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Trends in Total Infrastructure Outsourcing (TIO)

Trends in TIOIn the current IT outsourcing scenario total infrastructure outsourcing (TIO) services provide the backbone for systems of business engagement and provides the platform for new digital solutions for enterprises. The trends in market show that enterprises in order to improve customer experience prepare their infrastructure for the new digital age where cost savings is not the only motivation for outsourcing.

The trends in TIO is evolving as the infrastructure outsourcing industry has come a long way by providing a platform for delivering expected results in the present IT landscape. Along with networks, storage and applications, TIO providers offer features such as autonomic computing,   self-service (cloud models), predictable analytics and automation in their IT offerings. Currently, these are viewed as some of the main drives for TIO adoption. Further, flexibility has been another hallmark of infrastructure outsourcing while enterprises seek to optimize customer relationships, gain new customers and perform new levels of innovation.

According to Forrester Research Inc. survey on Global Priorities, 75% of enterprises seek to improve customer services and 64% were identifying options for reducing IT costs. Another prediction by Technaivio’s market research shows that IT outsourcing is likely to grow at CAGR of 6% in 2016 and expected to increase. With TIO adoption, enterprises are likely to focus on core competencies and realize improvements in operational effectiveness along with effectiveness to remain competitive. IDC press release in May 2015 on worldwide analysis on outsourcing shows that India based outsourcing providers captured nearly a quarter of all worldwide outsourcing deals in 2014.

Looking into the market for infrastructure outsourcing, CtrlS Data Centers expects the following trends will shape the TIO markets globally and in India.

TIO trends in Global scenario: Security is viewed as one of the main elements that will likely influence TIO strategy globally. The proliferation of IoT is becoming more prevalent, which poses several security risks and hence outsourcing providers should address this concern on priority.

Centralization by TIO providers is another area which promises to offer services to all internal departments and eliminates dependency on multiple IT outsourcing vendors. This technological development is likely to provide increased TIO adoption globally.

In 2016, TIO vendors are expected to focus on centralizing IT service delivery to improve service quality, productivity with reduced costs. According to industry sources, hybrid cloud services is another area likely to have a positive effect on infrastructure outsourcing which is estimated to grow at CAGR of around 19% including $70 billion market for the private cloud in 2018.

Infrastructure outsourcing clients will recognize the need for contractual innovation in order to overcome lack of innovation and lack of technical expertise. According to Forrester estimates the global TIO market is expected to reach $187.5 billion worldwide. The overall trend globally promises good potential for outsourcing providers in the years to come.

TIO trends in Indian scenario: IDC study on worldwide outsourcing highlights on the Indian outsourcing industry making significant inroads in global IT outsourcing arena. India’s significant market share is 23% of the total outsourcing market. This is mainly due to incorporating new service delivery and transformative capabilities such as business analytics, social media and support for mobility. These areas have enhanced local capabilities and resources for India to strategically compete with well-established global players in TIO services.

According to Gartner, the data center infrastructure market in India is expected to reach $2 billion in 2016.  This is an increase of 5.2% from 2015. Within India the IT infrastructure market is forecast to reach $698 million and enterprise networking will continue to be the biggest segment in terms of revenue, expected at $963 million in 2016.

According to NASSCOM, TechSci Research, IT and BPM sector is expected to grow at CAGR of 9.5% to $300 billion by 2020. This trend is influenced by strong Indian expertise and India is viewed as an important outsourcing destination according to the Indian Brand Equity Foundation (IBEF).  This potential can be capitalized by infrastructure outsourcing providers.

IBEF report mentions that Indian IT firms already have 640 IT delivery centers across the world in over 78 countries as of 2015. In addition to this, Indian SMBs are gaining more traction as this sector offers high potential for TIO and this market is estimated to be around $250 billion by 2020. The increased focus on big data activities and mobility, software defined networking is expected to show high adoption by Indian enterprises which are driving TIO trends.

From the above trends India is clearly viewed as a major infrastructure outsourcing destination in this year and beyond. Infrastructure outsourcing spending in India will continue to grow with data center modernization, disaster recovery and business continuity and automation along with focus on software defined networking being the priority for Indian infrastructure outsourcing providers.

In summary, TIO trends indicate lot of potential for outsourcing providers in the years to come. India is poised to be an effective player in this arena due to its skilled manpower, IT expertise and knowledge and resource availability.

Cloud Adoption trends in the Manufacturing Sector (Insights into Global Vs Indian Scenario)

The manufacturing industry is undergoing a major transformation which is driven by smart technologies and IT, notably cloud computing. The main thrust of cloud computing is to provide reliability, scalability and on-demand provisioning of resources. According to industry sources, the availability in a distributed environment along with economically attractive pay-as-you-go pricing and instant provisioning of redundant resources to manage agility can be considered as some of the major factors for adoption in the manufacturing industry.

The recent trends in IT such as internet of things, collaboration, analytics, smart manufacturing and many others are shaping enterprises worldwide. Manufacturing industry is diverse where cloud computing platforms can play a major role due to its benefits in enhancing agility, expanded flexibility, reduced costs and enhanced productivity. According to one IDC survey on Worldwide Cloud Adoption in Manufacturing Industry, trends show that the adoption rate of public clouds is 66% and 68% have private cloud, out of 593 respondents across 17 countries including India.

