Indian enterprises leveraging the power of hybrid cloud

Hybrid Cloud is the way to go as Indian enterprises intensify their reliance on a hybrid Cloud setup, eyeing substantial cost savings and organisational benefits. To better serve the needs of Indian enterprises and SMBs, most cloud companies have either set up local data centres in India, or are in the process of doing so - 

Hybrid Cloud represents the cloud model which orchestrates the mix of on premise Cloud, Private Cloud and Third party Public Cloud models to scale, meet and widen the data deployment options. This model offers several key advantages over using only private/ public cloud, especially for large enterprises that have considerable existing investments in IT infrastructure.

“This synergy benefits an organization to deploy high critical projects on an ‘On premise Model’, dynamically changeable workloads on a “Private Cloud” and customer facing, less critical projects on the third party Public Cloud,” says Aniketh Jain, CEO & Co-Founder of Solutions Infini Pvt. Ltd. “This segmentation basis on organizational requirements ensures resourceful usage of cloud models to enable high end flexibility and scaling. Enterprises benefit through the customization and flexibility, while Service Providers operate at moderate business costs.” 

Hybrid cloud’s climb to the ranks of an important IT infrastructure pillar can be attributed to the unprecedented benefits it provides in terms of deployment flexibility, resource utilization efficiencies, lower costs, as well as lower management overheads. These benefits, therefore, are responsible for truly delivering the best of both worlds.

Nikhil Bagalkotkar – Chief Technologist, Citrix observes that public clouds are here to stay but moving lock stock & barrel onto the public clouds for organizations is a difficult transition and this perhaps is eventually leading to the rise of hybrid cloud. “Most organizations are seriously looking at public cloud but have so far only managed to move Tier 2 and Tier 3 applications onto the cloud. Even large conglomerates continue to host and run their Tier0/Tier1 applications in the datacenter where they have a finer degree of control. This balanced approach of moving some workloads onto public clouds while retaining the core business applications in the datacenter/private cloud has led to the rise of hybrid cloud,” he says.

Comments Hitesh Arora, Director Strategy and Customer Advocacy – CRMNEXT, “With Hybrid Cloud, businesses have the flexibility to keep the core business logic on premise while adopting latest cloud technology for faster market coverage on cloud and thus bringing agility and stability together. We are seeing increasing interest of customers evaluating hybrid cloud depending on the type of system, no. of users and integration capabilities needed.”

According to Gartner, by 2020, 90% of organizations will adopt hybrid cloud solutions. “This projection further highlights the advantages brought to an organization through deployment of Hybrid Cloud which not only includes finding the right fit solution for a business’ specific requirement but also reduces trade-offs, technical glitches and breakdowns that result in deterioration of the overall performance. The liberty of availing technology according to your operational needs and revenue pattern is what makes hybrid cloud spearhead overall cloud adoption, as stated by Gartner,” explains Nikhil.

A Microsoft-Zinnov study done on hybrid cloud reveals that the hybrid cloud market is fast becoming a new standard for delivery of digital transformation.With the substantial cost as well as organizational benefits, enterprises are increasingly intensifying their reliance on a hybrid cloud setup.

“The report observed that hybrid cloud deployment at a steady rate could result in cost savings of anywhere between 5% and 30% for an enterprise (depending on the growth of virtual machines in an enterprise’s data centre and a proportion of workloads moving from private data centre to public cloud infrastructure), based on the output of its proprietary cost modeller." contends Meetul Patel, General Manager, Marketing & Operations, Microsoft.

He further continues that as per the survey conducted, over 40 percent of enterprises have planned or are planning to build a hybrid cloud infrastructure or transform their existing IT infrastructure. The primary reasons cited for adopting hybrid cloud solutions include, lowering total cost of ownership (54 percent), facilitating innovation (42 percent), enhancing operational efficiencies (42 percent), and enabling companies to respond to and meet customer expectations more readily (40 percent).

“Today, it is widely accepted across enterprises that there is no single, optimal solution for all workloads,” asserts Vikram K, Senior Director, Data Center and Hybrid Cloud (DCHC), HPE India. “Additionally, customers are no longer willing to wait weeks and months to deploy new applications and services. They expect infrastructure resources and services to be available to them on-demand. Hence, most businesses seek to implement a right mix of private, public, and managed cloud along with traditional IT to speed innovation and growth. It also helps address the challenges related to security and data privacy by providing flexible options where sensitive and client data can reside on a private cloud. Companies from across industries including financial services, public sector, retail, social media, and healthcare view this as an effective IT strategy for the foreseeable future.”

According to Anshuman Rai, Director Sales– Converged Platform & Solutions Division (CPSD) - Dell EMC, hybrid cloud provides the foundation for a cost-effective and successful digital transformation. “Today's most innovative organizations are enthusiastic adopters of hybrid cloud. The best platform for digital business is hybrid cloud, and its implementation can dramatically reduce the operating costs of IT. A global survey of business and technology leaders by IDG puts the average savings at 24%, and the average enterprise reinvests 40% of those savings in new technology-driven business initiatives. A fully configured hybrid cloud can be implemented in three months or less, unlocking new benefit streams of business agility, IT efficiency, and digital business. Companies with significant workloads in hybrid cloud have been able to implement digital transformation initiatives faster and grow revenue up to 2x.”

