Marquee names like Microsoft, Apple and Amazon sprucing up their cloud play is an indication enough that businesses are gradually veering towards renting storage space instead of spending a fortune on buying hardware.
By Sayan Chakraborty
A network of remote servers, cloud helps businesses store and manage data at a substantially lower cost. To top it up, data stored on cloud can be accessed with web-enabled devices from anywhere, which is a boon for small companies unwilling to shell out substantial amount as IT budget.
A transition to cloud helps a business on three counts: it helps them gain agility, reduce cost and gives them the flexibility to expand or reduce technology capability according to need. Despite this, adoption of cloud among Indian companies is as low as 5%, but according to industry observers, has the potential to surge past 40-45% in the next three-four years.
“Commonly customers think of security. It’s fear of the unknown. Moreover, cloud is a relatively new phenomenon. Most of the businesses have already made investments in servers which will last them for, say, five years more. That’s why adoption rate is slow, but whenever there is a new project, cloud is the first preference,” said AS Rajgopal, MD and CEO of NxtGen, a cloud service provider.
According to research firm Gartner, public cloud services market is on pace to grow 32.2% in 2014 to total $556.8 million, a significant increase from the 2013 revenue of $421 million. Spending on software as a service (SaaS) will total $220 million in 2014, growing 33.2% from last year. The Gartner report further adds that SaaS is the largest overall cloud market segment, followed by infrastructure as a service (IaaS), totaling $78 million and business process as a service (BPaaS), totaling $75 million.
Nonetheless, cloud has emerged as a major phenomenon abroad, with companies like Adobe and Microsoft launching an array of related services, at a reduced cost. Adobe for instance, has adopted cloud in a big way to turn around its fortunes. The company has launched its creative cloud service at a 12-month subscription of $50 a month, which is less than one-fourth of $2,600, the cost of its creative suit on disc. The company had said that the creative cloud service has attracted over 1.8 million registrations.
In a bid to spruce up its cloud business in India, Microsoft has made its Azure cloud platform available in the open licensing catalogue, thus enabling SMBs to purchase the the cloud platform from local IT partners. Office 365 is already available in the open catalogue. Earlier, customers had to purchase Azure either directly from www.azure.microsoft.com or as part of an Enterprise Agreement with Microsoft. These options will, however, continue.
“Cloud adoption will be a key element to transform the Indian business scenario. Advantages of cloud services such as low capex, lesser TCO, flexible storage options and easy data management is attracting lot of players, especially the SMEs. According to a recent NASSCOM report, SaaS adoption by Indian SMBs is growing at a CAGR of 25% and is expected to reach $ 370 million by FY18. A significant portion of SMBs would continue to focus on business software and enterprise applications, mainly for an integrated business view,” said Tyler Bryson, general manager, Marketing and Operations, Microsoft India.
A major value proposition for adopting cloud being a significant scale down in IT costs, companies are providing services cheap, in some cases even reducing prices. In March, Google cut cost for 100 GB from $4.99 to $1.99 and for 1 TB from $49.99 to $9.99. Apple, as part of its iCloud services, would sell 20 GB at $0.99 per month and 200 GB for $3.99 per month.
However, security concerns among clients remains a thorn for cloud services providers. According to Rajgopal, in the financial services segment, customers prefer storing critical data related to regulatory compliance on their respective premises while applications running on the customer end are usually on cloud.
“Although cloud computing can be seen as a new phenomenon which is set to revolutionise the way we use the Internet, there is much to be cautious about. There are many new technologies emerging at a rapid rate, each with technological advancements and with the potential of making our lives easier.A move to the cloud requires a well-planned strategy as there are many business and technical constraints that need to be mitigated. Regulations are needed to clear doubts with regards to transfer of data across borders and the ownership/security of data stored on the cloud,” said Kumar Prabhas, managing director, Unisys India.