Unlike the private Cloud where adoption is picking up, particularly in the large enterprise segment, the public Cloud is yet to take off in a big way in the country although SaaS-based offerings have proved popular with small manufacturers. By Heena Jhingan
Despite the capability to deliver higher RoI and faster time to market, the multi-tenanted character of a public Cloud has led to it being perceived as a setup that is vulnerable to breaches. Then there’s the fact that the IT heads of most Indian enterprises, particularly the larger entities, are worried about losing control of the IT apparatus. There are exceptions to this rule, obviously, particularly with small scale manufacturers who have gone in for public Cloud-based CRM and SFA as well as organizations that have adopted the Cloud—Microsoft’s and Google’s—for messaging.
If you go by the published reports, India is all about private Cloud. However, there are doubts over whether a lot of these deployments that are being counted as private Cloud are anything more than virtualized infrastructure. Nevertheless, in the large enterprise, it has mostly been a private Cloud play in terms of interest, pilots and the occasional deployment. The same holds true for the government, although there is a community Cloud model evolving there.
The public Cloud is mostly in a cleared for takeoff stage. The exception is in the SaaS space where vendors like Salesforce.com, Google and Microsoft have all had some degree of success in getting customers on board for non-core applications.
Today, players like CtrlS, Wipro, Tata Communications, Microsoft, Sify have placed big bets on the public Cloud. Netmagic Solutions claims 100% YoY growth on its public Cloud portfolio.
Charges of misrepresentation
According to Karan Kirpalani, Product Management Services and Solutions Engineering, Netmagic Solutions, although the Public Cloud’s share of the Indian market was undoubtedly smaller than that of the Private Cloud, he felt that the data around the private model was being misinterpreted. “A large number of vendors are simply virtualizing private servers and calling it a private Cloud,” he added.
Srikanth Karnakota, Director – Server & Cloud Business, Microsoft India, concurred, saying that a clear distinction had to be made between the Cloud and vanilla virtualization. “Virtualization is the first step to the private Cloud, but several other steps need to follow for the process to be completed. Post-virtualization, good management tools need to be put in place for orchestration of workloads, a comprehensive management capability needs to be built without which it cannot be termed as a private Cloud deployment,” he explained.
Case for the Public Cloud
The biggest setback for the providers of public Cloud services have been concern about network security and data loss/leakage. The industry has done its best to convince IT heads that the public Cloud is safe and it has succeeded—partially. CIOs now frame their security concerns in a different manner. They no longer ask if the public Cloud is safe. Rather, they demand proof that a particular vendor’s Cloud is safe.
Hemant Kumar, Director – Dell Services, explained the reason as to why security concerns continued to haunt the public Cloud. “CIOs dread the idea of letting corporate data travel over a public data network over which they have little or no control as, in such a case, it is impossible for an enterprise to overlook the regulatory compliance aspect,” he said.
Karnakota said, “The majority of security breaches and data theft occurs within the company firewall. Considering the scale at which Cloud service providers like us operate, it is unimaginable that we would do so with less than optimal security layers and certifications.”
Nitin Bharadwaj Vyakaranam, VP, Marketing & Alliances, Prithvi Information Solutions Ltd., noted that even if vendors promised a secure network, storage and compute, it was still an arduous task to impress a CIO with a public Cloud offering. “There is a perception among the CIOs that as long as the IT infrastructure is on his premises, he has control. Since there are no stringent regulations on Cyber security, in such conditions, a CIO would choose not to risk data ownership at the end of the day as he is accountable in the event of any intrusion into a data repository,” he said.
A large number of banks and financial institutions that could have benefited from the public Cloud have refrained from deploying it due to RBI’s regulatory requirement around data residency that bar them from storing their data outside the country’s borders. The regulation holds true for government agencies as well. This is another reason as to why the public Cloud hasn’t taken off with government agencies, which earlier were anticipated to be earlier migrants to it.
