Though many organizations, large and small, have put
non-critical
applications such as email,
HR and payroll on the cloud, there is
still a lack of proper understanding about the cloud ( computing ) and its benefits. According to industry
estimates, SMBs will become the largest cloud ( computing ) adopters in India since they operate on
lower IT budgets and hence, the cloud ( computing ) is the perfect option for them. Indeed, cloud
( computing )adoption among SMBs grew
40 percent in 2010-11. Key opportunities for partners came from the
manufacturing, retail, BFSI, education, real estate and tourism sectors for cloud
( computing ) security services, online
back-up and storage, IT infrastructure,
network solutions, collaboration,
database and utility applications. Opportunities also exist for smaller brands
and start-ups which offer customized applications or white-label services on
the cloud. According to market research firm Zinnov, 60 percent of SMBs are
willing to try solutions from new brands. “Tech-inclined partners are talking
the language of storage on the cloud, SaaS, DR, business continuity and
verticalized
applications with reference to hardware, support and maintenance
cost, and savings in real estate,” says Kalyan Banga, Manager, Product
Development, Netscribes India. What does all this mean for the partner? We take
a look at the existing opportunities and highlight some new ones which partners
can explore to increase their share in this evolving segment.
Messaging
Industry leaders and analysts are unanimous that email and
unified communications will be the services that move to the cloud (
computing )the fastest. One of the
reasons for this is that almost all users have been exposed to hosted email
services, and are comfortable with the idea when large vendors are willing to
back it up with security, reliability and quality of service. “In our SMB study
we found that over 85 percent of SMB customers were willing to move their email
to the cloud. Small business customers are already exposed to the hosting
model, and are comfortable with the idea of cloud-based hosting,” says Neha
Jalan Goenka, Senior Associate, AMI Partners. According to the latest research
from AMI, SMBs (companies with less than 1,000 employees) in the Asia-Pacific
region (excluding Japan) will invest $16.5 billion in cloud ( computing )computing solutions in 2012. While hosted
email was for very long the territory of shared hosting providers, the entry of
Microsoft, Google,
VMware, IBM and a host of cloud ( computing )service providers reselling their cloud (
computing )offerings has changed
equations. “While shared email hosting remains the best option for a start-up
or small business to have a business email, there are scalability issues.
There’s also the perceived security threat,” says George Zachariah, GM, Host
Cats, a Bengaluru-based hosting company. Most shared hosting providers run
their
email servers on a free email server application such as Sendmail,
Postfix or Exim
Mail, and host hundreds of customers and thousands of email
accounts on a single server. They set several limitations on the attachment
size, number of emails which can be sent and received within an hour, and so
on. Typically, the pricing is included within the Website hosting charges, and
are usually Rs 100-500 per user per year.
“We used to advise customers with over 100 users to set up
their own mail server,” notes Zachariah. “Now with the cloud ( computing )we can service customers of virtually any
size.” Google is offering a free Google App version for customers with
less than 50 users. The only caveat is that the service is the same as the free
Gmail service, and comes with Web ads but no strong SLA. At $50 per user per
year, Google is offering not just mail, messaging and
calendar, but a whole
suite of office applications. Microsoft is offering hosted Exchange for as low
as $2 per user per year. There is also a package at $8 per user per year with
Exchange, Lync and Sharepoint integration. Compare this to the cost of an
on-premise deployment of Exchange—roughly Rs 1,400 per user in terms of
licensing alone. Apart from the licensing cost, there are server, storage,
power system, administrator, redundant network and bandwidth costs. Often, the
cost of hosted email is estimated to be around Rs 2,500 per user per year for a
server catering to 500 users over a 3-year period. Messaging solutions off the cloud
( computing )offer no real entry
barrier in terms of technical knowledge for channel partners. Microsoft has
even engaged regular distributors such as Redington to engage with channel
partners for enablement. Migration services (from premises to a hosted model)
and other integration opportunities can result in extra services revenue for
systems integrators.
Office & small biz apps
Office applications off the cloud ( computing )is a business opportunity that requires
channels to make little or no investment. Puneet Thakkar, CEO,
ShivaamiCorporation, Mumbai, who has been selling Google Apps to his existing customer
base, says that he has not made any investments. “Since
Tata Communications
have taken over the distribution, we have been pushing Google Apps to
customers. We make around 20 percent, and there is no technical challenge or
financial issue.” Google, Microsoft and Zoho are the three main players in this
space. Microsoft India has initiated one of the most aggressive pitches to woo
channels to sell its Business Productivity Online Services (BPOS) offering,
Office365, through the Microsoft Cloud ( computing )Partner Program. Business Productivity Online Servicesconsists of cloud (
computing )versions of Microsoft
Office, Exchange, Sharepoint, Windows Intune and Microsoft CRM Dynamics, as
well as Microsoft’s cloud ( computing )computing
platform Azure. The pricing cuts across several slabs with the highest slab
presently priced at $24 per user per month. The company is offering standard
commissions of 12 percent for the first year and 6 percent from the second year
onward. “Over a period of time we will be introducing various channel rebate
schemes that increase the profitability of the partners,” says Sanjay
Manchanda, Director, Business Division, Microsoft India.Meanwhile, Zoho is
offering, on monthly rates, a number of services including office applications,
CRM, invoicing, project management, remote support and accounting. Tata
Communications, which offers Google Apps through a white-label service called
InstaOffice, is also offering Zoho products. TCS is another vendor. It has
floated a cloud-based model called iON, which offers, apart from messaging,
office applications, CRM, business analytics and ERP.
