InformationWeek May Issue by Viraj Mehta

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Cloud Computing? Pehle Aap…

Businesses will increase confidence in the cloud after seeing competitors successfully deploy applications to, and benefitting from the cloud

Want to hear what thought leaders are saying about the cloud? Come along to the CloudConnect Forum (debuting in India) on May 24 - 25, 2012 in Bengaluru. See page 14 for details

informationweek may 2012

am often asked the question, “What’s your take on cloud computing in India?” Well, there’s plenty of talk about cloud right now, yet few Indian companies have successfully completed their journeys to the cloud. What I do observe is a flurry of preparatory activity in the areas of consolidation and virtualization. Interestingly, our correspondent Amrita Premrajan observes a lot of virtualization happening at the desktop level (read her report in this issue). Virtualization of networks and security are the next hot areas to watch (read our interviews with VMware). The general consensus is, it would take 18-24 months before companies in India move to the cloud. It’s unlikely that large enterprises will have cloudonly deployments for all its applications, though this scenario is more likely with the small and medium companies. Market researchers are pretty optimistic about cloud computing in India. Zinnov, for instance, estimates that the Indian cloud market will reach USD 4.5 billion by 2015. SaaS, a flavor of cloud, has the fastest uptake and is likely to reach the USD 650 million mark by 2015. These figures cannot be ignored and the service providers are now adapting their traditional offerings for cloud, as you’ll read in Vinita Gupta’s story aptly titled, ‘Indian service providers pursue cloud opportunity.’ While projections for the cloud computing market have been pretty strong, it’s not difficult to see why Indian organizations are holding back. Lots of questions are being asked about security and data privacy from the cloud service provider. It will take a lot of faith and courage for an organization to move its customer database with sensitive information to the public cloud. But it’s more likely to go hybrid, keeping its database behind the firewall, yet providing controlled access (presentation layer) to employees via the cloud. Hybrid clouds too present a set of challenges because of the geographic separation of the application components (on cloud and on-premise). This causes latency-related issues that affect application performance and response time. And when you deal with a business like stock trading, where the slightest delay in information transmission across systems will result in a huge loss (for traders), this is highly unacceptable. So private clouds (on or near premise) are likely to take off first, as organizations will continue to be in control of their applications. The other option of course is server co-location in a non-captive data center. It takes time and effort to port existing apps to the cloud. So, CIOs are considering cloud for newer applications. Satish Pendse, President, Highbar Technologies (formerly CIO at HCC), tells me cloud will need an inflection point where some customers have moved core applications to the cloud. The growth will be tremendous at that inflection point, he says. Businesses will increase confidence in the cloud after seeing competitors successfully deploy applications to, and benefitting from the cloud. And the cloud ecosystem (vendors, service providers, SIs, etc.) needs to do a lot to improve business confidence in the cloud. To ensure cloud success, they need to rationalize pricing structures, improve security and privacy standards, form assuring SLAs, and partner with business. u Brian Pereira is Editor of InformationWeek India. brian.pereira@ubm.com

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24 cover story Indian service providers pursue cloud opportunity TCS, Infosys, Wipro, Mahindra Satyam & HCL are converting the cloud threat into an opportunity by building new strategies. Today, less than 5 percent of Indian service providers’ revenues come from cloud, but by 2015 this is expected to increase to 10-15 percent

India sees rise in emergence of cloud-based startups Targeting a fast growing SMB market, Indian startups are offering everything as a service with services ranging from collaboration, enterprise applications to Business Intelligence in the cloud. Here is a first-person account from the founders and leaders of nine such cloud computing startups. Discover the challenges and excitement as these leaders reveal why they zeroed in on the cloud computing model and the opportunities they envisage ahead

Desktop virtualization gains momentum in India While desktop virtualization has been around for a long time, it is only recently that it has caught the attention of Indian organizations across verticals. The rise of BYOD, coupled with reduced hardware and management costs is forcing organizations to take steps to adopt this trend

case study Intel shows how the cloud can transform internal IT The processor giant’s enterprise private cloud has already realized USD 9 million in savings, and reduced provisioning time from 90 days to 45 minutes

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Cover Design : Deepjyoti Bhowmik

Essar’s journey to the cloud

How Hexaware is using the cloud to improve its competitiveness

Having built a robust infrastructure foundation using virtualization, the Essar Group is now accelerating its journey towards the cloud

Hexaware’s cloud journey has not only helped it in driving productivity, but has also resulted in a reduction of nearly 2.7 million pounds of carbon and a positive environmental impact

Nilkamal furnishes better sales through Salesforce.com The reduction in communication gap between the front-end and back-end sales staff has resulted in average weekly time savings of 20 percent

Web development company harnesses the power of Amazon cloud Idyllic Software, a web development company, is using Amazon EC2 cloud services as it provides ease of usage, flexibility, complete control and most importantly huge cost savings

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THE BUSINESS VALUE OF TECHNOLOGY

interview

40 ‘Data centers are becoming software defined’ Raghu Raghuram SVP & GM, Cloud Infrastructure and Management, VMware

44 ‘CIO is becoming more of an IT service broker’ BS Nagarajan Director - Systems Engineer, VMware

‘Salesforce.com’s biggest competition is spreadsheets and e-mail’

‘Cloud Computing is one of the most misunderstood terms’

Peter Coffee VP and Head of Platform Research, Salesforce.com

Raj Biyani Head, Microsoft IT India

book review

Bringing ‘Cloud’ down to earth

EDITORIAL.........................................................4 INDEX..................................................................8 event: Cloud connect............................. 14

opinion Securing the nebulous cumulus: Cloud security

news analysis............................................. 16

Who is using cloud computing: Five observations

Questions that CIOs must ask a security SaaS vendor

cio quotes................................................... 46 analyst angle........................................... 68 technology & risks................................ 70 global cio.....................................................71

A cloud-enabled mobile workforce

Dispelling the vapor around cloud security

practical analysis..................................72 down to business......................................73

may 2012 i n f o r m at i o n w e e k 7

Imprint

VOLUME 1 No. 07 n May 2012

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Managing Director : Sanjeev Khaira Printer & Publisher : Sajid Yusuf Desai Director : Kailash Shirodkar Associate Publisher & Director : Anees Ahmed Editor : Brian Pereira Senior Associate Editor : Srikanth RP Principal Correspondent : Vinita Gupta Principal Correspondent : Ayushman Baruah (Bengaluru) Senior Correspondent : Amrita Premrajan (New Delhi) Copy Editor : Shweta Nanda

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Editorial index Person & Organization Ajay Chandramouly, Intel �� 50 Anuj Kumar, Red Hat �� 60 BS Nagarajan, VMware �� 44 Deepak Varma, EMC India �� 37 Dharmesh Rathod, Essar Group �� 52 Dr JS Sodhi, Amity Group �� 38 Francis Rajan, Bangalore International Airport �� 46 Hanuman Tripathi, Infrasoft Technologies �� 13 Jayabalan Subramanium, Netmagic Solutions �� 64 Jinesh Parekh, Idyllic Software �� 55 Kantanu Kundu, A2ZApps �� 31 Karan Doshi, Nilkamal �� 54 KS Abhiraj, whitehat’People’ �� 58 N Nataraj, Hexaware Technologies �� 53 Nandkishor Dhomne, Manipal Health Enterprises �� 46 Nick Jones, Gartner �� 67 Peter Coffee, Salesforce.com �� 42 Prashant Kumar, PromptCloud �� 32 Praveen Bhadada, Zinnov Management Consulting �� 26 Raghu Raghuram, VMware �� 40 Rahul Sethi, BusinessIntelligenze �� 31 Raj Biyani, Microsoft �� 49 Rajesh Rege, Cisco India and SAARC �� 37 Ramnath Iyer, CRISIL �� 46 Ranendra Datta, SABMiller India �� 46 Rushabh Mehta, iWebNotes �� 30 Sachin Duggal, nivio �� 31 Sahil Parikh, Synage Software �� 30 Samir Bodas, Icertis �� 33 Sandeep Phanasgaonkar, Reliance Capital �� 36 Sanjay Manchanda, Microsoft �� 16 Satish Pendse, Highbar Technologies Limited �� 46

ADVERTISERS’ INDEX Company name Page No.

Website Sales Contact

Seemant Chaudhry, Citrix India �� 34

Juniper

2 & 3

www.juniper@dnbindia.in

Shankar Krishnamurthy, Microsoft �� 17

Schneider-APC

5 www.SEreply.com

in-care@schneider-electric.com

Sid Deshpande, Gartner �� 26

Cisco

9 www.cisco.in

cisco.in/build

Fluke Networks

india-marketing@flukenetworks.com

Siddhartha P Chandurkar, ShepHertz Technologies �� 32

Zoho

27 www.zoho.com

IFSEC

35 www.ifsecsouthindia.com pankaj.jain@ubm.com

FTS

39 http://fts.informationweek.in anees.ahmed@ubm.com

Sunil Lalwani, Research In Motion �� 63

Cloud Connect

56 & 57

surajit.bit@ubm.com

Sunny Ghosh, WOLF Frameworks �� 32

Interop

66 www.interop.in

salil.warior@ubm.com

Vamsicharan Mudiam, IBM �� 18

Machsdata

71 www.drobo.com

arun@machsdta.com

Venkat Narayan , Mahindra Satyam �� 26

IBM

75 www.ibm.com

ibm.com/cloudsolutions/in

Vinod Krishnan, VMware India �� 36

www.flukenetworks.com

www.cloudconnectevent.in

Priya Sharma

india-sales@ManageEngien.com

Smitha Murthy, McAfee India �� 62 Srikanth Karnakota, Microsoft India �� 36

Important Every effort has been taken to avoid errors or omissions in this magazine. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice immediately. It is notified that neither the publisher, the editor or the seller will be responsible in respect of anything and the consequence of anything done or omitted to be done by any person in reliance upon the content herein. This disclaimer applies to all, whether subscriber to the magazine or not. For binding mistakes, misprints, missing pages, etc., the publisher’s liability is limited to replacement within one month of purchase. © All rights are reserved. No part of this magazine may be reproduced or copied in any form or by any means without the prior written permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only. Whilst care is taken prior to acceptance of advertising copy, it is not possible to verify its contents. UBM India Pvt Ltd. cannot be held responsible for such contents, nor for any loss or damages incurred as a result of transactions with companies, associations or individuals advertising in its newspapers or publications. We therefore recommend that readers make necessary inquiries before sending any monies or entering into any agreements with advertisers or otherwise acting on an advertisement in any manner whatsoever.

