The Cloud Landscape


5 Aug 2011
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The cloud has been the most hyped technology in recent times. Vendors have often touted a variety of clouds—public, private and the hybrid—as the panacea for all existing business computing problems.

While opportunities in the private cloud for channel partners are largely seen as systems integration, reselling or consulting opportunities (which are not very different from the usual large server-storage or network deployment contracts), opportunities presented by the public cloud are a bit fuzzy as of now.

The primary reason for this vagueness is that while pricing models of public cloud vendors are transparent, it’s not so for the revenue-sharing opportunities for channel partners. Also, since cloud itself is a new business paradigm, channel partners are also being forced to rethink about their go-to-market strategies.

However, there is a lot of optimism among the analyst community. Analysts are of the view that channel opportunities do not die with the public cloud; rather, they get enhanced for partners.

“Public cloud is a huge opportunity, especially for the smaller partners who are focusing on the SMB segment. This is a model where upfront investments are lower, and it is easy for a small partner as well as small business customer to jump in,” says Neha Jalan, Senior Associate, AMI Partners India.

A large vendor like IBM seconds this claim. “Public cloud opportunities for channel partners are definitely healthy in the country. IBM is helping partners choose the right strategy, irrespective of the cloud computing model,” says Anoop Nambiar, Country Manager, Business Partner Organization, STG, IBM India.

Research done recently by a business magazine suggests that the Indian public cloud computing market will reach Rs 2,434 crore or $543 million in 2014, growing at a CAGR of 53 percent in 2010-2014.

The main drivers of the public cloud in India include government, healthcare and education segments. Besides, startups, SMBs and SOHOs too are key adopters of the cloud. And all these segments have one thing in common: they are seeking advisers or consultants who would enable their journey into the public cloud, and thereafter.

“All customers are looking forward to a partner to help them move to public clouds and take advantage of the SaaS model. This is where thousands of partners will see opportunities in future,” says Jalan.

Understanding the public cloud
A public cloud is one based on the standard cloud computing model, in which a service provider makes resources, such as applications and storage, available to the general public over the Internet. Public cloud services may be free or offered on a pay-per-use model. It can be described as the retail version of cloud computing, with pricing and all details to operate cloud offerings open to the users.

The classic examples of public clouds are those offered by Amazon, Google, Rackspace and Microsoft, among others. The pay-per-use model starts as low as a single cent per hour in some cases. The billing model depends on factors such as the number of virtual cores, amount of memory, disk space, operating system and software used, incoming traffic bandwidth and outgoing traffic bandwidth. While the basic premise is very similar to the model used by Web hosting companies, with a public cloud, users can scale the infrastructure in a matter of minutes with a few clicks of the mouse.

“Typically, if you are ordering a dedicated server with a hosting vendor or an ISP, allocation would take anything from a single day to ten days, depending on the configuration you require. And then, you need to do further configurations and installations. But in the case of a cloud, irrespective of whether it is a public or private cloud, scaling from a single core instance running 2GB RAM to a four-core instance running 8GB RAM will take minutes at the maximum. This kind of scalability is something that makes cloud computing special,” explains Akash Saxena, VP, Infrastructure Services, IBM Global Technology Services.

However, building expertise in public cloud is not easy for channel partners. One reason is that most partners have not dealt with cloud market leaders such as Amazon, Rackspace or Google—who are yet to penetrate the Indian market aggressively. This means they are yet to benefit from the accumulated wisdom of these vendors.

Fortunately, things are looking up. “Google has started talking, and some of the channel partners have started doing business for Google Apps, but they are yet to do a massive go-to-market approach by targeting the wider reseller community. Microsoft has been beta-testing Office Live, and we expect the market to take off in a big way very soon,” says Ashok L, CEO of Futurenet Technologies, Chennai.

Apart from the fact that their association with most cloud vendors is new, the business model itself is a novelty for many partners. “Most partners, especially the smaller ones, are used to selling products and are heavily transaction-oriented. Here, you have a sudden change in the model, and this would make it a little difficult for them to adapt,” says SR Nair, MD of Team Frontline.

Sriram S, CEO, iValue InfoSolutions, a distributor, sheds more light on partners’ readiness. “The reach and resources of tier-2 partners are limited. But there are some who are reaching out to the customers—advising them, handholding them. Their customers are mostly SMBs or SBs who are not afraid to experiment. SMBs are actually putting non-critical applications on the cloud and they are doing it piecemeal. They essentially leverage on the long-term relationships they have developed with their partners.”

Shailesh Palande, IT Manager of Mumbai-based Urban Infrastructure, endorses Sriram’s view. Sharing his experience of the cloud, he says, “Suresh Ramani, CEO, Techgyan, helped us throughout. Our entire corporate email was on Zimbra. But there were some issues, and based on Ramani’s suggestion, we migrated the entire email account to Microsoft Exchange Online. More than 60 users are now on the cloud, and we are saving $5 per user per year, besides cost savings on server and storage.”

