With server virtualization becoming something of a given, the road’s clear for large companies to migrate to the private Cloud. Meanwhile, a growing number of Cloud Service Providers is gearing up to get SMBs onto the public Cloud. By Prashant L Rao
Over the last few years, server virtualization has become a mainstream technology and is considered to be a routine deployment. As the use of this technology has become widespread, IT folk are starting to figure out that virtualization alone isn’t enough, you also need automation. Which means, it’s time to deploy a private Cloud.
“Virtualization is now routine in all the segments including banking. Customers are realizing that they need to add automation to the mix as otherwise they don’t get the full benefits of virtualization. Increasingly, a large number of organizations are adopting that in their production environments. We had over 50 installations of the private Cloud in the previous fiscal,” said Santanu Ghose, Country Head, Converged Infrastructure Solutions, HP India.
Neeraj Athalye, Head – Strategic Solutions, SAP India, said, “Adoption of the Cloud has been pretty good for the past couple of years. Both large enterprises and SMBs are coming up with Cloud initiatives. It resembles the Net era when new business models came in. The Cloud is in a similar situation at present. Companies are trying to figure out how to maximize the Cloud, in terms of their own processes or extended processes that include their dealers or distributors. Some customers are even looking at how B2C customers can come on to the Cloud and interact with them.”
“In terms of virtualization a certain critical level of maturity has been reached. Virtualization leads to sprawl, which in turn leads to automation. A larger portion of the critical apps are coming under the Cloud umbrella. 2011 and the previous years were more about virtualization. In 2012, it will be about automation and provisioning,” said Seema Ambastha, Director – Technology, VMware India.
“We will see a growing number of enterprises migrating existing platforms to Cloud computing. It may not be for the core application. Rather it is likely to be about new projects and apps,” said Anna Gong, Vice President, Solution Sales, Cloud, Virtualization & Service Automation, Asia Pacific, CA Technologies.
“We see significant adoption of the private Cloud in large enterprises in 2012,” said Rajesh Rege, Senior Vice President, Data Center, Virtualization and Cloud, Cisco India & SAARC.
Sridhar S, Director – Marketing, India Relationship, Dell India, commented, “The indications seem positive. Many proof of concept implementations have already occurred.”
Dhruv Singhal, Senior Director, Fusion Middleware Sales Consulting, Oracle India, said, “In the last two to three years, the maturity has come to all parties including OEMs, partners and end customers.”
Anand Naik, Director, Technology Sales (India & SAARC), Symantec, said, “We are seeing gradual adoption. Large enterprises have taken a hybrid approach (build a private Cloud and avail of some services from internal/external service providers). SMBs are seeing a higher value in the Cloud than the large enterprises. It will be two to three years before adoption accelerates.”
“In 2011, organizations evaluated vital apps in the Cloud. The entry point, not just in the SMB segment but also for large enterprises, is to take advantage of the scalability provided by this model to rationalize costs. We have 400 customers running their critical business application on the Cloud,” said Sundara Raman, VP – Ramco OnDemand ERP, Product Development, Ramco Systems.
Pilots have been conducted and, in some cases, the concerned organizations have put some of their applications on the Cloud, perhaps not the critical ones but important ones nevertheless. The pace of adoption is gradual and it will take more high profile examples of successful deployments to get Indian companies fully on board.
Early adopters
The government has clearly been an early adopter with some states going in for a private Cloud for their second SDC. Other than that, IT/ITES and private banks are looking to this model.
“FSI has the greatest demand for elastic compute. Their demand increases and reduces. That’s where it makes a lot of sense to go in for Cloud computing. Customers are checking their readiness here. The other industry is telecom where it is about having the right backbone of data centers to support customers,” commented VMware’s Ambastha.
CA’s take was that, in the government, Cloud adoption was in the SDCs. There was also a lot of traction with telcos, private banks and service providers for the private Cloud.
Cisco found that other than government, IT/ITES companies and private sector banks were adopting private Clouds.
For Dell, it was ITES where test & development on an internal Cloud was a popular option. BYOD is also prompting the adoption of Cloud computing with a view to enabling app delivery to any device.
HP’s Ghose said, “Corporate and cooperative banks are using the x86-based Cloud for deploying non-critical apps. Healthcare, entertainment and IT/ITES are other sectors with the latter leading in terms of the rate of adoption. The government is also in the fray with DIT framing guidelines for adoption.”
Oracle’s Singhal said, “FSI and telecom have progressed, primarily on private cloud. They have large and complex IT setups and stand to gain the most from private Clouds. Hosting and system integration companies have driven the public Cloud. For example, Wipro has a HCM offering using Oracle software. Telcos are also offering options on the e-mail and collaboration side.”
“The automotive sector (Tier 2/3 suppliers) has started looking at the Cloud as a way to connect with their OEMs. Cluster-based organizations have tied up with software providers. SMBs are looking to graduate from accounting-based software to Cloud based apps,” said Ramco’s Raman.