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How India can boost Dell’s fortunes With 25 percent of its workforce present in India and serving global customers, Dell is now training this same workforce to service local customers. And with a large base of enterprise customers in India using Dell hardware, it makes sense to focus on infrastructure management services http://bit.ly/Hx06bv

Technology update: SAP’s cloud plan for 2012-13 SAP is currently focusing on rolling out line-of-business applications to the cloud and is all set to respond to the requirement of large enterprises for on-premise + cloud, with a solution next year. Here’s the plan http://bit.ly/JFIARa

Wired Cloudline (@Wired_Cloudline) tweeted: Milly Pellizzari (@millypelli) tweeted:

Dell woos India with industry standard hardware & software, leveraging local talent base #Iwork4Dell

So what’s SAP’s big cloud game? Sanjay Chikarmane, VP & GM #SAP Technology Solutions talks ERP and ‘Project Titanium’ http://bit.ly/HfzA50

http://bit.ly/HAr3tH

Erofeeva Tatiana (@ErofeevaT) tweeted: Ms. R. (@LizChar) tweeted:

How India can boost Dell’s fortunes #Iwork4Dell http://bit.ly/HAr3tH

Anand Barry (@AnandBarry) tweeted:

Interesting perspective on Dell’s growth plans in India

http://bit.ly/Hx06bv

Humans and Heuristics: Making people part of information security solutions How do we protect against websites and attachments that are not yet known to be malicious? The answer is heuristics, and while this heuristic protection may exist in your anti-malware software, it also needs to exist in your workforce http://bit.ly/GDRehD

Ascencion Consulting (@AscencionJp) tweeted:

InformationWeek – Security > Humans and Heuristics: Making people part of information security solut

http://fb.me/xDWg6QCO

Joe Burton (@internetcrimes) tweeted:

http://internetcrimes.net Humans and Heuristics: Making people part of information security solutions http://bit.ly/ IX1yio computer forensics

informationweek may 2012

Technology update: SAP’s cloud plan for 2012-13

http://www.informationweek.in/Cloud_ Computing/12-04-02/Technology_update_SAP_s_ cloud_plan_for_2012-13.aspx @iweekindia

‘My inspirations from life’ - N Nataraj, Global CIO, Hexaware Winner of several prestigious awards, there are several important lessons from N Nataraj’s career and life, which are inspirational for emerging CIOs. He shares his key inspirations from life, and the lessons learnt from every individual http://bit.ly/IQW0rs

Hardik Shah (@HardikShah81) tweeted:

‘My inspirations from life’ - N Nataraj, Global CIO, Hexaware: A fast rising performer, N Nataraj, Global CIO, Hexaware... http://bit.ly/K0Tyhr

RebornPhantom (@RebornPhantom) tweeted:

‘My inspirations from life’ - N Nataraj, Global CIO, Hexaware: A fast rising performer, N Nataraj, Global CIO, Hexaware...

http://bit.ly/K0Tyhr

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may 2012 i n f o r m at i o n w e e k 11

News

The month in technology AICTE adopts Microsoft’s cloud-based solution to improve technical education All India Council for Technical Education (AICTE) and Microsoft Corporation announced that AICTE will deploy Microsoft Live@edu over the next three months to more than 10,000 technical colleges and institutes throughout India. The cloud deployment will expand students’ access to high-quality technical education and collaboration. Live@edu is a hosted communication and collaboration service that will offer e-mail, Microsoft Office Web Apps, instant messaging and storage to AICTE’s more than 7 million students and nearly 500,000 faculty members, for a total reach of 7.5 million users — roughly double the size of the Los Angeles population. With 7.5 million users, AICTE is Microsoft’s largest cloud customer ever.

Dell buys Wyse Technology to expand cloud offerings Delll recently acquired Wyse Technology, a privately held provider of cloud computing and desktop virtualization technologies. The deal is the latest in a string of moves by Dell to move beyond its hardware business into management and services offerings. Dell in recent months has also completed acquisitions of networking specialist Force10 Networks, as well as security and continuity vendors SecureWorks and AppAssure. Last month, Dell announced an agreement to buy SonicWall. Dell’s acquisition of Wyse “enhances our portfolio in the critical area of cloud computing and further supports our efforts to help our customers innovate end-to-end IT solutions from the edge to the core of the cloud,” said David Johnson, Dell’s Senior VP for Corporate Strategy. Dell’s acquisition of Wyse has been approved by both companies’ boards, but remains subject to closing conditions.

informationweek may 2012

Facebook captures Instagram Facebook recently acquired Instagram, the popular mobile photo sharing app and the company behind it, for USD 1 billion dollars. The deal is Facebook’s largest acquisition to date, and is aimed at expanding

its mobile presence and assuring that it remains competitive in photo sharing. Facebook CEO Mark Zuckerberg said in a blog post that his company wants to see Instagram continue to grow as an independent brand and that the service’s connections beyond Facebook will remain in place. Zuckerberg characterized the deal as a milestone for the company as this is the first time that Facebook has bought a business with so many users.

Tech Mahindra, Mahindra Satyam ink pact with CA Technologies

Tech Mahindra and Mahindra Satyam announced that they have signed a Global Framework Agreement (GFA) with CA Technologies. The GFA is aimed at building a business model where shared and managed services can be provided to new and existing customers through a joint and strategic approach. As per the pact, Mahindra Satyam, Tech Mahindra and CA Technologies will offer application performance management, test automation, content aware security and MSP offerings. Under the agreement, they will develop innovative and differentiated joint offerings for telcos and manufacturing, BFSI and healthcare verticals.

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Security

Cloud Computing

Infrasoft targets co-operative banks with cloud-based solution

Co-Operative bank, which was looking at availability of risk management products like derivatives, while maintaining IT adherence and alignment, to effectively compete against other private banks. By implementing a core banking solution from Infrasoft in partnership with IBM, the bank will be able to offer its customers financial solutions such as Internet banking, online money transfer, ATM services and mobile banking on a centralized network. More importantly, the bank is able to offer this service twice as fast and at half the cost compared to an onpremise licensed software model. With a potential base of more than 1,500 co-operative banks, Infrasoft has a sizeable business opportunity. As these banks scale up their branches, the demand for Infrasoft’s solutions too grows according to the expansion plans of the banks. Infrasoft has already signed five customers for its cloud-based core banking solution, with customers such as the Bhatkal Urban Co-operative Bank, Nawanagar Co-operative Bank, Sardar Billawara Pardi Peoples Co-Operative Bank, Kurmanchal Nagar Sahakari Bank and Pavana Sahakari Bank.

India lost ` 171.94 crore or USD 38.2 million in 2011 due to phishing attacks, according to findings released by RSA, The Security Division of EMC. Furthermore RSA established that in 2011 the total number of losses were ` 5,760 crore or USD 1.28 billion globally. The number of phishing attacks saw an increase in volume from 115,009 attacks recorded in 1H 2011 to 164,571— a 43 percent increase during 2H 2011. RSA has also ranked India in the top 5 most targeted countries for phishing attacks. In 2011, approximately one in every 300 e-mails circulating the web was deemed to contain elements pointing to phishing. Most phishing content targeted the public sector, which was followed by the SME business sector. A majority of these were targeted phishing attacks aimed at leveraging known brands in fake e-mails that attempt to fool e-mail recipients. In its October Fraud report, RSA had estimated that the worldwide losses from phishing attacks alone amounted to over USD 520 million during H1 2011. The number of phishing attacks identified by RSA in September increased by 45 percent, setting a new all-time high of 38,970 attacks. According to RSA findings, U.S tops the list for the company that suffered the highest losses (USD 497.4 million), followed by the U.K (USD 304.3 million) and Canada (USD 52.6 million). India ranked fourth (USD 38.2 million), followed by Brazil (USD 45.4 million).

—Srikanth RP

—InformationWeek News Network

Hanuman Tripathi, Group Managing Director, Infrasoft Technologies

India has more than 1,500 co-operative banks, and a majority of them do not have the required IT infrastructure to offer basic features such as net banking offered by the large banks. With customers opting to go for banks that offer the latest technology features, cooperative banks too have to keep pace with private sector players. However, unlike private or public sector banks, co-operative banks do not have the required capital to invest in IT, which makes them perfectly suited for cloudbased solutions. Infrasoft Technologies has rightly identified this market segment, and has developed a cloud-based core banking solution. In this model, banks do not need a branch server and branch processes can be accessed at a central remote location, which significantly reduces the investment cost of setting up branch infrastructure and its maintenance. “A cloud-based core banking solution is perfect for co-operative banks, as it enables them to provide customers with the latest technology choices, and expand rapidly without worrying about costs of scaling up,” states Hanuman Tripathi, Group Managing Director, Infrasoft Technologies. A case in point is The Nawanagar

India loses ` 172 cr from phishing

may 2012 i n f o r m at i o n w e e k 13

Cloud Event

UBM India to launch in Bengaluru

fter the smashing success of the Cloud Connect series in Santa Clara and Chicago, UBM India is bringing ‘Cloud Connect’ — a comprehensive conference-cumexhibition that covers the entire ecosystem of the cloud. The launch of ‘Cloud Connect’ in India comes at an appropriate time, as independent analysts believe that the market is on the verge of taking off. Consider these independent statistics: A study by NASSCOM and Deloitte estimates the Indian cloud computing market will reach USD 16 billion by 2020. Similarly, a report by consulting firm Zinnov Management Consulting estimates that the cloud computing market will grow from USD 400 million (currently) to USD 4.5 billion by 2015. A recent Microsoft-IDC study says that cloud computing will generate over 2 million jobs in India by 2015. While these numbers are

N Nataraj CIO & SVP, Hexaware

impressive, they indicate just a glimpse of the immense potential and transformation that is possible from the adoption of cloud computing technologies. For a country like India, the importance of a technology like cloud computing is manifold as a majority of small and medium enterprises who cannot afford technology in the current form can now afford to adopt the latest technologies and compete effectively in the marketplace — similar to how most Indians skipped the landline to adopt the cellphone a decade back. Against this context, we at UBM India, are extremely excited to bring the first-ever edition of Cloud Connect in Bengaluru, the Silicon valley of India. The huge interest and enthusiasm for a conference related to cloud computing, was amply reflected in the ‘Call for Papers’ program. This initiative, seeking speaker nominations from cloud experts,

practitioners and analysts received an overwhelming response. We received over 100 submissions from some of the most experienced domain experts, CIOs, CTOs and analysts in the cloud computing space.

Over 60+ speaker sessions

We have three keynotes, over 60+ speaker sessions, three parallel conference sessions, real-world workshops and panel discussions. This is complemented by an exhaustive exhibition where leading cloud vendors will demonstrate their latest technologies. We believe that this is one of the most comprehensive cloud computing conferences in India, and our effort has been to cover almost every possible topic related to the cloud — from mobile cloud, Big Data, social cloud, issues (legal aspects, security), and several application development and cloud architectingrelated sessions.

T Srinivasan

Vamsicharan Mudiam

Srikanth Karnakota

Ravi Gururaj

Managing Director, VMware India & SAARC

Strategy Leader, Cloud Computing Service, IBM India/South Asia

Director, Server and Cloud Business, Microsoft India

VP Products, Cloud Platforms Group, Citrix Systems

informationweek may 2012

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We also have presentations from leading companies (Hexaware, Essar, etc.) who will showcase in detail how they have gone about adopting the cloud, and their lessons and experiences from the same. We also have sector-based cloud conference sessions (Banking, Media, Telecom and Education). Some of the prominent speakers include: N Nataraj, CIO & SVP, Hexaware; Venguswamy Ramaswamy, Global Head of iON, TCS; T Srinivasan, Managing Director, VMware India & SAARC ; KP Unnikrishnan (Unni), Marketing Director Asia Pacific for Brocade; Srikanth Karnakota, Director, Server and Cloud Business, Microsoft India; Ravi Gururaj, VP Products, Cloud Platforms Group, Citrix Systems; Janakiram MSV, Cloud Specialist; Vamsicharan Mudiam, Strategy Leader, Cloud Computing Service, IBM India/South Asia; Krishnan Subramanian, Industry Analyst and Researcher; Chidambaran Kollengode, Director, Cloud Computing, Nokia; Jayabalan Subramanian, CTO & Co-Founder, Netmagic; Jason Bloomberg, President, ZapThink; and Sunil Varkey, Head - Information Security, Idea Cellular.