Citing the example of a PSU that expressed interest in the public Cloud, Kirpalani commented, “It is incredible to find that some state-run units are still clinging to legacy technologies such as FoxPro.”
He said that it was encouraging to see a large number of projects moving to the production stage from being Proof of Concepts.
Beyond Security
A large section of the industry felt that Cloud providers would have to carry the security albatross around their collective necks for years to come. Having said that, the public Cloud market is largely driven by agility, focus and cost.
“Public Cloud services are SLA bound. The buyer demands the best in terms of connectivity, latency and availability,” said Kumar of Dell.
This makes the public Cloud business all the more challenging. “If a Private Cloud goes down, it affects only a particular company’s business. However, with the breakdown of a public Cloud, the business of all the provider’s tenants is affected. Therefore, for a public Cloud provider, there is much more at stake. For this reason, public Cloud service providers have to be more conscious about resilience and redundancy. Successful deployments by e-commerce players like Flipkart and trading players like India Infoline are cases to prove that public Clouds can be trusted for high level SLAs,” reasoned Kirpalani.
“For potential buyers, lock-in has been an area of concern. Vendors have tried to resolve this by optimizing their heterogeneous data centers. Unlike earlier when the applications were running in silos, the focus today is upon elastic platforms that support smooth migration and interoperability,” said Deepak Varma, Regional Head – Presales, EMC, India & SAARC, adding that the public Cloud market is picking up.
New opportunities
The most popular public Cloud offering continues to be IaaS. All the leading players in the data center service provider segment as well as the new players that include telcos like BSNL and Reliance have geared up to provide this category of Cloud services to SMBs.
Benoy CS, Director – ICT Practice, Frost & Sullivan, South Asia & Middle East, said that the overall Indian Cloud market was pegged at about Rs 850 crores and that it consisted of captive data center providers alongside third party service providers. “The telecom service providers and other non-IT players would contribute only Rs 130 crores to this market, which is not a huge number. Of this, nearly 70% would be earned from IaaS, 25% from SaaS and the rest from PaaS. However, in the captive data center market the largest contributor is SaaS,” he said.
A large number of SMBs invest in public Clouds especially for SaaS-based email, HR, collaboration and business productivity applications.
Vyakaranam of Prithvi, pointed that, while customers were reluctant to move mission-critical applications onto the Cloud, CRM and ERP core applications were now being hosted on the Cloud.
Vinay Dwarakanath, Head – Cloud Computing Services, Data Center Services, Wipro Ltd, said that a novelty in this space was the emerging trend of DR as a Service. “Compute, storage and backup are the basic IaaS offerings. These services, along with associated managed services, are the answer to most workloads that are required by enterprises. Additional services that can guarantee higher availability from the Cloud infrastructure include clustering, load-balancing, increased security and specific managed services such as database or middleware management. An emerging derived service is that of DR-on-demand that helps clients achieve the assurance of a full-fledged DR setup at a fraction of the cost that’s required to enable a traditional DR.”
The cost of restoring backups on demand is high and the setups are quite complex in terms of management. Net4India, Tata Communications and Sify provide DR as a Service offerings. In a similar vein, Hitachi Data Systems is working to align with ISPs in order to offer Cloud-based storage.
Moreover, certain workloads like development environments (amongst offshore/game developers) and resource- intensive dynamic environments (like media streaming, survey/assessment initiatives) have shifted as part of an early adoption of public Cloud, Dwarakanath added.
Telcos as Cloud providers
Telecom players have entered this space in a big way in order to balance out the impact of dwindling ARPUs from their consumer business.
According to Praveen Bhadada, Director – Market Expansion, Zinnov, while many Indian telcos had forayed into the Cloud space, they had not yet been able to effectively establish their practices. Success for them had been witnessed only in parts and for select services. According to the firm, the share of Indian telcos in the Cloud space was less than 3%.
