Monthly Archives: April 2016

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.