While Public Cloud Services are estimated to grow at 40% in 2017, Hybrid Cloud continues to dominate the Cloud Industry. Hybrid Cloud creates an intuitive framework for the service providers, and its adoption is expected to grow due to new early entries and high preference from global enterprises.

But is cloud a reality in India?
While discussing hybrid cloud, it also becomes pertinent to discuss on how popular has cloud become among Indian businesses. Deepak Pargaonkar, Senior Director – Solutions Engineering, Salesforce India believes that India has welcomed or embraced cloud really well. “I understand customers will have a lot of questions in mind before trying any new technology, but the end result has always been great. Like any customer using our Salesforce cloud can focus only on doing his business, without having to worry about when and how to upgrade the latest software to the next version. The curious customers always make the decisions to go on cloud. The cloud journey has started but as we see now, thanks to whatever efforts we took, lot of others are following suit. Today we do not have to spend time convincing or spending time on having a conversation with the customer of what cloud is. Today everyone knows that to transition to cloud is possibly the best way.” 

With the increasing prominence of the Digital India movement, enterprises from various sectors like government, banking, healthcare and education have been making their journey towards cloud and reaping significant benefits along the way. “SMB segment in particular has been increasingly open to adopting cloud services due to their disposition to focus on their core competencies and simplify the rest of the processes. As more and more institutions adopt SaaS, they are inching closer to achieving greater flexibility, control and visibility,” tells Nikhil. 

Rapid growth in internet adoption – fueled by government initiatives like demonetization and GST, growth of mobile data (the number of mobile developers is estimated to double from the current 300,000 by 2020), and digital transformation, led by the emergence of disruptive start-ups, especially in areas such as fintech, e-commerce, SaaS, are stated to be the key reasons for the deployment of cloud.

To better serve the needs of Indian enterprises and SMBs, most cloud companies have either set up local data centres in India, or are in the process of doing so.
But despite that, enterprises hang back from opting a full fledged cloud strategy due to compliance, data sovereignty and lack of direct connections with vendors involved in the process. Cloud Systems obligate partial or complete access to enterprises information, which few enterprises aren’t liable to vouchsafe. 

Hybrid clouds are a good fit for companies that:

•    Have considerable existing investment in private datacenter and legacy software solutions
•    Have unpredictable spiky traffic to their digital assets, typically driven by seasonal buying patterns
•    Have to compete with one or more disruptive player in the market, forcing them to innovate and improve their offering constantly
•    They are also a good fit for Indian companies that want to access markets outside of India, and provide their global customers with a fast and seamless experience
•    Travel and Transport, Retail, BFSI and Entertainment are going to be the most likely sectors to lead the pack on adoption of a Hybrid Cloud model.

“There are many reasons customers may not be able to adopt a full-fledged cloud strategy,” points out Sharath Satish, Office Technology Principal - ThoughtWorks India. “Some of which are:

●    They have core legacy systems that cannot be moved to a public cloud due to incompatibility of the packaged software solution they have licensed
●    They have an innate distrust of the public cloud, from the perspective of security & performance
●    They believe it requires heavy investment in data center and IT assets likes servers and network infrastructure
●    They are wary of the regulatory / policy issues around storing data on shared servers and data centers not operated by the company
●    There is a  lack of capability / knowledge in how to work with the public cloud within the current IT team.”

Traditional Indian Businesses on the other hand are still building an understanding of what the public cloud is all about. While the buzz has certainly permeated through the industry, there are still several myths that need to be overcome before Indian customers can truly reap the benefits of public and private clouds. 

Some of these myths are:
●    It will mean a loss of jobs since fewer people can manage virtual servers than physical ones
●    Customers are not able to see what they are buying, how can they guarantee that their investment is safe.
●    Moving to the cloud will make them digital/ agile/ make them disruption proof
●    Will have to scrap all existing infrastructure /applications if moved to the cloud.

The views of Nishikant Nigam, Chief Delivery Officer at CSS Corp are also somewhat the same. “Cloud is increasingly changing the way business is done,” he observes. “But despite the increased cloud adoption, enterprises are finding it difficult to identify the right cloud strategy and model, and still lack clarity in segmentation and prioritization of applications for cloud migration. Scores of enterprises are still struggling with critical questions such as -

What applications should I move to the cloud?
Which type of cloud is best suited for my requirements – Public? Private? Hybrid?
Which provider can offer me the most flexibility and support?”

