Deployments of in-house Clouds are on a roll in India with a 80% plus share of the overall Cloud market in the country. By Mehak Chawla
When the Cloud started becoming the buzzword of the Indian IT industry half a decade back, vendors, analysts and observers were confident that it would be the low cost public Cloud that would change the face of Indian IT. Anything low-cost has mass appeal in India and, consequently, the public Cloud was also expected to be an instant hit.
Murphy’s law knifed through this prediction. Although the optimism around the public Cloud is still strong, it is the private Cloud that has captured the imagination of Indian CIOs. So much so, that over 80% of the Cloud deployments in India today are those of the private Cloud.
EMC & Zinnov did a study on the private Cloud landscape in India and they estimated that the total market in India was about $400 million and that it would reach $4.5 billion by 2015. Of this private Cloud adoption is expected to account for $3.5 billion, growing at over 60%. The study further predicted that the total expenditure on Cloud computing, as a percentage of the total IT budget, would go up to as 8.2% in 2015. The key verticals driving growth would be IT/ITES, BFSI, telecom, manufacturing and government.
There are many reasons, some well grounded and others not quite so, behind the rapid adoption of the private Cloud in India. At the crux of the matter lies the fact that the Cloud is yet to make inroads into mid-sized enterprises. Large enterprises, which have gone in for the Cloud, have picked the private Cloud option.
Superficially, security concerns seem to be the driving force behind this choice. However, there’s more to this story.
Rationale for choosing to go private
Large enterprises are steering the growth story of the private Cloud in India. Since these enterprises would have had to expend CAPEX on a convention data center server/storage refresh in any case, and they are possessive about their data, going in for a private Cloud has been the answer to their need for IT consolidation.
Arguably, regulatory compliance is one of the heftier forces behind the adoption of the private Cloud in India. Regulatory requirements prevent industries like healthcare, BFSI and Telecom from moving their data outside their internal safety nets. Vijay Mhaskar, VP, Information Management Group, Symantec, said, “There are a lot of compliance issues that carry weight when it comes to making a decision about going for the Cloud. Many enterprises have to ensure that their data resides within the country rather than in some unknown place.”
Using the public Cloud usually means that an organization’s data is stored in another country. Most providers have a point of presence in Singapore or some other part of the region but few have moved to set up Cloud data centers in India.
Sid Deshpande, Senior Research Analyst, Gartner, argued that this was the reason as to why something like UID or a bank’s customer data would never reside in the public Cloud.
According to Rajiv Singh Sehgal, CIO, Fortis Healthcare (India) Ltd., the compliance issue looms large in the healthcare industry. Therefore, this industry vertical won’t evaluate anything other than a private Cloud. “Customer privacy and data protection according to regulations are the top priorities for CIOs in healthcare. Consequently, we prefer to keep our data with us,” he explained.
There are also issues around control of data. While public Clouds do have defined SLAs, many felt that they didn’t encompass vital aspects of control and accountability. Thejaswi Parameshwaran, Program Manager, Information Communication & Technology Practice, Frost & Sullivan, South Asia & Middle East, felt that, since control aspects in a public Cloud were still unclear, organizations were exercising precaution and adopting the private Cloud. Since the law isn’t clear on this matter, data ownership and control becomes a challenge in the public Cloud.
Other than control and compliance triggers, the private Cloud also has agility and better application performance tipping the balance in its favor. However, the most crucial factor behind the growth of private Cloud has been security.
Sure and secure
That security is a given, even in a public Cloud setup, is a statement that has been doing the rounds for quite some time now. Yet, the paranoia around security in the public Cloud refuses to fade away. Angira Agrawal, Head & Associate VP for NEC’s Cloud business in India, remarked, “Security can sometimes be better in a public Cloud than in a private Cloud setup. It is a physiological barrier. It is the business process that defines security and the not the other way around.”
However, others argued that, although public Clouds were secure in terms of data isolation and protection, the controls were not always well defined. Parameshwaran observed, “Security, together with being a mindset issue is also about who owns the data.” In a public Cloud, this ownership is not always well defined and most of the bigger enterprises are reluctant to take a chance.