In India, according to MintJutras research, 22% of manufacturing and distribution software uses the cloud SaaS delivery model and this adoption is expected to exceed 45% in the next decade. Manufacturing industry is increasingly becoming more and more dependent on cloud models for the following reasons:

  • Manufacturers pursue a cloud strategy to achieve business goals by focusing on business systems, processes, models and performance to develop long standing relationships with customers.
  • To realize the full automation in industrial and operational management systems. Clouds due to their computing abilities ensure effectiveness in producing physical goods and to manage product lifecycles.
  • Clouds provide efficient information flows along with easing complexities in implementing fully automated workflows in operations.
  • Provide greater supply chain visibility and improved forecasting accuracy through the use of cloud based applications.
  • Organizations are enabled for more growth, remain competitive and at the same time explore new markets.
  • Offers the ability to solve system integration problems easily. Cloud based enterprise software, ERP, CRM, SCM systems and other manufacturing systems can automatically scale up or down as required.

Cloud Adoption in Manufacturing
In addition to the above, cloud services offer the platform for continuous innovation, agility, ability to scale and flexibility, business focus and availability, cost savings and so on which are some of the other pointers accelerating cloud adoption. Some of the recent cloud adoption trends in global and Indian scenarios are explored a bit more and summarized here.

Cloud adoption scenario in manufacturing globally: The IDC study provides insights on cloud based strategies in manufacturing that are oriented towards enterprise IT. Adoption in other manufacturing areas such as engineering and operations are proceeding with caution. In a recent Bain & Company study titled ‘Tapping Cloud’s Full Potential’, enterprise organizations are able to realize 35% of their total potential value from cloud deployments. However the reliance on cloud for integrating existing systems and for developing new business models is increasing steadily.

The Enterprise Cloud Report 2015 from Cloud Sherpas, based on a survey shows that almost 66% of organizations prefer cloud services due to its agility – positioning IT to change automatically to alter capacities according to changing business needs.

IDC Manufacturing Insights explains that manufacturing industry is in the middle of a digital transformation where manufacturers want to operate and service customers globally. Trends indicate there is more dependency on cloud service providers for technology resources and operational support at low costs.

Clouds support manufacturers in realizing tremendous value in terms of speed, cost and accessibility however IT and line of business must be defined clearly to realize full benefits of clouds.

Cloud adoption scenario in manufacturing in India: Cloud adoption in India is primarily aimed at overcoming challenges in legacy software, disparate systems, inefficient demand planning, high cost and low productivity. Indian manufacturing companies look towards adopting cloud models to implement collaboration and analytics tools, CRM, ERP, enterprise mobility tools and dashboards to share information and enhance accuracy in their production processes.

Manufacturing industry in India is a major contributor for Cloud ERP market and according to Infoholic Research, cloud ERP market in India is estimated to reach $97.8 million by end of 2015 and growing. Estimates provided by Infoholic Research also show that manufacturing market in India is expected to grow at 19.4% CAGR from 2015 to 2020.

The ‘Make in India’ initiative by the Government is providing a big boost to manufacturing sector with 24.1% contributions to the total cloud ERP market in India. In addition to this, SMEs are also implementing ERP systems on cloud platforms which can further promote cloud adoption trends in this area.

Ernest & Young India news release on cloud adoption mentions that more than 60% cloud implementations focus on infrastructure consolidation by adopting IaaS. The manufacturing industry is rapidly virtualizing their servers and desktops along with SaaS platform for enterprise application deployments by many manufacturing firms.

The Indian manufacturing scenario offers big potential for cloud adoption in 2016 and beyond. Government initiatives like Digital India and Make in India are expected to foster cloud adoption among manufacturing SMEs and large enterprises.

Insights on Cloud Service Delivery and Deployment model adoption in manufacturing: According to IDC Global Technology and Industry Research Organization IT Survey, manufacturing respondents access IT resources via public clouds. IDC Manufacturing Insights survey and IT Priorities survey results show that almost 50% of European manufacturing firms had already adopted ERP in public cloud models. Manufacturers in Asia Pacific region are using a mix of public and private clouds with an adoption rate at 49%. IDC cloud adoption estimates show that 61.6% companies prefer to use public cloud services and another 56.8% are planning to replace their existing IT functionalities through IaaS and SaaS cloud deployments.

A survey by EMC involving 900 respondents show that 88% respondents view cloud services as critical to their organization to realize digital transformation and 63% are already experiencing multiple benefits due to cloud adoption. Hybrid clouds seems to be the preferred adoption model to improve customer service, and EMC results show that 86% respondents are able to acquire new customers and another 82% are able to make real time business decisions. Hybrid clouds are preferred by manufacturers to implement their PLM strategies and applications.

Verizon Enterprise Solutions 2016 State of the Market: Enterprise cloud report explains that almost 50% of surveyed respondents use a mix of public and private clouds for their IT resource. Hybrid cloud adoption is gaining momentum with cloud spending growing at 38% compared to 2014. SaaS and PaaS adoption found to be increasing as more and more organizations are using these platforms for implementing applications, web pages and for development and testing new software models.

Industry estimates predict that 80% of new applications will be deployed on the cloud in the next few years. Indian manufacturers prefer to use open source technology and acknowledged OpenStack IaaS for its low cost and to avoid vendor lock-in concerns. SaaS platforms are emerging as a delivery vehicle for mobility, analytics and for handling big data projects.

Verizon report also highlights that manufacturers prefer cloud based ERP implementations to improve their workloads and this market is increasing steadily. According to Gartner estimates, almost 30% companies in services will move their ERP applications to the cloud. Traditional ERP vendors such as SAP and Oracle offer IaaS, SaaS and PaaS products to extend existing applications to cloud or on-premise apps and to create and develop new capabilities. Oracle offers a PaaS platform in their cloud ERP solutions.

Cloud service models are poised to provide significant value to manufacturers by integrating emerging technologies such as IoT, sensors, big data analytics and so on. In summary, cloud computing services are an effective way to access, analyze and share large volume of information across the manufacturing industry.

