Awareness of the benefits of cloud computing is high in India, but adoption remains modest and restricted to non-critical aspects of the enterprise, executives and analysts said.
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Business decision-makers, such as chief marketing officers, are keen to tap the benefits of the cloud as security concerns are addressed, whereas other challenges such as data privacy, integration with legacy infrastructure and even the location of the datacenter remain.
“People are not as hesitant as they used to be,” said Laxman Badiga, former CIO at Wipro, now an industry consultant. “Are companies moving an SAP or Oracle implementation to the cloud? The answer is no. But applications such as Salesforce.com or Workday are popular,” he said.
In financial services – among the largest spenders on technology – the high sensitivity towards how data is handled means CIOs are very circumspect about moving work to the cloud.
“The only asset for enterprises like us is data. It is a very important and vital role for a CIO, as a custodian of the data, to protect the data,” said Samrat Das, CIO of Tata AIA Life Insurance.
“Yes, we can adopt cloud, but only where data sensitivity is negligible,” Das said. Tata AIA has done that, for instance, by using Zimbra to provide email for its insurance agents, Das said.
Similarly among telecommunications firms, government regulations ensure that consumer data remains totally within the country, said Aiyappan Pillai, an independent ICT industry consultant and former vice-president of business transformation at Tata Communications.
More on cloud computing in India
“Cloud is still possible here if someone sets up a cloud hosting service which also ensures that every bit of data, including redundancies for data security, remains within the country,” Pillai said.
From that perspective, companies are yet to even think along those lines, he said.
Gartner research director Biswajeet Mahapatra said there has been some progress (not significant) in moving non-critical workloads to the public cloud, but said don’t expect major changes in 2014 or 2015.
For most large Indian enterprises, the proportion of IT in the cloud could be in the range of 10-15% – an “optimistic” figure, Mahapatra said, adding he wouldn’t be surprised if it was less than 10%.
One factor that is pushing CIOs to be more amenable to tapping the cloud is “rising customer expectations”, said Forrester Research country manager in India, Manish Bahl. Forrester expects the software as a service (SaaS) market in India to double, from $631m by the end of this year to $1.2bn in 2020.
Even as Indian enterprises become more eager to experiment with moving IT to the cloud, the nation itself has fared poorly in its cloud readiness, according to the Asian Cloud Computing Association (ACCA), an industry lobby group whose members include Microsoft, EMC, Rackspace and several other cloud computing, storage and software companies.
India dropped to 13th on ACCA’s Cloud Readiness Index in 2014, down four places compared with last year, and is higher only than Vietnam. Japan maintained its lead, among the 14 countries ranked in the index on several parameters including privacy, data sovereignty, broadband quality and government regulatory environment.
New Zealand, Australia and Thailand all improved their positions.
India showed “one of the largest declines in cloud readiness in Asia-Pacific”, according to ACCA. India “must address its weak data risk profile and IPR protection, and focus regulatory reform on creating a stable, pro-ICT business environment,” the group said.