Deshpande concurred, “Security is a major barrier for enterprises. However, beyond security, there is the accountability factor.”
Some felt that vendors hadn’t played their part fully when it came to inculcating confidence in the public Cloud. Mhaskar of Symantec said, “Security protocols in the public Cloud are only a vendor commitment for data isolation. Ultimately, security is all about confidence building on part of the vendor. Similarly, organizational policy also comes into play when it comes to evaluating security in the Cloud.”
Others were also of the opinion that unless an organization clearly defined its strategy around the private Cloud and built in security redundancies, the private Cloud could well end up resembling its public sibling. According to Prashant Gupta, Head of Services, Verizon India, “Buyers considering a private Cloud need to ask whether they want to take ownership of the equipment.” If its enough to monitor usage, then you might as well opt for a public Cloud.
Transforming the data center
Experts agreed that building a private Cloud was almost identical to building a new data center. Having said that, there are instances of the private Cloud being deployed to transform existing data centers.
Robert Healey, Marketing Evangelist, Riverbed Technology, said, “To build out a private Cloud is no different that building a new enterprise data center facility; the only change is the dynamic service model that’s implemented for the resources provisioned inside it.”
A phase wise implementation of private Cloud is occurring in many organizations, both from the application as well as the infrastructure standpoint. Srikanth Karnakota, Director, Server and Cloud Business, Microsoft India, observed, “Most companies go in for a private Cloud as part of a transformational strategy in their existing data center and, upon a successful trial, they adopt a new data center.”
Such was the case with the SIVA Group where Dr. Selvam K, CIO, SIVA Group found that the organization’s needs were growing quickly because its business was expanding rapidly. “We were ready for a new IT strategy and knew that a private Cloud solution was the simple way to overcome our challenges, he elaborated. He thus tested the waters, found them favorable and went on to deploy Microsoft’s private Cloud,” he added.
Another thing to consider here is that we still haven’t reached the tipping point where organizations would seriously contemplate putting their mission-critical applications onto a private Cloud, let alone the public Cloud. Satish Vishwanathan, Senior Vice President, Tulip Telecom, explained, “Organizations are starting with the private Cloud for test & development of non critical applications. This offers a low risk method to explore the value of Cloud services and the organization’s capabilities in managing the associated technology.” Moreover, a complete entry into the Cloud is impractical in most organizations due to the existence of back-end legacy applications that are not Cloud ready.
Some organizations are seeing the private Cloud as a means to an end. Deepak Varma, Regional Head – Presales, EMC, India & SAARC, said, “The private Cloud is not a one step process. Nor is it a rip and replace approach. Virtualization and data center optimization are the primary foundations for moving towards IT as a service.”
There are examples of organizations that are envisioning the private Cloud as a way to consolidate all of their investments and making step-by-step progress. “Our primary data center at the head office was filling up and could not indefinitely handle our present rate of growth. Also, we were unable to achieve economies of scale with many servers being underutilized. We wanted to consolidate the hardware environment in order to reduce energy consumption and costs. We also wanted to make it easier for the IT department to manage and ensure the reliability of the server infrastructure. Therefore, we chose System Center Virtual Machine Manager 2008 R2 and deployed our Cloud on it,” detailed Ritu Madbhavi, SVP – IT, Draft FCB Ulka Group.
Experts insisted, however, that Cloud should not be looked at in isolation as just another IT component. KP Unnikrishnan, APAC Marketing Director for Brocade Communications, opined, “The Cloud cannot be sufficiently understood as a standalone phenomenon in the IT market. Rather, it is a core ingredient of a larger transformation of the IT industry and many other industries that are using IT to transform themselves.”
Though a gradual process and a well defined road map seem to be sure shot mantras for private Cloud success, the transition is not always smooth.
Challenges en route
A scalable data center, applications that are Cloud ready, a highly virtualized environment—these are some of the prerequisites for an organization that is keen to hop onto the Cloud. This involves significant effort and a lot of CAPEX, which is the biggest challenge faced by companies contemplating a move to the private Cloud in India. That RoI hasn’t been established clearly, adding to the cost concerns.