Cloud Migration Mantras

Almost all type of organizations worldwide are adopting cloud computing models for its numerous benefits, but migrating existing applications and data to a cloud platform is filled with challenges. Cloud migrations and deployment can be made easy provided the organization has done adequate plans for action to work out the various tasks during a migration exercise. In this post we explore a number of significant points to consider while moving internal IT systems to a cloud.

The transfer of legacy systems or the migration of existing applications from internal systems to the cloud may sound easy, but not always as easy as it appears.  Though cloud models offer numerous configurations to easily integrate most of the software systems and applications, the IT department and management have a major role to play in a changed virtualized environment. Management along with IT should ensure that the migration is efficient, effective and business operations are not disrupted. This is because organizations may fail to understand the service provider’s true capabilities, or the approach to integrate business processes prior to migration may be inadequately planned.

Organizations normally decide for cloud service models to overcome challenges in

  • Executing business objectives more effectively, solving constraints in information flows
  • Ensuring service availability and superior performance
  • Managing and usage of latest technology and architectures

Migrating existing legacy applications and existing software to the cloud requires lot of preparation. Without a plan or a comprehensive assessment of existing internal IT assets, cloud computing benefits would be hard to realize. A successful migration plan will have the options for:

  • Transferring or shifting the applications in as is condition
  • Use migration as an opportunity to upgrade – make full use of new versions of the application technology stack
  • Extending the functionalities of applications to fulfill business needs. Here the deployment architecture is adjusted to increase the application’s resilience, performance, etc.
  • Replacing the existing software with an alternative implementation or it may be redeveloped
  • The existing application could be obsolete and need not be moved to the cloud

Cloud Migration
Therefore, migrating existing systems to the cloud can be summed up as a three step process: Preparedness, Migration and Switchover. During migration, the software and data from a recent backup is implemented in the cloud platform and verified thoroughly to ensure the systems work properly in the new environment.  In order to realize full benefits of clouds, given below are a list of mantras for migration, which can also be considered as a checklist for smooth sailing on clouds.

  1. Constitute an experienced project management team to document business requirements on the cloud and a desired timetable for deliverables.
  2. The existing business model should fit for the cloud.
  3. Assess existing applications and the capacity demands along with costs. Make sure to document all assessments and plans.
  4. Make plans to handle vulnerabilities in a multi-tenancy architecture environment. Data safety is highly critical.
  5. Prepare adequate protection plans and have mechanisms to meet compliance regulations.
  6. Ensure the cloud requirement plans are approved and reviewed by all stakeholders, management, IT and business investors.
  7. Prior to migration, have a recent backup of all applications and data. This is again highly critical.
  8. Develop performance benchmarks to compare performance of applications after migration.
  9. Understand all SLAs fully to know the cloud provider services and responsibilities and make procedures to track and verify usage when systems become fully operational on the cloud.
  10. Check for standards, disaster recovery, security, privacy and the ability for scalability with the provider.
  11. Prepare a test plan for verifying the software and data are functioning correctly and have a fallback plan to handle exceptions.
  12. Document all changes and ensure migration will benefit the organization with the envisaged ROI.
  13. Complete a full backup of all existing applications, data, web content and all important data.
  14. Disable existing tasks on the server during migration. This done in order to perform the movement of application programs from physical to virtual (P2V) environment.
  15. Migrate databases and data from existing system to cloud platform.
  16. Migrate all web content to the cloud platform from the existing systems.
  17. Perform testing to confirm migrated data and applications are working correctly. Verify and confirm all data.
  18. Check whether users are able to access web pages, data and other applications through the internet. Make sure the web pages, data and applications are reachable by users.
  19. Ensure full security, controls and compliance is in place during and after migration. Verify and define appropriate SLAs.
  20. Perform a reliability test on the cloud platform to ensure business processes are working correctly and decommission the existing system after a certain period.
  21. Prepare an orientation program to help internal staff to understand cloud services and migration and if required help them understand how they can easily provision services.
  22. Create a new customer support model in the changed scenario. Ensure the focus is on competencies and not on infrastructure management.
  23. Define new reporting structure or templates, frequency, etc. for monitoring business processes if required.
  24. Discuss specific changes and address concerns immediately with all stakeholders and business partners. If required, hold regular meetings to make sure everything is working correctly in the cloud.
  25. Monitor the performance of web and applications on the cloud and compare it with initial baseline. If required, develop new performance monitoring plans for the new environment.
  26. Nominate a focal point or establish a team for all cloud related operations – handling incident response procedures, track resources, cost, SLAs, and so on.

In summary, the above mantras for cloud migration are intended to significantly minimize much of the bottlenecks and challenges faced by organizations planning for a cloud implementation. The only method is to comprehensively evaluate organization’s business and IT objectives along with readiness in order to realize full benefits from cloud deployments.

Cloud Adoption in India

India is currently witnessing substantial expansion in terms of internet users, mobile device and application usage and business growth. As the demand for IT service delivery increases organizations in order to cope with demands look towards cloud service delivery models mainly for their agility, cost savings and to avoid risks. These advantages are influencing many organizations across industries in India to adopt cloud computing services in a big way. According to TechSci research, cloud services adoption market in India is estimated to grow at CAGR of 22% till 2020.

Cloud computing services are available to all types of organizations either big or small and provide immense potential to be a game changer in business. The infrastructure can be fully outsourced and eliminates the need for an expensive internal IT infrastructure which is one significant capital savings for the company.

CIOs in India are using cloud services for more strategic reasons like collaboration solutions, disaster recovery, supply chain management, offsite storage, etc. Cloud based IaaS services and public clouds are more favored in India compared to other service delivery models.