To know more details about the conference, please visit: http://www.cloudconnectevent.in/ conference_agenda.asp

Janakiram MSV Cloud Specialist

CIO Sessions at Cloud Connect Cloud lessons from the trenches: Hexaware’s journey to the cloud N Nataraj, CIO & SVP, Hexaware From virtualization to cloud: The Essar group’s journey to the cloud Dharmesh Rathod, Project Lead, Essar Group Moving to the cloud: Choose what works for you Jayabalan Subramanian, CTO & Co-Founder, Netmagic Cloud readiness and assessment: A new paradigm Dr Kumar Saurabh, Chief Solution Architect, Cloud Computing, IMS, Mahindra Satyam A customer’s journey to the cloud T Srinivasan, Managing Director, VMware India & SAARC Information Security & Privacy Considerations for Cloud Services Sunil Varkey, Head, Information Security, Idea Cellular The legal aspect of cloud computing Stephen Mathias, Partner, Kochhar & Co Embracing Cloud - Top 10 myths busted Dhiman Basu Ray, Senior Director & Global Practice Head - Cloud & SOA Adoption Business, Happiest Minds Technologies

Workshops @ Cloud Connect Building and scaling applications to the cloud Dr Dinkar Sitaram, Technical Architect, HP India Building a private cloud using Open Source Ravindra Dastikop, Assistant Professor at SDM College of Engineering and Technology

Sessions related to security in the Cloud The cloud is as secure as YOU want it to be! Debashis Banerjee, Senior Manager, Yahoo! India IT Control objectives for cloud computing: Controls and assurance in the cloud A Rafeq, Past Member, COBIT 5 Task Force, ISACA Scrutinizing the ‘achilles tendonitis’ of cloud security KS Abhiraj, ERS Consultant, Deloitte Debunking cloud security myths - Top ten cloud security risks Akhil Behl, Senior Network Consultant, Cisco

KP Unnikrishnan (Unni) Marketing Director Asia Pacific for Brocade

Chidambaran Kollengode Director, Cloud Computing, Nokia

Jayabalan Subramanian CTO & Co-Founder, Netmagic

Venguswamy Ramaswamy Global Head of iON, TCS

may 2012 i n f o r m at i o n w e e k 15

News Analysis

Since the high profile launch last year, Microsoft has been gradually upping the game to take on other nimble-footed cloud-based competitors By Srikanth RP

Microsoft gets aggressive on Office 365 in India While Microsoft has been tight-lipped about Office 365’s numbers globally, some Microsoft executives have gone on the record to say that Office 365 has already crossed 5 million licensed users. In India too, while Microsoft is not ready to give out specific numbers on Office 365, Sanjay Manchanda, who heads the Microsoft Information Worker (IW) business group in India, comprising the Office 365 (cloud services), SharePoint, Unified Communications and Office businesses, says that the momentum is extremely strong. “Indian customers are adopting Office 365 four times faster than its predecessor BPOS. Clearly, there is

informationweek may 2012

strong appetite in the market, even among the smallest businesses, to get powerful productivity and collaboration tools. Adoption is not only strong among enterprise customers with companies like Infiniti Retail and Dabur, but a majority of customers

are small to medium-sized businesses with less than 1,000 employees,” states Sanjay Manchanda, Director, Microsoft Business Division. A glimpse of this momentum was seen recently when Microsoft announced that it had reached an

“Adoption is not only strong among enterprise customers, but a majority of customers are small to medium-sized businesses”

Sanjay Manchanda

Director, Microsoft Business Division

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agreement with the All India Council for Technical Education (AICTE) for the implementation of Microsoft Live@Edu for 7.5 million users over the next 2-3 months at more than 10,000 technical colleges and institutes throughout India. This makes AICTE Microsoft’s largest cloud customer ever. While Live@edu is a hosted communication and collaboration service that offers e-mail, Microsoft Office Web Apps, instant messaging and storage — this is a door opener for Microsoft as AICTE also plans to deploy Microsoft Office 365 for education when it becomes available later this year. AICTE plans to provide access to Microsoft Exchange Online e-mail and calendar, Microsoft SharePoint Online, Microsoft Lync Online and Microsoft Office Professional as the technical infrastructure to support member colleges and institutes. A pulse of the momentum can also be seen from its partner ecosystem. Partner adoption has been strong with the partner ecosystem numbering over 750 resellers pan India. Over 50 partners announced cloud practices on Office 365 and over 5,500 partner resources have been trained on Office 365. Manchanda says that one of Microsoft’s major partners, Quadra Systems has doubled its Microsoft cloud business in one year. For Office 365, Microsoft has categorized users, and tailored its offerings to different types of users. Small businesses have the flexibility to choose a portfolio that includes Office Web Apps, Exchange Online, SharePoint Online and Lync Online. In addition to these features, larger organizations can avail of features such as Exchange archiving, which is increasingly becoming important from compliance

Indian enterprises that have gone live on Office 365 Company Product chosen / Benefits Infiniti Retail

Decision to choose Microsoft Exchange Online has reduced TCO by 25 to 30 percent. It has also yielded productivity gains by reducing system administration workload by approximately around 25 to 30 hours a month

ACME Tele Power Decision to use Microsoft Exchange Online and Microsoft SharePoint Online has resulted in productivity gains of over 30 percent Adhunik Group

Uses Microsoft Exchange Online and Microsoft SharePoint Online and has seen productivity gains of 15-25 percent, and reduction of TCO by 40-50 percent

Dabur

Uses Microsoft Exchange Online, and has reduced IT infrastructure expenses by 80 percent

point of view. In a first, the firm has also innovated by customizing its offerings based on usage scenarios. For example, it is providing a ‘Kiosk Worker’ subscription — a move targeted at users who do not have access to a PC. “The kiosk worker subscription is designed to be targeted at users who only spend a small portion of their time on a PC, and share their terminal with others,” explains Manchanda. This strategy has helped Microsoft in targeting branch office workers.

Targeting SMBs

With Office 365, Microsoft is also targeting small and medium businesses — an extremely important and fast growing market segment. According to the research firm, Zinnov, with over 50 million businesses, India has the largest number of SMBs across the world. The research firm also states that Indian SMBs contribute more than one-third of India’s GDP. More importantly, for Microsoft and other cloud-service providers, a majority

“Using Lync, we do almost 40-50 web conferences per week. Besides developers, Lync is also used actively by functions such as HR and Finance”

Shankar Krishnamurthy CTO, Aspire Systems

of these Indian SMBs have ambitious global aspirations. As many of these Indian SMBs cannot afford investing in CAPEX for IT, a cloud-based route is an attractive alternative. A case in point is Aspire Systems, a company focused on outsourced product development. A fast growing company with a global presence uses Exchange Online and Lync Online from the Office 365 suite. Today, everyone in the organization uses Lync actively to communicate with each other. “Using Lync, we do almost 40-50 web conferences per week,” says Shankar Krishnamurthy, CTO, Aspire Systems. Besides developers, Lync is also used actively by functions such as HR and Finance who use the platform to connect and collaborate effectively with their globally dispersed counterparts. The cloud game is about volume and being nimble-footed to capture emerging opportunities. Microsoft realizes the importance of this, and has accordingly cut prices by lowering prices of Office 365 by 20 percent. In a price-sensitive market such as India, this move could help Microsoft increase its presence in the SMB segment. With a foothold in many companies in India through its Office portfolio and a growing partner ecosystem, Microsoft has a big opportunity to position and establish Office 365 in the cloud the same way, as it has traditionally positioned Microsoft Office. u Srikanth RP srikanth.rp@ubm.com

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News Analysis

IBM adopts holistic approach to target SMBs for cloud initiative Big Blue is cleverly positioning its solutions and services to offer SMBs everything they may want to do with the cloud By Srikanth RP Research firm, Zinnov says that with over 50 million units, India has the largest number of SMBs across the world. In a recent report, Zinnov also said that the Indian SMB sector will contribute over one-third of total domestic IT spend by 2015, with the SMBs expected to grow at a CAGR of 15 percent, contributing USD 15 billion to the overall domestic IT spending. In such a high growth potential market, IBM is putting together a deep portfolio of products and expertise, to succeed in a highly competitive market that is eyed by not only global vendors like Microsoft but also by domestic ones such as TCS. Big Blue is cleverly positioning its services to offer SMBs everything they may want to do with the cloud — from quickly building a private cloud with IBM Smart Cloud Entry; integrating on-premise applications with cloud-based ones with IBM Cast Iron; providing Infrastructure as a Service (IaaS) with IBM Smart Cloud Enterprise; enabling cloudbased virtual desktops with IBM Smart Business Desktop; allowing SMBs to do web conferencing and collaboration with LotusLive; and finally, enabling cloud-based backups with SmartCloud Managed backup. “Today’s SMBs are tomorrow’s enterprises, and as these SMBs grow, they would need cost-effective IT solutions to fuel their growth. As cloud computing enables SMBs to concentrate on innovation instead of worrying about costs, we believe that with a large base of SMBs, India is one of the most attractive markets for cloud computing for IBM,” states Vamsicharan Strategy Leader, Cloud Computing

informationweek may 2012

Service, IBM India/South Asia.

Building localized solutions

While IBM is finding traction in its traditional offerings, it is also innovating by partnering with local partners to create co-created customized solutions. For example, understanding that new regulations and corporatization are impacting co-operative banks, and fueling the need for cost-effective IT solutions, IBM has partnered with Mumbai-based Infrasoft Technologies. As part of the agreement, IBM is providing shared infrastructure services to host the core banking application from Infrasoft with remote managed services at IBM’s data centers. The alliance already has a customer in the form of The Nawanagar Co-op Bank, which has decided to deploy core banking solutions on a hosted cloud services model. Unlike private or public sector banks, co-operative banks do not have the required capital to invest in IT — which makes them perfectly suited for cloud-based solutions. In this model, banks do not need a branch server and branch processes can be accessed at a central remote location, which significantly reduces the investment

cost of setting up branch infrastructure and its maintenance. India has more than 1,500 co-operative banks, and a majority of them do not have the required IT infrastructure to offer basic features such as Net Banking. This is a huge opportunity not only for IBM, but also for its partner, Infrasoft. By combining complementary strengths, IBM is making inroads into a new territory and has succeeded in creating a new market. IBM also sees huge opportunities for its virtual desktops solution in sectors such as education and IT/ITeS. The firm already has a customer in the form of The Jeppiaar Education Trust, which has colleges of engineering and management studies. The institution was setting up a new college, Jeppiaar Institute of Technology (JIT), in the state of Tamil Nadu, and needed to deploy 350 desktops across its various computing labs. The main challenge was the loss of productivity and discontinuity in research, due to non-availability of sufficient desktops. IBM provided the institution its Smart Desktop Cloud solution, which lets students access computers from any lab or workstation across the campus — be it from hostel or their home. The virtual desktop solution also gives the

“With a large base of SMBs, India is one of the most attractive markets for cloud computing for IBM”

Vamsicharan Mudiam

Strategy Leader, Cloud Computing Service, IBM India/South Asia

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News Analysis IBM’s Cloud Play Client IBM’s role / solution or services deployed The Nawanagar Co-op Bank

IBM is providing shared infrastructure services to host a core banking application from Infrasoft with remote managed services at IBM’s data centers.

