This is for certain. At any rate, the cloud is not simply "water vapour", as the boss of a software giant had once predicted. Even for an industry prone to hype, the buzz surrounding cloud computing is, indeed, sky-high. The vendors are reinventing their technology strategies with cloud offerings. Cloud computing is being offered by vendors of all hues and shades.
Cloud computing promises to provide cost-cutting offerings that are strongly appealing to SMEs. After all, the more popular cloud computing gets, the less hardware SMEs will need to buy. The compelling benefits of public cloud computing for a typical SME are: no initial hardware investments, pay-as-you-go fees, and quick time to value.
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Santanu Ghose, Country Head, Converged Infrastructure Solutions, HP India, says, “Cloud Computing Services helps to address these issues very well and will help to address the compute requirements of SMB very significantly. With availability of fibre and connectivity across the country, the ability to connect to a service provider is no more a challenge. This connectivity accounts for the increased adoption of Cloud Computing amongst SMB's. It is expected about 35% of SMB compute requirement will shift to Cloud by 2013. The ability to get SLA Based service and shift from Capex to Opex are also catalysts for triggering adoption of Cloud in the SMB segment.”
Cloud computing has been well understood as a profound shift in the IT model, evolving over time and having long-lasting implications for how IT builds applications, runs and delivers those applications, and how end users consume applications across an ever-expanding range of devices. Cloud has the potential to change everything about IT, allowing enterprise IT to create competitive advantage by intelligently and dynamically anticipating and responding to business needs.
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“There are many factors that drive an organization towards cloud computing. Fast go to market and ease of management are the key factors to begin with,” says Anuj Mediratta - Founder & Director Technology Ace Data Devices Pvt. Ltd. He adds, “SMBs don't need to invest huge money on setting up the infrastructure and procuring those applications. They can pay as they use and defer their large expenses.”
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Companies have tested the waters and have gained the confidence to migrate their critical applications to the cloud. According to Annual Cloud Maturity Index, 91% of organizations in India have considered cloud relevant to their businesses. The Cloud Computing in Asia Pacific: the Annual Cloud Maturity Index is a VMware-commissioned study conducted in association with Forrester Consulting. As a stepping stone to the journey to cloud, several organizations embarked on the same with Server virtualization. “Apart from huge savings in capex, implementations of virtualization also helped customers reduce their opex costs, like cost or real estate, power, cooling etc. Companies are increasingly considering, evaluating and consuming compute services in the cloud,” says VMware.
Cost-saving, incremental model and flexibility are the key drivers for cloud computing. According to the Cloud Computing in Asia Pacific: the Annual Cloud Maturity Index report, data privacy has been cited as a major barrier to cloud adoption. Apart from this, factors such as fears of vendor lock-in, loss of control over data and interoperability issues between different clouds are the other major challenges or fears that will act as a barrier for cloud adoption.
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"Cost savings and time-to-value are the leading drivers in cloud adoption today. Other important drivers are: paying only for what is used, software licence savings reduced IT support needs, rapid deployment, scalability and elasticity," says Vamsicharan Mudiam, Cloud Solution Sales Executive at IBM India/SA.
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According to Vishak Raman, Regional Director, India and SAARC, Fortinet, “Cloud computing delivers IT on demand scalability and at a relatively low cost.” There are several good reasons for SMBs to adopt it. Firstly, organisations only pay for what they use, thus moving IT expenses from a Capex to a more sustainable Opex model. This is a significant driver as SMBs are often constrained by capital. Real estate and IT staff cost are related issues. By allowing firms to do away with equipment on their own premises, cloud computing allows rental savings and quicker deployment of IT services. SMBs also don't need skilled manpower to manage and secure the day-to-day running of computing equipment, or handle software/hardware upgrades and licensing issues. Besides taking care of these, reputable cloud providers also have back-ups and redundancies in place, giving SMBs disaster recovery protection measures that would have been costly for them to match on their own. Lastly, through the cloud model, SMBs can access the same powerful computing tools used by large enterprises, helping them become more competitive.
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Bobby Mon, Head - Enterprise Business, SMB, Dell India says, “As far as SMBs are concerned, we feel that there is a lack of understanding on what benefits cloud computing can bring to SMBs. There are also too many marketing buzzwords associated with cloud computing.”
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Amit Mehta, Director, Marketing, EMC India & SAARC, says “Cloud Computing enables SMBs to dynamically scale their computing capability without having to invest in costly infrastructure. Another factor that is helping SMBs marking a growth curve is availability of resources and the cloud model is not only aiding availability but also enabling SMBs in optimum utilization of these resources which is essential for their development. To retain the competitive edge, SMBs are relying on cloud which is cost effective yet has the ability to provide solutions across the boards.”
