Why cloud computing has high penetration in India?

By Akhilesh Shukla 

It is more than a mere coincidence that Satya Nadella, before moving into the shoes of Bill Gates and Steve Ballmer as the CEO of Microsoft, was heading cloud computing initiatives of the company. His elevation from head of cloud computing to the post of CEO shows the growing significance of cloud services within the IT giant.

The entire ecosystem, be it service provider, vendor, research firms, etc are positive about the growth of cloud computing.

Research firm IDC in a recent study predicted that in 2014 spending on cloud services would surge 25% to over $100 billion worldwide.

CIOs in India have also adopted cloud computing with open arms. The adoption rate of cloud computing is 67%, as per IDC.

It is lower than countries such as Singapore, Australia and New Zealand. However, Indian CIOs have adopted cloud for more strategic purposes like collaboration solutions, disaster recovery, supply chain management, etc. On the other hand, CIOs of South Asian countries have moved only basic applications like database hosting, email hosting, back-up, servers and storage on cloud.

The main reasons for high usage and adoption of cloud in India are its cost-effectiveness, agility and scalability. Cloud also suits the present need of CIOs, who are asked to show quick results and high return from every investment made on IT infrastructure.

"Cloud computing has several benefits, which are driving its adoption worldwide. It helps the CIOs to save IT resources, space, and it is also scalable. It can be quickly deployed, reduces the capital expenditure as well as the time to market," said Sandra Ng, Group Vice President, Practice Group, IDC Asia/Pacific. "It's a win-win situation for them," she added.

But cloud computing comes with its own risks and apprehensions. Data security is one of the major concerns for technology buyers. Meeting compliances is another barrier to adoption of cloud. Apart from these, factors such as lack of understanding of how cloud works, vendor lock-in, and upgrades required in the existing infrastructure are some other concerns of users.

"It is not that Indian CIOs are not aware of the risk factors involved in adoption of cloud computing. But they try to ignore them, as they look at the merits (faster and cheaper) of cloud computing," pointed out Sandra.

Another factor that is discreetly driving cloud computing in the country is lack of regulatory guidelines.

In the West, permissions are required from the authorities in case an organisation is moving any data, services or applications on cloud. In Europe, an organisation requires permission from the government to store data out of the physical geography of the country. Similarly, National Security Agency needs to access any data, any time in the US.

"It is true that cloud is popular in India because it is cheap and we do not have any guidelines for data security and privacy. Indian government and to some extent CIOs are yet to rise to the growing challenge of data security and privacy. Off-late, we have seen some action. But it will take some more years for them to match steps with their western counter parts," said Manpreet Singh, director, Technology Business Services, Capita. Capita provides business process outsourcing and integrated professional support services solution in UK. The company has an India office in Pune.

India has always been a price-sensitive market. CIOs, just like other denizens, are no exception to the rule. They love to shop cheap goods including technology. But security should not be compromised, especially, when around 80% of the critical infrastructure is in hands of private organisations.