Prasad Natu, Sr. Vice President – Infrastructure Services, ITC Infotech puts it that it is the perception concerning the security of the cloud deployment that seems to be the primary reason for caution for deploying cloud. Cloud companies, consultants and security companies are making a significant effort in increasing the awareness about the right models that can be considered by customers in developing the cloud strategy. “The other reason that is put forward by some of the customers is concerning the initial investments. There seems to be a lot of internal debate on the overall business case about the cloud adoptions. But nevertheless, Indian customers are investing in preparing for the high velocity cloud adoption. The benefits are being vetted out against the business needs with a very sharp focus on overall cost of ownership. There is a bit of uncertainly and concern over the initial spend , however, the business drivers over the next 24-36 months on the back of digital transformation of aspects of doing business will most certainly put to rest these concerns on initial spend.” 

Advantages of using Hybrid Cloud
 

Public cloud
.    Leverage scale and elasticity of public cloud for innovation and burst / spike capacity
.    Provide edge services to improve user experience for customers by leveraging cloud sites closer to end users, but retaining sensitive / key data and services in private cloud
.    Using hybrid as a model for testing out if public cloud is a viable option for your organization
.    Use hybrid as a way to get a disaster recovery site without investing in a whole new datacenter

Private cloud
.    Store regulated / sensitive data that you are not sure about moving onto a public cloud
.    Retain and maximize value of investment in existing IT infrastructure by using it to handle regular traffic
.    Use private cloud for workloads that require hyper-specialized hardware
 

Organizations, if not all but most of them are investing in their internal IT/private cloud/data centers, making a significant shift to public cloud non-viable from a RoI perspective. In this context, a hybrid IT arrangement could be a viable option that could drive cost optimization and help organizations maintain a balance of security and convenience.

Hybrid Cloud adoption in India market...
Cloud with its digitization capabilities has steadily become a core ingredient of modern day business IT set-up. Indian organizations are also slowly realizing that cloud gives them an edge in terms of cost efficiencies, business agility as well as delivering differentiated value. Hybrid cloud is uniquely placed here since it empowers organizations to leverage the cloud for services which can yield immediate value while freeing up resources to work towards optimizing the heavy, complex and legacy workloads in the datacenter.

The growth of the cloud industry has been spurred by the funding and investments in cloud tech startups, which have increased exponentially. In 2016, the cloud market saw an estimated 370+ deals with the average investments growing at CAGR 15% between 2012 to 2016. The hybrid cloud deals accounted for 45-50% of the total cloud deals that happened from 2012 to 2016, and these primarily focused on storage, automation as well as hybrid cloud management solutions. 

“Indian customers are looking forward for solutions that provide them high end virtualization with reduced commercial complexities of dealing with multiple vendors. Hybrid Model provides them a right blend of Public and Private Clouds on the same platform. Through a fully aligned Hybrid Cloud Model, enterprises are freed from managing day-to-day tasks that a data center environment demands. This holistically reduces maintenance and infrastructure costs and enables business to focus on other strategic measures,” supports Aniketh.

“Many Indian conglomerates are widely recognized as the early adopters of technology. In fact, many Indian start-ups are at the forefront when it comes to using cloud hosted technologies to disrupt established business models. As India’s footing in the global business landscape strengthens, we are posed to be the hotbed of cloud first companies that deliver business capabilities on a scale and speed unheard of earlier,” says Nikhil. 

Anshuman believes that as Indian IT organizations race to keep pace with the demands of the modern and rapidly changing business, they need to leverage a mix of both private cloud – because it is trusted, controlled and reliable - and public cloud – because it’s simple, low cost and flexible. “Hybrid cloud models help companies spend less on operational upkeep and more on innovative new projects. Hybrid cloud not only makes IT and the entire company more agile but it also streamlines operations and frees up budget for the things that really make a difference for corporations.” 

When it comes to total IT spends, the organizations’ finance departments are quick to realize that embracing hybrid cloud not only lowers IT spends but also helps organizations run workloads at greater efficiency in the private cloud. 

However according to Sharath Satish, Office Technology Principal - ThoughtWorks India, Hybrid Cloud is still a nascent concept for customers whose private clouds / data-centers are based in India. Out of the many reasons for this, the top two are -

●    Lack of access to high-speed WAN connections between their data centers and hyperscale public clouds
●    Lack of availability of Public clouds whose data centers are based in India, which some business require, due to regulatory restrictions around where they can store / process customer data

Enterprises who manage to be present on both online and offline channels prefer cloud over others. Major hybrid cloud industry contributors are from Logistics, Aviation, Telecom and BFSI. It’s also interesting to see that some of the Government Organizations have been preferring Hybrid Cloud and experiencing rapid growth. 

In the end…
The cloud journey in India is evolving but data security, vendor lock-in period and less availability of quality IT hardware infrastructure in semi-urban regions across the country are some of the challenges faced while deploying full-fledged cloud services in the country. Also there are integration and scalability challenges with public cloud for large implementations requiring complex integrations with back office systems.

Nonetheless, while there are concerns that still remain unsolved, hybrid cloud is the present and clearly is the future as it provides best of both the worlds for business as well as end customer, guaranteeing the customer high scalability, reliability, and security. 

Samrita Baruah
samrita@varindia.com