According to GrowthPraxis research, IaaS will witness higher adoption rates in India and this market is set to grow at over 40% from 2015. Enterprises in Healthcare, ICT, government, education and manufacturing are expected to be major cloud adopters in the years to come. Forrester predicts the SaaS market value in India will be worth over $1.2 billion by 2020.

Here are a few main business drivers influencing cloud adoption in Indian markets,

  • Indian companies look for cost-effective IT solutions, business agility and scalability in their business and IT operations, clouds offer immense promise in these areas.
  • By adopting cloud service models, CIOs have the ability to produce quick results and good return of investment.
  • Clouds can overcome delays in time to market for quick ROI and help enterprises to reduce their capital expenditure.
  • IT departments benefit by way of Infrastructure consolidation – desktop, server virtualization and IT consolidation.
  • Cloud services offer enterprise e-mail applications, productivity tools, collaboration tools and storage facilities and many more.
  • Clouds offer high levels of security. Most enterprises face the challenge of security, privacy and data protection. Cloud deployment models help in overcoming most of these issues.
  • Enterprises can find easy answers for interoperability, enterprise mobility, availability and scalability through cloud adoption.
  • Cloud systems due to their efficiency and agility offer responsive customer interactions to ensure customer satisfaction.
  • Business companies are able to leverage various public data sources on the internet for forecasting, analytics and business intelligence.
  • Clouds offer all compute, storage and network resources needed for big data analytics and BI.

Cloud adoption in Indian markets shows a lot of promise for cloud vendors and service providers. For instance, manufacturing and technology services lead in cloud implementations followed by healthcare, financial services and so on. In addition to this trend, Government of India (GOI) is investing in cloud service to offer e-services to citizens using web portal. This initiative by GOI is to optimize technology spending by government departments.

According to one cloud adoption survey by Gartner in 2015, 61% of respondents from India are already using cloud services in their operations and another 33% of Indian companies plan to implement clouds by end of 2015.

Cloud usage and adoption patterns in India show that small and medium businesses in India are slow in cloud adoption. This is because many Indian SMEs are owned and run by individual owners who are complacent with their existing IT, or are unaware of the advantages of cloud service models in business expansion and growth. SMBs may seek help of experienced cloud solution providers or advisory firms to design appropriate cloud strategy road map to align their business with IT. However with large enterprises and organizations, cloud adoption in India looks highly promising as CIOs are aware that cloud services provide the headlights for business growth and innovation.

With emerging technologies such as mobility, analytics, IoT and so on, many enterprises are deploying new applications on the cloud. According to Ernest & Young estimates, 80% of new applications worldwide will be deployed on the cloud and spending on big data analytics solutions is likely to grow three times faster through 2019 as compared to internal solutions. Gartner also predicts that cloud adoption in India will continue through 2019 and the market is expected to reach $1.9 billion. These trends along with convergence of the cloud with new technologies will certainly foster digital transformation and make sense for Indian enterprises in the years to come.

Desktop as a Service (DaaS) and its Business Advantages

The concept of DaaS is a cloud service that provisions virtual desktops using a server to host many personal computer desktops at the same time. DaaS offers virtual desktop infrastructure (VDI) hosted by a cloud service provider. From the technical perspective IT administrators can easily automate changes to individual systems instead of logging into individual computers for upgrades. According to one IDC survey on Virtual Desktops in April 2015, companies with virtual desktops had 83% reduction of time savings in IT software deployments/patching and 63% man-power hour savings on desktop setup and configuration.

DaaS relieves IT responsibilities by maintaining virtual desktops and applications and is an ideal, cost effective solution for organization with low IT budgets. Earlier, IT staff used to login from individual computers to perform a task such as upgrades or system changes for each user. The concept of DaaS in a cloud hosted infrastructure works by allowing client hardware to connect with a remote server for secure access. User desktops, whether they are in-house or remote will connect to a remote server on the cloud for changes to be effected. IT staff can securely access client systems even in remote locations and perform application changes.

DaaS Adoption Trends

By adopting DaaS a company can provide applications, information and data anywhere, anytime and on any device. Evolve IP a cloud services company did a survey titled 2015 State of the Desktop, to understand the challenges of desktop management. Their survey involved 1031 IT professionals and organizations worldwide.
Evolve IP survey results indicate that over 37% of the organizations had desktop services or VDI already implemented in their business and another 33% have plans to implement desktop virtualization in the next one to three years. 65% of executives cited mobility, BYOD as an excellent benefit of virtual desktops.
Citrix in their report titled ‘2015 Desktop-as-a-service global market trends’ explain that over 49% organizations prefer DaaS model to grow their business and another 22% prefer cloud VDI.
Citrix report also provided insights on virtual desktop adoption among different industry verticals globally that comprises of 11% adoption in financial institutions and manufacturing industries, 10% in healthcare, 9% in legal, construction, retail, education, government and public sector and 6% other industries.
According to Research & Markets, global VDI market is poised for growth at CAGR of around 27.35% in 2016-2020.

Business advantages of DaaS

The trends provided above from industry sources indicate that DaaS helps companies to overcome the problems of acquiring, developing and managing an internal infrastructure through desktop virtualization. DaaS offers numerous benefits, a few key benefits include,

  • For users or employees DaaS provides high-quality experience on any device.
  • For IT, the service is simple to deploy and highly secure, also DaaS is scalable
  • For business, it improves agility and productivity and reduces costs for organizations

In virtual desktops, data is not stored locally because they access data and applications through the cloud. With DaaS, the integration of major upgrades or patch applications is performed quickly by allowing the client computers (internal and remote) to connect to the cloud server on VPN. It is a good option for organizations that are low on budgets that face deployment challenges and when there is a need to replace client systems.

