Leading the Way to SaaS: Issues of Cloud Acceptance

Cloud may be the answer for many companies seeking to make savings or even turn on a green leaf. But, are cloud offerings being accepted the way they should be? What is stopping CIOs of companies from taking the leap towards cloud? To get a first hand account of whats going on in the maze, Dataquest gathered views of noted industry specialists at a knowledge exchange session, Leading the Way to SaaS.

Under the Scanner

Adoption of cloud services has been limited, but that could primarily be due to the fact that different CIOs have different perspectives about cloud. The cloud is very cloudy. So, each time cloud is discussed differently, it is probably the beginning of the problem. Cloud should not be perceived as a cost cutting measure as many think. But, instead there are other parameters of cloud that need a mention. Cloud gives any organization the flexibility and business manageability facility. Perhaps if any organization takes into account these parameters, cloud would appear to be a good candidate for consideration.

Cloud has perhaps not received the scale of acceptance that it perhaps should have owing to the fact that not many commercial/enterprise options are available. Apart from that, the issue of data security is there which is a primary concern for any CIO of the traditional thought process. This is basically limiting the adoption of cloud services, says Dhiren Savla, director, IT, CRISIL.

Cloud has mainly been in the fringes of an organization and has been struggling to get into the mainstream business process. It can be estimated that until such penetration begins to take place in an effective manner, cloud may not be able to make a difference that it is capable of making or promises to make. Cloud promises to reduce operating costs and a large part of the operating costs goes in sustaining the transacting system. If cloud is not able to impact this, then it cannot effectively reduce a major amount from the IT budget too.

There is more that can be done about cloud solutions. We are trying to make a more advanced application to help managers make critical decisions to be better business managers. The good thing is that we see an increasing adoption of cloud services, says Aaron Au, chief technology officer and founder, SuccessFactors.

Challenges

I have had discussions with many service providers like Amazon, Google, etc, on how to leverage the cloud. And, till date I am yet to find a service offering that I can integrate with my business, says Arun Gupta, customer care associate and group chief technology officer, Shoppers Stop.

Every organization has been operating its processes on its own ERPs. If an organization intends to opt for a shared services provider then the provider needs to first get the organizations processes right, align the organizations processes to his processes and then take the processes to his premise. A cloud vendor with multiple clients experience suits me. Every company has its own processes and for a cloud vendor, customizing his offerings is not a practical option, says Vikas Prabhu, CIO, corporate functions, Essar Investments.

The starting point for cloud adoption would be for a vendor to offer a company capacity-on-demand similar to the one that was started by Amazon. But, capacity-on-demand would bring to the surface the issue regarding volume of data that can be pumped in. The other issue that needs consideration is the challenge posed by the fact that in India, bandwidth is still expensive. Probably, a company may pay a few dollars to Amazon; but in India, one may have to pay a few hundred dollars to its telecom service provider to provide them the same service which may not even function properly.

When a company approaches a service provider to move their ERP type applications to cloud, they start finding reasons why the same cannot be done. ERP service providers have a problem regarding licensing on the cloud. So, if I have made any investment in SAP, ERP, etc, what happens to that? There would be license agreements about the number of users, number of CPUs, etc. The moment a company decides to move to cloud, these become important as they do not know how to manage it, which again becomes a challenge. Internally, perceptions are largely driven by what everyone writes or reads. Today, even business magazines speak volumes about the issues of cloud, says Gupta.

Companies should not consider only the cost savings as a result of the adoption of cloud. There have been instances of companies who have chalked out a roadmap for 5-10 years and have aligned their businesses accordingly. It is cloud that helps them to be more agile. To make a business agile, it is very difficult for a traditional ERP vendor to do so. That is not their DNA, says Au.

One option is to first understand the best practices and then move ahead. To me, the concern is if all the advertising agencies follow the same processes then where is my cutting edge, says Ritu Madbhavi, VP, IT, Interface.

Concerns Addressed

In the past, security was the main concern. But, with the pass of time, organizations are now becoming more open to the adoption of cloud services. In certain aspects, a company may trust a vendor with his data because they are large companies and have processes much more fine tuned than regular companies. The other possible concern which many CIOs face is the fact that their bosses are not comfortable with the idea of their data residing outside the premises. According to them, it is a risky issue, for which an answer could be to create their own cloud which CIOs do not support.

But in the BFSI segment, certain laws prevent us from hosting our data outside the premises of our office, says Kamal Goel, vice president, technology, India Infoline.

If security is one concern, then there is also migration that needs a special mention. What happens to the data when a company decides to change its vendor? It is the agreement between a company and a vendor that holds the answer to this concern. The vendor needs to be much more open regarding the agreement. It is totally up to the vendor and I believe competition will force vendors to make the migration easier, says Au.

There will be changes in general cases too. Consider a case in point, wherein a company moves from its own cloud infrastructure to that of an outsourced vendor. We are moving from a software to a per transaction kind of scenario. In such a case, the licenses will undergo a sea-change and even the companys SLAs will change, apart from many other things. But, the main fact to be taken note of is that the companys basic core software may not change, says Vinod Vyas, vice president, information systems, Lavasa.

On a final note, Shyamanuja Das, editor, Dataquest sums it up, The best option would be to gather the best from the experiences of others. Apart from all this, the best part is that a majority of governments view cloud as an opportunity.

Shilpa Shanbhag
shilpas@cybermedia.co.in