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Gearing up for the Cloud

Cloud computing is rapidly becoming the Holy Grail of enterprise computing, with most CIOs, network managers and IT departments investigating how they can develop and leverage a cloud strategy. Manjari Juneja finds out what companies need to do in order to prepare for cloud computing and lists the checkpoints that need to be taken into account

Although cloud computing means different things to different people, true cloud computing provides massively scalable IT capabilities as a service over the Internet, and can offer companies a single point of access to manage and meet their computing needs. When implemented correctly, cloud computing can help companies cut IT and personnel costs, produce a leaner IT environment and create a dynamically scalable infrastructure that lends itself to rapid growth.

In an ideal scenario, cloud computing can reduce the total-cost-of-ownership for a company’s IT infrastructure by moving resources to the cloud and minimizing the physical infrastructure that is required. Companies need a comprehensive data strategy that can complement, catalyze and drive their compute strategy. Most enterprises today maintain enormous distributed architectures across multiple disparate data centers that require huge amounts of compute power (and thereby electricity to power and cool the servers involved) to move the correct operational data to the right applications and people in real-time.

“Cloud computing is a potentially cost-efficient model for provisioning processes, applications and services while making IT management easier and more responsive to the needs of the business. These services—computation services, storage services, networking services, whatever is needed—are delivered and made available in a simplified way ‘on demand’ regardless of where the user is or the type of device they’re using. It is this approach that enables both rapid innovation and support of core business functions. New applications are made available by highly efficient virtualized compute resources that can be rapidly scaled up and down in a flexible yet secure way to deliver a high quality of service,” said Dr Manish Gupta, Associate Director, IBM Research India.

Thomas Abraham, Managing Director, Sage Software India (P) Ltd, commented, “Cloud computing is at an early stage with several standards available at present. As the business model matures and this infrastructure is made widely available in a cost-effective manner we will see some traction happening. Over time, there will be several applications and services available on a ‘pay by use’ basis. Therefore organizations that are seeking to not create their own infrastructure would see this as being useful for their business.”

Market Scenario

The overall market size for cloud computing compared to traditional computing is still small in India. Some current estimates peg cloud computing in India at around $500 million (as opposed to $16.2 billion worldwide; among the five major IT segments). The annual growth in this category in India is also estimated to be lower than global figures; growth in India could be in the range of four to five percent.

“With cloud offerings coming in the form of services, this means that the IT organization will be replaced by relationships with many cloud computing service providers, each for one or a handful of services,” said Phil Dawson, Research Vice President at Gartner. The reality of the future IT organization will be something of a combination. “Larger organizations will continue to have an IT organization that manages and deploys IT resources internally. Some of these will be ‘private clouds’, but not all,” said Dawson. “IT departments will also take on IT service sourcing responsibility determining when to leverage external providers, when to deploy internally, and when to leverage both for specific services.”

Ravi Raman, Head – BFSI, Religare Technologies, said, “At Religare Technologies, we are aggressively targeting this segment and we have moved our solutions to this model. We find that there is a lot of interest in this model in the segments that we operate in namely Financial Services, Insurance, Health Care and Life Sciences, and Enterprise Solutions (CRM, ERP, etc). We are targeting a growth of around 20% across our global markets.”

Be prepared

Companies of all sizes are contending with a combination of market trends which are forcing them to seriously reevaluate how they do business. These forces include growing globalization, lower customer loyalty and the widening dispersion of today’s workforce.

With increasing globalization and mobility, as well as escalating competitive forces and corporate productivity requirements, corporations of all sizes have started to rethink how they should operate. At the same time, a combination of rapidly changing customer expectations and radically different technological advances are driving a new generation of on-demand services which are transforming the way in which organizations operate and innovate.

Vinod Krishnan Regional Sales Manager, VMware India, said, “IT budgets are tighter today than at any time in history. Nevertheless, in spite of severe budget constraints, user demands are still slowly rising—as they always will especially for mission-critical applications and services. IT managers should analyze all new investments in IT infrastructure carefully to ensure that they match key business needs and deliver intended results in the most efficient and cost-effective way. To maximize investments, IT organizations are beginning to move away from a device-centric view of IT to an infrastructure that is application-, information- and people-centric. Cloud computing technology can drive this change in today’s computing industry, enabling IT managers to treat infrastructure as a common substrate, on which they can provision services to users faster in a much more flexible and cost-effective way—without having to redesign or add to the underlying infrastructure. Cloud computing lets enterprises to do more with the infrastructure they already have, and expand capacity quickly and economically by leveraging external cloud computing resources, when needed.”

“On-demand services and Software-as-a-Service (SaaS) solutions have become the preferred mechanisms for organizations to better leverage the power of technology. Rather than contend with the endless hassles and escalating costs historically associated with traditional, on-premise, hardware and software products, today’s on demand services and SaaS solutions enable organizations to more quickly and cost effectively harness technology to achieve their business objectives,” said Kiran Datar, Managing Director, Cisco WebEx Technology Group.

