BANGALORE, INDIA: Cloud computing represents a major shift in information technology architecture, sourcing, and services delivery for a given IT organization.

Also Read: Cloud is the next shift for IT industry

There are three kinds of cloud –
Vendor cloud (External): Cloud computing services from vendors that can be accessed across the Internet or a private network, using systems in one or more data centres, shared among multiple customers, with varying degrees of data privacy control. Sometimes called “public” cloud computing.

Private cloud (Internal): Computing architectures modeled after vendor clouds, yet built, managed, and used internally by an enterprise; uses a shared services model with variable usage of a common pool of virtualized computing resources. Data is controlled within the enterprise.

Hybrid cloud: A mix of vendor cloud services, internal cloud computing architectures, and classic IT infrastructure, forming a hybrid model that uses the best-of-breed technologies to meet specific needs.

SME/MME Sector
Many IT applications and services can be structured and accessed as needed through virtualized architectures, either internally or through service providers. Since there is a possibility to procure the IT services/applications from a third party service provides, Indian SME/MME companies can now avail these.

Hitherto, these enterprise class IT capabilities were only available to large-cap companies as the upfront capital expenditure was not practicable for most of the Indian SME/MMEs. Vendor clouds can now act as a game changer.

Quick startup time; no capital investment required.

In managing in-house applications, enterprise needs to procure license and shell out cash to the implementation providers or maintain enough in-house IT specialists; thus, this constitutes a large part of capital expenditure (CAPEX).

However, in cloud computing, this becomes a recurring monthly license fee and not an upfront investment – thus it becomes a part of OPEX.

Allows outsourcing of noncore functions to a service provider; yet some enterprises may not be ready to turn over control of technical architecture.

Leverage highly scalable vendor infrastructure.

Gain access to best practices which might otherwise be costly to manage in-house.

Lower initial fees, variable costs, billed by usage; however, beware of vendor lock-in.

Vendor can provide best-in-class infrastructure and technology since they obtain economies of scale.