IDC India Cloud Report: More money is coming from services than products in cloud computing

Companies in India are making a gradual move from on-premise legacy to different forms of cloud, according to IDC. “While the process is gradual, it is starting by migrating certain application workloads to cloud.”

IDC has highlighted the emerging cloud trends in its India Cloud Report - ‘India Cloud Cross-Vertical Demand-Side Perspective, 2014’, which is based on the India data cut that includes responses from 310 companies across verticals.

The report said that cloud services usage in India is largely limited to ad hoc projects (more so in small businesses) as line-of-business (LOB) users consider it an unproven technology, while their IT counterparts advocate it as mainstream usage; “optimized” usage of cloud is higher in medium-sized and large enterprises.

More than half of respondents have had challenges with their providers’ implementation but will continue with them, reported IDC.

When it comes to cloud investments, decision to invest in cloud is jointly made by LOBs and CIOs (79 percent), with overall cost guidelines from finance (57 percent). Business units decide which projects move to cloud, and the trend is across all verticals, according to the report.

Existing technology/service providers are the biggest influencers (about 77 percent of the cases) for cloud; direct engagement from the cloud service providers or their distribution representatives (in about 55 percent cases) also drives sales.

The study further stated that on-premise legacy carries the highest workload in 2014. Public cloud carries the highest workload of the four cloud platforms.

Majority of the respondents said they would be willing to migrate to virtual/hosted private and public cloud from existing outsourced IT portfolio and/or on-premise private workloads.

ISVs, systems integrators (SIs), and cloud SPs are preferred vendors for workloads across all the application categories.

Most external assistance in cloud deployment is needed in training and education of cloud administrators and users. According to the report, telecom SPs and SIs are the most preferred partners for sourcing skills for on-premise or hosted cloud; Google, Amazon, and Microsoft are the most preferred external specialists.

Primary reasons for usage of on-premise private cloud are security concerns on public cloud (34.5 percent) and compliance (25.5 percent).

Hosted private cloud is preferred over public cloud for IT architecture compatibility, reduced energy consumption, and performance guarantees meeting the application requirements.

Preferred vendors for hosted private cloud are IT vendors and telecom SPs with a good working relationship with public cloud providers and having multiple datacenters spread across country.

IDC highlighted some of key emerging trends in cloud services:

-- More money is coming from services (including open source for standards) than products in cloud computing.

-- Ownership of the network - thus blurring the lines between technology and service providers, green computing (highly distributed energy-wise cluster computing, intelligent management of energy usage for network devices)

-- Smaller and niche players (including Sify, Netmagic, Allied Digital, and Omnitech) are providing managed clouds / expert services such as engineering experts, security solutions, and 24x7 support to differentiate themselves.

“IT in an organisation is no longer a support function, it is a lever to achieve business goals. And cloud is the technology that is helping organisations realise quantifiable benefits. While on-premise legacy is still the dominant form of IT, the share of cloud services is only increasing while still largely limited to ad-hoc projects. Among cloud services, while highest deployments are in public cloud it has its fair share of concerns in security and vendor lock-in. Thus, organisations are increasingly looking at ways to deploy cloud on on-premise, hosted and virtual private clouds,” said Rahil Maniyar, senior analyst, IDC Consulting.

“On the vendor side, players are trying to carve out a niche for themselves by providing differentiated services compared to industry leaders. While smaller players are concentrating on providing managed clouds/ expert services such as engineering experts, security solutions, and 24x7 support to differentiate themselves, large players are trying to own the network, provide energy efficient services like distributed energy-wise cloud computing,” he added.