Tuesday, November 1, 2011

The Cloud Computing Paradigm

by Avinash Pitale Co-founder & Joint Managing Director, Omnitech InfoSolutions Ltd.

A major shift in the acceptance of cloud computing will soon be seen. There will be increased adoption of cloud by large enterprise organisations. This will be due to increased market demand, delivery of predictable service levels and improved governance to resolve business domain specific challenges.


The buzz around cloud computing has triggered a need for various market segments to evaluate the subsequent scope of growth in the technology setup. Key factors influencing evaluation and focus of cloud computing for various sectors are:

Service providers: Large and medium datacentre hosting service providers and Managed Service Providers (MSP) are testing various technologies to build low cost private clouds. Various technology partners are providing cloud offering to their MSP partners for enabling them to create private clouds.

Platform and application providers: Fundamental advantage of cloud computing is pay for the usage financial modeling and multi-tenancy for the applications to reduce resource utilisation. The coming years will encourage various application and platform providers to scout for various cloud malls for placing their products to increase market reach. The IT industry will see a different format of licensing policies based on SaaS model.

Customers: Most CIOs have started seeing value in using cloud as a delivery model for their IT requirements to reduce cost of operations and improve go-to-market timelines. But most of them are in the process of using cloud technology for their test bed and not for production site due to various apprehensions such as security.
Cloud computing and its impact as defined by various technology evangelists depict the diverse set of thoughts associated with the term. Most enterprises especially SMEs are still trying to understand the exact value and flexibility that cloud computing can offer to them.SME customers are holding back lot of process automation initiatives due to lack of infrastructure for initial testing. Elastic cloud modeling shall help SMEs undertake new IT initiatives at a fairly low cost. This is certainly going to increase their competitive edge in the market. As the cloud model offers a faster Return on Investment (RoI), SMEs are likely to be the early implementers of cloud.

The BFSI industry has traditionally been the early adopter of various IT technologies and it considers cloud computing has the potential to be path breaker that can deliver cost effective services. Hence, major banks have started preparing themselves by testing their applications in the cloud. But they do restrict themselves due to issues like non-clarity in regulatory compliance and data security. Major banks and financial institutes have been planning to create its private cloud to bring all business outfits under one roof thereby reducing cost of compute and storage. But using public cloud for their business purpose is still far flung.

Currently cloud computing has been discussed by technology wizards with various terminologies like IaaS, DRaaS, PaaS, SaaS, etc. Sooner or later these technology norms would be converted into business delivery models to drive various industry verticals to deliver their products more effectively and efficiently. Due to flexibility of operations and pay for usage revenue modeling, many business verticals have started redefining their business models to create better market reach.

Cloud computing drives various benefits such as reduced total cost of ownership, improved SLAs, infrastructure availability, elasticity of operations, freedom from licensing management overheads and operational flexibility. But technology complexity also brings forward various business challenges such as data security, application security, legacy application integration in cloud and risk of dependency on cloud service providers.
Movement from private cloud to public cloud will take little more time since the industry still carries a lot of apprehensions such as data security, intra country data exchange regulatory issues and confidentiality.

Most SME customers will prefer private clouds than public clouds for their production sites. Large private sector customers will build their own private cloud and are less likely to move into public cloud for next couple of years. Various mid-size ISVs have started using public cloud for testing their applications.

Currently, public cloud is also being used by the customers who may require compute and storage infrastructure expanded capacity for a temporary period. There have been success stories for public cloud providers wherein good amount of customers have outsourced their enterprise mail services.
One of the inhibitions for moving to cloud is the fear of getting locked with a certain service provider. In such a scenario, interoperability will offer a smooth transition of applications from one cloud to another leaving no space for monopolistic market. Many open standards for the cloud are being contemplated by major vendors in the cloud space. Probably such standards can act as a catalyst for the cloud movements for customers.

Legacy systems issue is another area of apprehension for moving to cloud for many customers. Systems that do not support virtualised environments may not be able to move to cloud. They need to be changed or operated in standalone mode.

There has been a lot of debate on security of information in the cloud model, especially when data is on the public cloud. It is critical to establish a code of conduct for managing and protecting data. Also, it is imperative to ensure that a legal framework is in place for when data moves across country borders.


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