Cloud adoption trumps traditional IT at enterprises: Nasscom round table

17 May, 2019

Cloud adoption in India is growing faster than traditional IT services buoyed by demand from enterprises which are looking towards digital transformation, panellists at the Nasscom-TechCircle round table said.

“Cloud computing in India is growing at a healthy rate and is, in fact, growing faster than traditional IT services and the outlook for the next four years seems very bright," Sangeeta Gupta, senior vice president and chief strategy officer at Nasscom, said while discussing cloud adoption in India.

According to a recent Nasscom report, cloud spending in India was estimated at $2.5 billion and is estimated to grow at 30% year-on-year to reach $7.2 billion in 2022.

The report estimates that the growth will come from multiple factors such as increased awareness of cloud, consumerisation of IT, proliferation of the startup ecosystem, diverse landscape of supplier ecosystem, rising investments in infrastructure, talent, strategic partnerships and the impetus from key digital-led government programmes.

However, the report also showed that cloud computing formed only 6% of relevant IT spending in 2018 in the country compared to a global average of 7.9% and an average of 11.4% in leading countries.

Explaining this, Anurag Sharma, vice president and head of growth initiatives at Tech Mahindra, said that cloud adoption in India is going to grow as companies look towards digital transformation.

"The reason of slower cloud adoption in India can be attributed to industries such as services and manufacturing that form the bulk of our GDP. They are yet to take up cloud services. The moment they do so we are going to see an acceleration in the pace of cloud adoption," Sharma said.

Nitin Bawankule, country director, Google Cloud, also seconded Sharma, stating that most enterprises also face challenges such as already large investments in traditional IT infrastructure and shortage of teams that can handle cloud adoption during digital transformation.

"Even if we say that companies can somehow manage the cost of infrastructure, teams, or in other words, shortage of professionals is the biggest hindrance to the adoption of cloud or any other frontier technologies," Bawankule explained.

Sharma also said that enterprises sometimes face challenges during migration to cloud strategy because of the way Indian IT has grown.

"Companies have invested in multiple segments and in building multiple databases. It is not possible to lift and shift all of these databases, applications overnight because it gets too complex," he explained.

Bawankule also seconded Sharma and said that Google takes a different approach with larger enterprises, wherein it takes up one of the most critical applications and moves it to the cloud to show results to the customer.

“Once that is done, we move to the next process," he explained.

Hybrid cloud

According to Nasscom’s Gupta, hybridity is beneficial for cloud proliferation but it has come about because enterprises are reluctant to give up their legacy infrastructure. However, she added that some of this reluctance is driven by regulatory statues.

She also said that a hybrid cloud environment gives enterprises the flexibility to build a multi-talented environment.

Sharma seconded Gupta and said that the rapid growth in demand from customers is driving hybridity.

Siddharth Jain, founder and CEO of MyCloudBazaar.com pointed out that cost also drives hybridisation. "Moving lock, stock and barrel to the cloud could be more expensive than running your own data centre. Hence, companies tend to only move certain applications or processes to the cloud keeping the databases on-premise," he explained.

Talking about how policies can help accelerate cloud adoption, Gupta said that there are three or four pillars that the country needs.

“India needs to accelerate the skilling journey and Nasscom along with companies such as Google are trying to push it. Also, a partnership with the industry and academia is going to help a lot," she said.

She added that while enterprises don't need a lot of fillip or help when it comes to cloud adoption, the government could set an example.

Further, she said that the government should also incentivise companies to ensure more data centres are set up in the country.

When asked about how the government can help cloud computing startups, Jain, whose startup is DIPP-certified, said that the government should look at the grassroots level and help startups compete with other large rivals by offering them bids.

Adding to Jain's comments, Gupta said that there were certain flaws with the procurement process and Nasscom was in talks with the government to fix them.

When asked about why cloud or data centres have not extended to Tier-2 and 3 cities and villages, the panellists said that data centres need certain physical infrastructure such as electricity, submarine landing cables, etc, which are absent in rural parts of India.

Gupta said that cities which have such physical infrastructure available should be competing against one other to get more data centres.