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The business plan is brilliant; value proposition (Customer delivered value) is apt for the current tumultuous times; bandwidth/network availability is all time high in top cities; addressable market is vast and awareness levels are on the rise….. So are we ready to witness a rise in ground level adoption of the cloud computing concept (PaaS/SaaS/IaaS) in India?

One is being presumptuous of the value on offer. Isn’t the very idea of availing business applications on the web with fraction of the cost of traditional routes lucrative enough? What are users saying? AMI Partners Q-pulse provides demand side quarterly updates on the current dynamic market conditions where sentiments, mindset and purchase plans are being constantly re-assessed against the backdrop of changing macro-environmental factors as well as internal company issues.

A quick peek on AMI’s last JFM Q-pulse “XaaS” adoption trends in India indicate that almost 3/4th of the 30K plus medium businesses in India expressed willingness to invest in similar on demand solutions.  More than 30% of the medium businesses (100-999 employee segment companies as defined by AMI partners) are already availing some kind of hosted applications or SaaS. There are more granular details available on the reports.

We can look at Cloud computing as virtual data-centers on the web which allow availing computational power on tap. Users can pay for only what and how much they need and utilize; the flexibility, agility and scalability of the models are unconstrained. The technology also takes care of the need of IT innovators/ISVs to use resources for development, testing and hosting their applications for the user community. Techies are going ahead and writing codes on the cloud. No wonder it catches their fancy…..its just a question of time!

One would not want to use too many tech jargons here, but let us see very briefly how these setups work….. The technology dynamically leverages servers, storage area networks, network equipments, security appliances etc as per the load requirements. A typical architecture consists of Data center, provisioning manager, application servers, virtualization software and monitoring servers. User requests would typically be handled by Web 2.0 components deployed on the application servers.

Concept acceptability is promising in developed countries like US, UK, Japan, Australia etc, where organisations are innovating and awareness is higher. In its nascent stage market in India, vendors who are championing this space will need to drive huge awareness generation campaigns and detail success cases to be showcased before we see any major mainstream activity. One finds potential takers in IT/ITeS sector, Public sector, Education, E-governance initiatives, Healthcare, advanced professional services, Research and development outfits; wherever there is need to process massive data and do complex computations.

Most suitable targets are business outfits where processes have variable and unpredictable computational capacity requirements. Businesses which need to respond very quickly to fresh requirements and stay ahead of competition will definitely see value; convincing initiatives from the influencers will be the key. Watchful users will pilot non-core processes to start with. They definitely don’t want the headaches and will need to be convinced on reliability of the architecture. Detail risk assessments need to be properly done before taking the plunge! The logic of “on-demand” holds good but finally it will be the understanding level of the target sector and openness to adopt the new technology, which will decide if we see increased traction in coming few years. Network availability in specific pockets and security concerns will continue to play spoilsports for some more time.

Key takeaways..? The future for CC looks fairly bright when everyone is talking about resource utilization and budgets constraints in these present economic times.

Nirupam Chaudhuri is Sr. Manager – Software & Services Research Practice, at AMI Partners and can be reached at nchaudhuri@ami-partners.com