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As small and medium businesses in India struggle to stay afloat during the global economic slowdown, they are opting for relatively cheaper technology options like cloud computing. In cloud computing, users share software over a wide network of computers.

Sumeet Sabharwal, senior vice-president of outsourcing and IT hosting firm Navisite Inc, says cloud computing is a viable Internet model for small and medium businesses across India, especially in the technology hubs in and around the capital and in Bangalore.

"The demand for having a reliable hosted infrastructure has increased over the years in India as businesses are shifting to the Internet from offline facilities. At the same time, users do not want to burden themselves with the cumbersome processes of installations and hardware specifics. They look for solutions that are flexible, to scale and automated from the deployment standpoint, to maximise profit and output," Sabharwal said.

He said cloud computing was "still in a nascent stage in India and users need to be educated. Demand will grow as medium and small business owners realise its financial upside. I think it is the technology of the future for a country like India".

"Cloud computing," explained Sabharwal, a Cornell University alumnus, "is a computer paradigm in which tasks are assigned to a combination of connections. It operates on three basic principles - computer, bandwidth and storage.

"It eliminates the manual tasks of shipping the software to the user and allows users direct access to the software from the net. This network of servers and connections is collectively known as 'the cloud', which is a kind of a platform."

Computing at the scale of the cloud, said Sabharwal, allowed users to access supercomputer-level power. "Using a thin client or other access points like an iPhone, BlackBerry or laptop, users can reach into the cloud for resources they need. For this reason, cloud computing has also been described as on-demand computing."

Cloud computing, where the "intelligent network acts as the supercomputer", is a way to increase network capacity or add capabilities without investing in new infrastructure, new personnel or licensing new software.

"It is a pay-per-use service and cuts business cost by at least 40 percent depending on how the businesses leverage it. At the same time, one can scale up or scale down on the network itself, going by the number of visits to a business site and its growth," Sabharwal said.

"Clouds are of two types - the public cloud, where infrastructure can be shared horizontally depending on areas and geographies of growth - and large private clouds dedicated to big companies, mostly the independent software vendors, retail firms and technology providers.

"Cloud Computing," said Sabharwal, "is also the most effective technology for hosted e-mails for medium-sized corporate firms."