Cloud computing has been a part of the tech scene for years, but its adoption has surged recently. While initially, the Covid-19 pandemic accelerated digital transformation, pushing businesses toward the cloud, the rise of Generative AI (GenAI) is further driving this shift.
Analysts say the need for powerful, scalable, and efficient computing to train and deploy large language models (LLMs) makes cloud services essential in this new era of AI.
Sudarshan Seshadri, SVP, data & AI, at Coforge said, “GenAI exploded to become mainstream, mandating a complete data strategy review and significant changes in architecture. The automation of data migration and schema designs through GenAI has reduced costs by up to 60%.”
Naveen Kamat, VP & CTO – data and AI services at Kyndryl, echoes the view. “The ecosystem of large language models and GenAI guardrails offered by cloud providers have made it very intuitive to compose GenAI applications on the cloud, bringing significant opportunities for cloud providers in infrastructure or data foundation services,” Kamat said.
The surge in cloud computing is also driven by factors like digital transformation, the need for operational efficiency, and competitive advantages. As a result, “the growth of public cloud is expected to be above 20% y-o-y with GenAI further boosting the growth”, according to Vivek Kant, a partner at BCG.
Moreover, the opening of new cloud regions has also accelerated as enterprises seek to comply with data residency requirements and achieve disaster recovery and resiliency.
Chris Chelliah, senior VP of technology and customer strategy at Oracle Japan and Asia Pacific, recently said the company is launching new cloud regions every 28 days. Oracle operates 68 customer-facing Cloud regions, with two launched this year.
What’s in it for IT firms?
With cloud services expected to continue the growth trajectory, IT firms are poised to benefit significantly. Companies like Tata Consultancy Services, Infosys, HCLTech, and Wipro have reported substantial increase in their revenue from cloud divisions. In FY24, all of them saw a 13-27% dollar revenue growth from their respective cloud businesses.
“IT services companies can expect significant opportunities from their cloud businesses,” said Himani Agrawal, country head – Azure, Microsoft India and South Asia.
Demand for cloud related services like consulting and managed services is rising, with the industry seeing 16-18% CAGR growth in this area, according to Ritesh Gupta, senior vice president & CTO of product engineering services at Happiest Minds Technologies. “Indian IT companies will particularly benefit from this, as they have established strong partnerships with global cloud providers and developed comprehensive cloud services and solutions,” he said.
Cloud security
While the move to the cloud offers immense benefits, it also introduces several security challenges that businesses must navigate.
One of the primary concerns, as companies migrate sensitive and critical operations to the cloud, is that they become attractive targets for cyber threats. The complexity of these threats requires robust security measures, including strong encryption and continuous monitoring.
Another challenge is ensuring data privacy and meeting compliance requirements in a cloud environment, where data may be stored across multiple regions with varying laws. This is compounded by the limited visibility and control over the network, making it difficult to detect and respond to vulnerabilities and breaches.
To overcome these challenges, businesses are increasingly turning to the zero trust security model, which operates on the principle that no user or device is trusted by default. Access is granted based on identity verification.
Agrawal from Azure said, “Organizations mitigate these risks through best practices, robust encryption, and continuous monitoring.”