Jeppiaar Institute of Technology The institution is using IBM’s virtual desktop solution which lets students access computers from any lab or workstation across the campus — be it from hostel or their home EmployWise

The HR Software-as-a-Service provider, is leveraging the IBM SmartCloud Enterprise Infrastructure as a Service (IaaS) offering to deliver its services on a cloud computing infrastructure

WinHire Technologies

Using IBM’s IaaS cloud solution, the company has been able to put together a scalable infrastructure with a cost benefit of 1:80, avoiding upfront capital expenditure

Shriram Transport

The company is using IBM Lotus Notes for its corporate employees and LotusLive iNotes for transport finance branch and field sales force

institution better manageability and security controls as complete control over the security in terms of disabling the USB ports, restricting Internet access and tracking student activities can be done from a central location.

Wooing SMBs with IaaS

From an ROI perspective, IaaS is one of the most popular services for IBM in India, as it allows SMBs to quickly scale up their infrastructure in line with their business needs. A case in point is EmployWise, an HR Software-as-a-Service provider, which is leveraging the IBM SmartCloud Enterprise Infrastructure as a Service (IaaS) offering to deliver its services on

its applications in a much faster way as it can provision its computing infrastructure in a matter of minutes. IBM is also encouraging companies to build new business models. For example, WinHire Technologies, wanted to change the way hiring was done in the country, by introducing the concept of video resumes. The company believed that this hiring capability would give the firm the ability to address challenges of identity fraud in the recruitment process and also replace the early stage of faceless communication with interactive video interview capability. If WinHire had used a traditional way of building IT infrastructure to host videos of

IBM is putting together a deep portfolio of products and expertise, to succeed in a highly competitive market that is eyed by not only global vendors like Microsoft but also by domestic ones such as TCS a cloud computing infrastructure. This agreement will help EmployWise have better focus on continued innovation and rapid on-demand expansion, while IBM manages the back-end operations like installing, upgrading and maintaining the company’s valuable high-end infrastructure. Using the IaaS offering from IBM, EmployWise has been able to develop and test

informationweek may 2012

candidates, it would have spent a huge amount of time in setting up the required IT infrastructure, and incurred heavy costs. Today, using IBM’s IaaS cloud solution, the company has been able to put together a globally scalable infrastructure with a cost benefit of 1:80, avoiding upfront capital expenditure. It took WinHire just 15 days to get the solution up and running (which would

have otherwise taken them up to 6-8 months).

Collaboration as a service

IBM is also firming up its SaaS play for collaboration and e-mail. Its biggest ace is LotusLive, as there is growing demand from SMBs for cloud-based collaboration solutions. A case in point is Shriram Transport, which is India’s largest player in commercial vehicle finance with a network of 484 branches and service centers and over 20,000 employees. With a large diversified presence, the company was facing challenges in scaling up its service levels in terms of factors such as performance, loss of mails and bandwidth. Today, the company is using IBM Lotus Notes for its corporate employees and LotusLive iNotes for transport finance branch and field sales force. As a result, the firm’s sales professionals who do not go to office on a regular basis are able to access e-mails on mobile phones at no cost for the company. With growing interest in SMBs for cloud-based solutions, IBM is positioning itself as a one-stop shop for SMBs for availing cloud-based services. In a fast growing market such as India, IBM’s ability to provide localized customized solutions accompanied by a comprehensive portfolio may help it gain traction, as perhaps no other player has a similar depth and breadth of offerings. u Srikanth RP srikanth.rp@ubm.com

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India sees rise in emergence of cloud-based startups

Interview: Peter Coffee, Vice President and Head - Platform Research, Salesforce.com

Intel shows how the cloud can transform internal IT

How Hexaware is using the cloud to improve its competitiveness

53 may 2012 i n f o r m at i o n w e e k 23

Cover Story

TCS, Infosys, Wipro, Mahindra Satyam & HCL are converting the cloud threat into an opportunity by building new strategies. Today, less than 5 percent of Indian service providers’ revenues come from cloud, but by 2015 this is expected to increase to 10-15 percent By Vinita Gupta

very few years a new technology comes along, drives new efficiencies and reduces costs. While this is welcomed by user organizations, there is a flip side to the happy story. Service providers and vendors see the new technology as a threat to their traditional offerings. For instance, when cloud computing and its new delivery model surfaced a few years ago, service providers in India feared that traditional sources of revenue such as application development, application maintenance and implementation would be massively impacted. It’s true that there

informationweek may 2012

Indian service providers pursue cloud opportunity

has been some impact to traditional SI revenues; but the cloud has also opened up new revenue opportunities for Indian service providers. Zinnov Management Consulting observes potential for cloud computing technology in both global and domestic markets. It says the present Indian market for cloud computing (both private and public cloud) is about USD 800 million. Considering this, every service provider realized that it would be very difficult to exist without having a cloud foray. Also, companies adopting cloud technology would need IT consultancy and services — a big business

opportunity for service providers. But it’s a known fact that all IT workloads will not move to the cloud, because of its complexity. Infosys believes that up to 60 percent of networks will end up in the cloud. Service providers have taken note and are offering holistic solutions, positioning themselves as comprehensive cloud service providers. These companies are offering traditional services over the cloud such as Testing-as-a-Service. For instance, Mahindra Satyam has offerings that combine a traditional service with cloud model priced on consumption basis. For example, it has a collaborative

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There’s Money in the Cloud

learning management solution that gets combined with traditional L1 support and is offered on a consumption model to the customers. While Indian service providers are moving towards the cloud, the moot question is are they getting enough cloud revenues?

Private cloud adoption will dominate and account for USD 3.5 billion (EMC Corporation and Zinnov Management Consulting study)

Cloud computing to be an over USD 148 billion industry by 2014 (Gartner) l

Cloud revenues

Today, less than 5 percent of the service providers’ revenues come from cloud. But service providers see great promise in the future, with both existing and new customers wanting to move applications onto the cloud. “The service providers in India are looking at significant amount of revenues from the cloud computing space. Presently, it is less than 5 percent, but by 2015, it will increase to 10 -15 percent. The service providers’ major revenues would come from large and medium enterprises,” asserts Praveen Bhadada, Director-Market Expansion at Zinnov Management Consulting. Last year 2-3 percent of overall revenue at Infosys came from cloud computing. Also, TCS targets USD 1 billion from the cloud computing services by 2015. According to

The global cloud market is set to grow from USD 40.7 billion in 2011 to USD 241 billion by 2020 (Forrester Research) Revenues from cloud services in India will grow to over USD 3 billion by 2015 (IDC)

Cloud Provider Landscape

Zinnov, MNC service providers are looking at the Indian market and Indian service providers are looking at the global market, as is the case in IT services. The reason is that a company’s customers are transforming to the cloud platform, and the service providers have to transform along with its customers. Infosys has grown its cloud engagements five times over the past few years; the company already has close to 140 engagements in the cloud space. Wipro sees exponential growth in its cloud service and believes cloud could become a very large business unit for its India, West Asia and Africa business of the firm.

Some areas for revenue opportunities in cloud mirror the traditional SI businesses, such as cloud consulting, cloud system integration, and cloud based offerings in the areas of IaaS, PaaS and SaaS. For instance, Mahindra Satyam has a number of its own IP and partner IP-based cloud provider offerings, and it expects this to grow over a period. One example of this is iDecisions, which is a cloud-based, domainspecific BI/analytics offering.

Building capabilities & strategies

Indian service providers are investing in creating new service offerings in all

Company Type

Offerings

Examples

Cloud Technology Provider

Creates cloud technology, including cloud software stacks. In many cases, these firms are also cloud service providers

Microsoft, Amazon, Google, Salesforce, VMware

Cloud Service Provider

Provides cloud products, hosts cloud services, or both; may or may not build all the underlying technology themselves.

Fujitsu, Dell, HP, Rackspace

Cloud Independent Software Vendor

Offers value-based services for clouds, including managing or monitoring. Cloud also include building value-add services or applications on top of clouds

RightScale, CIRBA, enStratus, ScaleXtreme, Canonical

Cloud Systems Integrator Assists companies in implementing applications on clouds

Accenture, Infosys, TCS, Wipro

Source: To the Cloud: Cloud Powering an Enterprise (Book by Pankaj Arora, Raj Biyani and Salil Dave) may 2012 i n f o r m at i o n w e e k 25

Cover Story The Opportunity for Cloud in India: A new Growth Story The cloud market in India has rapidly evolved in the last two years — to an extent that it is now the safe to say that cloud in India is no longer a concept but a reality. While large enterprises have demonstrated adoption potential, vast base of SMBs in India is further strengthening the potential. The government, on the other hand, has been a key adopter of cloud and other associated technologies. Club all this with the rapid consumerization of IT and you know why the Indian market has become “strategic” for many of the top cloud vendors across the world. The cloud market in India (including both public cloud and private cloud) has grown at an impressive rate of 56 percent in the last two years. The market currently stands at USD 860 million, with 78 percent contribution from private cloud and 22 percent from public cloud. At the same time, while the Indian market is growing, it continues to be price sensitive and may not have hit the inflection point yet. However, enterprise level adoption of virtualization, remote infrastructure solutions, and outsourcing’s acceptance in India is indeed opening new avenues of growth. Given the opportunity that exists in this space today, a number of telecom companies and system integrators have

the areas of the cloud, infrastructure, people, partners and data warehouses to support their cloud services and also building on its strengths. Sid Deshpande, Senior Research Analyst at Gartner mentions, “Enterprises want cloud like attributes and hence, service providers are increasingly ramping up their play by re-designing and re-architecting the environment to be cloud like.” Infosys is investing significantly in building new services, tools and platforms on the cloud platform. About two years ago, the company set up a dedicated cloud unit and also established cloud environments in the U.S., Australia and India. Infosys has about 3,000 experts working on cloud technology, and it is working with over 30 partners to strengthen its proposition as a cloud ecosystem integrator. Likewise, Wipro’s services are building a strong R&D backbone with about 20 cloud centers. It is quietly ramping up a public cloud service for

informationweek may 2012

also started venturing in the segment. From a vertical standpoint, IT/ITeS, manufacturing, BFSI, education, retail and healthcare have been the early adopters. While SaaS is the most popular category, IaaS is increasingly gaining traction. PaaS market is still very small in India and is expected to evolve in the near future. Rising affinity and maturity of Indian enterprises towards cloud, alongside the entry of new global/ Indian players in the ecosystem and investments in building local infrastructure, is helping the segment grow further. With all these growth market indicators, we expect the public cloud market to reach USD 685 million by 2014, while on the other hand, private cloud opportunity could be of the order of USD 3.5 billion for the same period. Praveen Bhadada, Director-Market Expansion, Zinnov Management Consulting

the domestic market. Some areas where Mahindra Satyam plans to invest in the future include building a private cloud for its customers to try a solution before they buy it; Workstation-as-a-Service, pre-production environments, and environments for warehousing unstructured data. “On an ongoing basis, Mahindra Satyam has planned investments in co-development with some of our key partners for development and going to market with horizontal IP and niche vertical solutions. Some of our strategies to tap the cloud market include going to market with selected telcos (given the strength of our parent Tech Mahindra’s relationship with telcos) and service offerings that combine cloud with mobility, analytics and security,” informs Venkat Narayan – Head of Strategic Initiatives, Mahindra Satyam. Another company, HCL plans to direct its investments around building cloud architectures, business and service models.