Compared to physical desktops, DaaS offers many compelling business benefits,

  • Cost Effectiveness: According to IDC, desktop as a service can reduce capital expenditure by over 56% and also offers to reduce annual operating expenditure. The cost of virtual desktop is two times less compared to a traditional PC because of its low power consumption and the absence of no local hard disk. For example, if a company decides to upgrade software, virtual desktop service enables the reuse of existing hardware and ensures the life of individual PC investments are extended. This reduces significant capital expenses for the company.
  • Easy to deploy: DaaS is fast and easy to deploy different use cases. Time is considerably reduced as organizations no longer have to wait for weeks or months to get their physical desktops ready for implementing new software or systems. Desktop virtualization offers organizational agility and flexibility by providing all necessary desktops with resources within hours. Also, if an organization has undergone a recent merger or acquisition, DaaS deployments can overcome challenges in integrating disparate infrastructure and integrates new employees into the corporate systems quickly without a major IT overhaul.
  • Better Security: In business environments, a personal computer or a laptop can be hacked, stolen or lost. In this case all data and important information is lost. VDI addresses this issue by storing all sensitive information on the remote server and nothing is stored locally. Further, individual computers are vulnerable to viruses, malware, etc. which can infect corporate LAN. With desktop as a service, it is difficult for viruses, worms or malware to penetrate cloud systems. This results in low risk in terms of security. With DaaS, centralized updates, continuous back up and synchronization of data ensures easy compliance.
  • Prevention against data Loss: Traditional business desktops are likely to be damaged in the event of natural disaster. Virtual desktops store data in remote locations thus ensuring data is protected and available at all times. Business continuity is also ensured because employees can access their data and applications without interruptions using any device even after a disaster event has occurred.
  • Mobility: Access to applications and data is possible from anywhere using any type of device (smart phones, tablets, etc.) in virtual desktop environment. DaaS allows remote and mobile workers to be connected at all times. This results in more employee productivity and
  • Promotes green IT: Power consumption in virtual desktops is significantly low. For instance, a desktop computer may consume over 150 Watts electric power compared to virtual desktop with electricity consumption less than 20 Watts. Reduced electricity consumption reduces energy costs – overhead savings for the company. This benefit also results in low carbon foot print and emissions, thus advancing the idea of Green IT.

Virtual desktops can be implemented and scaled quickly and the issues of application compatibility with different operating environments are easily overcome. Organizations adopting DaaS are sure to benefit in terms of reduced costs in managing IT and extending their reach by making employees more mobile and responsive.

Cloud Adoption Strategies (Public, Private, Hybrid)

We are witnessing a scenario where cloud computing models are proving to be game changers across industries and IT organizations. Organizations globally are already moving towards the cloud and adopting cloud services in one form or the other for their operations. Though adopting clouds may sound easy, it requires careful planning and comprehensive migration strategies because the organization may undergo significant changes in their normal operations.

During the last decade, cloud computing were viewed as infrastructure services on the internet which offered software delivery as a service. During these years clouds have evolved to become mainstream business enabler with substantial business sense for companies. Cloud computing platforms are available as a variety of IT services, mostly as three main service delivery and deployment models. Industry experts indicate the reasons for cloud adoption to a certain set of most straightforward business drivers that include,

  • Costs are optimized: Businesses look for optimizing costs as business grows and expands there is an increased utilization of resources and need for more hardware. Cloud models optimize costs by allowing organizations to hire services and resources which incur only operational expenses. The need for purchase of new hardware and infrastructure is fully eliminated which is a saving on capital cost. Further the cloud infrastructure is managed and maintained by the data center or cloud service provider which reduces the need for IT personnel.
  • Enhanced agility: Clouds due to the method of elasticity can quickly scale up or scale down resources based on usage and workloads. For example, online retailers normally experience heavy usage of applications and network during festive seasons. Cloud models can efficiently handle sudden spikes in workloads without disruptions or breakdown.
  • Improved cash flow management: Organizations face significant expenses in internal IT operations which are due to software licenses, storage, servers, communication costs, etc. In clouds capital costs are reduced into monthly rental cost for subscriptions, this improves cash flow management in the organization.

Cloud Adoption Strategies

The adoption by a variety of industries is largely driven by these business drivers, but cloud adoption is not just using the technology, rather adoption is a journey with extensive planning and strategies. First, a quick brief on how cloud models are used will help in understanding the strategies required for adopting the appropriate model for the business.

Service Delivery and Deployment Models in Clouds

Clouds have two main service delivery models: Private Cloud and Public Cloud. The third delivery model is a combination of private and public clouds and is called the Hybrid cloud.

  • Private cloud services are owned and used by a company internally. For example, private clouds can be found in large enterprises where data, applications, storage and servers are centralized. Private clouds can also be hired from data centers.
  • Public clouds are owned and provided by a third party or provider for use by external companies. For example, Google offers public cloud services in the form of email, storage, etc.
  • Hybrid clouds are a combination of private and public clouds. A hybrid cloud will combine certain public cloud services with the internal or private cloud. For example, data and applications can be private, but the network and communication services can be external (For example, a VPN on the internet).

All of us are aware of three main cloud service delivery models,

  • IaaS: Provides the infrastructure for cloud services. Networks, servers, compute resources, data center, virtual fabrics, etc.
  • PaaS: Provides the operating platform for cloud services, also known as middleware. OS, software development tools, databases, Java TM runtime, Web 2.0, HMTL5, and many other platforms are available in PaaS.
  • SaaS: Offers all application instances for the cloud. Popular applications are ERP, CRM, E-mail, collaboration tools, etc.