Getting ready

There are multiple facets to cloud computing including Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service, and even highly decentralized P2P networks. There are various types of solutions available including Google Apps,

the Force.com platform from Salesforce.com, infrastructure services from Liquid Computing, solutions from Ariba, security solutions like OpenID, payment solutions such as PayPal or Google Checkout, compute infrastructure such as Amazon EC2 etc.

While it is clear that enterprises are striving to reduce their CAPEX where such expenses are fairly large, care needs to be taken to ensure that OPEX can also be lowered and kept low and that the level of availability of remote resources is consistently maintained at a level acceptable to the company. Other considerations may include the level of comfort that a company has with leaving its data on infrastructure that is not within its control. Contingency planning in case the vendor goes out of business is also a critical part of the preparation. The vendor should also be capable of provisioning resources in time to handle unpredictable peak loads.

Ashish Masand, Country General Manager, Micro Focus India, said, “Cloud computing is the next ‘turn of the crank’ in IT data center paradigms. IT data center managers have been put to the test over the years, being asked to respond to in-sourcing (in 1970s), glass-house build-up (in the 1980s), server-room build-out (in the 1990s), data center outsourcing (the shift in the 2000s) as well as virtualization and server-consolidation (today). Cloud computing combines the best of infrastructure utility outsourcing with the IT control of in-sourcing and the lower-cost advantages of server consolidation. Micro Focus believes that cloud computing is too important a paradigm shift to be left to new application construction alone. That’s why the Micro Focus’ Enterprise Cloud Services offering provides a simple, easy-to-use environment for business applications to be deployed into the clouds by System Integrators (SIs), IT Departments (IT) and Independent Software Vendors (ISVs).”

Trimming IT OPEX

On-demand services and SaaS solutions capitalize on the ubiquity and real-time availability of the Web to deliver a new breed of business applications that offer greater collaboration and productivity features via a ‘pay-as-you-go’ subscription fee structure. These solutions also eliminate the infrastructure, installation, maintenance and support costs of the past. Organizations no longer have to acquire additional hardware or hire additional staff to support their business requirements. Instead, the SaaS provider assumes this responsibility as a part of guaranteeing the availability and performance of its solutions.

With the rapid evolution of the SaaS movement, the primary focus of individual SaaS providers has been on developing specific point solutions which can be combined into broader, transaction-oriented packages.

Meghdari Ghosh, Director of Engineering, GemStone Systems, said, “In addition to lowering the entry cost of having an IT infrastructure, the cost incurred by the cloud vendor to maintain the technical infrastructure is distributed over multiple customers. Additionally, the company using the cloud does not have to incur the cost of licensing different software needed for its functions.”

Keeping pace with organizational growth

Customers are looking for ways to extend communications to every employee, in every workspace at all times—especially the mobile workspace—to increase productivity and collaboration. By offering cloud computing services to their customers, solution providers can help them increase cost efficiency and productivity.

Satish Joshi, Executive Vice President and Global Technology Head, Patni, said, “Cloud computing is touted as one of the biggest trends in the IT landscape which is set to revolutionize the way in which varied services are delivered. Analysts such as Gartner expect worldwide cloud services revenue to exceed $56.3 billion in 2009 and up to $150 billion in the next five years. They also predict that cloud computing will get commoditized by 2015 and by then it will be the preferred solution for many application development projects. According to IDC, the cloud adoption trend will be amplified by the current financial crisis and it expects a number of opportunities to catch on in the government, healthcare and manufacturing industries for cost savings.”

Manish Bansal, Regional Manager, SAARC & India, Websense, Inc, commented, “Predictions are that this model will continue to grow and that it could become the most common form factor for application delivery in the not-too-distant future. Cloud computing and SaaS can deliver efficiencies and business beyond what is achievable with traditional approaches. The security market in particular is leading the way and (according to Forrester’s Content Security Suite Analysis) Websense is leading the security market.”

“Over the next five years, IDC expects spending on IT cloud services to grow almost threefold, reaching $42 billion by 2012 and accounting for 9% of revenues in five key market segments. More importantly, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year. We are excited with the growth in the last couple of years and are positive that we will see more. Cloud computing technology will continue to evolve as customers look to replace legacy technology costs with predictable, scalable subscriptions and constant built-in innovations of cloud computing,” said Lee Thompson - SVP, Corporate Sales (APAC), salesforce.com.

Checkpoints to consider

RSA stated that a few questions needed to be asked before trusting a vendor concerning said vendor’s approach to securing its infrastructure, the security procedures that were in place to protect the data center etc. “Encryption technologies used by vendors to authenticate users to the services and the level of encryption that vendors offer to their customers to protect their data are vital,” said Amuleek Bijral, Country Manager – India and SAARC, RSA, The Security Division of EMC.

“Security is a critical concern when availing the advantages of cloud computing services. Within security, identity poses one of the biggest challenges in cloud computing. This leads us to a solution of ‘Federated Identity for Enterprises or Consumers’ or ‘Identity as-a-service for Enterprises or Consumers’. Which one of these will be adopted by cloud computing providers, is a question in itself. Whatever the option, security and authentication will remain key factors for success. A Cloud-based Authentication Service (CBAS) will be critical. For this service, support for multiple types of credentials will be necessary and there will be a need for a trusted third party. It will also require simple implementations for consumers and enterprises and availability,” said Rajiv Chadha, Vice President, VeriSign India.

