The hype curve for cloud computing is at an all-time high, that too for pretty good reasons. The convergence of Internet technologies, virtualisation and large-scale data centres has created a powerful way to deliver IT services with many companies already putting clouds to work. Cloud computing can help increase IT agility, decrease costs and improve service delivery capabilities?and it could happen fast.
While many leading proponents of cloud computing are introducing a variety of new IT delivery methods and business models, they all share one common characteristic?a strong focus on the promising Indian market. Take for instance the world?s biggest software maker Microsoft, which sees cloud computing as the firm?s next big opportunity. Microsoft CEO Steve Ballmer says, ?India will move directly to the cloud, much like it bypassed the landline revolution and leaped directly to mobile services. The country will not only see a surge in cloud computing services, but companies all over the world will look to India to support their transition to cloud computing?.
Microsoft, which has Azure as its cloud services platform, believes that cloud will be a huge catalyst in accelerating IT adoption among government offices, schools, homes and small and medium businesses. A recent study by Zinnov Management Consulting estimates the global cloud computing market to be over $70 billion by 2015. India, with its powerful ecosystem of over 1,300 independent software vendors (ISVs), 1.4 million developers and more than 11,000 system integrators, is ideally poised to address this growing opportunity. As a result, an additional 3,00,000 jobs related to cloud services are estimated to be created in India over the next 5 years.
IDC expects spending on IT cloud services to grow almost threefold over the next five years, reaching $42 billion by 2012. The pace of spending on cloud computing will accelerate, capturing 25% of the growth in IT spending in 2012 and nearly one-third of the following year?s growth. In India, the cloud market is estimated at $1 billion, it estimates.
Slowly and steadily, the cloud momentum is building up in the country. Indian Institute of Science (IISc), Bangalore is building a large scale application on Windows Azure to study resource allocation constructs and strategies to address; Cognizant has developed solutions to enable implementation, migration and management of cloud-enabled application portfolios built on Azure; CDC Software has rolled out a cloud version of ?CDC Respond? built on the Windows Azure Platform; NIIT is expected to train 1,00,000 students on Windows Azure over the next three years.
?The cloud is the direction in which we are evolving every product of ours?Windows, Office, Windows Server, Bing, SQL Server, Internet Explorer and SharePoint. It is the fusion of the best of the Internet with the best of the enterprise data centre with the best of the PC, with the best of the phone and the TV. Today, these different entities are loosely linked through the browser. We are trying to make these links stronger,? adds Ballmer.
Microsoft is not alone in betting big on cloud computing services. Software maker CA Technologies (formerly Computer Associates), IBM, Google, Amazon, Salesforce.com, among others, are making claims about what their solutions can deliver and what they can offer further down the road. Indian IT majors like Infosys, Tata Consultancy Services, Tech Mahindra and Wipro are going high on business prospects arising from this emerging technology. India?s biggest software exporter, TCS, expects cloud computing to account for nearly 10% of its new business together with product revenues over the next few years.
CA Technologies CEO Bill McCracken says, ?Cloud computing is reshaping the IT marketplace, creating new opportunities for suppliers and driving changes in traditional IT offerings. Running IT in a cloud-connected enterprise will be more like running a supply chain, where organisations can tap into the IT services as needed?specifying when, where and precisely how they are delivered?.
But are Indian enterprises really ready to adopt cloud computing and more importantly, how to get started with it? The fact remains that with any emerging technology, there are potential pitfalls and dead ends to avoid. That?s especially true in cloud computing, because its use can have such a profound impact on a company?s IT model, as well as business model. Technology and business leaders need to understand the potential for a broader impact on their organisations. It is also about data management policies, security risk, compliance and even tax strategies. These are only a handful of the areas that can be affected by cloud adoption.
Amit Chatterjee, managing director, CA Technologies (India), comments: ?Cloud computing is an emerging trend in India and has generated keen interest during the economic difficulties of the last 18 months or so. This is because the technology helps reduce operating and capital costs?. According to him, India?s 8 million population of small-to-medium-sized businesses represents huge potential for cloud computing. ?We are seeing small businesses moving faster towards the public cloud, simply because it is an easy way for them to get cost-effective access to really good technology,? he says. ?Specific to India, we find that manufacturing, pharmaceuticals, healthcare and education sectors are demonstrating greatest interest in cloud technology?.
Of late, cloud computing services are receiving a lot of attention in India, primarily because of advancement of technology in two specific categories. First, parallelisation: The ability to split a software task across many machines and seamlessly add or remove machines from the task. Second, virtualisation: The ability to split one physical machine into multiple virtual machines and ensuring that they run independent of each other.
These technologies allow the cloud computing service providers leverage economy of scale and more efficient use of server hardware thereby providing more value for money. According to Udayan Banerjee, CTO, NIIT Technologies, cloud computing also provides a neat solution to two major hurdles faced by an emerging entrepreneur: In the case when an emerging enterprise is small, it may still require access to complex IT solutions to run efficiently. Such solutions are normally very expensive and can only be cost effective for very large enterprises. However, cloud service providers can offer such solutions in shared mode thereby significantly reducing the cost of ownership through a model of pay per usage and not ownership.
In addition, emerging enterprises that have IT systems as the backbone of their core offering, will always have the dilemma on how much to invest on IT infrastructure. If they invest too little, scalability may be a future issue whereas investing too much upfront may have negative impact on the cash flow and even jeopardise the viability of the venture. ?With cloud computing it becomes easy to start small and seamlessly grow as much as necessary,? says Banerjee.
Another thing that Indian enterprises need to keep in mind is that clouds come in a variety of permutations, each serving a different need. ?Until all the technical and business leaders are aligned about what they mean by cloud computing, there are going to be misunderstandings,? cautions Jack Story, CTO of Infocrossing, a Wipro company.
In layman terms, the cloud can be defined as Internet-based computing made up of a set of shared resources, software and information provided to PCs and other devices on demand. What makes the cloud exciting is that it enables organisations to use existing and emerging technologies in a new way to transform IT and its relationship to the business. For instance, instead of being a monolithic supplier of technology services, the IT department becomes the manager of a dynamic supply chain of internal and external resources.
To keep it simple, cloud computing represents a fundamental change in the way businesses consume and utilise IT resources. However, a word of caution is required. Cloud technologies are evolving at a very fast pace and it may take a couple of years before they fully mature. ?So, like most emerging technologies, the current hype may shortly give way to disillusionment before it becomes a mainstream technology,? says Banerjee.
The industry is abuzz with cloud computing?s promise of greater agility, flexibility and cost efficiencies. It is poised to fundamentally change the dynamics of IT?and it?s coming along right on schedule. Its time for Indian enterprises to embrace this reality.