Also, the service providers are expecting a bulk of its revenue to come from small and medium businesses (SMBs), especially in emerging markets. Thus, they are launching several products that would focus on the SMB segment. For example, Infosys has launched Finacle Lite for rural and semiurban banks. TCS has iON exclusively for SMEs. Mahindra Satyam has also created a portfolio of product offerings and is adopting a force-multiplier strategy for the SMB segment. The company will go to market with aggregators like telcos or industryspecific associations to target SMBs. Indian service providers are smartly converting the cloud threat into an opportunity — by delivering traditional services via cloud, developing new products, capabilities and strategies. This in turn is helping service providers in increasing revenues from the cloud. u Vinita Gupta vinita.gupta@ubm.com

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Cloud Computing Facts

Cloud soars sky-high in India The total cloud market in India , currently at USD 400 million, will reach a market value of USD 4.5 billion by 2015 Cloud spend of IT is expected to grow from

1.4% in 2010 to 8.2% by 2015

IT/ITES, Telecom, BFSI, Manufacturing and Government to lead in spend, with nearly 78% of the total market Source: EMC and Zinnov Management Consulting

@ Work, in cloud

Cloud computing will generate over 2 million jobs in India by 2015 and 14 million new jobs worldwide in the same time

15% of total jobs created by cloud across the world will be generated in India

More than 2 million jobs each will be generated in the Communications and More than Media and 50% of these jobs Manufacturing will be generated in sectors, followed by the small & medium Banking at over businesses 1.4 million Source: Microsoft and IDC

informationweek may 2012

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Riding the cloud wave Out of 100 CIOs across verticals, 54% have already evaluated cloud computing and another 36% are planning to do so in the near future

Willingness of CIOs to use cloud services for: SaaS

Major Cloud Benefits :  Reduced total cost of ownership  Better IT and Line of Business alignment  Reduced IT staffing / administration cost  Increased flexibility and on-demand scalability  Better productivity

from

38% in 2011 to 58% in 2015

IaaS and private cloud to increase from 36% in 2011 to 47% in 2015 Business Processes from 10% in 2011 to 19% in 2015

PaaS from 4% in 2011 to 9% in 2015

Source: EMC and Zinnov Management Consulting

Taking the private route

Private cloud adoption will dominate and account for USD 3.5

billion in revenues by 2015 , growing at over 60%

Private cloud deployments could result in potential savings of up to 50% on the IT investments on average, when compared with a legacy IT model, with cost optimization in segments like telecom and networking, hardware, software, internal labour and external IT services

Drivers: Enterprises are looking at private cloud as it ensures better security and access to information and offers enhancement in efficiency and cost savings, as opposed to traditional IT environments

Road Block: 60% of the CIOs surveyed in India indicate that data security and privacy

are the two biggest challenges for a private cloud adoption, only 13% said they feel a loss of control over IT is a challenge, and 10% feel there is a lack of maturity of cloud service

providers

Source: EMC and Zinnov Management Consulting

may 2012 i n f o r m at i o n w e e k 29

Cover Story

Sahil Parikh

Founder and CEO, Synage Software Flagship offering: Project collaboration service on a SaaS model When I moved back to India in 2005, SaaS as a delivery model had not yet arrived here. I saw great potential in creating a SaaS-based offering when others were still trying to figure out how to run their service companies. That led to the establishment of Synage software, a web company delivering SaaS to the global audience, in 2005. Our flagship SaaS product, DeskAway, was launched in 2007. Considering increased broadband penetration, growing number of small businesses and distributed teams and a 24x7 mobile work culture, we positioned DeskAway as a web-based project collaboration service that provides teams a central location to

informationweek may 2012

easily organize, manage and track their projects and work. Our customers are web-literate, distributed teams working on projects or shared activities. These could be professional service firms (web design, development, consulting, marketing, architects, education etc.), startups, freelancers, or non-profit organizations. Most of them use e-mail as their main form of project collaboration.â&#x20AC;¨ DeskAway is starting to gain acceptance in the Indian market in the last couple of years. Since most of our customers are from the U.S./U.K. it is easy for us to tap into the Indian market as an already established player. Recently, we are seeing startups, marketing companies and business consulting companies from India signup and start using DeskAway on our paid plans. This trend will only get better once people realize the true potential of powering up their business with SaaS solutions. DeskAway is positioned between the simple project tools and complex per user, per month project management software. Since our operations happen from India, we can keep costs very low, while providing the same or better customer experience Our future plans are to concentrate on our product â&#x20AC;&#x201D; make the experience so good that people come back for more and spread the word for us.

Rushabh Mehta

Founder, iWebNotes Flagship offering: ERP on a SaaS model The flagship offering of iWebNotes is ERPNext, an Open Source, web-based ERP for small and medium-sized businesses. The idea behind creating iWebNotes is quite interesting. My family business (manufacturing) needed an ERP and after a failed attempt by a vendor, they entrusted me with the opportunity to build one. I used to write software as a hobby. In addition, when I was doing my postgraduation in the U.S., I was exposed to Semantic Web Technologies, which gave interesting ideas on using some concepts for ERP. This helped me to build the product quickly. In my view, the idea of SaaS/cloud is massively oversold. The biggest benefit of SaaS is to the vendor because the

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vendor holds the control to the “main switch” i.e. he/she can switch off the application any time if there is a conflict. However, from the customer point of view, this is very dangerous especially for ERPs. We stand out by offering our solution as both SaaS and Open Source. Our product offering is priced at onetenth the price of the competition for a full module product. Our software is built on MySQL, Python and Javascript and our entire latest source code is available at GitHub. We are targeting only SMBs in India and abroad. Last year, we added 95 customers across the world. Also, we have around 30 customers in India — most of which, we converted in the last year. We still believe we are an early stage product and still have a lot of work to do before we get in the big league.

service (BaaS) for BPOs. Available for as low as ` 500 onwards per user per month, it is one of the most inexpensive BI solutions in the world. In less than a year after starting, we have won global BI contracts from mid to large-sized BPOs, contact centers clientele and even stalwarts of the industry like Microsoft, Intel and BlackBerry. We work with a variety of businesses like BPOs, KPOs and LPOs including marketing research companies. In the next 24-48 months, we are targeting to have 50,000 subscribers.

Kantanu Kundu

cloud platform. The platform also offers a ‘Work Apps Store’ that lets employees pick their relevant work applications instantly and a ‘Work App Builder’ supported by an easy-to-learn REST API and component library for instant development of a brand new needbased app. Typically, a brand new app takes somewhere between 1-10 days. We’re currently building a community of cloud app developers, which will build apps from within A2Zapps Cloud platform from any place in the world, and publish to our apps store for customers to grab. A2Zapps plans to sell its end-to-end business solutions to SMEs (less than 100 users) by providing login to every employee in the organization but for medium-sized and large enterprises, we will primarily focus on function/ team specific app(s) such as marketing, sales automation, human capital management etc. Also, as educational institutions are slowly starting to look at cloud-based solutions, we’re also planning to have a separate group within the company to help educational institutions in India with a cloud-based platform for work automation and real-time student collaboration.

CEO, Chairman and Founder, A2ZApps Flagship offering: Cloud-based collaborative Desktop

Rahul Sethi

Founder, BusinessIntelligenze Flagship offering: BI as a service for BPOs The pressure on BPOs to boost revenue, maximize productivity and reduce overhead costs is growing by the day. Business Intelligence (BI) is the panacea to their woes but then enterprise BI solutions are prohibitively expensive to implement. A typical BI implementation costs crores of rupees, making them way out of reach for the small and medium-sized BPOs. We saw an opportunity to bring about a paradigm change in the way BPO reporting and forecasting can be done, by using the SaaS model. We decided to offer dedicated BI-as-a-

Although there are hundreds of players including big names like SAP in India who have been providing ERP or CRM type software to enterprises for a long time, but when it comes to providing a world-class enterprise ‘Cloud platform as a service’ (known as PaaS) with customers’ choice of applications (known as SaaS), I found that there was not a single vendor in Asia. Surprisingly, even today in the North American market, we are the only alternative to Salesforce.com and its Force.com PaaS Platform. We are essentially an enterprise cloud computing company that offers a cloud-based ‘Work Platform’ — which is provided on a monthly subscription model priced between ` 249 to ` 999 per user per month for Indian customers within a single integrated

Sachin Duggal

Founder, nivio Flagship offering: Desktop as a Service We are a California-based cloud startup which has offices in India, U.S., U.K., and Australia. We take your Windows desktop, apps and your data and deliver them from the Internet bubble to any

may 2012 i n f o r m at i o n w e e k 31

Cover Story connected screen. We came up with this idea seven years ago — our flagship service is the world’s first Windowsbased online desktop. nivio is in the process of being launched and is in early beta. Currently, we are seeing great demands right from Fortune 50 to Fortune 100 to students. With our Desktop-as-a-Service solution (consisting of nDesktop, nDrive and nApp Store), we are moving traditional desktop software and storage into the cloud. While nDesktop allows users to switch on and access a Windows desktop from all their devices in less than 30 seconds, nDrive enables online storage synching and sharing of data across a number of devices.

services, gives us a definitive edge over our competitors. App42 platform is currently in private beta — all our services are currently free. App developers can register online and use our platform to develop applications on the cloud. In the next three months, we will start charging, but there will always be an option for app developers to have a free account with us for free basic services, which will allow them to develop an application without paying us anything. We will be charging our services on subscription and usage-based models. Since our launch, we have received a very good response. We have also successfully sold components of App42 on license. In addition, we are in discussion with various IaaS providers, telecom operators and device companies to forge an alliance and reach out to the market. For the first six months, our focus will be on India and North America. India has a vibrant developer community, which we would like to reach out to aggressively to encourage them to use our platform.

we noticed is the coming of “situational applications” — essentially functional guys/departmental heads not running behind developers, but having the access to the tools that can empower them to develop and deploy their own solutions. WOLF is a PaaS provider that allows customers to export their database and entire application design in XML so that they can switch providers anytime and that their IP always resides with them. The WOLF platform offers a prebuilt SaaS architecture, ready-touse online forms, custom templates, reports and charts for analytics and an easy-to-configure, code-free business rules engine to implement workflow/ business logic. With our solution, if you know a rough database structure, your app will be up and running in the cloud. Our offering is targeted towards database designers and not developers and we sell into startups and micro-ISVs. Our conversion rates are very high — 3 out of 10 customers sign up with WOLF for their online database application requirements. WOLF network has netted over 40,000 end users in sales during first 30 months of business and is constantly gathering more momentum.

