Indian businesses will spend 36% more on public cloud services this year to lower costs and increase business flexibility, according to research.
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Cloud-based IT, particularly public cloud services, reduces the upfront costs associated with hardware and software purchases and implementation. In addition, public cloud services make capacity planning less critical as a result of on-demand computing.
According to Gartner, public cloud services sales will be worth 24.54 billion INR this year, a 36% increase compared to the last year. Infrastructure as Service (IaaS) is the fastest-growing segment of the market. IaaS sales rose 22.7% in 2012 to reach 2.38 billion INR. Gartner expects sales to grow 39.6 % this year.
The biggest segment of the market is Software as a Service (SaaS), which has 36% of the total cloud service market. Out of the 233 billion INR that will be spent on cloud computing between 2013 and 2017, 89 billion INR will be spent on SaaS.
"The continued growth of the cloud services market will result from the adoption of cloud services for production systems and workloads, in addition to the development and testing scenarios that have led as the most prominent use case for public cloud services to date," said Ed Anderson, research director at Gartner. "Evidence of this growth is found in the increasing demand for cloud services from end-user organizations, met by an increased supply of cloud services from to the era of full-scale enterprise deployments.
The cloud service that mainstream software giant Microsoft offers is evidence of this. Curt Anderson, chief financial officer at Microsoft's server and tools division, recently said the company's Azure cloud service had made one billion in the last 12 months. Microsoft is aggressively targeting competitor Amazon in the IaaS market. It recently reduced the general availability prices on Linux and Windows Server virtual machines and cloud services by 21-33% to match Amazon's Elastic Compute Cloud prices.
According to research from India-based CIO Klub and Ernst & Young LLP, businesses are moving to the cloud to lower their IT infrastructure and administrative costs and to adopt a flexible and scalable model for IT.
The Enterprise IT trends and investment 2013 report from CIO Klub and Ernst & Young revealed that 38% of CIOs have cloud computing as a priority. More than 60% said the need for scalability and flexibility is driving this.
Cloud services have gained impetus in India but progress is slow. As stated in the report, "This is not surprising, as the number of risks and challenges identified by respondents have remained fairly consistent over the years."
According to the research, data security and lack of control in the IT environment are the key concerns of CIOs. As noted in the report, "Like any transformational initiative adoption of cloud also faces internal resistance as turning over control of the security of their IT infrastructure and data is an inherently uncomfortable situation for any senior corporate manager."
Another factor that CIOs say is slowing the progress of cloud computing is increased bandwidth and network costs. This can reduce the savings in internal infrastructure costs.