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Press Mention: The Cloud’s New Pitch for Channel Partners

Love it or hate it, but you can’t ignore the cloud—not when it’s growing at 40 percent CAGR in India. That’s an assessment, a recent survey of Indian IT leaders by CIO magazine (CIO is a sister publication of ChannelWorld) concurs with. But if there’s no doubt that Indian enterprises see cloud computing as the way forward, they are also, just as undeniably, unprepared for it. The survey points to a surprising amount of cloud unpreparedness among Indian enterprises in multiple areas including where cloud security, architecture, management, skills, etc.

This represents an untapped opportunity for the solution partner community. The question is: Do partners know what these gaps are? Have they estimated how much can be made from filling cloud gaps such as a lack of integration abilities or strategic thinking? And are they preparing the groundwork to address these opportunities?

Based on inputs from enterprise channel partners and Indian CIOs, here are some unexplored opportunities for the channel community, and a round up of where different players find themselves in this new cloud market.

The Security Gambit

One of the biggest fears among Indian enterprises about going to the cloud, immaterial of their size or industry, has been—and remains—the security of their data. Sure, there are some organizations that have gotten passed this issue, but there exists a sizeable number of companies that still need help in that area.

According to CIO’s survey, 45 percent of Indian businesses admit that their current security measures are not designed for cloud computing; 29 percent say they do not have a formal process to ensure security and compliance for cloud computing; and 41 percent say they do not have—or need— governance for cloud computing.

Sanchit Vir Gogia believes that the security hurdle will be straddled, if slowly, given the amount of attention that’s been directed at it. “2012 will see better user cases and adoption (of the cloud), but the scenario won’t change overnight. Concerns like security and a lack of knowledge about the cloud are now being replaced by different challenges, like privacy concerns and integration challenges. Security is not a technical concern; it’s always been a mind-set related issue.”

On the ground, however, channel partners are a little less optimistic. “That cliche, “where do you keep your money and jewelry?” (referring to the fact that if people can trust banks with their money, they should trust the cloud with their data) might work in selling the cloud story to a few flexible organizations, but not for skeptical customers,” says Sandeep Vahi, director, at New Delhi-based Compton Computers.

One way around the challenge, says Vahi, is to get customers to visit your datacenter and run PoCs with them until they are convinced the cloud is safe. “Customers get a live demo at our datacenter, demonstrating to them that all is well when their data resides with us.”

High bandwidth and data encryption are some means and ways of mitigating the risk of a data breach, he adds. Working towards these goals, the SI is looking at between 30-35 percent growth in cloud and datacenter services over the next two years.

Sanjay Kulkarni, CEO and director at Pune-based Sunfire Technologies, a key player in the virtualization market, also believes that security fears and a lack of a robust cloud strategy are two of the main reasons that large adoption of the cloud will only take place after a couple of years, in the Pune market.

“Some customers might have moved non-core applications to the cloud,” he says, “but moving their production environment to the cloud is still a distant goal for customers in Pune,” he says.

That said, Kulkarni firmly believes that the cloud is the next natural driver for growth, and says he is party to plenty of discussions around the cloud, which is why Sunfire Technologies has already started work around cloud security. This way, says Kulkarni, they can be prepared with the right answers when more serious cloud discussions take place. Besides this, the SI has also expanded its capabilities in storage and networking, keeping in mind future opportunities in private cloud implementations.

As far as cloud compliance and governance is concerned, Vahi at Compton Computers says it only affects a very small percentage of customers, specifically large buyers, PSUs, and government bodies that have compliance and governance issues. “Smaller companies do not have the bandwidth for these problems,” he says. “All they need is a safe, secure and seamless flow of applications.”

The Integration Play

There’s more to the cloud than security issues, believes Girish Madhavan, CEO, Quadsel Systems, “Customers have to be sensitized to some fundamental ideas regarding the cloud,” Madhavan says.

Gogia agrees. Customers, he says, are pre-occupied about how different applications, from different public cloud providers, will talk to one another. That’s an opportunity for the channel that’s waiting to happen. “SIs need to pull up their socks and get into the value chain by developing specific capabilities around consulting and integration,” he says. “They can act as a broker of cloud services and look at things like user agreements, SLAs and unified billing as possible opportunities. Besides, application and support are big opportunities for them, because service provider partners currently do not bring in those capabilities.” (For more on cloud brokers, turn to page 36).

Pawan Khurana, CEO of QuantM Technologies in New Delhi, has already latched on to some of the opportunities Gogia is talking about. “Customers tell us that they are not yet able to get a consolidated view of the cloud. A solution provider essentially, as in our case, has to focus on whether the disparate applications a customer has from different service providers can be integrated seamlessly.”

QuantM has also developed its own cloud offerings which it is taking to customers; the company’s recent acquisition of Teamworks Solutions is a part of the overall cloud strategy of the company. Teamworks (renamed TeamworkQ), is an application software company, will help in leveraging application software as an umbrella integration offering to customers. “We work on the multiple public cloud applications of customers, offer low-cost QuantM offerings, and also design and support a customer’s private cloud,” says Khurana.

