Clout of cloud computing

It is the situational demand to make cost cutting an essential component of the best practices in retail business. IT support is not lagging behind in this respect. Retailers are now preferring hosted applications on the Internet over a large sum of investment in infrastructure which keeps on expanding as the size of the business increases. The present day business status quo calls for more flexible mode of operation where efficacy will not be sacrificed at any cost but expenditure will remain under close monitor. Cloud computing is such a type of service which meets the requirement of the user on-demand basis, involving the duration of the services used. As far as the infrastructure is concerned, personal computer with the Internet accessibility constitute the perfect IT environment for cloud. Cloud computing has derived its name from the cloud symbol that symbolises the Internet in a programme flowchart, and has three categories - Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). 

 

Under IaaS come the services like virtualised servers, networks, storage or system software to increase and replace a data centre; PaaS provides operating systems to run and develop applications; and the most widely used SaaS offers the user to run applications through web browsing instead of installing them. Some common examples in this category are Google’s Gmail and Apps, and VoIP from Skype.   And all of these three categories can be delivered in two different models primarily - Private Clouds, which allow retailers to bring in the cloud solutions within their enterprises and deliver it more efficiently, and Public Clouds wherein they can rent these capabilities in a more flexible payment model.

 

Retail service


Cloud Computing is the ideal system for retail operation to stay abreast of fast paced modernisation. “We provide advanced IT services over the Web, with scalable, on-demand access to business processes, applications and data. Consider the impact of using and paying for only the IT services that retailers need for everything, from development and testing to data storage to optimising store environments. Our solutions can cut costs of retail operations significantly by reducing the need for IT support and maintenance, lowering capital outlay for software and energy-devouring hardware and optimising workloads through standardised IT and business services. Furthermore, our integrated service management solutions can boost efficiencies and productivity by enhancing process visibility and control from end to end”, informs Mr Sameer Batra, Vice President-Distribution Sector, IBM - India & South Asia.

 

While underlining the advantages of centralised services, Mr Venguswamy Ramaswamy, Tata Consultancy Services, Global Head-Small and Medium Business says, “SMBs in food and beverages need technology for federation. The good news is that it has arrived. It means better, faster and more relational interaction with customers, partners and suppliers as systems can inter-operate and are more agile.  The aim is to lead to faster access to customer data, more responsive systems and higher throughput in transactions.”

 

Cost management


As Mr Batra puts, “Nearly 70 per cent of the IT budget goes towards maintenance of existing infrastructure which leaves them with very little for adoption of new technologies. IT spend for most of the SMBs, including retailers, is anything between 0.4 to 3 per cent of their total revenues. In this context cloud computing offers low total cost of ownership, an easy solution to offer to SMBs in comparison to on-premise solutions.” “Cloud provides a very powerful alternative to license based model.  The overall cost savings can be to the tune of 35-40 per cent less than the typical license based implementations.  In addition, significant overhead costs in maintaining the IT infrastructure are eliminated in the cloud model”, informs Mr Ramaswamy.

 

Popularity in India


According to Zinnov Management Consulting, the Indian cloud computing and cloud services market holds a potential of more than $1 billion by 2012. Springboard Research reveals that India is already the fastest growing SaaS market in the Asia-Pacific (excluding Japan), and is expected to register a 60 per cent CAGR from 2008 to 2012. The SaaS market, which was estimated at $54 million in 2008 by Springboard, is projected to be worth $352 million by 2012. “Microsoft has seen strong momentum for its various cloud-based offerings in the Indian market. We have more than 1000 customers in India (across industry segments) who have subscribed to Microsoft Online Services and have experienced increased operational efficiency, since the launch in October 2009. Globally, Microsoft has already sold more than two million seats for Microsoft Online Services, including Exchange Online, SharePoint Online and Office Communications Online”,  reveals Mr Vikas Arora, Group Director - Cloud Services, Microsoft India. “Retailers are certainly intrigued by the cloud and we observe encouraging numbers keen to adopt cloud solutions.  The initial fear on data privacy and data security are fast fading with increasing number of adopters in the country. With strong technology advancements, we expect this to take momentum in the near future”, comments Mr Ramaswamy. TCS has a number of retail customers including Oxford Book Stores, The Loot, etc for cloud computing.

 

The challenge


Cloud computing model offers compelling advantages for ISVs (Individual Software Vendors) in today’s software applications and services market. However, the challenges for ISVs are substantial when switching to cloud. From revenue interruption to customer and data migration, the business challenges are as complex as the technical issues. Comparatively being a new concept in India, there are usual accompanying hurdles. As Mr Shreekanth Joshi, Associate Vice President, Practice Head for SaaS and Cloud, Persistent Systems explains, “Today, SaaS is at a nascent stage in the country and is yet to prove its value for the partners. Since the service has not gained in the market, the margins in this business are around 5 to 10 per cent, which is still lesser than the common expectation of around 25 per cent. However, with increasing adoption, SaaS is expected to reach a level where the demand will determine the price of the offering, making the whole implementation worth the effort.”         

 

 

“We have more than 1000 customers in India (across industry segments) who have subscribed to Microsoft Online Services and have experienced increased operational efficiency, since the launch in October 2009.”

Vikas Arora, Group Director - Cloud Services, Microsoft India

 

“IT spend for most of the SMBs, including retailers, is anything between 0.4 to 3 per cent of their total revenues. In this context cloud computing offers low total cost of ownership, an easy solution to offer to SMBs in comparison to on-premise solutions.”

Sameer Batra, Vice President-Distribution Sector, IBM - India & South Asia

 

“The overall cost savings can be to the tune of 35-40 per cent less than the typical license based implementations.  In addition, significant overhead costs in maintaining the IT infrastructure are eliminated in the cloud model.”

Venguswamy Ramaswamy,  Tata Consultancy Services, Global Head-Small and Medium Business

 

“Since the service has not gained in the market, the margins in this business are around 5 to 10 per cent, which is still lesser than the common expectation of around 25 per cent. However, with increasing adoption, SaaS is expected to reach a level where the demand will determine the price of the offering, making the whole implementation worth the effort.”

Shreekanth Joshi, Associate Vice President, Practice Head for SaaS and Cloud, Persistent Systems

Stay on top – Get the daily news from Indian Retailer in your inbox