Adoption Strategies
Cloud adoption strategies take into account specific business goals, best practices, cloud standards for current and future use by a company. A basic adoption strategy for any type of cloud model will consist of a series of steps that includes Assessment, Planning, Migration and Optimization.
From the perspective of business the adoption strategies to consider for Private, Public and Hybrid clouds are explored and summarized in the table.

  • Applications are developed only for internal use
  • Application usage patterns are predictable and require low storage
  • Private clouds can be configured to support any application
  • Certain features in legacy applications can be protected. These applications may not work well in public clouds.
  • On-premise infrastructure with virtualization layer in the data center or a dedicated infrastructure
  • Security levels are high
  • Can also be hosted from a data center.
  • Compliance standards are fully ensured
  • Capital costs are high
  • Offers a cloud infrastructure (IaaS) for companies looking to reduce hardware costs
  • Cost-effective solutions for long term storage
  • Enterprises looking for a managed services provider can consider public clouds
  • Data centers maintain all managed services (web servers, application servers, load balancing and other infrastructure).
  • Offers good load testing environment for developers
  • Security is low, low data protection
  • Compliance is not a priority
  • No capital costs. Operational expenses only.
  • Used in scenarios where applications are supported well in both private and public clouds
  • Best suited for customer service interactions
  • Hybrid clouds are attractive for organizations looking for flexibility and scalability
  • Legacy applications and data can be stored in private clouds, whereas networks can be used on a public cloud
  • Security is an issue. Companies must have adequate security planning to protect internal data.
  • Data centers offer a wide variety of hybrid architectures, solutions.
  • Compliance is ensured through SLAs
  • Cost will include both capital and operational expenses

All cloud computing systems and services offer common benefits like elasticity, availability, scalability, and so on. Prior to adopting cloud services, organizations need to assess, plan and develop comprehensive cloud adoption strategies because each service model is different. Developing a well planned strategy will help organizations to deploy the most suitable model to optimize their business operations.

Infrastructure as a Service (IaaS)

IaaS is one main cloud service delivery model ideal for companies seeking cost effective infrastructure services. IaaS offers scalable and elastic infrastructure resources to efficiently handle changing workloads due to unexpected surge in computing needs. Companies can instantly provision resources and infrastructure components to meet business requirements. Some of the other characteristics of IaaS include automation of administrative tasks, desktop virtualization, dynamic scaling and policy based services among many others – which are much required by many organizations.

Infrastructure as service (IaaS) is one of the major service delivery models of cloud computing where users can access virtual computing resources over the internet. In IaaS the cloud service provider offers hardware, servers, storage, networks and also software along with the infrastructure as required by consumers. IaaS service providers handle multiple tasks that include resource provisioning, maintenance, backup, disaster recovery, and also resiliency planning. Like other cloud models, IaaS resources are scalable and the infrastructure can be adjusted according to the business requirement.

Like all cloud service models, IaaS services are charged on per-use basis over a period (week, or month). The pay-as-you-go model eliminates capital investments incurred in deploying hardware and developing an infrastructure to run applications. For instance, if an organization plans to deploy newly developed software, it is more cost effective when the testing and implementation is done on IaaS. In spite of these benefits, many companies planning to hire IaaS services should monitor their environments closely from being charged for services that are no longer used.


Business Benefits of IaaS

  • Shifts the focus of IT: IaaS eases much of the hassles in maintaining and managing the internal infrastructure. The resources of IaaS are managed by the provider or data center. This frees time for internal IT staff for focusing on solutions and innovation that will generate business growth and value. For example, a banking organization can hire IaaS and focus on their core banking areas for growth without much worry for their IT infrastructure.
  • Service without disruptions: In clouds every component is offered as a service. For example, storage is a service, network is a service, etc. IaaS provide the flexibility for companies looking for specific solutions, such as storage space. Clouds ensure services without disruptions because the cloud infrastructure is built with redundant resources. Clouds offer business benefits like availability at all times and scalability due to the concept of elasticity.
  • Dynamic scaling: The infrastructure can scale up or scale down based on application usage to handle unexpected resource demands. This is one major benefit in all cloud service models. IaaS allows the consumer to add or remove resources automatically based on usage. This flexibility results in optimization of resources and cost.
  • Utility services: IaaS is a utility service and follows the model of pay-per-use or pay-per-resource subscription model. The customization and provisioning of resources or utilities can be made in less time. The services can be used as long as they are required and returned back when not in use to result in subscription cost savings for the company. In IaaS the company pays only for the services and components utilized. The utilization of each resource is metered, if the usage is low, bill amount is low.
  • Eliminates capital costs: Organizations may not be willing to invest huge money in hardware and infrastructure. IaaS is an ideal solution, because no capital costs are involved. Organizations pay for hiring the IT infrastructure services form data centers which incurs only operating costs. Also the need for hiring IT personnel is reduced in the company which is another cost saving with IaaS.
  • Ubiquitous availability: The infrastructure is available for access from any location and from any device.

IaaS offers infrastructure services for organizations across all industries to align IT resources with their business objectives at minimal cost. Businesses must identify and consider specific areas of IT that are appropriate for IaaS and understand how resources are available for use along with their risks and performance metrics which are defined in SLAs. IaaS will certainly prove to be beneficial in companies with reduced IT budgets and in dynamic market scenarios.

Top 10 reasons why CIOs should adopt Cloud

The current economic climate is forcing organizations to refocus their systems and IT operations with minimal resources. CIOs are quite used to ‘doing more with less’, the squeeze on IT budgets and personnel creates new approaches and solutions to cope with demands. According to, the unprecedented financial limitations led to the optimization of existing resources and since 2009 enterprises are moving to cloud based solutions and deployment. It is also envisaged that cloud will drastically change the economics of IT in the coming years. Cloud computing offers a different paradigm compared to in-house or outsourced IT operations.

