Vamsicharan Mudiam,
Strategy Leader, Cloud Computing Service,
IBM India/South Asia
In India, the SME sector plays a pivotal role in the overall industrial economy of the country. With optimum technology adoption, SMEs have a scope to penetrate the business opportunities in international markets. According to ASSOCHAM, SMEs are expected to contribute over 22% of India's GDP in 2012, up from 17% in 2009. It expects technology upgradation by SMEs to be one of the critical factors driving this growth. As per a recent study by AMI Partners, SMBs, in the Asia-Pacific region (excluding Japan) will invest US$16.5 billion in cloud computing solutions. These companies will continue to leverage cloud technologies as a major enabler for their future growth and innovation strategy.
AMI predicts that the market for cloud solutions will grow more than 1.5 times the rate of traditional ICT technologies in 2012 in the Asia-Pacific markets. In India, SMBs are projected to spend more than $2 million on ICT in 2011 and there is an anticipated growth of nearly five times of this spending by 2014 as per a different study conducted by AMI.
Cloud has definitely moved from being the latest industry buzz word to an accepted operational expenditure and an IT service that enterprises and businesses have already adopted or are evaluating their adoption. It is surely the next big wave after the Mobile era. "India with its huge population base, part of which comprises entrepreneurs / to be entrepreneurs; is looking at the cloud as a viable option for accessing enterprise class technology at affordable costs," says Kothandaraman Karunagaran, Vice President, Global Infrastructure and Enterprise Services, CSC. The sectors from which the opportunities in cloud would come early from are – BFSI, Telecom, Healthcare and IT/ITeS simply because they are traditionally early and mature adopters of IT. Emerging sectors like ecommerce, retail etc. would also provide huge opportunities to the new model due to the nature of their business which call for greater flexibility in accessing IT services.
Factors driving SMBs to adopt Cloud
Talking about the adoption drivers in Cloud - while IT budgets across verticals continue to increase, Cloud computing is expected to reshape the Indian IT market by generating new opportunities by driving changes in traditional IT offerings. "The rapid proliferation of data is one of the biggest drivers for the adoption of Cloud Computing amongst SMBs," shares Amit Mehta, Director, Marketing, EMC India & SAARC. It estimated that India's share of digital information will grow 60-times by 2020, driven by the roll-out of 3G/BWA networks, digitization of television networks, and increased technology adoption. Managing this data deluge would lure the SMBs to adopt the cloud model. Another factor that will fuel the need for Cloud adoption among SMBs is managing cost and maximizing efficiency.
It can be said with certainty that cloud computing provides cost-cutting services that are immensely appealing to SMBs. This is for certain that with the growing popularity of cloud computing, SMEs will need the less hardware to buy. The compelling benefits of public cloud computing for a typical SME are: no initial hardware investments, pay-as-you-go fees, and quick time to value.
Cloud Computing Services helps to address the compute requirements of SMB very significantly. With availability of fibre and connectivity across India, the ability to connect to a service provider is no more a challenge. This connectivity accounts for the increased adoption of Cloud Computing amongst SMBs. It is expected about 35% of SMB compute requirement will shift to Cloud by 2013. The ability to get SLA Based service and shift from Capex to Opex are also catalysts for triggering adoption of Cloud in the SMB segment.
Today, we are headed towards "an era of virtualization"with a lot of interest in cloud computing. It has essentially grown to provide a level playing field for new companies, small and large, both in developing and developed markets.
The IT world is abuzz with talk about cloud computing and virtualization. Companies are turning to both technologies to help cut expenditures and extend their computing resources. "Although some small businesses can benefit from virtualization, any small business can take advantage of cloud computing, accessing enterprise-grade software that would otherwise be too expensive and too complex for their IT departments,' says Rajesh Rege Sr. Vice President – Data Center, India & SAARC, Cisco
The number of small businesses using cloud computing may be even higher, believes an analyst at Forrester Research. He explains that smaller companies often access applications in the cloud without realizing it, noting that employees often use hosted email or a Web conferencing application such as Cisco WebEx.
