the share of revenue from Cloud computing is similar for

all the firms in Delhi• This analysis ignores all Government or PSU organizations because:

• No Government/PSU agency has been covered in the survey• The IT decisions in such organizations are not straightforward and involve multiple

actors and are affected by political considerations

Step 1: Define The Target Customer• IDC’s India Cloud Market Overview, 2012 states that large

businesses are more savvy and able to adopt cloud computing more than SMEs

• The same report states that SMEs “either don’t have existing IT systems or have ones that lack experience, and as such, are more averse to adopting the cloud for their use”

• According to HP’s Innovations for the Next Billion Customers Lab, less than 1 percent of these SMEs use any type of automation, and rely heavily on paper documentation

• An Indian CIO said “in my culture, we don’t just want to ‘kick the tires,’ we want to drive them for 10,000 kilometres and wear them out before we buy.” to IBM Global Business Services

• So, the target customers for Cloud Computing Services are medium and large companies i.e. companies with more than 500 employees

• The share of such companies in the survey was 65%

Step 2: Estimate Number Of Target Customers

• There are 11217 registered companies with head offices in Delhi/NCR. Out of this, about 60% are small scale enterprises thus, 40% of the companies are medium or large scale i.e. 4487 companies are medium and large scale enterprises

Step 3: Determine the penetration rate• According to CyberMedia Research, the cloud computing

penetration was 6.8 in Indian enterprises in 2012• Another research by TechSoup arrived at a penetration

rate of 6.6 in a survey carried out in 2012• We can assume that the cloud penetration rate in

Delhi/NCR is same as the rest of India• Since cloud computing is forecast to grow at 53% CAGR,

we can assume that the penetration rate in 2013 would be 6.6 + (53% of 6.6)

• Thus the penetration rate is 10.1

Step 4: Calculate the market size volume and value• Market volume=Number of target customers × Penetration rate

Volume=4487 * 10.1% = 454• Market value=Market volume × Average value

Value = 454 * 0.253 = 115.87 Crores• Thus the market value in Delhi/NCR is Rs. 115.87 Crores, with a low

penetration rate of 10.1%• However, as cloud computing becomes more popular, the penetration rate will

increase and the market size will grow• We have ignored the Government and PSU sectors for this analysis.

Projects such as UIDAI, NPR, etc. are taking off and schemes such as MGNREGA, Direct Cash Transfer, etc. are being tightly integrated with the above projects

• According to Zinnov Consultancy, PSUs such as BPCL, IOCL, and ONGC have expressed interest in moving to cloud within the next two years

• Since the above projects are controlled by Central Government in Delhi, the market would be at least 30% more than the calculated size if we include the Government sector and PSUs

Conclusion• The awareness of CtrlS and its offerings was 20% in the

surveyed companies• The market size for Cloud Computing in Delhi/NCR is Rs.

115.87 Crores excluding Government and PSU sector. However, this is expected to increase by 53% CAGR until 2016 to reach Rs. 635 Crore

Thank You

References1. CtrlS Offerings From CtrlS Website (http://www.ctrls.com)

2. Gustafson And Chabot, "Brand Awareness", Cornell Maple Bulletin 105 (2007)

3. Gartner, "Hype Cycle 2012"

4. Cisco, "Global Cloud Index 2012"

5. Asia Cloud Computing Association, "Cloud Readiness Index 2012"

6. Symantec, "State Of Cloud Survey 2013"

7. Cushman & Wakefield, "Data Center Risk Index 2012"

8. Research And Markets, "Cloud Computing Adoption - Large Enterprises In India 2012"

9. Ministry Of Information And Broadcasting, "National Telecom Policy 2012"

10. MaRS Development District, "Estimating The Market Size"

11. Gartner, "Cloud Computing Report 2012"

12. Sales Figures From Mr Abhinav Misra

13. IDC, "India Cloud Market Overview 2012"

14. HP Labs, "Innovations For The Next Billion Customers 2012"

15. IBM Global Business Services, "Business Strategy For Cloud Providers 2010"

16. Fundoodata.com (http://www.fundoodata.com/companies-in/delhi-ncr-l0)

17. CyberMedia Research, "Cloud Computing India 2012"

18. TechSoup Global, "2012 Global Cloud Computing Survey Results"

19. Zinnov Consultancy, "Indian PSU Landscape 2012"

20. KPMG, CII & Amarchand Mangaldas, "The Indian Cloud Revolution 2012"

21. Gartner, "Data Center Services: Regional Differences In The Move Toward The Cloud 2012"