Cloud computing is traditionally implemented as an infrastructure service model to reduce IT costs. Cloud models have evolved to prove it is a better business solution with many benefits. Today, business organizations big or small having understood the abilities of cloud services are using cloud in their organization to transform their business capability, to improve agility and to gain competitive advantage. From the perspective of business technology clouds offer measured service, on demand self-service, redundancy, resource pooling, scalability and broad network access along with other technical benefits.

Due to global economic downturn, IT departments are currently re-evaluating their IT strategies to fulfill three main financial demands: initial capital expense, operating costs and return of investment or time to value. Therefore, CIOs face the challenge of delivering more with less due to reduced budgets. The role of CIOs is also changing from managing IT operations to a more strategic business role to develop business value, foster innovation and overall business growth all using technology.

CIO adoption to the cloud

Cloud services offer an ideal solution to fulfill these demands because IT projects continue to be critically evaluated on these demands. Cloud computing offers huge potential for easily overcoming most of the challenges faced by CIOs in terms of providing secure, faster and cost-effective alternative to internal application development and management. Here are some reasons why CIOs should adopt cloud computing.

  • Faster time to value: Companies normally delay projects that take time to deliver ROI. CIOs can make use of fully pre-built applications and project management services that streamline design, coding, testing and training and so on in the cloud. Developers can quickly create user experience by defining the data model and business logic in a cloud environment to result in delivery of faster time to value.
  • Requires no upfront capital costs: CIOs can benefit from subscription pricing model available with cloud computing platforms. The pay-as-you-go model significantly reduces risk because projects can be scaled based on customer satisfaction. Also in clouds no upfront capital cost for purchase of hardware is needed.
  • Significant reduction in operational cost: Clouds offer multiple environments which benefit developers, testers, trainers and end users. All these environments are available as an integrated service which is ready to use. CIOs can make use of available services that include administration, centralized management and governance, etc. which significantly reduces project time and cost. Also cloud adoption eliminates capital costs for purchase of new hardware.
  • Extensive technical resources are not required: The cloud service provider handles all resources needed to support applications and maintenance. CIOs have the advantage of optimizing cloud resources for more business growth.
  • Overcome challenges in integration: Integration is easy with cloud models as enterprise applications can be quickly deployed and made available. Existing legacy databases from major business categories such as SCM, HRM, ERP, etc. can be integrated easily with enterprise applications such as SAP, Oracle, etc.
  • Enterprises are more TCO aware: The cost benefit analysis on cloud usage within the enterprise can be quickly realized by organizations. For example, each business case can be determined for its value by adjusting resources in the cloud. CIOs can be sure to realize agility which comes along with TCO. Since performance metrics are established for agility, the organization can easily realize TCO.
  • Cloud accelerates innovation: Cloud deployments significantly minimizes time, expertise and separate technology resources needed for innovation. CIOs can quickly provision resources for experimentation cycles or innovation thus enhancing time to market.
  • Potential for more revenue and opportunities: Cloud models avoid duplication and redundancy across all departments in the organization. Business strategies are aligned with IT. CIOs can focus more on product launch in new markets, identify potential opportunities, innovation and business growth.
  • Better customer engagement: Cloud systems have the ability to handle large data storage and perform analysis on them efficiently. CIOs can use this analysis to gain business insights easily from customer data and use it for improving business outcomes.
  • Security and compliance: Security and privacy are handled well by clouds as they offer in-depth protection to data and applications. For instance, private cloud models offer SLAs and privacy protection assurances for organizations. In addition to security, compliance requirements can be fulfilled by the CIO by defining appropriate data ownership and controls in SLAs with cloud providers.

In addition to the above reasons for cloud adoption by CIOs, there are numerous other benefits for both business and IT. CIOs can help business growth by improving connections with suppliers, etc., enhance employee productivity and optimize operating expenditure and so on.

How TIO (Total Infrastructure Outsourcing) is transforming the role of a CIO

Organizations to cope in volatile economic climate are increasingly investing time, talent and resources on core competencies to maximize business value. IT is no longer viewed as a business core competency area, but the capabilities of IT as a business enabler is well acknowledged. Internal IT infrastructure and operations are becoming a big burden due to increased risks and complexities in deploying new technology and synchronizing the infrastructure to cope with dynamic business demands. Total infrastructure outsourcing (TIO) offers the solution for overcoming internal IT management in order for the CIO to play a more strategic role in business growth and innovation.

The role of IT as a business enabler is highly emphasized in scenarios where business growth relies relentlessly on business innovation and customers. The focus of CIOs is shifting from managing normal IT operations to playing a more strategic role in business growth where innovation is gaining momentum and driven by technology. Technology enables a CIO to focus more on streamlining business operations, improving solutions, enhancing service competitiveness and generating revenues from new business models. CIOs strive to fulfill these expectations in a highly challenging environment and to a large extent they are successful.

Business expansion is one top priority for enterprises. IT infrastructures that drive business operations depend on three aspects namely, managing risks, enabling agility and flexibility and innovation. For IT to contribute fully in business expansion towards growth and innovation, it has to overcome multiple challenges if the IT infrastructure is maintained internally. The major challenges faced by CIOs with internal IT management include,

  • Complexities in controlling an expanding infrastructure and networks at minimal cost
  • Unable to meet demand spikes and service quality due to limitations in infrastructure
  • Provisioning a highly scalable and secure computing infrastructure with high availability, at the same time keeping costs down
  • Providing a flexible IT environment which is agile in changing market demands
  • Managing vendors needed to support high levels of service delivery
  • Difficulties in identifying and retaining skilled IT staff

These challenges can be overcome to a large extent by optimizing the infrastructure and by avoiding wasted capacity which results in excess spending, and avoiding inadequate capacity which is influenced when responding to market demands. Business enterprises look towards total infrastructure outsourcing (TIO) as an effective alternative to optimize capacities, improve business focus while reducing business risk and complexities.