Siddhartha P Chandurkar

CEO and Founder, ShepHertz Technologies Flagship offering: PaaS offering App42 is a PaaS offering, provided by ShepHertz Technologies. We provide a complete ecosystem for app developers to develop, host, run and manage their applications on the cloud. Globally, PaaS providers have taken an approach where they have tried to solve one problem for the app developer on the cloud, but left them to deal with other problems. Due to this, app developers have to combine solutions from many vendors or develop custom solutions to have a holistic architecture and solution. Our ecosystem approach with our Unified PaaS offering, which is technology and device agnostic, plus our focus on providing not just technical services, but also business

informationweek may 2012

Sunny Ghosh

Director and CEO, WOLF Frameworks Flagship offering: Online Database Application Platform (PaaS) The Indian IT ecosystem is predominantly a services industry. Anything that can drive cost low and add value is the biggest asks from the market. Hence, we developed WOLF as a platform that could drive cost lower in terms of time and money in developing newer business applications. Another key trend that

Prashant Kumar

Founder, PromptCloud Flagship offering: Data as a Service The Indian market is still emerging in a sense that a number of companies are trying to hit it right with e-commerce. Be it a daily deals website or a website related to online shopping or travel —

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all need data in some form or the other to run their businesses. Also, in order to keep pace with the trending industry where the call of the hour is Big Data, almost all businesses that would like to make an online presence will have to deal with data. What we are witnessing today, in the consumer web level is that vendors are connecting with micro-influencers in the community using data. At the enterprise level, we are seeing more focus on insights from Big Data. We have witnessed multiple initiatives in bigger firms for migrating their legacy infrastructure and applications to Big Data and cloud technologies. In such a global technology landscape which is witnessing churning of humongous amount of data, a Data-as-a-Service offering that enables leveraging insights from Big Data becomes extremely relevant. Our Data-as-a-Service enables customers to do large-scale custom data crawl and extraction. This essentially means crawling data from multiple sites and extracting it in a structured format, which is then readyto-use for further processing if required at the client’s end. We also index the data that we extract so that data can be made searchable for our clients. We also help our clients in deriving insights from large-scale data that is usually obtained from industries such as retail, telecom, pharmaceuticals, etc. We provide our solutions on a per-client basis so each client gets customized data as per his/her needs which only he/she uses. We do both deep crawl (i.e. crawl all past data on a website) and incremental crawl (data as it gets refreshed on web pages at certain frequencies). We have heavily used Hadoop, Map-Reduce, Lucene, and other cloud computing technologies to create magic for us. We have a homegrown stack for data analytics and management. For all Data-as-a-Service offerings, there are minimal monthly recurring costs depending on the number of sites that you need data from and the frequency at which you need data. This model suits the client because they don’t have to pay for what they don’t use. For some of these services, there

are certain initial set up fees attached depending upon the nature of the project. As this offering is vertical agnostic, it is suited for players in all domains who have a real need for data. However, our typical customers are market research companies, vertical search engines, product catalog aggregators, companies from travel domain, e-commerce sites, pharmaceutical research firms and the like. Adoption rates in the Indian market are still too low to quantify. The reason being Internet penetration is still low and online spending hasn’t picked up yet. This is evident from the fact that most of our customer base lies in the U.S., Canada, U.K., Germany, Switzerland, Israel and other countries in the West.

Samir Bodas

CEO, Icertis Flagship offering: ERP Surround Solutions in the Cloud As a company, we are dedicated to the Microsoft stack of technologies (Windows Azure and Office 365 and enterprise solutions in the Microsoft Cloud). We provide ERP surround products in the cloud, which includes solutions for contract life cycle management, transportation management, and partner relationship management. When you move to the cloud, the beauty of it is that your licensing cost is almost nothing, because you don’t need any additional license — you just pay for usage. In the case of cloud, security is one of the key concern areas. When it comes

to our offerings, the business logic is all in the cloud, but the data can reside either on premise or in the cloud. So, the option that we give (and CIOs really appreciate )is that any data that you are very sensitive about can be kept behind the firewall, and any data that you are comfortable in putting in SaaS environment, could be put in Windows Azure. And then depending on the requirements, we bring in the data into our business logic and if it is the data from behind the firewall, we bring it in a non-persistent way. That is, data is brought in the cloud, we compute on it and then we update and push it back behind the firewall. So, sensitive data is never stored in any storage in the cloud. One of our major customers is a technology company which has more than 150,000 employees and a host of vendors, contractors and people who access its Contract Life Cycle Management Solution. It has around 200,000 executed contracts in the system, and produces more than 2,000 agreements per month that flow through the system. These agreements are in 42 languages and there are 400 odd template types. So, it is a very complex, worldwide, broad robust system. And form the research we have done, we believe that this is probably the largest implementations of contract life cycle management solution in the world. The cloud move is happening at a fast pace. And in India, CIOs are more interested than in other places. The reason being, many of them do not have those massive investments in data centers that U.S. and European CIOs have. In India, the data center evolution is going to be bypassed by the cloud. CIOs are looking at the cloud as their data center instead of buying new servers every year. Our pipeline in India is actually as big as our pipeline in the U.S. or Europe. I think India is going to be way far ahead in next 5-10 years because we will be able to adopt these new technologies far quicker and faster while others will have to transition. u Amrita Premrajan amrita. premrajan@ubm.com

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Cover Story

Desktop virtualization gains momentum in India

While desktop virtualization has been around for a long time, it is only recently that it has caught the attention of Indian organizations across verticals. The rise of BYOD, coupled with reduced hardware and management costs is forcing organizations to take steps to adopt this trend By Amrita Premrajan

he past few years have seen businesses in India showing a great deal of interest in understanding the pros and cons of desktop virtualization, evaluating the benefits and taking major steps to adopt this technology. A report by Gartner also substantiates this upward trend in desktop virtualization adoption, estimating that by 2013, 40 percent of all corporate desktops will be virtual desktops. Gartner also says that the desktop virtualization market is estimated to be worth at least USD 1.8 billion by 2012. Traditionally adopted by businesses like BFSI or BPOs, desktop virtualization solutions are now attracting the attention of several Indian organizations across verticals, according to solution providers. And many organizations like Geometric, Essar, ESIC and Amity are

informationweek may 2012

already reaping its benefits. Seemant Chaudhry, Director – Enterprise Accounts, Citrix India confirms the significant increase in the adoption rates of virtual desktops since the past two years. “In terms of moving the needle of adoption, Indian customers have transitioned from testing phase, to actual implementations of desktop virtualization. The year 2011 in particular, has been an exciting year for

Citrix in India — we sold 1 lakh desktop virtualization licenses through the year. We work with over 3,000 customers in India, majority of which use our desktop virtualization solution. Our customers include a list of marquee names, such as Aegis BPO, Geometric and Perfetti Van Melle,” says Chaudhry. So what is driving the heightened adoption of desktop virtualization — a trend which has been around for a while? “The recent thrust seen

Indian customers have transitioned from testing phase, to actual implementation of desktop virtualization Seemant Chaudhry

Director – Enterprise Accounts, Citrix India

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Cover Story in the server virtualization space has also renewed an IT head’s focus on desktop virtualization. Most organizations have consolidated their servers through server virtualization and are reaping benefits, such as reduced hardware costs, management costs and energy consumption. They are now looking to extend the same benefits at a desktop level with desktop virtualization,” informs Vinod Krishnan, Director - Advanced Technologies, VMware India. Substantiating this fact, Srikanth Karnakota, Director, Server and Cloud Business, Microsoft India says, “Before deploying desktop virtualization, a company has to virtualize its servers and storage. Post the success of server virtualization, the Indian commercial market is now open to the idea of desktop virtualization.”

BYOD driving desktop virtualization

Traditionally, desktop virtualization solutions were considered by businesses in the BFSI and BPO sector, which have a distributed infrastructure and a number of endpoints to secure. But today the scenario is changing. The rise of BYOD as an undeniable and powerful trend is forcing almost every industry vertical to evaluate desktop virtualization within their organization. With the growing trend of BYOD, IT departments of organizations across the globe are grappling with the question of how to allow employees to bring their own devices along with providing secure access to enterprise apps, ensuring information security and effectively managing all the endpoint devices that users want to bring in.

The change from a desktop architecture which remains rooted to the office to a VDI architecture, should give us productivity benefits Sandeep Phanasgaonkar

President and Chief Technology Officer, Reliance Capital

Desktop virtualization is a solution that hits the nail and resolves all the above mentioned issues linked to BYOD, enabling organizations to reap the benefits of BYOD, like cost savings, increased productivity and employee satisfaction. With virtual desktops, data remains secure in the data center with no transactions happening at the endpoint devices and no data being stored there. Applications and desktops are completely secure over the network to the endpoint and the threat of data leakage and hacking is minimal. “Today’s workforce is becoming increasingly mobile and wants to use a growing array of client computing and mobile devices, based on their personal preference. The increasingly mobile workforce demanding to be able to work from anywhere, anytime is increasing the pressure on IT to ensure protection of corporate data and prevent data leakage or loss through any combination of user, endpoint device, and desktop access scenarios. This trend is leading to the adoption of desktop virtualization,” says Rajesh Rege, Senior VP, Data Center and Cloud Business, Cisco India and SAARC. Supporting the argument, Krishnan of VMware India, says, “With the consumerization of IT, the mobile worker is also evolving as a virtual

With the consumerization of IT, the mobile worker is also evolving as a virtual worker for whom location and device are becoming less relevant Vinod Krishnan

Director - Advanced Technologies, VMware India

informationweek may 2012

worker for whom location and device are becoming less relevant. They want a rich desktop experience, be it on a laptop, a tablet PC or even a smartphone. Most employees want to use a tablet or a smartphone for work and companies are under pressure to provision these devices, while maintaining control and security of the company’s data and network.”

Weighing investments vis-àvis long-term cost savings

Security and compliance, infrastructure and application management, operational efficiency, and most importantly cost saving have been the traditional drivers of desktop virtualization. When an organization evaluates desktop virtualization, it also evaluates the ROI that would be achieved as a result of this deployment. While significant savings definitely result due to desktop virtualization, a company needs to be ready to heavily invest in certain areas like server and storage virtualization, so as to successfully deploy and run a robust desktop virtualization solution within the organization. Since, desktop virtualization needs considerable investment in order to reap the long-term cost benefits, it becomes extremely important for a CIO to first carefully evaluate the kind of business benefits desktop virtualization can bring to the company and be convinced about its absolute relevance for the business. Throwing light on the kind of cost savings an organization would achieve through desktop virtualization solution, Krishnan says, “With desktop virtualization, an IT head need not worry about frequent hardware buying cycles to deploy desktop hardware

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that meets changing application and operating system demands. With all virtual desktop images centralized at the server side, updates and patches to applications and operating systems can be applied centrally, thereby reducing the manpower cost and time involved in going across to each desktop and maintaining it manually. With security managed at the server side, the need to deploy additional IT security measures and the associated costs reduces.” Business expansion is another important area where companies can benefit through desktop virtualization in terms of saving costs. Highlighting the fact, Chaudhry of Citrix India, says, “When companies look at expanding to different parts of the country, virtualization helps the organization reduce the cost of the infrastructure. With rural banking coming in, the problem of managing the infrastructure can be solved with virtualization.” Agrees Deepak Varma, Regional Presales Head, South, EMC India, “As the ITES industry expands and proliferates to secondary towns and cities, desktop management will become an increasing burden on companies to which a virtualized option is one of the best available solutions.”

Virtually there

Of late, a number of businesses have stepped into the desktop virtualization domain and have been deriving great business benefits. Geometric is one such company,

Growing trend of mobile workforce is increasing the pressure on IT to ensure data security. This is leading to the adoption of desktop virtualization Rajesh Rege, Senior Vice President,

Data Center and Cloud Business, Cisco India and SAARC

which has done a large-scale desktop virtualization implementation based on the Virtualization Experience Infrastructure (VXI) architecture with Cisco, NetApp and Citrix technologies. Apart from significant cost savings, with VXI solution the company has been able to centralize desktop management. This has resulted in the reduction of security threats and also the time spent on management for tasks like installation restoration of OS and other applications. An example of a company that is taking significant steps in the direction of desktop virtualization is Reliance Capital. Analyzing the emerging need of employees to access corporate data on the move and how desktop virtualization can actually resolve this issue, Sandeep Phanasgaonkar, President and Chief Technology Officer at Reliance Capital says, “Today, VDI and thin clients allow you to virtualize your desktop and your sessions and enable you to shut down one session and the same session can continue and can be opened anywhere — on a laptop, tablet or smartphone.”

Championing desktop virtualization Company

Desktop virtualization benefits

Geometric

Geometric has already achieved significant benefits by an initial deployment of 250 desktops, which will further improve with scale. A cost reduction of ` 1.2 million is anticipated with the deployment of 600 desktops.