“Over the past few months we have seen a lot of interest
from customers for the
Tata Consultancy Services cloud ( computing
)offering. The market is just starting to mature. Customers are keen to
look at a pay-as-you-go model,” says Edward Jeevan, Director, Binary Systems,
Bengaluru. Smaller vendors are also looking at delivering business applications
over the cloud. One example is GreeneStep Technologies, a Bengaluru-based
company which is offering a suite of business applications including CRM, ERP,
ticketing, ecommerce and supply chain for as low as Amount Rs 2,500 per user per
month. “We are actively scouting for partners who can provide level one and two
support, and can hand-hold customers. Partners need not make any extra
investments,” says Mr.SunilKumar, CEO, GreeneStep. While some partners sound
excited, others point out that selling business applications or office software
off the cloud ( computing ) will not be
easy. “While Microsoft and Google have simplified the entire process by
evolving compelling cloud ( computing ) models,
a few users may be unwilling to shift from a desktop-based Office suite to a
Web-based Office suite,” points out Vishal Bindra,
CEO, ACPL. “Nevertheless, I
see a huge market shift; give it a year and a half.” Adds Ajay Sawant, MD,
Orient Technologies, “At present, the Internet here costs a bomb compared to
what it does in the west. But bandwidth prices are going down, so adoption would
begin in a couple of years as prices rationalize.” Vinod Menon, Director,
Ashtech Mumbai, is more upbeat. “Without doubt, selling business applications
through a cloud-based model is more exciting than other opportunities. This is
because for a solution provider like us it is a space which is fairly new, and
proposing a cloud-based model makes it easy for us.”
Storage-as-a-service
One of the hottest trends in the cloud ( computing ) landscape is storage-as-a-service. There
are several models and services in storage depending on the specific needs of a
customer. In fact, many industry leaders are concerned about the future of
stand-alone storage; they say that channel partners must embrace cloud-based
models and be prepared for hybrid storage. “
Enterprise storage will move
partially or fully to the cloud ( computing
) over the next few years,” forecasts Girish Krishnamurthy, former MD,
Kaseya India. “It will be interesting to see how channels react to this
disruptive change in the way customers store data.” Several partners have
already launched their own services or the white-labeled services of other
vendors. For instance, Delhi-based Ace Data Devices (ADD) has launched a
cloud-based service for backup and recovery, and offers a pay-as-you-go model.
“We have 10 live customers at present, and are running pilots with 45 more,”
disclosed Neeraj Mediratta, CEO, ADD. “The conversion rate is at least two
customers per week. We are focusing on the manufacturing and healthcare
segments.” Tata Communications, IBM,
HP and Netmagic are some of the other
vendors which have started offering cloud-based storage. “We recently tied up
with Netmagic to roll out disaster recovery services off the cloud. We are
hoping to address the needs of mid-market resellers and their customers through
the partner network of Netmagic,” said Ashish Guha, President, Global Sales,
Sanovi Technologies. Object-based storage systems are another promising
alternative to traditional NAS. Object-based
storage forgoes traditional file
systems which have capacity and management shortcomings. Instead, these systems
assign a unique identifier, or digital fingerprint, to each file plus its
metadata.
Netmagic and Tata Communications are both expected to
announce their Object-based storage cloud ( computing )offerings shortly. While customers are
expected to prefer their own premises for primary storage, the cloud (
computing )has already become a common
option for secondary storage, backup and disaster recovery. Says Karan
Kriplani, Product Manager, Netmagic, “Customers are showing a lot of interest
in storage-as-a-service. While primary storage is still within the premises,
backup and secondary storage is definitely moving to the cloud.” The
consumerization of storage is a reality in mature markets, and channels expect
it to happen in India too. There are several cloud-based backup and recovery
services like Backblaze, Mozy (an EMC company), Dropbox, Apple iCloud, Box and
Microsoft SkyDrive that target individual PC users. All services offer some
basic storage (like 2 GB) free while extra storage is charged. The biggest
advantage of storage-as-a-service for an enterprise is the freedom to take
decisions based on pure SLA terms. As Harikrishna Prabhu, Director, Technobind,
a VAD based in Bengaluru points out, “A customer need not worry about capacity
planning, the choice of technologies or vendor software licensing, but pay
based on the storage required.”
