Friday, October 05, 2012

CLOUD COMPUTING: FLIP SIDE

Cloud Computing has been Hyped Ever since its Evolution by Amazon. But Inherent Contradictions in the Concept Threaten its Potential as the next big thing in The IT Services Space. 

Cost reduction was the sole purpose of cloud computing but India does not get a benefit over there either, as cloud as a service is at a nascent stage in India and the costs of implementation are very high compared to the dollar driven markets. In addition, while cloud computing requires all original software on which one could use the platform, the Indian market still continues to be hit badly by piracy, with 65% of the country using pirated versions; the Indian IT industry loses a whopping $2.03 billion due to piracy as per an IDC report on global piracy. Security on the cloud is again a major concern. In the eighth Annual Global Information Security Survey CSO, 12,847 technology executives around the world were surveyed and most of them were not confident about putting the data on the cloud. Almost 62% cited security concerns. Out of the 49% who have even entered the cloud, a major 39% have deeper concern about their data safety. In a report from Ernst & Young, 72% of respondents from India said they were not ready to take up cloud computing and admitted to deep concerns on security. Vishnu Prashanth P., Senior Manager, CSC quotes “Many of the business in India are slow in adopting cloud solutions because they are not sure about data management on the cloud.” Gartner itself interviewed 148 Indian companies recently and 42% had not deployed or were unsure and negative about deploying cloud computing through 2011.

Sunil Chavan, Director-Software Group & Solutions, APAC, Hitachi Data Systems tells B&E, “Considerations like managing cost, creating virtualized – cloud ready infrastructure for IT agility, adoption of low cost, cloud-based storage solution with a utility-based, “pay as you grow” model, driving revenue growth, improving customer loyalty and generating a higher ROI will be key areas to shift on the cloud”. Vendor lock-in is another big concern for CIOs that’s not allowing them to take the big plunge as cloud consumers. Once you sign up with a cloud service provider, the switching costs and portability issues become huge. So interoperability and standards become critical inhibitors. Even disaster management needs to evolve in the instance of any mishap from the service provider’s end. Gartner also points out that a user company needs to ascertain where its data is being hosted and whether the vendor is complying with the laws of that country. Also, customers need to ascertain the safety of their data if the vendor goes bankrupt or gets acquired.

All in all, while clouds provide significant cost and scalability advantages, deploying the technology is not without a fair share of contradictions and risks, especially with respect to the Indian market. As it stands today, the Indian IT- BPO market, which is estimated to be around $71.7 billion and which contributes 5.8% to India’s GDP, has already developed much of the required infrastructure to sustain for the next 10 years. These companies may attempt to achieve piecemeal objectives through cloud computing adoption, but they look largely unlikely to pursue it as an alternative to their existing framework. Cloud computing could only be helpful to SMBs who will be entering the booming Indian IT market, and there are numerous instances of those happening. Since they aren’t normally amenable to adopting proper diligence and being technology savvy, they may ignore (and in fact some of them are ignoring) the disadvantages in favour of enormous cost savings. In essence, while the hype is big, this is an idea half a decade too early into India!


Source : IIPM Editorial, 2012.
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