Thursday, August 19, 2010

IT giants bet big on cloud computing for revenues

Steve Ballmer, Narayan Murthy or Azim Premji, the icons of the IT industry, are all talking about cloud computing.Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand. It has three parts: software-as-a-service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS).Cloud computing becomes important in a market like India which has plenty of small and medium size businesses of Rs. 50-200 crore in size, that want to grow but don’t have the ability to commit to hefty capital expenditure upfront.Clouds are nothing but infrastructure or data centers that can be used and paid for on an usage basis.So, from storing your data to software applications to database servers all are available on demand on rented basis."We are into software and are not into hardware. We will have to make strategic alliances to offer cloud computing. We are looking at cloud computing as a big opportunity," said S Mahalingam, ED and CFO of TCS.Indian market is expected to offer a market opportunity of about $4-5 billion in 2 years time. Of which about 30 per cent will be in the small and medium size businesses.Nearly 10 per cent of the total IT spending globally is projected to be in cloud that amounts to almost $50 billion.But still Indian IT companies may lag behind in capitalising on cloud opportunities to their global peer."The Indian players realise their lack of bandwidth in cloud computing offerings and say forming alliance across hardware and software vendors is need of the at an early stage is critical," said Milan Sheth, partner, technology advisory services, at consultancy Ernst and Young."We have formed a separate cloud computing innovation center. We are investing in it and we see a significant part of our revenue coming from there in future," said Sujay Sen, head – cloud practice at L&T Infotech.In a survey by E&Y titled ‘Cloud adoption in India — Infrastructure as a Service (IaaS)’, over 72 per cent of the Indian IT infrastructure firms surveyed said they will adopt cloud computing in a big way over the next 2-3 years.Cloud computing is not a novel concept as it has been there for a while but dormant. Industry experts say the market space is far more ready now with last mile connectivity in place to adopt cloud and India will be a key market.