It's All In The Cloud

If you're an optimist you will see that the economic slowdown did come with a
few blessings in disguise for enterprises. This was a time when companies
decided to consolidate operations, become leaner in terms of shedding extra
employees and put off a lot of their IT purchases to buy only those things that
were urgent.

Yes, in a sense they were becoming frugal but a correction was wanting. And
this was when companies began exploring different options that were cheaper and
fulfilled their requirements at the same time. The same applied to their IT
shopping lists. While some could be put on hold there were others that required
immediate attention.

This is where offering solutions-as-services comes in. Increasingly, we now
see this trend of offering a pay-as-you-use model among vendors, but one wonders
whether there are many takers for this in India. The most common form, or most
talked about in the recent past, of everything-as-a-service (EaaS) is
software-as-a-service (SaaS) which has of late gained a lot of steam in India.
The basic idea behind services-as- solutions is to offer an alternative to
making heavy investments in hardware and software.

“When it comes to IT, increas-ingly everything is being made available as a
service. Gone are the days when companies would have to invest in software
licenses, hardware and headcount to simply keep the lights on,” said Jeremy
Cooper, VP-Marketing, APAC, Salesforce.com.

Shedding more light on the trend of offering solutions-as-services, Frank
Gens, Senior VP and Chief Analyst, IDC said, “An IDC survey of IT executives,
CIOs, and their line of business (LOB) colleagues shows that cloud services are
'crossing the chasm' and entering a period of widespread adoption. IDC expects
the cloud adoption trend to be amplified by the financial crisis. The cloud
model offers a much cheaper way for business to acquire and use IT. In an
economic downturn, the appeal of that cost advantage gets greatly magnified.
This advantage is especially important for small and medium businesses (SMBs), a
sector that will be key target in any plan for recovery.”

As mentioned, the benefits of this model are plenty. The client does not need
to buy software and servers, they can just access it over the Internet and pay
for what they use. This also eliminates the need to pay for IT upgrades and
maintenance and the customer gets all the support they require through the
service provider.

Offering solutions-as-services has evolved from the basic necessity to save
costs. “The very genesis of SaaS (applications) and PaaS (platforms) was a
simple question: Why are consumer applications so easy, but enterprise IT so
hard? Our response to that question has now become the world's most popular CRM
application, Salesforce CRM. For Salesforce.com, the evolution from SaaS to PaaS
was driven by customer demands approximately three years ago. They were
experiencing incredible success and cost savings from our SaaS-based CRM
solutions and were 'desperate' to develop custom functionality and apps to
deploy SaaS in other parts of the businesses. That is what gave birth to The
AppExchange and Force.com,” explained Cooper of Salesforce.com.

“When it comes to 'IT', increasingly everything is being made available as a service. Gone are the days where companies would have to invest in software licenses, hardware and headcount to simply keep the lights on” Jeremy Cooper VP-Marketing, APAC, Salesforce.com	“SaaS makes sense for SMBs in the current economy. Most SMBs are cash-flow-financed instead of debt-financed, and the pay-as-you-go model lets them spend more money on service configuration than on capital costs” Ross Brown VP-Solution Partners, Microsoft

EaaS defined

The next time you pitch for a client who wants to upgrade their IT
infrastructure, try offering them solutions-as-a-service. Small medium
enterprises, retail, banking, BPOs and the government are booming segments in
India. If we look at the kind of IT require-ments of their employees you will
see that there is a lot that they have or want that they may not necessarily
need. Customizing solutions as services for these segments is what will make you
stand out.

By deploying EaaS you help your client decrease their dependency on hardware.
All the applications are available for them in the cloud. And there is no
dependency for accessing those applications from a particular hardware or
certain location. Each user is provided with a username and password using which
they are given access to the information in the cloud.

Salesforce has been pionee­ring its vision of 'No Software' for more than a
decade and today more than 63,200 companies worldwide-including hundreds in
India-login to www.salesforce.com, to manage their business and customer
information. “They are not buying software. They are simply using an Internet
browser and a monthly subscription model. That is the power of the
software-as-a-service (SaaS) and cloud computing models,” stated Cooper.

EaaS components

The everything-as-a-service market is a booming one with many additions. It can
broadly be categorized into software, platform, infrastructure, security and
communication-as-a-service.

In the SaaS space, Salesforce.com has been a pioneer. The company also allows
customers and partners to leverage its infrastructure and platform (force.com)
to build their own SaaS applications. “Force.com is the fastest platform for
building and deploying enterprise business applications that run in the cloud.
Nucleus Research recently found that companies building applications on
force.com were able to do so five times faster and at half the cost of
developing on .Net. Again, they are developing these applications without
significant investments in hardware and software, so they can go from idea to
success in a matter of days or weeks versus months or years,” informed Cooper.

“The interesting thing about the platform is that many people believe that we
developed our CRM applications first. But, in reality we had to develop
world-class infrastructure and our multi-tenant platform first. It is the
foundation that enables performance, scalability, security and reliability of
our CRM applications. The rest as they say is history. PaaS is now a material
part of our business-and is a key differentiator in winning CRM deals,” said
Cooper.