The checkpoints are:

• How secure are the vendor’s SaaS apps and does it work with an independent security group to establish the security of its application code?
• What are its terms when it comes to data ownership?
• How easy is it to export data from the cloud service in order to move to a new one? Are there any extra charges for exporting data from a cloud vendor’s service?
• Does it delete data completely when the customer deletes it from its Web service?
• Also relevant are a vendor’s privacy policy and if it uses customer data to promote its business interests by offering advertisements based on the data content, selling the customer behavior/information for third party marketing, etc..
• Courts are still not sure of how to treat data in the cloud vis-a-vis data on personal desktops. Customers should prod cloud vendors into taking initiatives to change the existing laws and to offer better protection for data in the cloud.
• How many copies of a customer’s data does a vendor keep and are these copies stored in geographically separated regions?
• If the data is stored in geographically diverse regions, what are the countries where the data resides and what are the laws governing security and privacy of user data in those countries?
• Vendors should offer SLAs for their cloud-based services.

Challenges loom

While customers agree about the benefits of cloud computing, they have concerns about cost and flexibility, in particular about security, compatibility with existing applications, lack of a migration path from existing applications to clouds, freedom of choice, federation of internal and external resources, lack of SLAs for policy-based management, and interoperability.

The good news is that these challenges can be resolved using a cloud computing approach that includes computing, network, virtualization, and storage resources.

Simon Dale, Senior Vice President, Business User Organization, SAP Asia Pacific Japan, said, “Based on our customer feedback, while parts of their businesses have cloud software today, there are a number of enterprise-class attributes that are required before adopting cloud-based solutions for business-critical needs on a wide scale. Enterprises will broadly adopt cloud computing when they can ensure compliance across the complete landscape, integration across critical business information and business processes, holistic application lifecycle management, regardless of deployment mechanism, coupled with guarantees on quality of service, high reliability, security and high availability. SAP has deep and broad domain expertise in delivering enterprise-class solutions which provide these essential attributes for companies of all sizes and across all industries. As a result, it is significantly easier to expand our portfolio in the direction of SaaS applications and services than it is for today’s SaaS vendors to move into SAP’s domain. SAP will therefore play a significant role in how the cloud affects businesses in the future because it is the most-qualified vendor to produce business-critical cloud-based products.”

Atul Saini, CEO and CTO of Fiorano Software, added, “Cloud computing is hyped up today. It’s a good concept, but it has been around in some form for a while. The real challenge is how software applications change their licensing models to adapt to the cloud and how customers adapt to new ways of licensing such technology. The challenges are both business and technical. On the business front, one has to convince customers to move to a new rental model and changing customer habits takes time.”

Surajit Sen, Director-Channels, Marketing & Alliances, NetApp India, said, “The biggest challenges associated with cloud computing as a model are the lack of information and understanding within all the players in this ecosystem. Most customers see the value in adopting such a model. Since this is not a technology decision the primary challenge is to evaluate and understand the business benefits and present the same to the management. Many cloud service providers are experimenting with pricing models and services that are viable in the market. This service like any other would go through an adoption lifecycle wherein there are going to be early adopters, early majority, late majority and laggards. In terms of technology the biggest challenge faced is a solution or service offering that offers secure multi- tenancy. For cloud computing to succeed, it is imperative that multiple customers should be able to share a common infrastructure without compromising on the security of their information. NetApp has built a solution along with Cisco and VMware which offers customers end-to-end multitenancy.”

“As cloud computing becomes part of an integrated solution; there will be many issues and concerns that will need to be addressed. These include control issues, such as security, privacy and lock-in; and service-level issues, such as integration, reliability and availability. Additionally, it will be important that organizations look at software licensing and governance in the cloud,” said Brian E Boruff, Vice President, Cloud Computing, CSC.

Opportunities galore

Cloud computing and SaaS are generating a whole new set of opportunities for all types of vendors in the industry. These range from those who would like to create a platform to deliver cloud computing to those who might want to write software that can be delivered in this new paradigm saving on large investments that would otherwise have to be made in product development and marketing.

Vikas Arora, Group Director, Enterprise Services Division, Microsoft India, said, “Cloud computing opens a whole new range of service offerings for vendors across the world. We believe that software delivery for most enterprises will reside in a combination of software on premise and accessed as a service. Hence, to provide an easily compatible and trouble free environment, vendors have the opportunity to scale up to a $20bn SAAS market by 2011(Yankee Group). Microsoft’s approach is to give customers the choice, flexibility and power of both software plus services. It is like a continuum, ranging from pure software to pure services approaches. Most customers will be somewhere in the middle. Different customers will make different decisions and even customers with similar situations will make different decisions for what they want on-premise and what they want as a service from the cloud.”

Vendors of point solutions can argue for one approach or the other. But either-or approaches don’t address all of the technology challenges and opportunities in today’s workplaces. In addition to providing customers more choice, software plus services balances the massive power of the Web to connect people, devices and information with the interactivity and performance of software on a machine with a powerful processor.

manjari.juneja@expressindia.com