Private Cloud in 2013: Leading the Charge

IDG News Service - Private cloud remains the go-to choice for most organizations. Even with the advent of the hybrid model, nothing much is expected to change.

As we usher in the new year, IT will continue to see cloud as a discussion among the CIOs and the service provider networks alike. Research firm IDC put the Indian cloud market to be around $535m (about Rs 3000 crore) in 2011, with a growth of more than 70 percent expected for 2012 and almost 50 percent forecast for the next three years. So, the cloud computing market is a space that is fast maturing and seeing many new entrants with a broad range of investments and solutions taking key roles in the cloud ecosystem. Similarly, Gartner also believes that the Indian enterprise is inclined towards the private cloud vis-A -vis the public cloud. Biswajeet Mahapatra, Research Director, Gartner India, says, "Organizations tend to retain their existing infrastructure; so solution providers would serve well to build a strong business case and strategy for the cloud--be it public or private."

Mahapatra further says that the bigger players such as Wipro, TCS, HCL and Cognizant will continue to do well in 2013, while mid-level players like Mind Tree, and smaller players such as Allied Digital would continue to make inroads with their offerings. A robust service provider and SI ecosystem would take the cause of cloud computing further, he estimates.

While the market is quite gung-ho, there are solution providers such as Future Soft Solutions in New Delhi that are realistic about the cloud wave. Vipul Datta, CEO, Futuresoft Solutions, believes that the cloud should be pitched with caution because the idea is to optimize the opex model for the customer. He states, "Customers are still looking at low cost solutions, which may not necessarily be derived out of cloud-based solutions but yes, the cloud has its ROI, given a set of variables -- number of users, scale of infrastructure etc." Futuresoft Solutions is looked at hosted applications (ERP, CRM) and a hybrid pitch for its clientele, again, with a very tight eye on the annual outflow for the customer, which Datta estimates, in some cases, can get as high as Rs 70 lakh.

On the other hand, Dharmesh Anjaria, Executive Director, Dynacons Solutions, says cloud computing is out of the hype cycle, and sooner or later the Indian enterprise is going to head the cloud computing way and make their IT infrastructure very light by offloading as much to the cloud. Dynacons is expecting a 20 percent increase in its cloud business the coming fiscal. The company is going all out to promote private cloud.

Anjaria makes a valid observation when he says, "VDI and server virtualization are already getting quite a bit of attention. So what we are doing now is to have discussions with existing customers and then dive deep into selling the cloud." Dynacons is approaching existing customers with the pros and cons of all the three cloud models--public, private and hybrid. Dynacons also believes that in a slow thickening market, it is vital to align with the right vendors in order to make sense. The company has tied up with IBM for SmartCloud Computing. Anjaria foresees challenges in the form of recession and the capex freeze in enterprise spend. He says, "Given the current scenario, solution providers must be able to suggest the right opex-capex model to customers in order to reach out."

Gartner's Mahapatra believes that the standard 69:31 ratio of opex to capex (both public and private setups) would work the coming year too, and organizations will increasingly look at pay-per-use models, with a dash of the subscription model. Like Futuresoft's Datta, Mahapatra observed, "This is because SLAs between customers and service providers do not insist on availability and speed of performance clauses. So, customers find it viable to opt for pay-per-use rather than give in a bulk amount for 'n' number of mail boxes and so on, unless they have exceptionally limited usage levels."

However, Ketan Shah, Director of Bangalore-based Kruti Comp India, says as far as the cloud is concerned, it is still a wait and watch game. The company is looking at the cloud scenario with some caution, while at the same time building its virtualization and video conferencing capabilities to service organizations with as many as two to five locations. Shah says, "Devices such as smartphones and laptops are increasingly pro-cloud. In the future solutions are not going to be CPU-centric, and that elevates the discussion to the next level." Kruti Comp estimates that the second half of 2013 will help the company get clarity, and galvanize its cloud strategy.

The common observation is that solution providers have to look at establishing ROI very seriously if they have to win customer confidence about the cloud. Says Datta of Futuresoft, "It is about utilizing budgets and keeping licensing costs low."

Going forward, Mahapatra says that the hybrid model will make maximum sense to the Indian enterprise. More customers are headed this way.