AMG India International The organization has slashed costs by 75 percent and energy consumption by 90 percent Amity Group

Deployment of virtual desktops have helped the group in slashing energy consumption ratios by a significant percentage

Talking about the desktop virtualization plan for Reliance capital, Phanasgaonkar says, “We are actually kicking off a live pilot for desktop virtualization. One-third of our total desktops are ready for refresh and need to be actually replaced in the next one year. The pilot will cover 10 percent of this one-third base of desktops, and our plan is to refresh the entire base of onethird desktops by the end of one to one and a half year, based on the success of this pilot.” On the benefits which are expected out of this implementation, Phanasgaonkar says, “The change over from a desktop architecture which has traditionally remained rooted to the office to a VDI architecture, should give us productivity benefits.” Another group that is betting big on desktop virtualization is the Essar Group, which plans to move its 90 -95 percent workforce to Citrix XenDesktop platform and aims to complete implementation of virtual desktops for 40,000 users in the next one year. This is expected to save the company more than 40 percent in desktop computing costs by enabling easy, centralized management of desktops and applications and reducing the need to refresh expensive hardware. Advantages of desktop virtualization can be reaped by various verticals in different ways. A case in point is AMG India International, which is using the technology to provide computer access to schools located in remote locations, with unreliable access to power within very low budgets. The social service organization has implemented NComputing and vSpace Virtualization software, which enables a single PC to be shared by as many as 11 users, thus bringing down

may 2012 i n f o r m at i o n w e e k 37

Cover Story the cost of infrastructure, installation and maintenance. With the solution, the organization has slashed costs by 75 percent and energy consumption by 90 percent. A similar implementation was done by Amity Group, last year in April, when it refreshed its computer labs with NComputing L230 virtual desktops and VSpace virtualization software. With the implementation, UPS of 10 KVA were replaced with 3KVA for each of the 40 computer labs, which led to far lesser energy consumption by thin clients over the traditional desktops, which resulted in significant energy savings. Dr JS Sodhi, Head-IT & CIO (Assistant Vice President), Amity Group, says, “We, at Amity, implemented desktop virtualization as a social responsibility of environment-friendly use of IT. By doing this, we are not only saving power and helping in reducing the carbon emission but also are reducing

With desktop virtualization, we are saving power and helping in reducing carbon emission, along with reducing computer lab administration overhead Dr J S Sodhi

Head-IT & CIO (Assistant Vice President), Amity Group

computer lab administration overhead and improving manageability.” Desktop virtualization has also found relevance in streamlining insurance and healthcare services. For example, Project Panchdeep, an e-governance project, where NComputing and Wipro cost-efficiently leapfrogged existing technologies at Employee State Insurance Corporation (ESIC) and dramatically improved service delivery. The biggest e-governance contract to date, valued

at ` 1,182 crore, Project Panchdeep has created one of the largest medical records database globally and one of the largest roll out of identity cards in India. The project involved deploying 31,000 NComputing thin-client workstations and NComputing vSpace virtualization software to outfit all ESIC offices and clinics. Over 31,000 NComputing’s L130s virtual desktops were connected to Wipro desktop PCs, which then connected to one of the largest cloud computing environment in India at ESIC data centers. The project is said to benefit more than 6 crore people spread across the country. According to Wipro, Project Panchdeep provides online facilities to employers and insured people for registration, payment of premium and disbursement of cash benefits. Each day, close to 75,000 people are benefitting from Project Panchdeep.

Desktop virtualization trend set to accelerate

Factors like, enabling BYOD without compromising on data security, longterm cost benefits, convenience for the IT to remotely manage all virtual desktops and feasibility of utilizing virtualization software to enable even a single PC to be shared by many users, is actually driving the adoption of desktop virtualization not only across enterprises but also amongst educational institutions and SMBs. With the penetration of high-speed Internet networks in the country, in the coming few years, desktop virtualization is undoubtedly going to witness much higher adoption rates. u Amrita Premrajan amrita. premrajan@ubm.com

informationweek may 2012

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Interview

â&#x20AC;&#x2DC;Data centers are becoming software definedâ&#x20AC;&#x2122; What are the transformations that you observe in the data center? Can you update us on the state of virtualization? Firstly, there is a transformation from physical to virtual, in all parts of the world. In terms of workloads in the data center, the percent (of workloads) running on virtualized infrastructure as against physical servers has crossed 50 percent. So, there are more applications running in the virtual environment, which means the operating system no longer sees the physical environment. This is a huge

change in the data center. The virtual machine has not only become the unit of computing but also the unit of management. Earlier, operational processes were built around a physical infrastructure but now these are built around virtualized infrastructure. The organization of the data center team is also changing. Earlier, youâ&#x20AC;&#x2122;d have an OS team, a server team, and teams for network, storage etc. Now virtualization forces all these things to come together. So, it is causing changes not only in

the way hardware and software works, but also in the people and processes. The second change is that data center architecture has gone from vertical to horizontal. You have the hardware and the virtualization layer with applications on top of it. Hence, you can manage the infrastructure separately from managing the applications. You can also take the application from your internal data center and put it on Amazon Web services or the external cloud. Thus, the nature of application management has changed.

Data centers around the world are increasingly being virtualized and organizations are restructuring business processes in line with infrastructure transformations. Raghu Raghuram, SVP & GM, Cloud Infrastructure and Management, VMware tells InformationWeek about the software defined data center, and how virtualized infrastructure will bring in more flexibility and efficiency 40

informationweek may 2012

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How is the management of data center infrastructure changing? The traditional and physical data center was built on the notions of vertical integration/silos. You’d put agents in the application and at the hardware and operating system levels. And then you’d pull all that information together (from the agents) and create a management console. And when the next application came into the data center you’d create another vertical stack for it, and so on. This led to the proliferation of management tools. And there was a manager of all the management tools. As a result, you were layered on more complexity instead of solving the management problem. The second problem was that operating systems did not have native manageability built into them. So, management was an afterthought. With virtualization, we were the first modern data center platform. We built manageability into the platform. For instance, the VMware distributed

this is a feature of VMware vCenter Operations. What is the Software defined data center all about? This is a bit forward looking. Increasingly, the data center is being standardized around x86 (architecture). And all the infrastructure functions that used to run on specialized ASICs (Application Specific Integrated Circuits) are now running on standard x86 hardware and being implemented via software as virtual machines. For instance, Cisco and CheckPoint are shipping virtual firewalls; HP is shipping virtual IDS devices; and RiverBed is shipping virtual WAN acceleration (optimization). All of it is becoming virtualized software; now the entire data center is becoming one form factor, on x86. As it is all software, they can be programmed more easily. And hence it can be automated. So, when an application comes into the data center, you automatically

collaboration with Cisco) a technology called VXLAN (Virtual eXtensible LAN). The difference between us and Nicira (network virtualization) is that we are doing it so that it works well with existing networking gear. We are creating a virtual network that is an overlay to the physical network. As the applications are set up, the networking can be done in a virtualized fashion. Load balancing and all the network services can happen in a virtualized fashion, without the need to reconfigure the physical network. But you also need virtualized security services and virtualized network services for this. We have a line of products called vShield that offers this. It has a load balancer, NAT edge and stateful firewall; application firewall etc. Then, you have the management stack that ties it all together. We call this software defined networking and security. And we are doing the same thing with storage with Virtual Storage Appliance.

Software defined data center is a new way of automating and providing the infrastructure needed for applications resource scheduler (DRS) automatically guarantees resources — you don’t need an external workload manager. We have built in high availability so you don’t need an external clustering manager. Our goal has been to eliminate management, and wherever possible turn it into automation. We are going from a world of agents and reactive type of management to a world of statistical techniques for managing data. One of our customers has almost 100,000 virtual machines and they generate multiple million metrics every five minutes. There’s a flood of information, so you can’t use the conventional management way of solving a problem. You need to do real-time management and collect metrics all the time. We use statistical learning techniques to understand what’s going on. It is about proactive management and spotting problems before these occur. And

provision the infrastructure that it needs. You can grow/shrink that infrastructure. Scale it up or out. And configure policies or move them as the application moves. All of this constitutes the software defined data center. It’s a new way of automating and providing the infrastructure needed for applications, as the applications themselves scale and react to end users. We see that rapidly emerging. This is a concept in the large cloud data centers, but we want to bring it to mainstream enterprises and service providers. VMware is a pioneer for virtualization of servers. But what are you offering for virtualized networking, security and storage? There are smaller players such as Nicira Networks, which are actively pursuing network virtualization. Last year we announced (in

We also offer storage provisioning automation with vSphere and vCloud Director. What is the key focus for VMware this year? Our slogan is business transformation through IT transformation. We want to enable businesses to transform themselves, by transforming IT. We talk about transformations with mobility, new application experiences, and modernizing infrastructure to make it more agile and cost-effective. These are the fundamental transformations that engage us with customers. So, it starts with virtualization but it doesn’t stop there. The faster customers progress through virtualization, the faster they can progress through the remaining stages of the transformation.

u Brian Pereira brian.pereira@ubm.com

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Interview The current social and mobile revolution is opening avenues for companies to look for newer areas of serving customers better. As organizations discover the potential of social media, they are forced to rethink the traditional methods of handling customer service. Against this backdrop, InformationWeek caught up with Peter Coffee, one of the most respected thought leaders in the cloud computing space, and VP and Head of Platform Research at Salesforce.com. In a freewheeling interview, Coffee shares his thoughts on how companies are adopting social model to transform businesses, and how this is creating new opportunities in countries like India for ISVs and developers

‘Salesforce.com’s biggest competition is spreadsheets and e-mail’ How important is social media to an enterprise and how can organizations become social enterprises? The most important thing that companies are recognizing today is the enormous shift of power to start and control a conversation — away from the vendor, and into the open customer community. What this means is that when you want to sell to someone, you have to reach out to them through networks of their trust and influence, such as social media, instead of more traditional tools such as conventional advertising. It also means that if someone is dissatisfied with your product or service, they will not communicate

informationweek may 2012

directly to you — they will go out to the same social networks, and voice out their dissatisfaction. Today, there are no simple boundaries between pre-sales experience, sales experience and support experience. Your current customers are talking about their experiences on social media to people you would like to have as future customers. Today, it is all one big conversation. Hence, as an organization, you cannot have one part of the organization that sells and another part of the organization that supports — all of them need to be aware of each other’s activity. Internally, you need to be involved and engaged with social networks, and need to adopt a collaborative style.