SAP’s Athalye commented, “As power companies start privatizing their operations and selecting partners to run certain circles for them, that’s like a BPO environment. These partners are asking for Cloud solutions. EDI used to be a point-to-point relationship. That is changing slowly to a hub and spoke environment. Large global companies are connected to the central hub. Indian companies supplying to these MNCs connect to the central hub as well. Cloud-based EDI is coming up in a big way in pharmaceuticals, CPG and Retail. The automotive sector has always been ahead of the curve.”
Symantec’s take was that large enterprises were experimenting in POC environments but overall adoption was a little slow. Larger companies are trying to build a private Cloud and eventually looking to move to a hybrid model while SMBs are evaluating offerings from various CSPs.
Public, private or hybrid
When it comes to the Cloud, organizations can either choose to go with the private or public Cloud to the exclusion of the other or they can choose to go with both in a hybrid model where the core applications are kept in-house in a private Cloud and the remainder hosted in a service provider’s public Cloud. Then there’s the formation of community Clouds.
HP’s Ghose said, “The Government is deploying a community Cloud. From a private organization’s perspective, they have not yet gone for the public model. The auto industry will probably form a community Cloud for dealer organizations. As of today, private organizations are building their own shared services networks for internal consumption.”
“Most companies will look at a hybrid model. Where it is essential that all aspects of security are addressed, the private Cloud will exist. For certain apps, a SaaS model is easy to deploy and the public Cloud is great for that. We are providing the connectors to move an application from private to public-using standards such as OVF,” said VMware’s Ambastha.
CA’s view was that SMBs, especially for new set-ups, were going in for the public Cloud. Larger legacy enterprises are prone to deploy a private Cloud. “We haven’t seen too many going on to a hybrid model. Core test & development is moving to the private Cloud in large enterprises,” added Gong.
Dell’s Sridhar said, “At the moment a lot of implementations have been on the private Cloud. Over time, once the security and other issues are addressed, people will start utilizing the public Cloud. Companies will choose a hybrid solution in the longer term.”
“In FSI, it is only the private cloud. In telecom, organizations are deploying the private cloud for their internal use. They are also looking at the public Cloud from a revenue generation perspective. The core apps are usually left alone while the surrounding apps go on to a private Cloud. People are willing to experiment with things like e-mail or collaboration on the public Cloud,” said Oracle’s Singhal.
SAP’s Athalye said, “SMBs are going in for the public Cloud. When it comes to large enterprises, there are two sorts of customers. One set is looking at speedy growth by making numerous acquisitions. Here, the COO has to control new entities that have been acquired somewhere else in the world and their definition of rollout time is in weeks not years. The second set of customers are purely innovating.”
Some examples of innovation in the Cloud would include companies getting the pulse of their customers through social media or giving bonus apps to customers to download or even M2M integration. “These customers are using the Cloud as a platform for innovation,” added Athalye.
Public Cloud: an SMB play?
The consensus appears to be that large organizations prefer the private Cloud. Ergo, it appears that SMBs are the ones who are considering the public Cloud at this point of time.
HP’s Ghose had this to say. “From the service provider’s perspective, the public Cloud offers a huge opportunity. Consider the fact that around 4,000 blades are shipped in a quarter. About 80% of these are used in a virtualized environment. Assuming 20 VMs per blade, that’s 80,000 VMs per quarter. Even if only 50% are used, the market is 40,000 active VMs per quarter. Service providers are selling 100-200 VMs per month. If 20-25% of the blade market moves, the public Cloud will explode.”
Oracle’s Singhal gave the example of NABARD that had a public Cloud offering wherein 140 banks’ CBS were being run from a data center hosted by NABARD.
Cloud for DR/BC
Again, when it came to using the Cloud for disaster recovery or backup, it appears that it is mostly SMBs who are looking at this option.
“SMBs are implementing DR/Backup in the Cloud. You can do pay-per-use and there’s a good SLA. In most organizations, DR is a dead investment in most cases. It’s more from a compliance or insurance perspective,” said VMware’s Ambastha.
CA saw it as more of an SMB phenomenon. “This is a conversation that we are having with a lot of customers in the SMB segment. Large enterprises have their own DR sites,” said Gong.
“Only the top 15-20% companies have an active DR/BC set-up. Companies with existing set-ups may use the Cloud to make their DR/BC setup more effective. Till you start using primary services in the Cloud, you will lack the confidence to use the Cloud for DR,” said Cisco’s Rege.
HP’s Ghose said, “Private organizations are debating if they can go for DR-as-a-service. The concept is getting propagated but adoption is slow. If there are guaranteed SLAs, a significant amount of DR will move to public Cloud providers. In a couple of quarters, we expect to see a lot of Cloud DR. Archival is moving to the public Cloud where organizations aren’t bothered about archiving data in house. They can even use multiple service providers as the cost is low.”
Oracle’s Singhal commented, “DR is a good use case and we are seeing some traction in that area in India today for both databases and apps. In terms of Cloud DR, the database part is being offered but the app part is still pending.”
SAP’s Athalye said, “There are two phenomena there. Indian conglomerates are setting up shared service infrastructure for the group. Some customers are saying, let’s start by moving DR into the Cloud. That’s the first step. The real big one is to put the entire infrastructure into the Cloud and do value-added governance rather than management of IT.”