While offering Oracle CRM On Demand to its customers, Delhi-based Path Infotech has bumped into many integration projects. The SI has been taking a SaaS platform as a service to its customers for some years and has been doing reasonably well. “When we implement a SaaS offering for a customer, it requires customization and integration. This integration can be with their existing on-premise or cloud applications. We have different use cases including SaaS-to-SaaS, SaaS-to-on-premise, and SaaS-to-SaaS-plus-on-premise integration scenarios. We believe that implementation and integration are two large opportunities and we are a serious player in that space,” says Pankaj Ratra, director of Path Infotech.

Madhavan at Quadsel Systems wants to focus on both security and integration, and adds that a vertical approach helps drive the cloud. That’s probably why Quadsel has spun off a separate company, Infracloud, which specializes in cloud solutions. Infracloud, which was launched with an investment of Rs 40 lakh, will front end all of Quadsel’s cloud initiatives. Madhavan says he isn’t expecting Infracloud to turn a profit in the first two years, although he adds that investments in the company may touch Rs 7 crore in the near future.

Infracloud, adds Madhavan, has already acquired customers in mid-segment education and healthcare. He also feels that the application layer is where the cloud roadmap is headed, and that is what serious players should focus on.

The Rounded Approach

Despite concerns from the buying community around the cloud, a section of channel companies have already developed their cloud roadmaps and know exactly where they are headed. New Delhi-based Albion Informatics is a good example. Albion has been selling its in-house developed ERP, CRM, enterprise e-mail, HR solution, and back-up services using a cloud model for the last three years, primarily in the US. It is also one of the few players that has developed proprietary apps for the cloud. And now the SI wants to replicate that success in India.

As a next step, it is customizing these apps to suit industry clusters. Sanjeev Gupta, MD of Albion is pretty confident. “We already have about 5,000 customers in the US for these services and in India, we currently have 1,800 customers. The response in India has been very encouraging and we have been witnessing a 30 percent growth in our cloud business.”

Albion’s experience in the US market, a far more mature cloud market than India, gives them a competitive edge, believes Gupta. At the same time, its fairly long list of Indian clients, has exposed it to all types of customers, at various levels of understanding and adoption, he says. “There are people who ask, ‘what will happen to the cloud if it rains?’. But that’s just a small percentage. The market is transforming and we have effectively addressed certain concerns around security, integration and governance,” he says.

Bangalore’s NewWave Computing is another key player in the cloud space. The company has partnerships with various tech vendors including IBM, Netmagic, TCS and Microsoft in the public cloud space. But that’s just one part of its cloud story. NewWave has a full-fledged strategy to tap various segments ranging from small to large enterprises. While a lot of SMBs are struggling to get on to cloud, due to lack of processes, large enterprises are fuelling the private cloud market, says Ajit Andrew Mohanraj, director, cloud services, NewWave. And, that’s where Newwave is spotting the money. (For more on how SMBs see the cloud, turn to page 32)

“Customers are at various points in the maturity curve. While some are in the process of virtualizing their environments, some have moved IT-shared workloads to cloud. Though only very few customers have moved business critical apps to (private) clouds, there is a clear trend towards true private cloud implementations among large enterprises,” he says.

Mohanraj agrees that there are concerns around security and integration, and constraints in terms of apps, which are not cloud ready, but he believes that as the market and offerings mature, the cloud story is going to get far more exciting. Newwave says it is ready with all the required partnerships and capabilities to address these multiple opportunities. But instead of getting into an aggressive bidding mode for private cloud projects, the strategy that works best for the company, says Mohanraj, is to conduct workshops for its customers, followed by select one-on-one discussions that will result in PoCs, and later in implementations.

Channel Cloudscape

The cloud computing market is still fluid and different stakeholders are in the process of understanding and positioning themselves. “Iaas and Saas and virtual private cloud are playing out in a big way. Paas is not seeing much traction as of now,” says Nirupam Chaudhuri, research manager, Software and Services, IDC Centre for Consultancy and Research.

Archon Consulting Systems, a Bangalore-based SI, is currently in the process of reselling some interesting cloud offerings from vendors to its enterprise customers. The idea is to read the minds of customers and test the waters. This approach helps the company understand customer perceptions around the cloud better, as compared to throwing random questions related to the cloud.

Sachin S. Rao, CEO of Archon says, “Currently, customers do not have a clear-cut cloud roadmap for their businesses. Neither do vendors seem to have clear answers for everything. However, when we go and pitch simple offerings like mail or messaging on the cloud, customers open their minds. Security is a big concern even when a dialogue around cost or what apps should be moved to cloud takes place. They have a lot of other apprehensions as well and we are in the process of collating it all that so that we can be ready when actual adoption happens,” he says.

In closing, Gogia says that channel partners “need to understand the business models of their customers and their sales force need to re-look at the way they have been selling solutions so far. While SIs are evolving by improving their skills sets, they need to realize that the speed of change has also changed. It’s a far more dynamic industry and they need to play catch up faster. Survival will be tough if you’re just a box-pusher,” he says.

Source: http://www.channelworld.in/features/clouds-new-pitch-channel-partners

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