Most large enterprises in India are yet to move critical workloads to the public cloud. While Gartner projects $6 billion spending on managed services and cloud infrastructure in 2019, this would be mostly towards IaaS and private cloud deployments.
“Cloud adoption is driven by business transformation,” said Sid Nag, Vice President, Research – Cloud Services, Gartner. “There are tactical reasons like application and workload migration. And it also changes the business model dramatically. When you do this, you want to minimise risks. So organisations are not in a hurry to move their critical applications to the cloud unless they get that level of comfort.”
CIOs want to leverage attributes of cloud such as scalability and elasticity, multi-tenancy, and OpEx models.
“However, there are issues related to governance, such as data residency, certain data mandates, rules & regulations, data retention needs, and industry compliance. All this is also holding back organisations from the public cloud,” said Nag.
He said until the public cloud service providers address all these issues, private cloud will be the interim step to the public cloud.
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A Strategic Approach
A strategic approach is essential for cloud migration, but many go about selecting their cloud service provider first and then try to figure out how to fit their application portfolio to fall into that cloud.
“The typical mistake people make is they retrofit their cloud strategy based on vendor selection. Instead, they need to consider their environmental needs, the higher order goal and narrative, and then transposing that requirement to your cloud provider requirements and then identify the right cloud provider that meets those requirements,” said Nag.
He said it is essential to set the right expectations among the business leaders and that one must get “executive sponsorship” first.
Cost transparency, visibility, and predictability are all important considerations in a cloud strategy.
“Another mistake is setting the wrong expectations on the cost structure. You are not going to save cost on day one, by moving to the cloud. That’s because you are operating in bimodal mode. You may see cost neutrality and some cost negative situations in the in-years. In the out-years you will reap the benefits of cost but not immediately. So it is extremely important to set phased expectations from a cost perspective,” said Nag.
He also mentioned the need for a “cultural shift” for the whole organisation. “You need to transform your whole organisation to think differently,” he said.
Managed Services and Cloud Infrastructure Services Continues to Grow
As per Gartner estimates, in 2019, managed services and cloud infrastructure services remains the biggest segment in terms of spending on IT services in India, accounting for close to $6 billion. The segment represents 40% of the end-user spending on IT services in India.
“We have identified a shift in how organisations adopt cloud technologies,” said Arup Roy, research vice president at Gartner. “Organisations in India are increasingly looking to acquire not only cloud infrastructure as a service (IaaS) resources themselves, but also the automated management of those resources, management tools delivered as services, and cloud software infrastructure services.” As a result, Gartner analysts expect that, while IaaS-only cloud providers will continue to exist, they will become increasingly niche due to the breadth and depth of service offerings that end-user organisations require.