Small businesses owners are very satisfied with cloud computing services, according to Cisco's SMB Cloud Watch survey, rating their average level of satisfaction as 7.8 out of 10. Of all the benefits cloud computing can provide small businesses, the most important is that it allows them to focus on their business instead of getting sidelined by IT.
According to Vamsicharan Mudiam, Strategy Leader, Cloud Computing Service, IBM India/South Asia, "Cost savings and time-to-value are the leading drivers in cloud adoption today. However, the level of savings achievable depends on many factors, including the types of workloads concerned, the delivery method selected and the efficiency of the current infrastructure under consideration to be supplemented or replaced by cloud. Other important drivers are: paying only for what is used, software license savings reduced IT support needs, rapid deployment, scalability and elasticity."
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| Rajesh Rege, Sr.Vice President-Data Center India & SAARC, Cisco | Dhruv Singhal, Sales Consulting Director Oracle India | Ganesan Arumugam, Director-Partner Channels, VMware India | Bobby Mon, Head - Enterprise Business, SMB, Dell India |
Recent surveys show that the top two benefits of cloud computing are speed and cost. Through self-service access to an available pool of computing resources, users can be up and running in minutes instead of weeks or months. "Making adjustments to computing capacity is also fast, thanks to elastically scalable grid architecture. And because cloud computing is pay-per-use, operates at high scale and is highly automated, the cost and efficiency of cloud computing is very compelling as well," opines Dhruv Singhal, Sales Consulting Director, Oracle India.
Saas, Iaas or PaaS
Cloud computing is divided into three general categories: Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). Small businesses have embraced all three types of cloud services for their ease of use as well as the ability to access technology innovations that might have been out of reach due to the IT investment required.
Infrastructure is gradually falling into place to support greater cloud growth within India SMBs. The availability of affordable and quality broadband services is a major driver for cloud computing. The development of virtualization is another key booster.
There has been a dramatic demand for cloud solutions from the market. At each of the layers (IaaS, PaaS, SaaS), optimization can be achieved for varying sizes of organizations. Infrastructure, Software and Services can be optimized in the cloud environment. There are possibilities to expand from BPaaS (Business Process as a service) to XaaS (Anything as a service). Though currently the services are revolving around planned / subscription model, one can clearly see that, this can evolve to a true utility model for computing. Cloud solutions provide a natural ecosystem for a true 'follow the sun' work model; an industrialized solution that can truly work as single virtual global resource
Public or private
A lot of organizations today are facing an important question of whether to adopt a private cloud or a public cloud. "Given our experience with cloud computing we at VMware feel that we are uniquely positioned to help organizations address these concerns through our offerings," says Ganesan Arumugam, Director - Partner Channels, VMware India.
Key factors driving an organization towards cloud computing are fast go to market and ease of management. If an application is to be hosted in-house, complete infrastructure is required and if this is an enterprise application, infrastructure requirements could be huge followed by regular maintenance. Especially for SMBs, who do not have IT departments, they can enjoy using enterprise applications on cloud with minimal in-house infrastructure and reduced management costs. Economics is the other key factor. There is no need on the part of SMBs to invest huge money on setting up the infrastructure and procuring those applications. They can pay as they use and defer their large expenses.
The cloud computing journey for an enterprise is a complex one. Business leaders want to obtain the benefits of private clouds sooner rather than later. In India primary reason for adoption of cloud computing is the need to effectively manage IT assets.
Economics, security and performance are the major factors of interest among anyone using or planning to use the cloud services. While it may be complex to arrive at an economical model for cloud services, it is not largely believed - in fact, taken for granted- the cloud services are economically very beneficial. The extent of savings that can be achieved lot depends up on the point of departure. If the current environment is old and has not been upgraded for quite some time, the savings will be much higher. On the other hand, moving from a highly virtualized private environment to cloud services will give much less benefit.
