Cloud: The reality that enterprises cannot escape

20-25% of outsourcing contracts now relating to Cloud; IT services companies that don't invest in Cloud may be making a mistake, say experts

Even as many still regard it as a 'new technology', experts and senior industry leaders are of the view that Cloud is increasingly becoming a game-changer for Indian information technology (IT) services companies. According to leaders in the sector, as much as 20-25 per cent of the large outsourcing deals now include 'flavours of cloud'.

Clients across industries have started to see benefits from adoption of Cloud and are more ready now than before to invest heavily into this technology. Thus, IT services providers with higher Cloud capabilities stand to benefit higher going forward, experts said.

Cloud computing, in simple terms, refers to storing and accessing data and programs over virtual infrastructure through a network (which is typically the internet), instead of physical infrastructure such as servers and hard drives. The use of Cloud helps in reducing capital costs of installing computers, services and other machinery.

IT industry body Nasscom had in its Strategic Review for 2014 said that Cloud along with a few other technologies such as internet of things, smart grids and 3-D printing would drive key client investments during this year.

"We see flavours of cloud or cloud in its entirety in most of our large outsourcing contracts," said Anand Sankaran, president and global head of infrastructure & cloud at Dell. "Though the cloud component in large contracts could be only 20-25 per cent of the total order, it has 80 per cent of the weightage in the final decision making."

Looking at the current trend in the market, Sankaran is of the view that if any Indian IT services provider is not making serious investments into creating capabilities around Cloud, it is making a "big mistake".

Raghunath Govindachari, vice president - research and innovation at mid-size IT services company Mindtree also says that there has been a "significance change" in Cloud adoption by clients since the beginning of this year. Customers are experimenting with different types of workload on Cloud, he said.

"As Customers consume Cloud application services (that is, build or move workloads to Cloud) from service providers like us, it is an expectation that we handle the Cloud management services as well," Govindachari added. "This includes the typical infrastructure services support like 24/7 monitoring, operating system patching and anti-virus to name a few. The difference to note though is that these areas require skills in software defined environment, rather than traditional networking, virtualisation skills."

India's second largest IT services company Infosys is also seeing an increased apatite for Cloud from its clients. Saju Sankaran Kutty, assistant vice president and regional sales head - Cloud and infrastructure services at Infosys strongly believes that "Cloud is no more a buzzword". He said that clients have moved forward from the question of whether or not to adopt cloud and are instead looking at how to maximise business value from it.

"Cloud is a reality that enterprises cannot escape," he said. "Leveraging the capability of the cloud has proven to be a strategic differentiator in the way enterprises do business today. With technology as the game-changer, enterprises are turning to the Cloud to gain breakout opportunities. Clearly, there is much more than just excitement for clients."