Solutions available

For any business, data is vital and the need to secure that data is of utmost
importance. Securing of data can have two parts to it. You can either buy
security-as-solutions from security software providers or you can outsource the
complete storage of your data on a service provider's data center.

Finjan, a provider of unified web security solutions for the enterprise
market, recently launched Vital Cloud and Vital Cloud Hybrid. These enterprise
web security solutions address the needs of enterprises as well as Managed
Security Service Providers (MSSPs). Speaking about the solutions, David Reichman,
Executive VP and COO at Finjan stated, “Vital Cloud and Vital Cloud Hybrid
solutions are the first cloud security solutions extending on-premise unified
web security into the cloud. With these scalable solutions, it is easy to apply
consistent security policies to users, regardless of their location. The mix of
cloud and on-premise security allows each specific enterprise to have a tailored
solution according to its needs. This minimizes the total cost of ownership
while retaining policy control to the full extent and keeping minimum latency to
ensure the quality of end-user experience.”

According to a report by Forrester Research, infrastructure-as-a-service (IaaS)
offering is an area of cloud computing that currently receives the most market
attention. This service allows pay-per-use hosting of virtual servers at an
external cloud service provider, and operating an internal cloud, where the IT
department offers virtual servers-as-a-service.

The findings of the Forrester review reveals many important facts: About 25
percent of all enterprises plan to adopt IaaS via an external service provider;
Firms are slightly less interested in internal clouds than they are in external
IaaS and large business respondents report more awareness, interest, and
adoption of external IaaS than small business-they also report the same for
internal clouds.

HP Adaptive Infrastructure-as-a-Service offers you a pre-built application
infrastructure with a design based on HP's Adaptive Infrastructure innovations
and delivered through automated processes and procedures. The technology can be
purchased as a service, with no capital outlay, enabling clients to take a rapid
path to infras­tructure and application modernization at reduced risk and cost.

Talking about the market, Ross Brown, VP-Solution Partners, Microsoft, said,
“SaaS makes sense for SMBs in the current economy. Most SMBs are
cash-flow-financed instead of debt-financed, and the pay-as-you-go model lets
them spend more money on service configuration than on capital costs.”

Brown added that Microsoft was seeing “significant uptake” in its Business
Productivity Online Services suite, which includes hosted versions of Exchange,
SharePoint, Office Communications Server and LiveMeeting.

Trends in the space

According to an IDC report, in 2009, IT 'Cloud Computing' service
offerings-including software-as-a-service (SaaS) hosted delivery model-will get
tested and adopted on a larger scale and will perform even better than in 2008.
The cloud model's advantages of lower capital outlay and operating costs,
coupled with the reassurance of more major players coming on board and building
capabilities (including enabling and educating the channel), will encourage more
customers at the margin to invest in cloud offerings.

As per the report, enterprises which have been shying away on account of
issues of security, connectivity etc, will be forced to re-evaluate the model.
Organizations across verticals will evaluate different models with services
delivered through the cloud, hosted and managed by suppliers (IT vendors),
telecom service providers (TSPs), system integrators (SIs) or pure-play hosting
players.

In the solution provider space, there seems to be quite a lot of excitement
around cloud services. While there have been a number of takers already, there
are still some that have not yet taken the leap.

Agreeing that there are a number of solutions that are being offered as
service in all types of areas, PN Prasad of Puducherry-based Microplus Computers
said, “Yes there are many vendors offering their solutions in this space. We
have also gotten into it and are offering payroll/HR solutions. The demand is
mostly from SMEs that have multiple locations and we see a lot of potential in
India because these enterprises are not afraid of trying out these offerings.”

Sivamani S, AVP-Business Develop­ment, PC Solutions, New Delhi added that
cloud services definitely had potential and they would be focusing on it. “We do
have certain plans in the pipeline. The cloud concept is just coming in India
and it will take another six to nine months' time to mature here,” Sivamani
commented.

QuantM, a
Delhi-based service provider, is offering IT management tools as service,
specially in the area of server, storage , network and security management. “In
such a service the customer does not need to buy the tools or have the skills to
use the tools for administration services. All the management and administration
services are provided remotely from QuantM's remote center called Global
Operations and Delivery Center (GOD-C),” said Sanjay Bakshi, CEO or QuantM Net
Technology.

The SP has been
seeing a number of customers asking for solutions as services. “Our biggest
success has come from service organizations in the area of financial and
knowledge management companies like large consulting organizations.
Manufacturing are slow to adopt,” added Bakshi.

He stated that in
India they were seeing security and infrastructure management tools getting the
highest on demand as a service because they need continued skills engagement for
customization and administration which are hard to find and can be easy part of
the outsourcing contract as a service.

Speaking about the
challenges/opportunities of offering EaaS in India Bakshi commented, “Main
challenge is customer awareness and well defined SLAs, both from customer and
vendor side. However, opportunities are so large that we believe market will
expand at a rate much higher than any other technology in IT and would slowly
begin to mature, ironing out the initial teething concerns.”

Ruth Samson

ruths@cybermedia.co.in