Cloud computing, yesterday?s pioneering idea, is already today?s technology must-have. And Indian IT services firms, always at the forefront when it comes to spotting the right business opportunity, are looking beyond their bread-and-butter offshoring model. Consequentially, they are belligerently moving into the cloud services business. They are increasingly choosing to host their applications in data centres, allowing customers to access via an ordinary Web browser, seemingly from the cloud of the Internet. Such cloud-based software, also known as software-as-a-service, or SaaS, saves customers the cost of buying licenses and running programs on their own computers, while saving the Indian IT services providers the hassles of deploying their application. Action has already begun among the Indian heritage tech firms such as Tata Consultancy Services (TCS), Wipro, Infosys or HCL Technologies.
Last fortnight, India?s largest IT services firm, TCS moved aggressively into the cloud services business by establishing a strategic unit called iON for small and medium businesses (SMB). Using a pay-per-use business model, iON provides on demand business solutions like HR, finance, inventory, sophisticated domain-based ERP solutions to basic applications like email, document management and website services. TCS has built a public cloud to offer its services to SMBs.
Indian tech firms? race to the cloud also gains credence from the bold predictions being made by industry-watching firms for the niche market. For example, IDC forecasts worldwide spending on cloud services will reach $42 billion by 2012. Gartner, another market research firm, expects global cloud services revenue to exceed $150 billion in 2013. And Bank of America Merrill Lynch predicts that the cloud computing market will reach $160 billion by this year-end.
One reason for all that expected growth: Cloud computing promises enterprises a new path to greater business agility, greater flexibility and greater control over IT costs. At a basic level, cloud computing promises enterprises on-demand access to a pool of computing resources that can automatically increase or decrease as needs change. This means IT?or even the business users ?can start new projects with minimal effort or interaction and only pay for the amount of IT resources they end up using.
For instance, the process of getting a new server up and running using infrastructure-as-a-service in the cloud model takes only minutes, compared with the three to six months needed for a conventional setup. That, in turn, can speed a project team?s ability to deliver a new service or product to the marketplace, or respond to new market demands. That makes a company more competitive, and it also drives revenue. And early indications say cloud computing delivers on these promises.
N Chandrasekaran, CEO & MD, TCS, and chief architect, iON, says, ?Our endeavor has been to ensure that the SMBs can grow smarter and faster by having the latest technology solutions along with the advantage of a pay-per-use business model that frees up capital to re-invest in their core business. Though premiered in India, iON?s cloud-based services and pay-as-you-use business model is also uniquely suited to SMBs in other developed and emerging markets.?
iON has already garnered over 135 SMB customers. The dedicated unit has created an eco-system of 85 cloud service partners across India. iON?s industry solutions are currently available for manufacturing, textiles, education, retail, quick-service restaurants, wellness and professional services. Venguswamy Ramaswamy, global head, iON, TCS, says, ?iON is modeled on a unique service paradigm named by us as ?IT-as-a-service?. This is a 3rd generation model. Generation-1 is the traditional license based model. Generation-2 is delivering software in a service model (SaaS).
In Generation-3, we integrate hardware, network, software and services as well.
No other player known to us in the market offers such an end-to-end solution stack as we do.?
According to Ramaswamy, the overall global market for cloud computing is more than trillion dollars. This includes hardware, network, software and services for small and medium businesses. ?In India, the opportunity is approximately $12 billion. We feel there is an opportunity to drive a billion dollar in the next 5 years,? he says.
Even IT bellwether Infosys Technologies is not far behind; It too sees cloud as a multi-billion dollar industry. ?Infosys sees enterprise cloud adoption accelerating,? says Vishnu Bhat, vice-president and head, systems integration, Infosys Technologies who is also leading the cloud practice at Infosys. ?Cloud is redefining the way business and IT services are delivered and consumed. While cloud offers significant benefits to companies, organisations are realising that the cloud adoption journey can be complex. They have multiple queries ranging from evaluating cloud readiness to setting up secure cloud environments to choosing the right partners and business services.?
Infosys? services in the cloud enable several business functions such as sales, marketing, customer service and human resources. ?We host, operate and manage these services on a subscription-based pricing model. These include: Infosys iEngage digital consumer platform which provides a comprehensive means to engage with consumers across the marketing, sales and service lifecycle; Flypp?A white labeled, ready-to-launch application platform for mobile operators that enables monetisation through ready-to-use experiential applications; HRO platform?which spans the entire ?Hire to Retire? cycle for companies and others which are being developed currently,? Bhat says.
Infosys is building competence across multiple fronts?people, partnerships, industry offerings etc. It has set-up a dedicated cloud practice with over 1,000 experts and has a centre of excellence (CoE) for cloud. ?We are investing heavily in building cloud expertise and scaling the practice.
Today, we have delivered 40-plus engagements across multiple industries. We are building a robust partner ecosystem system where we have identified 20-plus partners comprising cloud service providers, addressing various aspects of the cloud ecosystem. Internally, we have adopted cloud and are reaping the benefits,? he adds.
Suresh Sundaram, senior vice-presiden?ecosystm and business incubation division, HCL Technologies says, ?We see clear and visible opportunities to help customers adopt the cloud computing model through services around cloud consulting, assessment, redefinition of processes, environment standardisation and lifecycle management. We are also witnessing enterprise interest in migration and operation of cloud architectures to public, private and hybrid clouds.? He adds: ?Our diverse lines of business are investing and developing IP and services on cloud in their niche areas. We are also exploring using the cloud platform to offer consumer white labeled and B2B service aggregator models in select markets. We continue to direct our investments around building cloud architectures, business and service models, product enablement and consulting and advisory.?
Among others, Wipro Technologies? acquisition of Infocrossing three years back gave it a footing in cloud technology. Wipro has built w-SaaS, a platform for rapid SaaS enablement and deployment on cloud. It has chosen Oracle (Oracle Database, Oracle WebLogic Application Server and Oracle VM) as the deployment platform for w-SaaS enabled applications.
Nasscom officials say that cloud computing is expected to reshape the Indian IT market by generating new opportunities for IT service providers and driving changes in traditional IT offerings. The model offers immense opportunity to penetrate the huge SMB base in India (about 35 million) and offer innovative solutions by providing them an equivalent IT infrastructure, which they could otherwise not be able to afford. The infrastructure landscape is also transforming as businesses are also investing to optimise their IT infrastructure through consolidation and virtualisation.
The bottom line: It?s no longer important for Indian IT services firms to be mere implementers of technology. Today, in the era of cloud computing, they must become technology facilitators who constantly discover and deliver new opportunities for their business.