Successful outsourcing depends on a comprehensive understanding of business and IT objectives and the services worked out by different functions and the management. Here the CIO plays an important role in working out cost-benefit analysis, technology selection and evaluating the needs, risks and benefits.

In a total infrastructure outsourced environment the organization’s leadership focuses on service management as defined in the contractual terms and measured by SLAs. Changes are imminent for the CIO after transition to outsourcing. The role of the CIO undergoes dramatic transformation in TIO and the roles and responsibilities will focus on assessing service performance and compliance by outsourcing provider as agreed in the SLA.

The CIO’s roles and responsibilities in infrastructure outsourcing are examined below:

  • Avoiding costs: TIO services from data centers offer extensive resources with access to latest technology to result in world-class capabilities to gain knowledge, processes and tools. CIOs can significantly reduce the need for capital investments in IT and focus resources on business innovation and development.
  • Improve business focus: CIOs should take advantage of the cost structure in TIO and operational efficiencies. The focus should be more on core business development and strategies, technology solutions for business growth and innovation. Costs incurred in availing TIO services are always much lower because there is no capital expenditure involved in IT hardware. Also costs of maintaining the infrastructure is less compared to maintaining an in house infrastructure. In outsourcing, IT operations are managed by skilled experts available with the provider. This further reduces the time spent on IT by CIO and other IT staff.
  • Re-engineering: CIOs can accelerate re-engineering of systems and processes towards maturity and compete in world-class standards. TIO shifts IT expenditure from Capex to Opex. The pay as you go model offered by service providers or data centers promises significant cost savings for organizations.
  • Enhance agility: TIO offers the ideal solution for developing latest technology infrastructure capabilities from ground-up. The CIO can focus on business agility and competitiveness because outsourcing offers flexible, dynamic and adaptable IT systems for the company to readily compete in changing markets and demands.
  • Easily address business challenges: CIOs due to their technical backgrounds have strong understanding in technology and business processes and develop solutions to directly address business challenges. This process is quickened in TIO because the infrastructure is readily available. CIOs can shift their focus to management skills which include planning, organizing, developing, communicating, etc.
  • Reduce complexities and risk: Expertise is readily available with TIO provider which can be used to handle complex IT systems and applications. CIOs should plan to re-assign internal IT staff with tasks that generate maximum business value.
  • Managing innovation: In the current business trend, service providers play a role in development and delivery of services. In this scenario the key to success for CIOs is to synchronize business and technology strategies with diverse groups with clear objectives will motivate the use of technology in new directions. Therefore managing innovation becomes an essential requirement for a CIO.

In addition to the above responsibilities, outsourcing offers variety of benefits for businesses. CIOs can concentrate more on managing resources to easily meet market demands. With outsourcing CIOs can demonstrate the strategic role of IT in business for growth, innovation and competitiveness and at the same time eliminating risks to business and to IT.

Ten questions the CIO should ask his technology vendor

CIOs often face challenges in evaluating technology vendors and identifying the right strategic vendor for their IT needs. CIOs prefer vendor solutions which are able to provide business growth in dynamic and agile organizations. In this era of rapid technology growth the focus of vendors’ is normally more on system usability and features rather than fulfilling CIOs concerns on strategic IT. In this post, top 10 questions for technology vendors are provided which is intended to help CIOs in identifying the right IT vendor.

Business companies look for ways to increase efficiency and maximize their value. There are many examples to demonstrate the role of IT as an enabler for business. For example, e-commerce, web based applications, cloud computing, etc., to name a few. Vendors have also understood this well, and most of the vendors are quick to talk about their product features for its business benefits without understanding customer requirements or market demands. According to IDG Enterprise survey 2015 titled CIO Role and Influence Research it was found that in some of the CIO or industry gatherings, vendors fail to understand the specific business goals and challenges from CIOs. Vendors tend to talk more and listen less to CIOs and the much intended focus on achieving business objectives using technology is often lost.

From the technical perspective IT is undergoing fundamental shifts in technology where a variety of technologies are converging on business – some CIOs see them as disruptive. These trends create certain unique challenges for CIOs to identify strategic vendors for the organization. Strategic vendors are those that offer highest quality of service, understand business objectives and goals of customers and offer superior and proactive post-sales support and service.

It has become highly imperative for vendors to understand what exactly CIOs look for in their products and how their products can meet business goals easily without stretching IT budgets.

The role of CIO in any organization is highly challenging and critical because they play the role of bridging IT and business in order to enhance value for both. Therefore, CIOs by asking the right questions to vendors can maximize return on IT investments by implementing the right solutions that ensures business growth and value.

Given below is a set of top 10 questions every CIO should ask vendors in the current business and technology scenario:

  1. How the new system or technology can adapt with increasing tech savvy workforce?
  2. How can the organization capitalize opportunities in this era of data growth (big data)?
  3. Will the technology be able to integrate existing legacy systems and data?
  4. How can new technology adoption drive business growth?
  5. Can the solution handle integration across platforms?
  6. Is employee training included in the implementation cost? Can the vendor support the system for a period of time without any additional cost?
  7. How secured is information or data in the system/application?
  8. What are the recovery options and DR plans and how will data security fit into those plans?
  9. Will the solution ensure performance, availability and uptime?
  10. Where are the references?

CIOs look towards leveraging technology in a cost-effective and secure manner in order to improve productivity and efficiency within the organization. CIOs can use the above questions to evaluate potential vendors and identify strategic IT vendors for business growth and technology innovations.