Advertisment

Cloud services pie still small, but bound to fatten

author-image
Deepa
New Update

BANGALORE, INDIA: The cloud computing industry is growing and studies show that it is growing enough to be the next milestone in IT industry in India. Gartner estimates that public cloud services market in India will grow at 32.4 per cent in 2012 to total $326.2 million.

Advertisment

Praveen Bhadada, director, Market Expansion, Zinnov, says: "The overall cloud market in India is approximately $950 million, with 78 per cent contribution from private cloud. The cloud market in India, including both public and private, is rapidly growing at over 50 per cent YoY."

The market is still under the grip of same old reasons such as security and uptime, affecting its adoption.

Anurag Srivastava, CTO, IT Business, Wipro Limited, says: "When an organisation builds cloud, public or private, it has to bring applications, infrastructure and software layers together. Traditionally, enterprises have been managing IT, infrastructure and application layers as separate entities. So, it is a huge challenge for them to bring these layers together, as it means that they have to scale their competency within as well. They need to overcome the perceptions regarding security and risk related to cloud technologies," notes Srivastava.

Advertisment

"Moreover, when it comes to hybrid cloud, it poses several challenges in terms of security, risk and compliance and organisations find them to be disruptive in terms of data security, privacy laws, local laws. So, a CIO for whom speed of implementation is big criteria will think twice before going for it because of these reasons," adds Srivastava.

However, they along with consumers and IT vendors are eager to be a part of this journey and have come to accept it as the next big thing for them to grasp, tap and grow.

"We expect lot more companies to open up with respect to investments in cloud. Enterprises are now opening up to move beyond just pilots, to mainstream adoption BFSI, Telecom, government, healthcare are promising from private cloud standpoint. There are massive opportunities evolving in the public cloud space with manufacturing, retail, education verticals," adds Bhadada.

Advertisment

Vishnu Bhat, vice-president and global head, Cloud, Infosys Limited, says: "Cloud ecosystem is evolving and is evolving very fast and we believe in the next five-seven years about 60 per cent of enterprise workloads will be of cloud framework or hybrid cloud farmework."

"Traditional IT investment will shift by 20-25 per cent towards cloud-based technology by another three to five years. This is a significant shift," adds Srivastava.

From IT SIs to cloud integrators

Analysts estimate that although cloud based revenue is staggering somewhere between 8-12 per cent today, it is bound to pick up pace down the years and will be 12-15 per cent by 2014.

Advertisment

Almost all system integrators and IT vendors, such as Infosys, TCS and Wipro have made their presence felt in the cloud services space.

Arup Roy, principal research analyst, Gartner, says: "All these providers understand well that cloud is going to be one of the mega trends, although in terms of real adoption it has not really reached a stage where they can mint a lot of money. At the same time, if they are not there in this market today, moving forward there is a risk of losing out."

Agrees Srivastava. He adds. "Cloud is impacting most of the IT service providers in a fundamental manner. So this transformation is a very critical change for most of the IT service providers. Wipro started its cloud journey three years back and we went to the market with cloud services in 2010. We are not a full-fledged IaaS provider. Our focus is to bring process transformation using public SaaS providers, as well as our own platform or act as IT transformation players through cloud by bringing private or public through a hybrid set-up disruption"

Advertisment

Wipro launched an integrated cloud service group in 2011 and has about 1,500-2,000 people working for this unit. The company has won over 60+ customers in the last 18-24 months.

Infosys launched a dedicated cloud unit focusing on cloud services about 18 months ago. It has over 300 people working under this unit and has seen over 150 cloud engagements across the globe so far.

"We at Infosys started our cloud journey quite early. We have had a lot of activities around this since 2008 when we initiated our internal cloud adoption programme. Strategy wise we have very clearly chosen the footprint where we want to play. We are not in the business of providing infrastructure-as-a-service, however, we work very closely with our partner ecosystem to bundle those services with our service, applications, processes and act as an ecosystem integrator," adds Bhatt.

Advertisment

Infosys today works with companies such as Microsoft, Amazon, VMware, Cisco and is also tied up with over 30 partners globally.

So, how is it different from what they have been doing so far. "Cloud is an evolving set-up. Cloud integration has a few different components to it. The way in which IT services are consumed and delivered are also going through a shift. In some cases we end up doing ecosystem management, while migrating applications from data centre to cloud. Moreover, the manner in which organisations are consuming high performance computing is also undergoing change as well. So we need skill sets that are required to manage applications in such scenario," adds Bhatt.

Roy feels IT vendors understand that there is need for them to make this transformation and come up with cloud-based offering or align some of their offerings to cloud technologies. He also agrees that it is in a way the market pressure that has forced them to move to the cloud services forefront. At the same time, he sees it as a boon in disguise, if a substantial revenue comes from cloud based models.

Advertisment

"These companies have been growing in size, over a long period. inflationary scenario has depleted the cost advantage that they used to enjoy till a few years back. So they are finding it difficult to stay competitive in the market. Cloud is in a way helping them to get on with the business model that they have built because in cloud it is based on one to many kind of a scenario. So you invest in automation technology , or platforms that can be leveraged by many customers. So, you do not need too many headcounts to deliver such services and thus stand to gain," adds Roy.

There are some challenges that need to be addressed before cloud services can actually take off in the country.

"We still have challenges such as skill set deficiency, constant asset building etc. Our academia has to clearly change. There is a role that NASSCOM and academia can play to bring new kind of talent pool for new technologies. Cloud service standards are probably evolved, but the government has to start using cloud based models to deliver citizen services to give impetus to cloud adoption in the country and thus create a market for cloud and cloud based jobs," adds Srivastava.

smac