In Even though analysts termed 2010 as the Year of the cloud, in reality only some organisations began to use cloud computing in earnest. This year, however, cloud has taken wings with SMEs taking the lead in cloud computing, specifically public cloud. The larger enterprises, though, are still scouting the sky for the perfect cloud: public, private or hybrid.
IT heads have accepted that cloud computing is one of the fastest growing technology trends today and will reach unprecedented heights in the next few years. In March 2009, Gartner had predicted that sales of cloud computing services would almost triple over next five years, from $56 bn in revenues in 2009 to $150 bn in 2013. Recent reports indicate that the forecast is coming true.
IT Next embarked on a study of the cloud service model to understand if cloud was real and disruptive in the true sense, and the direction in which it was headed. The resultant cover story, gives insights into CIO experiences around the cloud. We have captured the various nuances of the cloud phenomenon legal implications, costing, security issues and the industry response to it as also their experience around it.
Almost every CIO or IT head we spoke to, was gung ho about the cloud, and intends to utilise it in the best possible way. But the major activity is around private cloud at this point of time, with the majority of customers opting for it. Sid Deshpande, Senior Research Analyst from Gartner, observes, Currently, it is the private cloud that has taken off, as the priority of CIOs is to drive efficient utilisation of IT infrastructure through virtualisation. Since there are still some issues around the public cloud, it will be at least three years before it becomes widely accepted.
All the Way to the Cloud
But IT heads vouch for the cloud. As Jawant Gowande, General Manager (Corporate IT), Mahindra & Mahindra Ltd, says, Cloud is a very important part of our IT strategy. We are going for private cloud, to reap advantages of its ecosystem cost optimisation, improved business efficiency, enhanced productivity, increased customer satisfaction and acquisition.
Dinesh Agarwal, Founder and CEO, IndiaMART.com, says, Recently, more than 4,000 of our employees, located across 75 offices across the country, started using Google Apps, as their primary messaging and collaboration suite. The cloud offers improved infrastructure and management than what is ordinarily possible with on-premise solutions, he says.
Cloud Consultant, PK Mishra, says, Industries that use a lot of distributed processing involving large volumes of data, are more likely to consider a cloud-based solution. Almost all industry verticals appear cautiously optimistic about the potential of the cloud, especially the private model.
Kapil Mehrotra, IT Head Applications, iYogi, says, We are on the cloud to ensure rapid deployment of IT infrastructure and applications. Two factors propelled us towards the cloud: faster response and better utilisation of assets, and reduced costs.
As reports indicate, SMBs (small and medium business) have taken to the public cloud in a big way, while large enterprises continue to watch this space and evaluate their options.
For larger enterprises, the path to the cloud is not clear with regard to the model that works best for them public, private or hybrid. Before we look at the actual study details, let us look at the direction that the cloud is taking in 2011.
Private or Public?
Public cloud, also referred to as external cloud, incorporates the conventional meaning of cloud computing: scalable, dynamically provisioned, often virtualised resources available over the internet from an offsite third-party provider, which divides up resources and bills its customers on a utility basis.
Despite being a hit with the SMEs, reports say that many enterprises feel public clouds are too restrictive with rigid infrastructures, incapable of being customised to meet their particular needs. And this brings private cloud technologies to the centre stage which, they feel, should be the preferred option.
Daya Prakash, Head IT, LG Electronics India Ltd, agrees. He says that as a company policy, they have decided not to go for the public cloud model and have hosted some mission-critical applications such as supplier portal, service portal and sell out management system on the private cloud.
Anand Ramakrishnan, General Manager, Cloud Computing Services, Wipro Infotech, however, is of a different opinion. He says that the most popular cloud model is the one that is linked to the specific business.
For example, in the core banking system, the per-account-per-month is the preferred cloud business model, since this provides the organisation tremendous clarity on the IT spend per account of business they have.
Gathering Weight
In a recent study, IDC (International Data Corporation) forecast that IT public cloud spending would reach $72.9 bn in four years, up from $21.5 bn in 2010.
That works out to 27.6 per cent compound annual growth rate, which the analyst firm applied to five categories: applications, application development and deployment, systems infrastructure software, and basic storage and servers. These will account for nearly 50 per cent in new net growth on IT spending, not just cloud computing, says the report. SaaS will account for about three quarters of IT public cloud spending.
A study by Ernst & Young revealed that SaaS appeared to be the popular choice with over 25 per cent of the respondents indicating that their organisation was already using it; 49 per cent indicated that they would evaluate infrastructure-as-a-service (IaaS) in the coming year; and 34 per cent plus of the respondents said that they intended to evaluate platform-as-a-service (PaaS). The advisory firm also said that these two cloud streams were in their infancy and, unlike SaaS, Indian enterprises were just warming up to them. Dharanibalan Gurunathan, Vice President, Cloud Offerings, IBM, says there has been a growth momentum amongst the customers in the past six months, with IT heads evaluating the vulnerabilities around various cloud models.
