Cloud computing: Now & beyond 2013 - I

by Sharon Lobo    Dec 17, 2012

Cloud AdoptionUndoubtedly, cloud computing can be counted amongst the most hyped technologies ever. And the last 5 years bear witness to this fact. In the last half decade, every IT vendor or analyst has prophesied how this technology will change the way we perceive and consume technology. However, the irony is that we were users of cloud even before we were made aware of the tag. Services like Hotmail, Yahoo Mail, Gmail, Skype etc. were all delivered via cloud. Even today, cloud continues to remain hyped, according to Gartner’s 2012 Hype Cycle Report, with a probability of achieving a plateau of productivity in 2 to 5 years. So has all this hype helped in the adoption of the cloud? In this first of a two part article, let’s take a look how businesses perceived and adopted cloud in 2012.

The story so far…
Ever since, cloud took shape of hype, IT vendors on various forums have always endorsed it to be the solution for every enterprise regardless of the industry or category it belonged to. It was mainly large enterprises who were early adopters of the cloud and too private cloud. Now, private cloud kills the whole concept of cloud, since the entire infrastructure is now managed by a third-party instead of the business to which it belongs. However, this was a positive step towards cloud’s adoption. Surprisingly, public cloud, which was primarily targeted towards SMEs, never saw an substantial uptake in this segment, with security concerns and weak SLAs being the key concerns.

The perception and obstacles
This year, at the EMC Forum 2012, while speaking to CXOtoday, Rajesh Janey, President - India & SAARC, EMC, made an interesting comment, “I feel the movement to the cloud is not defined by the size of an organization, instead it is defined as an organizations ability to adopt an IT as a service model or continuing to remain in an owned model.” If we validate this comment with the way organisations have adopted cloud, it holds ground. Not all large enterprises or all SMEs are game for cloud. It all depends on the risk appetite of an organization.

For instance, in the large enterprise space, the BFSI segment, which was considered to be a major adopter of cloud had its reservations as Pravin Lal, Director, Sapient Global Markets explains, “To be in heavily regulated sectors, such as the financial services sector, the deployment of a cloud computing solution is likely to come under a greater degree of scrutiny than in other sectors. Addressing data security concerns through certifications, neutral third party security and privacy audits and tighter contracts will lead to a higher level of cloud adoption.”

In addition to regulatory issues, it is the unclear SLAs and models that gives jitters to enterprise when they consider moving to the cloud as Indranil Mukherjee, IT Manager, Nicco Corporation says, “One of the key reasons why enterprises are apprehensive in terms of not moving to cloud for their sensitive applications is that most SaaS vendors tend to be rather secretive about their security policies.”

It is true there are some vendors that are not transparent enough and they go to the extent of hyping the adoption of an already hyped technology! As Praveen Bhadada, Director, Zinnov Consulting puts it, “Currently, there are full-fledged cloud computing companies, which are entirely charging on the basis of your usage. However, I agree that the models here are not that well defined and these companies have invested a lot and so look at holding on to customers for a long period of time.”

Another analyst, Sanchit Vir Gogia, senior analyst at Forrester agrees with Praveen, “Trust issues have always been there even before cloud and it would continue. As a result, it is imperative that businesses adopt cloud progressively and keep evaluating it. Also, no business would want to put its entire operation on the cloud and in fact not everything can be put on the cloud.”

However, it is not just concerns pertaining to compliance or not well defined models that has temporarily dampened cloud adoption, the current economic scenario is equally responsible, as Kumar Gs Das, Research Manager, IDC Retail Insights-Asia Pacific explains why there won’t be an immediate uptake of cloud amongst retailers in the APAC region, “The growth of retail industry in the Asia Pacific region has slowed down as China is experiencing a slowdown in its services and manufacturing sectors, along with the Indian economy that is weakening due to rising inflation and falling rupee. Thereby, the plan to move into virtual platforms does not appear to be immediate and would take off between two and five years.”

The trends
Despite, all the apprehensions about cloud is not that gloomy when it comes to client-vendor relationship. For instance, in the same BFSI segment, relatively unknown entities have adopted cloud, as in the case with Pondicherry Co-operative Urban Bank, which selected IBM SmartCloud for its Core Banking Solution (CBS). This itself shows that businesses are beginning to trust vendors with their information and also reiterates the fact stated by EMC’s Janey.

Also cloud maturity plays an important role in its adoption as Vishal Anand Gupta, Joint Project Director HIMS and Manager Systems at the Calcutta Medical Research Institute (CMRI) states, “As cloud technologies mature and security catches up, more hospitals will likely to move more and more systems to the cloud, so they can focus on their core business objectives.”

From all the above instances, it is evident that there are perpetual issues like security and compliance, and there are temporary issues such as economic slowdown, weak SLAs, regulations that will continue to hound the adoption of the cloud. However, no one can deny the fact that cloud will continue to overcome this hurdles and someday be the de-facto medium of consuming technology. In the concluding part of this article, we shall see how cloud is redefining the role of the CIO and kind of disruption it would bring about in an organization’s IT practice in 2013 & beyond.

(With additional inputs from Sohini Bagchi)