Security-as-a-service
Security vendors have also started taking the cloud (
computing )route to offer an
alternative to premise-based investments. In India Tata Communications has been
one of the first cloud ( computing )service
providers to jump on to the bandwagon. “Cloud-based security services, deployed
within our
IP backbone, complement your premise-based security components to
deliver a comprehensive solution. We offer purpose-built architecture and
scalable capacity to combat the full range of security threats you face,” says
Prateek Pashine, President, SME, Tata Communications. Some of the services
bundled by cloud-based providers include Internet clean pipes with DDOS mitigation,
virtual proxies, managed authentication, antivirus software management and
email security. Fortinet has been working with telcos and ISPs to offer
security-as-a-service to enterprises and consumers. “We have a partnership with
Sify Technologies for enterprise network and data center services based in
India to enable them to offer an on-demand security solution and their Clean
Connect service to their cloud ( computing
)computing customers,” says Vishak Raman, Regional Director, Fortinet
India & Middle East. Raman says that the biggest opportunity lies with
telcos which have the bandwidth to work with IT resellers to offer value added
services. “We see in the future security delivered as a monthly subscription
fee. L1 support can be handled by partners while the telco’s call center takes
care of continuous support.” Hosted email security is another business that’s
fast receiving acceptance. Symantec, which acquired Messagelabs, offers
antispam and antivirus filtering for email servers on a hosted model.
Even channel partners have come up with their own offers.
Chennai - based Futurenet Technologies has a hosted email spam filtering solution
which is hosted from multiple
servers across the globe. It has been offering
the service on a pay-as-you-go model for the past two years. Explains L Ashok,
CEO, Futurenet, “We have built the solution on top of an open source stack. The
hosted model works better for customers because they do not have to worry about
infrastructure costs.” The demand is coming even from the smallest
players—the SOHO and the home segment. And contrary to popular belief that the
enterprise segment would adopt a wait-and-watch attitude before taking the
plunge, it is this segment that is adopting the cloud ( computing ) because of the savings they could infer
after doing a cost analysis.
Infrastructure-as-a-service
As a concept, infrastructure-as-a-service has fast gained
maturity because of the attractive pricing models that vendors in the space
have launched. According to S Sriram, CEO, iValue Systems, “Selling infrastructure-as-a-service
in terms of simple compute instances has become an accepted norm in the
industry today.”
Amazon, which pioneered this idea, has actively started
scouting for opportunities in India. Said Shane Owenby, MD, APAC, AWS, “The
usage patterns and adoption rates for India are similar to those around the
world. Indian companies use AWS as a cost-effective underlying infrastructure
to build their business, and as an important part of their GTM strategy to
expand across different regions around the world.” A public cloud (
computing )is essentially a scalable
virtual machine that’s made available to a customer on a pay-as-you-go model.
“Since most on-premise infrastructure is not properly utilized, the cloud (
computing )model makes a lot of sense
for enterprises of all sizes,” reasons Ganesan Arumugam of VMware India.
Service providers are also offering infrastructure for partners to set up their
cloud ( computing )services as well as
white-label their services. “Our Instacompute platform can be white-labeled by
a channel partner and he can offer value added services to his customers,”
informs Pashine. VMware has signed on around 40
partners for the VMware Cloud (
computing )Service Provider program,
and is offering a pay-as-you-go model for them to offer
cloud ( computing )services to their customers at a monthly
subscription as low as $360.
Another opportunity for systems integrators is the private
and public cloud. “Private clouds and hybrid clouds represent a huge
opportunity. Customers who have reasonable in-house infrastructure could set up
private clouds and then move applications to the public cloud ( computing )to set up hybrid clouds,” says Apalak
Ghosh, Manager, Emerging Technologies Research, CMR. Intel has also joined the
race. Leveraging on its OEM partnership with Microsoft, Intel has bundled
nearly 74 applications and is offering the same on a pay-as-you-use basis. The
hybrid cloud ( computing )server is
leased out to customers for 1-3 year contracts. “We quote an indicative
upper-limit figure, of which a customer has to pay a standard fee for the
hardware irrespective of whether he uses it or not. The cost of the software
licenses are calculated on the cloud ( computing )payment model,” explains MuraliKrishnan,
MD of the Bengaluru-based NJ Data Print. Another obvious advantage is the
faster availability of infrastructure. “Customers need not wait and can very
quickly use infrastructure. This makes it easier for them to go to the market
faster,” says Vamsi Velluri, GM, Cloud, IBM India/SA.
While for many years the cloud ( computing ) remained a much-hyped technology, there is
no doubt now that the opportunities are real, hence cloud ( computing )service providers are developing channel
programs which make it easier for partners to sell cloud-based solutions.