Bhadada said that telecom players like Reliance Communications had dedicated business units to cater to data center and Cloud services. Other players like Airtel had formed strategic partnerships with IT vendors like VMware and Savvis in order to provide Cloud services to their customers. Hence, telcos did not face major issues with their technical capabilities. However, in most cases, these telcos use a common sales team to sell all products, including voice. Hence, lack of Cloud expertise in sales staff could be a challenge for some players. Some telecom players are perceived as infrastructure experts and it would take some time before they can establish themselves in the applications (SaaS) space.
KB Rajendran, Senior VP – Sales, Marketing and Business Development – Data Center and Managed Services, Reliance Communications, was of the view that they already had a large third party data center and managed services business and that entering Cloud services was a logical move forward. “Some technical expertise had to be acquired. Various initiatives like go to market arrangements with leading software players, active engagement in Cloud fora and communities etc helps change such perceptions.”
Telcos and data center players have both private and public Cloud offerings and they are cross selling to their existing customers and acquiring new accounts through channels such as online sales.
Satish Vishwanathan, Senior Vice President, Tulip Telecom, opined that telcos provided connectivity services to customers over their network and also had their data centers as part of this network. “Cloud services, therefore, become an extension of this infrastructure and customers benefit from the same. However, not all telcos are focused on Enterprise Data Services and service providers like Tulip are ideally placed to cater to the needs of customers through their widespread reach for connectivity and world class data center facilities,” he said.
Najib Khan, CMO, Airtel Business, said, “The network belongs to us as do the data center and the products of managed co-location. Therefore, the output of the SLA is much better than that from a third party who would be buying infrastructure from someone else. Based on the infrastructure that we have, the natural corollary is to build on the infrastructure and that is what we have done. The scope to move up the value chain is high and we have already made that transition.”
“The huge infrastructure setup created by Indian telcos makes them potential candidates for providing Cloud services. In the Indian context, some large BFSI companies are looking to telcos for their IaaS, SaaS and PaaS needs. These are generally for non-core functions, owing to the security concerns regarding the sanctity of customer data. The SMB space is mostly an IaaS customer of the telcos,” said Tarun Singhal, Director of Telecom & Communications Service Providers, India & SAARC, CA Technologies India.
Newer players, including BSNL, believed that their entry into the data market might be late. Nevertheless, they saw themselves as a strong contender in the market. “Being a PSU, we believe that we can better understand the security and other requirements of another PSU. We are already providing connectivity for several SWAN projects. We believe that we could be the front-end agency for the government’s Cloud projects as well,” said MSS Rao, Senior GM, Enterprise Business, BSNL.
Even though the service providers may claim to be offering end to end Cloud solutions, Biswajeet Mahapatra, Research Director, Gartner, felt that the RoI for service providers was still low as of now and, for this reason, they couldn’t expect big business from enterprises. “They might get one or two big orders per financial year but need a long term strategy to earn returns on the capacities that they have built. Telcos will do well with consumer offerings on the lines of iCloud or Dropbox. Since they have an excellent consumer connect, they could also look at leveraging their capacities for personal and community Cloud offerings,” he suggested.
Karnakota of Microsoft agreed saying that there was a consumer component as well for the Cloud in the forms of xBoxes sitting in living rooms and video on demand. Device makers, platform developers and telcos are working hand in hand to create the required ecosystem.
A gradual progression
The public Cloud can be a disruptive technology. This comes from a strong belief that Cloud computing will allow a large number of SMBs to adopt the same enterprise-class software and technology solutions, which were earlier the exclusive preserve of large enterprises.
Several analysts believed that CIOs were seeing value in exploiting the benefits of a public and private Cloud in order to remain competitive and that the Cloud market was expected to progress following a path of private to hybrid and, consequently, to the public Cloud.
There are others like Kumar of Dell Services who are more optimistic that the growth of Private and Public IDs going to be parallel and not sequential.