Keep it In-house
Private cloud (also referred to as corporate or internal cloud) is a term used to denote a proprietary computing architecture providing hosted services on private networks.
This type of cloud computing is generally used by large companies, and allows their corporate network and data centre administrators to effectively become in-house service providers catering to customers within the corporation.
Some vendors, including Amazon with its virtual private cloud offering, and Microsoft are pushing private clouds as the more likely option in the enterprise market. Santanu Ghose, Country Head, Converged Infrastructure Solutions, HP India, says that the customers have not accepted cloud as a technology, but there is a whole concept of cloud starting with shared services for infrastructure. There is a common resource pool created to provide services, aimed at increasing the utilisation of infrastructure with the ability to consolidate, which is again a private cloud, says Ghose.
Mehrotra of iYogi, says, We have not yet moved to the cloud, but will start soon with less business-critical applications and after seeing the results, we may plan to move our critical applications in a phased manner.
Enterprises moving critical applications to the private cloud, would be doing it within their own firewall. Agreeing to this, Pradeep Kar, Founder and CMD of Microland, says, Enterprises are hosting some critical applications on to a private cloud deployed within their own firewall, usually from on-site data centres.
Srinivas Kishan Anapu, former VP, Enterprise Information Systems, Mahindra Satyam, says, About 40 per cent of the landscape comprising nonfinancial and non-critical applications only, are ported to the private cloud.
Another study by Zinnov Management Consulting found the total cloud market in India to be around $400 mn, employing 10,000 people. It forecasts a market of $4.5 bn by 2015, with 100,000 new jobs. Out of this, over 70 per cent is around private cloud. The findings are based on a survey of more than 100 CIOs and IT decision-makers across industry verticals in India.
Hybrid Model: Fresh & Promising
Amidst the dilemma around private and public cloud models, the fresh hybrid cloud model is burgeoning. Experts indicate that it is the way the future of the cloud is directed.
A hybrid cloud is a composition of at least one private cloud and one public cloud. It is typically offered in one of the two ways: A vendor has a private cloud and forms a partnership with a public cloud provider, or a public cloud provider forms a partnership with a vendor who provides private cloud platforms. Many enterprises are already bucking this trend.
Karan Singh, VP, IT, Reliance Energy (BSES) Ltd, says, Ideally, for a company like BSES, the hybrid approach would give advantage of scalability and cost-effectiveness that a public cloud computing environment offers without exposing mission-critical applications and data to third-party vulnerabilities.
Mixing and matching private and public clouds can also be helpful for information control, scalability, burst demand, and fail-over needs. M&M supports the hybrid model. It provides the opportunity to enjoy best of both worlds, says Gowande of M&M. This also gives us an opportunity to test waters of the public cloud in terms of security and SLAs adherence by service providers, he adds.
Demystifying Platforms
Although the term cloud computing is widely used, it is important to note that all cloud models are not the same. Cloud models can be segmented into software as a service (Saas), platform as a service (PaaS) and infrastructure as a service (IaaS) and can be explained as follows:
SaaS: This particular model is focussed on managing access to applications, e.g., policy controls may dictate that a sales person can only download particular information from sales CRM applications.
PaaS: The primary focus of this model is on protecting data. It is especially important in the case of storage as a service. An important element to consider within PaaS is the ability to plan against the possibility of an outage from a cloud provider.
IaaS: This is delivery of the computing infrastructure as a fully outsourced service. Some of the companies that provide infrastructure services are: Google, IBM, Amazon.com, etc. Managed hosting and development environments are included in IaaS.
SaaS has been in vogue for sometime now and IT heads are also looking at IaaS, which is the first phase of cloud model. Sanjay Deshmukh, Area VP India, Citrix Systems, explains that under IaaS, virtual server instances with unique IP addresses and blocks of storage on demand are provided. Customers use the providers application program interface (API) to start, stop, access and configure their virtual servers and storage.
Anapu of Mahindra Satyam, says, IaaS is in the private cloud. We are still experimenting Paas. SaaS is a bigger exercise, as many of our internal applications need to be modified to fit it, and we are not ready as of now.
Mehrotra of iYogi, says that they would go for both SaaS and IaaS, the reason being that they carried out an internal exercise and optimised a few applications and infrastructure, and found interesting results.
The new term TaaS (testing as a service) is making its way, as a service in its individual capacity.
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