Unnikrishnan agreed, “The biggest challenge with the private Cloud is that to even take the first step one needs to have a scalable data center, virtualized network etc. You can’t just step onto the Cloud by doing server virtualization.”
Also, the Cloud needs support from other technologies including real time analytics and orchestration. Networks can be a bottleneck as the networks are hierarchical in many organizations.
Satish Vishwanathan, SVP, Tulip Telecom, agreed that migrating to a private Cloud has its own costs. “Private Clouds are likely to result in additional investments. Although organizations could repurpose existing IT resources, they would prefer to invest in new resources with additional capacity for meeting the demands of newer IT capabilities. Also, organizations have to invest in management automation in order to ensure efficient service delivery, monitoring, measurement, chargeback, and self-provisioning. This would result in additional CAPEX and the need to augment IT manpower for meeting and delivering on the new requirements.”
Besides cost and resources, dealing with vendors and understanding contracts is also a hurdle. Because, even if it is strictly private, the Cloud still involves dealing with multiple vendors. Mhaskar of Symantec said, “The challenge with both the private and the public Cloud is that you need to have a good understanding of SLAs and there are redundancies that need to be planned.”
The biggest challenge in the way of Cloud adoption, ironically, crops up right at the beginning. The definitions of private Cloud, believed Rajendra Dhavale, Director, Technical Sales, CA Technologies, seem to have gone haywire in India. “Private Cloud is an oxymoron in India that carries different connotations for different people. It has become an acronym and term that is being misused by many. What we need to evaluate is whether you can call all of these deployments as private Cloud in terms of the strict definition of the term. Some of them could easily fall into the categories of shared infrastructure or highly virtualized environments,” he opined.
Dhavale implied that, given the blurred fundamentals around the private Cloud, the numbers being touted might be inflated but unless there was a unified definition emanating from a central source of authority, there was no telling the exact penetration of the Cloud in India.
Eventual winner?
Despite the disparity in terms of adoption of the private to the public Cloud overwhelmingly favoring the former option at this point (80:20), there’s still hope for the public Cloud. The second coming of the public Cloud is expected to be aided by a blend of private and public also known as the hybrid Cloud. As organizational understanding of the Cloud landscape evolves, they are likely to want the best of both worlds and the hybrid Cloud could be way ahead.
Rajesh Rege, Sr. Vice President, Data Center, Virtualization and Cloud, Cisco India & SAARC, said, “While it’s easy for CIOs to consider public Cloud offerings as competitors to their own private Cloud offerings for meeting the needs of their business units, smart leaders are realizing that they can actually leverage the public Cloud to add greater elasticity, while keeping costs under control. This realization is leading to the buildup of interest in the hybrid Cloud.”
Apart from the hybrid model, the hosted private Cloud model could also gain prominence, given the emergence of granular SLAs.
Gartner has predicted that, by 2015, the majority of private Cloud computing services will evolve to leverage public Cloud services in a hybrid model. “Today, the hybrid Cloud is where the private Cloud was a year ago. In fact, one of the questions that enterprise CIOs are asking private Cloud technology vendors is whether they will provide support for eventually moving to a hybrid Cloud deployment model,” confirmed Rege.
Security, the primary reason for the adoption of the private Cloud, could also spark off the move towards the hybrid Cloud. Varma of EMC explained that customers were taking the hybrid route to be doubly sure about security in the Cloud. The government, with its state data center consolidation in full swing, is also propelling the community Cloud.
There is expected to be a push for the public Cloud from other sectors as well. For instance, start-ups tend to prefer the public Cloud because they don’t have to worry about moving legacy apps to the Cloud, believed Deshpande of Gartner.
Also, as vendors in the public Cloud domain deck up their offerings to make them more attractive to SMBs, the game could change. Although, we are nowhere close to a 50:50 ratio in the near future, Thejaswi of Frost & Sullivan felt that India could transition to a situation where the public Cloud could gain significant traction if data control and accountability were established. Mhaskar of Symantec was also of the view that, once enterprises gained confidence in the public Cloud and vendors took some confidence building measures, the public Cloud would gain adoption.
Going forward, we would see organizations stopping to ask if they can get the same standards of governance, auditing and security in the public Cloud that they can today in the private Cloud.