Hybrid Cloud
There is no reason to disbelieve that public cloud computing offers some compelling benefits, namely, no initial hardware investments, pay-as-you-go fees, and quick time to value. However, these are offset by worries about security, loss of data control, and vendor lock-in. On the other hand, though ironclad security and control are offered by private clouds, the scale and economics restrict most of the SMBs from venturing into private cloud landscape. In such a scenario, the hybrid cloud comes to the rescue of those willing to have the taste of cloud. In the hybrid cloud domain, the solutions provide the flexibility and affordability of the public cloud with the security and peace of mind of a private cloud. Adding hybrid cloud solutions can stand in good stead for the channel partners to grow their businesses among SMBs that want the best of the public and private clouds.
It is the combination of public and private models that is particularly appealing to SMEs.
Advantages for SMEs
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Rajesh Rege, Senior Vice President - Data Center, India & SAARC, Cisco says, “Small businesses owners are very satisfied with cloud computing services, according to Cisco's SMB Cloud Watch survey, rating their average level of satisfaction as 7.8 out of 10. Of all the benefits cloud computing can provide small businesses, the most important is that it allows them to focus on their business instead of getting sidelined by IT.”
One of the benefits of the cloud computing model for SMEs is its low barrier to entry. Risks are limited because contracts with service providers are generally covered by service level agreements. These contracts can be cancelled at any time.
For the channel community, this means only more opportunities, as the cloud will increase the penetration of IT services in the country. The market opportunity will be huge and no single vendor would be able to address it. Channels can themselves look to become cloud computing service providers for SMBs and niche verticals partnering with ISVs who can then deliver specific applications on the cloud.
Proponents of cloud computing are of the firm belief that the cloud technology has the potential of simplifying business processes for SMEs. Coupled with that, the technology adds value to software applications and lowers costs by moving the focus of IT applications outside the limits of traditional businesses.
Cloud computing is expected to help SMEs offer more cost-effective services to their customers, improving efficiencies in the process.
Finally...
SMEs have been the most aggressive segment to adopt cloud services. Since their IT needs are less complex and they have fewer legacy applications, and less IT support compared to those of big enterprises, SMEs are often willing to outsource the delivery and operation of IT to third parties, ensuring that they focus on running their businesses. According to a research by McKinsey, SMEs with fewer than 250 employees are more than twice as likely as big enterprises to adopt cloud services.
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Cloud Computing: Adoption Drivers for SMBs.
* Reduced costs: Cloud computing reduces an SMB's costs for computers, software, networking management and overall IT expenses. With cloud computing, a business pays only for what it uses.
* Automatic Updates: There is no need to worry about future software and hardware updates; since the software and equipment is centrally-located.
* Remote Access: Anyone can access and update information wherever they are working.
* Disaster Recovery Protection: With data safely stored in secure data centers instead of a server room, losing power due to a thunderstorm or a cut power line is no big deal as cloud providers have backups and redundancies in place.
* An Effective Solution for the SMB: A small business can utilize the same tools that Fortune 100 companies use and can do this because with the cloud a business will only pay for what it needs.
* Deploy Projects Faster: A standard server installation can take weeks; ordering hardware, installing software, etc. With a cloud, a service provider can have new computing power implemented with a single phone call or support ticket.
* Green Computing: Being green is the key these days; cloud computing uses less energy than traditional data centers.
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Kamal Gulati, Head India Operations, Atempo, lists following as adoptions drivers for cloud computing among SMBs
* Ease of upscaling & downscaling
* Ease of manageability without needing to higher experts
* Focus on business / functionality rather than technology
* Availability of best of the Enterprise class solutions for SMB at optimum cost
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According to a recent report by AMI-partners shows that in emerging markets, such as China, India, Brazil and Russia, SMB cloud services' spending and investments through service providers will increase nearly six fold from $111 million in 2011 to $615 million by 2015.
* This represents a four-year annual growth rate of 54 per cent. Additionally, close to 35 million SMEs in India contribute about 45 per cent of the industrial output, 40 per cent of exports and employ 42 million people, according to the SME Chamber of India Web site.
* Cloud Services to outpace spending on traditional IT Services over the next several years, rising to 44.2 billion in the US alone by 2013
* Worldwide cloud service revenues to reach 149 billion by 2014: Gartner
* Between 2010 and 2014, spending by SMBs globally on cloud services will rise at a compound annual growth rate of 13 percent to more than $95 billion: AMI Partners.
KEY TAKEAWAYS
* Hybrid Cloud Solutions enable SMBs to cost effectively extend IT functionality
* Hybrid Cloud Solutions are flexible and can be selected to fit a customer's specific needs
For more contact:
Deepak Singh
deepak@varindia.com
