Cloud computing spl: Is cloud storming ahead?

BANGALORE, INDIA: Some say it will rain. Some say it will pour. When it comes to prognosticating the future of cloud technology in Indian skies, it's not easy to come to a common ground. Outlooks and expectations show up in mixed shades, but nonetheless, pointing that it may rain 'adoption' sooner or later in India too.

To start with, Cloud computing is a style of computing where scalable and elastic IT-enabled capabilities are provided "as a service" to external customers using Internet technologies.

If we reckon some international comparisons here, the worldwide cloud services revenue is on pace to surpass $56.3 billion in 2009, a 21.3 per cent increase from 2008 revenue of $46.4 billion, according to Gartner, Inc. The market is expected to reach $150.1 billion in 2013.

Cloud is black

But not all Indian enterprises, seem as gung ho about it. Sectors like BFSI or insurance related enterprises would be a laggard in adoption to cloud-based technologies. The technology is still a far fetched phenomenon for Indian enterprises, mainly because of reasons of data control.

As V Subramanian, CISO, IDBI Bank puts it, since any data in a bank is related to sensitive information about customers, it would be preferred to hold it in one's territory rather than relegating it to a third party. "Of course, computing resources can be put and explored for cloud optimization but even then if customer data is involved in the transfer, it would raise eyebrows and concerns."

Business processes delivered as cloud services are the largest segment of the overall cloud services market, accounting for 83 per cent of the overall market in 2008. The segment, consisting of cloud-based advertising, e-commerce, human resources and payments processing, is forecast to grow 19.8 percent in 2009 to $46.6 billion, up from $38.9 billion in 2008, as per a Gartner estimate.

However India so far has been slow-paced and hesitant about embracing the change.

For Nivio, a startup provider of virtualization solutions that claims to have under its belt the world’s first online Windows Desktop, the journey has been more fast-paced in regions like Jordon, Saudi Arabia or Palestine, where thanks to one-window decision making, the business, specially on Government enterprises, has been better and faster in comparison to India.

Interestingly, the very model of cloud computing, started in the enterprise space, says Sachin Duggal, CEO Nivio, that is more avid on now transporting the same effect in the consumer space. "Still it's an early bus to take for many in India and has a far way to go, even in the consumer space. Short-term vision is a factor to be addressed. Cloud computing's true nature is that of shared-utility service. Large scale enterprises have still a long road to cover when you compare to middle-sized organizations."

Barometer

To some extent, till the desired level of maturity and confidence, enterprises like those from BFSI would be not very keen to adopt clouds, as Subramanian maintains.

As Ben Pring, research vice president for Gartner, shares in a recent forecast around cloud computing, “The IT market trends for the next couple of years remain highly uncertain. While short-term growth is expected to be inhibited, the potentially lower cost of cloud services is attractive to customers and will drive growth for these offerings.”

From what we can conclude now is that while that growth for many of these cloud services will be relatively modest through the next two years, as analyst eyes like those of Gartner see, it is expected to accelerate as these approaches prove themselves and then benefit from increased spending levels as macroeconomic conditions improve.

Till then the Indian sky is yet a blank canvas.

Cloud is white

Cloud may still be a grey shade in India, but not by all and not at all the times.

For instance, Subramanian wouldn't mind having a cloud technology to help in the authentication side of a customer transaction, which is a process area in banks. "Few foreign companies are already doing in form of federation. If the same can be offered in India, it would be very helpful. Authentication can be taken care of by another service provider over a cloud and I guess some providers are doing it for many banks simultaneously here."

For Duggal, in interesting tough market conditions like now, cloud-based adoption will only grow. As he foresees it, year 2009 would be the year of Cloud in India, with lot of new entrants coming in. In fact, cloud will come to rescue the dwindling PC sales with the new-age networked PC model. He shrugs off any possibilities of Clouds cannibalizing PC territory. It will only have a supplementary effect, he opines.

On the whole, there would also be a contributory role from India from a development point of view as many start-ups may emerge in 2009 to 2010 to make their hit in this arena.

"We are starting to witness some competition. Middle-bracket enterprises in particular have benefited a lot from cloud. Now even Government, state-units etc are looking at exploring the potential of cloud technology," Duggal says.

Enterprises like Hindustan Petroleum, Bajaj Auto, Chitale Dairy etc give a flavour of what it may look like when (and if) the 'cloud' arrives in Indian stratosphere.

For Raghuvir Singh Sohal, manager-MIS, Bajaj Auto there are many benefits that he credits to the recent implementation of virtualization of the company's IT resources. "As a hardware gestates, its AMC costs increases, and so does its utilization challenge. Now be it shutting off of obsolete hardware, or calculation of AMCs or replication to new hardware or managing full-life applications, everything has turned smooth with a virtualized environment of resource allocation.

He points out that the number of racks required have reduced from four to one, while server provisioning time has come down from two months that was required to procure a physical machine to one day now. "Centralized management of infrastructure, ability to migrate a virtual machine from a compromised server to a properly running machine with no downtime are some other benefits. Also, the fleet power and cooling costs have come down considerably."

As of now Bajaj Auto is running most of its applications from an infrastructure at its primary datacenter compromising 30 virtual machines and is happy with VMware.

Another case study is that of Hindustan Petroleum Corporation Ltd (HPCL) that too has tried virtualization. "The strategic objectives centered around enhancing the efficiencies of our virtual infrastructure. VMware technology has enabled us to run different services on the same box,” M.P. Keshava, Senior Manager, IT notes in a customer-speak.

The results as being touted by vendor show some interesting numbers though. Reduced hardware renewal costs by 40 per cent, reduced provisioning times for new servers by 80 per cent, slashed development time for new applications by 80 per cent, reduced deployment times for new projects by 80 per cent, a cut in IT labor costs by 50 per cent, enablement of business to save 50 per cent in data center building costs and reduced planned and unplanned downtime by 20 per cent at HPCL.

In another example, we can check out Chitale Dairy that acknowledges about 50 per cent reduction in server hardware acquisition costs and 75 per cent in case of software, after it implemented a virtualization solution by VMware.

Reduced storage costs by 25 per cent, reduction of server deployment time from three weeks to three hours are some other benefits that the company cites.

"In 2005, we began evaluating ways of streamlining and enhancing our technology environment. In June 2007 we consolidated our environment to three physical servers operating in one data center. They host 20 virtual servers running multiple production applications and operating systems," says an experience-sharing narration by Vishvas Chitale, director, Chitale Dairy, that is now evaluating VMware Desktop infrastructure for deployment next.