Cloud initiatives
VMware offers the tools and technology for companies that have gone in for server virtualization to upgrade to the next phase. It offers a program around OPEX for Cloud service providers.
CA supports core build out of Cloud environments. It offers assurance on Cloud services (availability and performance) as well as security solutions for the Cloud. In terms of automation, it lets you quickly develop and customize solutions, move them from physical to virtual machines etc.
Dell’s Cloud offerings include IaaS implementations; it supports organizations looking to provide IaaS to customers and designs an implementation model along with the service provider. It also offers SaaS and has helped set up an internal PaaS for a couple of ITES companies for their internal testing. In terms of provisioning and creating a virtualized environment 37 POCs have been completed. Some of these are looking at creating a Cloud-based internal implementation.
HP’s Converged Infrastructure approach aims to eliminate complexity in deploying the private Cloud. It has the CloudSystem Matrix for Enterprise and CloudSystem Matrix for Service Providers offerings that bring together everything needed to set up a private Cloud in terms of blade servers, storage, fabric and software. You can create a private Cloud portal, bill internal usage etc. The vendor offers Cloud services too. It has industry vertical-specific solutions for the Cloud and what it calls Cloud Maps (templates) for applications from both Indian and international ISVs. These take apps that are not multi-tenated and make them so, supporting both physical and virtual tiers in tandem.
Oracle offers technology for customers and partners to create Clouds called Oracle Enterprise Manager 12c. Its database and middleware are well suited for setting up a private Cloud. The vendor is working with SIs like Wipro (HCM public Cloud offering). It has its own public Cloud offerings as well (CRM/SCM).
SAP has had Business By Design for a couple of years now. It acquired SuccessFactors in 2011. It is offering a wider range of on-demand offerings including Sales-on-demand. Sourcing-on-demand (reverse auctions, contract automation), Travel-on-demand, EDI in the Cloud, BI-on-demand etc. It also has software-based hosting (private Cloud). The vendor works with partners like Wipro (textile cluster in the South etc), IBM (CRM hosting) and Highbar Technologies (solutions for ECC companies) to address the requirements of specific industry verticals. For customers that already have an SAP on premise solution, it offers complementary public Cloud services. For new customers, it offers Subscription Based Hosting (SBH).
Symantec offers all of its products as traditional licensed software, through the Cloud as a service and as virtual/physical appliances. It is among the largest online backup service providers backing up huge amounts of data into multiple petabyte environments for its Norton backup customers. Three years back it integrated all of its offerings into Messagelabs. The Symantec.Cloud offerings range from endpoint protection to remote anti-phishing to remote archival in the Cloud and e-mail retention services. The traditional model continues to see the biggest adoption and this will continue to be the case for the next two to three years.
Ramco provides ERP on the Cloud. Every quarter it comes out with new solutions. Currently, it also offers on demand analytics.
Hosting in India
For government entities and banks, ensuring that their data is stored within the country is a must.
“Given the current structure in India, from the compliance perspective, the comfort level of customers even if it’s not explicitly stated in regulatory terms, nobody’s comfortable with shifting data out of the country. If it’s a private data center for a MNC located in India, they don’t care where data is lying. For Indian businesses, it’s practical for them to keep their data in India,” said VMware’s Ambastha.
As per CA’s Gong, “Data residency does come up when it comes to the public Cloud. Banks and telcos are averse to putting confidential data on the public Cloud. That’s where the conversation veers to the private Cloud.”
“We have our own data center in Chennai. We also have DR within and outside India. It’s going to be an advantage for us as customers feel comfortable that we are here. A few customers aren’t really worried as long as the data center has the required specs. Large MNCs don’t worry about this,” commented Ramco’s Raman.
Dell’s Sridhar felt that, as long as the right kind of model was in place, residency would not be an issue.
Oracle’s Singhal said, “It depends on the service being offered. On the banking side, because of regulations, it has to be in the country. If I look at test & development for Java/middleware, those can be kept out of the country.”
SAP’s Athalye said, “For customers who require data centers to be based in India, we advise them to go for the private Cloud route where a partner handles the requirement.”
Symantec’s Naik said, “We are all creating data centers in the local market to address that need.”
And in the end
One things certain, the Cloud’s popularity has only grown over time. 20% of Cisco’s deals have a strong Cloud component. For Dell, there were identified opportunities but it wasn’t frequent. SAP saw a fairly large number of deals in SFA and HR/ SCM/ Payroll. Sourcing-on-demand was popular with project-based organizations. Ramco has found that on premise deals tend to be of a higher value although there are more Cloud contracts in terms of the sheer number of deals. 70% of its new customers are acquired through the Cloud.
All said, 2012 will see an increase in Cloud adoption in India although the degree of said adoption remains to be seen. It’s unlikely that the floodgates will open this year, though. Over the next two to three years, the private Cloud will become pervasive in the large enterprise. Whether or not the bet that service providers are making on SMBs adopting the public Cloud wholesale comes off, is still undetermined. At some point in the next few years, the Cloud will cease to be a point of differentiation with every deal having some Cloud component to it.