Public cloud opportunities for resellers can be classified into a few broad categories:
Consulting and advisory services: While these usually do not come to smaller partners, the real big money on public clouds is in helping customers pick and choose different public cloud offers. “Consulting on which application to migrate to the cloud, which cloud offering to chose from the plethora of vendors, which model to opt for, what should be kept on-premise and what would work on the cloud are some of the basic questions that need to be answered before a customer actually signs on the dotted line. If you as a tier-2 partner have the basics right, there is no stopping you from entering the role of the consultant,” says Sriram of iValue InfoSolutions.

Mail Services: Messaging on the cloud has wide acceptance. Many enterprises have moved to Hosted Exchange, a service rendered by Microsoft. Google is offering Google Apps, while VMware has hosted Zimbra. There are third-party vendors as well who use public clouds to build their own hosted mail offerings. “Messaging is the easiest application to move to the cloud. With 99.99% availability and the opportunity to scale up fast, it is easier to sell. Moreover, vendors have ready-to-reckon packages,” says Edward Jeevan, Director, Binary Systems, Bengaluru.

Office Apps: Google and Microsoft have locked horns as far as this market is concerned. Google offers Google Apps, a bouquet of services from mail to Web-powered collaboration apps: Google Docs, Google Sites and Google Video for businesses. Microsoft has announced Microsoft Office Live. Another player, Chennai-based Zoho, claims to have four million users for its Web-based offerings. All these vendors have reseller plans and programs in place.

Application Hosting: Google, Amazon, Microsoft and Rackspace are the market leaders. They have their own set of APIs which require specific software skills. Therefore, they normally partner with solution providers who help customers to host the applications. “An average reseller may not qualify for application hosting, since this requires some amount of software experience. However, many ISVs are willing to work with channels,” says Subbu Joise, CEO, Compusol, Bengaluru.

There are several specialized cloud application providers such as Engine Yard, which provides hosting for Ruby on Rails (a software development and deployment platform), and Eladrion, which provides support for Django Framework—all hosted on the public cloud.

Application Migration: Application migration is a huge opportunity for partners. “Whenever a customer migrates from the conventional IT infrastructure to the cloud, his primary concern is whether the applications on the traditional IT system would interoperate with the cloud. Once you convince the customer that everything would be fine and that seamless application migration is a part of your SLA, they put the ball in your court,” says Suresh Ramani, CEO of Techgyan.

Delhi-based Futuresoft has implemented one of the largest migrations from a data center to Microsoft Business Productivity Online Services for Acme. “This is not just the largest application migration in India, but also in Asia, for an application that’s migrated from a private data center to a public cloud,” says Sandeep Salman, VP, Futuresoft.

CRM and ERP: These two offer sizable if not significant opportunities. “While some customers are reluctant to move mission-critical applications to the cloud, others see obvious cost benefits,” says Jeevan. and Zoho are examples of cloud-based CRM solutions. CRM is one of the easier applications to move to the cloud. And since hosted CRM models have been popular for long, a customer has no issues in accepting cloud-based CRM solutions, say partners. With ERP, hosting applications have been tried for some time but the domain has met with muted success.

DR and Backup: Net4India, an ISP, is in the process of launching a backup service in the cloud. Not all organizations in India take backups but the growing need for regulatory compliance is now forcing them to take backups or store their data in a way that it can be retrieved whenever required. The cost of such backups is very high and the manageability is complex. That’s where a cloud-based backup service will gel. Besides Net4India, Tata Communications and Sify have announced similar offerings. Storage vendor Hitachi Data Systems is also trying to align with ISPs to offer cloud-based storage.

Selling the public cloud
Selling the public cloud is not easy and requires a lot more lateral thinking for partners. While distribution behemoth Ingram Micro has a dedicated team of 15 people to market cloud services from different vendors, overall, the distribution model for public clouds is yet to evolve.

One key challenge is to convince customers, who are usually wary of security issues associated with the public cloud. As Raghunandan H Vasan, Director of Bengaluru-based services company Bizprout Solutions, points out, “We do not know who or where our servers would be hosted.”

Sriram of iValue says, “The lack of water-tight compliance laws further discourages enterprises from moving onto the cloud. For example, in Europe, there is a law that no data will leave the shores; which is not the case in India.”

Costing is another issue. Cloud costing may not always come out as cheap. “For example, a full-fledged instance running on Amazon can cost you around $300 a month. So if your customer wants to just host a Website, a cheaper option would be shared hosting,” remarks Jitendra Janardhan, Head, Services, Websphere Technologies, Bengaluru.

Furthermore, smaller partners do need to build expertise in setting up solutions. Also, almost all vendors in this space have fairly proprietary solutions, and have their own set of APIs, deployment rules and even storage systems. For example, if you really need to migrate applications to the Google Apps Engine, you need to be conversant with either Java programming or Python skills. For other vendors, there will be different skill sets.

Another cause of concern, especially for smaller resellers, is that not all vendors currently offer billing in Indian rupee (though Google and Microsoft currently do so).

So, there are several challenges for channel partners who do want to exploit the cloud. But for those who are able to manage the complexities, re-skill their people and convince their long-standing customers, there will be showers of blessings.

source : crn
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