Economics
Cloud computing represents the next phase in the logical evolution in the delivery of IT services, building on previous innovations that include grid, utility and on-demand computing that were first pioneered by IBM. Early on, IBM recognized cloud computing's potential to dramatically improve not only how its customers deliver IT services, but also how cloud computing could streamline and enhance the way in which IBM meets its own internal demands for IT resources. As a result, IBM has moved aggressively and successfully within its own operations to implement cloud computing across the organization.
Thanks to cloud computing, IBM is able to respond rapidly to customer needs in a far more cost-effective manner. For example, cloud computing has enabled IBM to offer customers an extremely flexible, scalable solution for those peak periods when processing demands far exceed what customers' internal IT resources can accommodate.
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| Amit Mehta, Director, Marketing, EMC India & SAARC | Kothandaraman Karunagaran, VP, Global Infrastructure and Enterprise Services, CSC |
Security
As far as SMBs are concerned, there is a lack of understanding on what benefits cloud computing can bring to SMBs. There are also too many marketing buzzwords associated with cloud computing. There are concerns over security, insufficient development of cloud ready applications, lack of case studies measuring returns from cloud computing investments and erratic broadband availability. However, the reality is that there do exist solutions which make sense for businesses, small and big, to invest in cloud computing.
In addition to the usual challenges of developing secure IT systems, cloud computing presents an added level of risk because essential services are often outsourced to a third party. The "externalized" aspect of outsourcing makes it harder to maintain data integrity and privacy, support data and service availability, and demonstrate compliance.
Security is the major concern area for the cloud services, as the critical and sensitive information is stored in third party locations and in many cases stored in multiple locations. Implementing security controls in such environment, particularly to satisfy the regulators in different countries, is going to be very difficult. As part of the cloud transformation, the information security will be weaved into the fabric of the application rather than the traditional perimeter based approach. In future, the security controls will be stored inside the data itself and therefore removing the major worries around security concerns.
The IBM Security Framework was developed to describe security in terms of the business resources that need to be protected, and it looks at the different resource domains from a business point of view. IBM offers an informed perspective on cloud security based on extensive experience in the design, implementation and support of cloud computing solutions across a range of vertical industries.
IBM offers an unparalleled capacity to focus on driving business innovation and securing operational processes across all risk domains. Its comprehensive solutions and services enable organizations to reduce the complexity of security within their enterprise and implement a holistic security management strategy. With IBM, organizations can develop comprehensive, scalable, standards based solutions across the enterprise, supporting their security needs both now and in the years ahead.
According to a report by AMI-partners shows that in emerging markets, such as China, India, Brazil and Russia, SMB cloud services' spending and investments through service providers will increase nearly six fold from $111 million in 2011 to $615 million by 2015.
This represents a four-year annual growth rate of 54 per cent. Additionally, close to 35 million SMEs in India contribute about 45 per cent of the industrial output, 40 per cent of exports and employ 42 million people, according to the SME Chamber of India Web site.
Finally…
According to Bobby Mon, Head - Enterprise Business, SMB, Dell India, "Technology advances, delivery methods and the move to disruptive IT models like cloud are changing the fundamental way businesses operate. With this transformational shift, businesses are gaining benefits in terms of speed to market and organizational and compute flexibility." Vendors should mobilize to help customers capture these benefits and make the power of cloud computing accessible to more organizations and users. Companies should continue to make significant investments to deliver technology that helps customers thrive in the Virtual Era.
SMBs have been at the forefront of adopting cloud services. Since their IT needs are less complex and they have fewer legacy applications, and less IT support compared to those of big enterprises, SMBs are often willing to outsource the delivery and operation of IT to third parties, ensuring that they focus on running their businesses. According to a research by McKinsey, SMEs with fewer than 250 employees are more than twice as likely as big enterprises to adopt cloud services.
