'Cloud To Replace Traditional Dedicated Server Model'

Managed IT services provider Netmagic recently announced its cloud offerings , namely CloudNet, CloudServe and Private Cloud. Sharad Sanghi, CEO and MD, Netmagic, shares his thoughts on the new offerings and the relevance of cloud for Indian enterprises in a tête-à-tête with Biztech2.com.

Tell us something about your new offerings.

CloudNet will allow customers to create a complete IT infrastructure including servers (Web/ DB/ applications), firewalls, load balancers and switches. CloudServe is predominantly an alternative to the dedicated server model. Servers can be configured and re-configured on an on-demand basis depending on varying business needs. Private Cloud is mainly targeted at large enterprises to meet their individual requirements. Through this service, enterprises can have a dedicated hosted cloud infrastructure. Large enterprises in BFSI and telecom are often not comfortable hosting mission-critical applications on shared infrastructure as they are supposed to offer high availability and meet compliance policies.

You were already offering hosted managed services; doesn’t that mean you were already leveraging the cloud model?

We were offering some applications through the cloud, for example, e-mail, spam filtering and certain security services. What is different now is that the computing infrastructure is being offered through the cloud. Earlier, we were just providing a subset of this; back then, we had dedicated servers and virtual servers, but that was about it. People could rent out virtual private servers but not the entire environment. They could not dynamically provision it on the fly. They could get a certain amount of compute power whether it is CPU, memory or hard disk. However, for some reason, if they wanted to increase or decrease this power, it was not possible.

How do you plan to address the security and performance issues related to cloud?

We have logical partitioning for infrastructure. Besides, we have firewalls and intrusion prevention devices (both physical as well as virtual) within the mix at much more affordable prices. The only way to address the myth related to security and performance is to get customers to experience the same. For example, if a customer signs up for a single virtual server and later finds out that the application they are using demands more resources, the same can be dynamically increased to meet performance requirements. This will prove the cloud’s mettle on the performance front.

Do you see the cloud concept succeeding in India?

I think cloud-based products will be successful in India, particularly in this downturn, as they help to bring down overall cost of ownership on an average by 30 percent. It cuts the time to go live; with the cloud, you can go live in hours rather than in days or weeks. You don’t need to sign long-term contracts or make any upfront investments. If your business is growing, you can add resources dynamically, if the business is not doing well, you can reduce the resources as well. Cloud helps to convert capex into opex, which is why I believe it will succeed in India.

What are some of the main concerns raised by CIOs in relation to the cloud?

We need to demystify the cloud. A lot of CIOs have heard the buzzword, but don’t know exactly what it means; they are not sure how secure it is. Based on our initial interaction with customers, these were some of the questions, which were raised. There is definitely a need for some training and education to make people aware. We have done pilots with some of our existing customers. The result of the pilot has been very encouraging. A lot of people have signed up for these new services because of the ease of provisioning, ease of expanding resources and not having to make any upfront investment.

What about the competition from mega vendors like Amazon?

Our initial launch is in India and none of these big players have anything significant rolled out in India. Besides, when it comes to accessing some of their services in other parts of the world, there are latency issues. These issues, though, may not stop them from rolling out services in India. However, we have a long experience in providing data centre infrastructure and managed services with industry-leading uptime. We already have 650 customers, who have faith in us. This should prepare us to face the global competition with élan.

Which verticals will be early adopters of cloud offerings?

I think these cloud offerings will be more used for certain areas like development, quality assurance, testing environments and disaster recovery. These are reasonably vertical segment agnostic solutions, but different verticals may adopt them differently.

I also see cloud computing as a replacement for the traditional dedicated server model, which a lot of service providers like us offer. Now a lot of customers will use cloud servers, which are predominantly virtual servers, but have the additional feature of high availability. I believe that a lot of midsize companies that traditionally used dedicated servers will start moving towards the cloud now.

Doesn’t that mean that the cloud will affect your existing business of dedicated servers?

I will be candid enough to admit that when we looked at the cloud about a year-and-a-half ago, one of our concerns was that will it cannibalise our existing business? However, I don’t believe it will; for the simple reason that we can now target a much larger market segment.

I think the benefit would be much more significant than the slight loss in revenue when a person converts from a dedicated server to the cloud. Besides, cloud is also a step in the direction of free computing, which will help us to reduce the cost per square foot. Hence, I believe benefits of the cloud far outweigh the slight loss in revenue that may occur when customers move from dedicated servers to the cloud.