Cloud partnerships rising, but issues remain

Cloud computing is increasing in India with companies joining hands to provide services to enterprises, but there are some issues, including how to manage them and revenue sharing pattern among the companies.

Companies such as Bharti Airtel and Hewlett Packard India had tied up to provide cloud computing services recently. Though Bharti Airtel has been providing cloud services to some enterprises, the new partnership is focusing on small and medium businesses through HP India.

Tata Communications and Google also have similar partnerships for providing cloud services.

“While system integrators forming partnerships with service providers to offer public cloud services are a step in the right direction, there are multiple milestones before such alliances can be tagged mainstream,” Mr Sanchit Vir Gogia, Senior Analyst, Forrester Research, told Business Line .

He said investments need to be made by service providers to offer basic application support services.

They are currently only reselling, provide unified billing support and also train their traditional sales staff to sell the new breed of cloud services.

Revenue stream

Deployment is easy as a first step; however, issues come once systems are integrated. Planning is important as many of services may not work on cloud.

There are mission critical and non-mission critical issues such as internal security and regulations that need to be taken care of, he said.

The reason telecom companies are tying up with cloud service providers is that they want to increase their revenue stream.

“Growth is falling on subscribers’ base and average revenue per unit, so cloud is opportunity for them to reach out to various customers. It is a good proposition for them as cloud is the possible way to create anytime access to services such as primary education, health management and banking, especially in rural areas,” Mr Hemant Joshi, Partner at Deloitte Haskins & Sells, said. However, challenges are on the rise such as data security – privacy and confidentiality.

Therefore, the companies have to add values to customers in such areas, he said.

Though companies are deploying services together, but their revenue share pattern is not clear as pricing may differ between a telecom company and cloud service provider, he said.

Having said that the cloud computing market is growing rapidly in India and recorded revenue of around Rs 5,016 crore in 2011, which is expected to reach Rs 24,750 crore by 2015, according to independent research firm Zinnov Management Consulting.

New initiatives

According to the Confederation of Indian Industry’s latest report along with KPMG, cloud-based services can be leveraged by the Government to launch new e-Governance initiatives quicker and with lower overhead costs.

“A common cloud platform would also enable local Governments and other public agencies to adopt e-Governance for better citizen services, without requiring the setting up of significant IT infrastructure,” it said.

Influence of cloud

The whitepaper said banks and regulators such as the Reserve Bank of India, and the Securities and Exchange Board of India should be mindful of the influence of cloud.

It emphasised that a Cloud Policy would have to take into account the data sovereignty and governance considerations, and study the worldwide global practices relating to resolving jurisdictional conflicts.

>ronendrasingh.s@thehindu.co.in

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