Today, customers are not siloed either. To be a social enterprise, organizations must show social media commitment as a part of their leadership vision, and drive cultural transformation. Can you give us some examples of social enterprises? Toyota, Dell and Burberry are all examples of social enterprises. Toyota did not come to us and say that they wanted to build a social network for their cars. That was not on their list of things to do. We are not having conversations with clients on obvious incremental evolution of IT. For example, Burberry’s vision of being a global luxury brand

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sell, When you want to out h ac re to you have h ug ro th s er m to custo st tru networks of their as ch su , and influence social media

depends on not only having some excellent products — but it also depends on wrapping those products in an experience that make people want to be part of that community. At the other extreme, you have Coca Cola. The company is giving customers the ability to customize their own beverage by mixing different flavors, and enabling them to share their personal beverage on Twitter through smartphone. Coca Cola has enhanced this further by introducing a brand loyalty policy that rewards a customer for coming up with blends that other like. All these things signify the fact that a soft drinks company today is not just selling soft drinks — it is selling a lifestyle, participation and a shared experience. The technology does not guarantee any of this, but it can make them possible. Companies that see this possibility, and seize that possibility acquire brand leadership. Any company can become a part of people’s lives if it makes a commitment to do it. You don’t have to be the size of a Coca Cola to do this. The social media infrastructure is already present, and any company can leverage this infrastructure to compete better in the marketplace. Salesforce.com has moved beyond being a CRM firm? What is the positioning today? Around 10 years ago, we sold SaaS solutions to someone such as the VP of sales, five years ago, we sold platform level solutions to CIOs. Today, we sell social enterprise transformation solutions to people at the CEO level. We are still doing all the things we were doing earlier. We have grown in an orderly fashion; we never ever had to discard or rip apart anything. We have done more than 30 updates

— this is unheard of in the industry. In the traditional software model, you did not get the relentless innovation and enthusiastic customer adoption as seen in the SaaS or the cloud world. Can you elaborate on your acquisition strategy? There are people who look at our acquisitions and see it as ‘acquiring products’. There are companies who acquire companies, so that they can get hold of their client base. We buy a company for its team and the quality of its people. This is different from what some companies in the technology space have been doing, where they buy the product and the customers, and the original team leaves the company. Who is Salesforce.com’s biggest competition? My biggest competition is spreadsheets and e-mail. My biggest competition is people handling their business processes in a clumsy, expensive, inconsistent and ungovernable way. How is the cloud changing the software ecosystem? Due to the cloud, today, a five person team can build an application that is just as secure, robust and reliable as the software created by a global financial institution. They can also go out into a global marketplace and compete effectively without IT talent or capital for servers. When Venture Capitalists invest in

nowadays Customers d — your e lo are not si stomers cu t n e rr cu t their u o b talk a s on social experience eople to media p e to lik you would ture fu s a have customers

startups, they do not like to see their capital being locked up in servers. The cloud is a model suited for entrepreneurs as you can grow your capacity as the market demands. As entrepreneurs can now try things more cheaply, there is a fine balance of entrepreneurial risk and opportunity. Customers have come to expect a pace of improvement, which is far more rapid than they are used to. They expect to see problems fixed immediately, and improvements occurring regularly. Today, you cannot be a viable application

Comp don’t anies today n ucts — eed to sell just p a lifes they need t rodtyle, p o sell and a a shared rticipation exper ience

vendor, if you do upgrades every three years, and keep doing bug fixes. If one looks at the cost, complexity and risks of administering patches, it is huge. For the developer, the cloud has given more flexibility and ease of deployment. They are not driven by the technology roadmap of a major enterprise vendor, but by what the customer is demanding. The developer knows that he does not want to write for one major platform, but he wants to write one good app which that run on multiple platforms — and the cloud can help him do that. So the customer is in charge and wants applications that are continually improving; the developers are in charge and want technology that reaches maximum number of customers in the most rapid time to market way. u Srikanth RP srikanth.rp@ubm.com

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Interview

‘CIO is becoming more of an IT service broker’ How do you see the investment in virtualization and cloud computing pan out in FY13? The focus areas for VMware India are aligned to the global vision as always. This year and next, our focus will be on cloud computing and we would like to see ourselves as one of the key players in the cloud space. In contrast to the IT industry’s widely-held belief in a one-cloud-fits-all approach, VMware’s “Your Cloud” philosophy maintains that a cloud environment must be tailored to the unique business needs of each enterprise, while enabling organizations to leverage investment in existing IT resources. In addition, the migration to cloud should represent incremental and not wholesale change, while offering the flexibility to use on- and off-premise resources in a totally secure fashion. This year will see us take hybrid cloud forward with enterprises across the spectrum. The discussions we have with customers

these days is really about how fast they can virtualize and how fast they can move to a private cloud. So, it is not if they are going to virtualize anymore, it is how and how fast can they do it. Companies have tested the waters and have gained the confidence to migrate their critical applications to the cloud. We are in fact working closely with our customers to help them migrate their SAP applications to the cloud. The VMware Annual Cloud Maturity Index, a VMware commissioned survey conducted by Forrester Consulting in October last year, revealed that 91 percent of organizations surveyed in India consider cloud relevant to their businesses. India leads the region in terms of perceived cloud relevance alongside Japan, China, Malaysia and Thailand at 90 percent. The study found that Indian companies are accelerating their adoption of cloud computing, with 77 percent indicating

that they would do so in the next six to 18 months. Which are some of the key verticals you are focusing on in India? Please name some of your customers based in India. Last year was a fantastic year for VMware in India. As our products are not vertically aligned, we have seen good traction across verticals. However some verticals use IT more than the rest and the adoption is more. Accordingly, BFSI, manufacturing and telecom are some of the verticals that see great traction. SMBs have also taken to the cloud in a big way, given the value proposition of the cloud. We will continue to see growth in this segment along with the government sector. We have also seen good adoption for our desktop virtualization solutions in the IT/ITeS and BPO sectors. Sectors such as BFSI, healthcare and retail have a growing number of organizations using

The virtualization market has matured significantly in the past one year and customers have ultimately started to see its benefits and advantages. VMware has almost become the other name for virtualization; despite stiff competition from other players in the market, the company continues to hold real muscle in the virtual space. BS Nagarajan, Director - Systems Engineer, VMware, shares the company’s cloud philosophy and focus areas, and comments on the virtualization opportunity for CIOs, in an interview with Ayushman Baruah of InformationWeek 44

informationweek may 2012

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desktop virtualization to meet their dynamically changing user desktop requirements. Today, we have over 1,800 customers in India including big names like ICICI Bank, Axis Bank, HDFC Bank, Capgemini, NIIT, Cognizant, Airtel, Vodafone, Aircel, Bajaj Auto, Bharat Petroleum, Hindustan Petroleum Corporation, Mahindra & Mahindra Ltd, Reliance General Insurance, Shoppers Stop among many more. Despite a huge market-share in the virtualization market, do you worry about competition from players like Microsoft, which offer a complete virtualization/ operating system vertical stack? What’s your strategy to retain your dominance in the market? The virtualization market has matured significantly in the past year. Customers have begun to see the benefits and advantages virtualization offers them. The need to consolidate data centers, save money on hardware, power and cooling are driving adoption of server virtualization. Also, virtualization platforms have gained the support of the entire ecosystem of technologies — from servers to storage; networking to security; management to operating systems; and to applications.

CRM systems, SAP systems and so on. That’s when they start saving a lot more money. The third phase is what we call the agility phase, which is more about speed and responsiveness. A company’s transition through these phases varies as it depends on the industry or the company itself. We have seen some companies that go really fast from stage 1 to stage 2 to stage 3. Companies in India are in the first and second phases. Many are still familiarizing themselves with the technology, but at the same time, we have a number of companies that have moved their critical applications onto a virtualized infrastructure environment — this has been the key trend in the past year. As a market leader, we are helping our customers on their journey from virtualization to the cloud with our offerings. We believe that virtualization is the key underpinning technology to enable the cloud. How big an opportunity is virtualization for CIOs? With IT being provided to the business as a chargeable service, we see a CIO becoming more of an IT service broker to every department in the organization. A CIO would understand the needs of a business and then have IT resources provisioned to meet the demands. From the insight gained

Virtual Reality l

91 percent of Indian organizations consider cloud relevant to their businesses 77 percent of Indian companies plan to adopt cloud in next six to 18 months Companies ask how fast they can virtualize and how fast they can move to a private cloud BFSI, manufacturing and telecom are some of the verticals that are majorly adopting cloud computing. SMBs have also taken to the cloud in a big way

the enterprise. They need to focus on how they can move beyond keeping the day-to-day business running and help the company increase business revenue, reduce costs and improve customer experience. Having recently opened an office in Gujarat, what kind of traction are you seeing there? Do you have plans of entering more tier 2 and tier 3 cities going forward? We are definitely expanding into nonmetro cities. Gujarat is emerging as

Given all the technology that is out there and the proliferation of devices, CIOs need to think about how they can bring the consumer experience to the enterprise When we talk of virtualization at VMware, we have three phases. In the first phase, customers become accustomed to the technology. The customer goes into a testing environment, where they initially virtualize their tier-2/tier-3 applications. This lets them get familiarized with the technology. The second phase is when they start running mission-critical applications — when they put their ERP systems,

into the usage of IT-as-a-service over a period and the usage patterns, the CIO would be able to forecast IT demands of the organization in the near future. Post this is the important transition for IT from being a cost center to a strategic investment for the organization. Given all the technology that is out there and the proliferation of devices, CIOs need to think about how they can bring the consumer experience to

an important market for us as we are witnessing a growing demand for our virtualization and cloud computingbased solutions from the region. We have a growing customer base in the region and saw it necessary to have a presence in the market. We are similarly growing our presence in other cities as well. u Ayushman Baruah

ayushman.baruah@ubm.com

may 2012 i n f o r m at i o n w e e k 45

CIO Voice

CIO’s viewpoint on cloud computing

Francis Rajan

VP-ICT, Bangalore International Airport

Cloud computing is bound to get the traction it deserves, once some enabling legal provisions are in place and business finds a value proposition. Based on the organizational culture, there are reservations in hosting data outside the legal boundaries of the country or the enterprise itself. So, there needs to be harmonious normalization on cloud services from the legal standpoint. I believe that in next one to two years, industry is going to witness a lot more traction on cloud computing

Cloud computing is an evolving technology, which organizations are using and have used in some form or the other. Accessibility, security and compliance of data on cloud is becoming the most stringent and important facet of this technology. The adoption of cloud computing will be far-fetched if these concerns are not addressed by cloud service providers adequately

Ramnath Iyer

Chief Technology Officer, CRISIL

Ranendra Datta

VP-IT, SABMiller India

Cloud computing can make enterprise class technology affordable and when combined with (SAAS) Software As A Service, it allows enterprises to link technology expenses to revenues. Cloud computing also drastically reduces the time to market, permits lean operations and even provides regional options for technology recovery, irrespective of the size of the enterprise

Nandkishor Dhomne CIO, Manipal Health Enterprises

Cloud technology is still evolving and not matured enough for highly critical applications from India perspective. There are challenges like data security and privacy, managing contractual relationship, dealing with lock-in/exit strategies, effective legal framework and managing cloud services. Moreover, from technical standpoint, success of cloud mainly depends on network reliability and security — and in India, we lack in both. In a nutshell, it’s a wait and watch situation for hosting highly critical business applications. However, we can use cloud for other productivity applications like messaging systems, unified communication and CRM

Any new concept takes some time to gain acceptance and it is the same with cloud. Customers expect to see some success stories and look for early adopters. So, cloud will need an inflection point where some customers have moved core applications to the cloud. This will happen after 2–3 years. But it would be industryand application-specific. Right now, it is the small and medium-sized businesses that are showing interest in cloud. A few small-sized subsidiaries of large businesses will also be the candidates for applications on cloud. Similarly, joint ventures/ special purpose vehicles formed specific to a large project will also be ideal candidates for cloud-based applications since the said entities have limited life 46

informationweek april 2012

Satish Pendse

President, Highbar Technologies Limited

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Book Review

Bringing ‘Cloud’ down to earth

To the Cloud Cloud Powering an Enterprise Pankaj Arora, Raj Biyani and Salil Dave Tata McGraw-Hill

informationweek may 2012

here is no doubt that the cloud has significant benefits for businesses. With attractive propositions such as OPEX model, lower TCO, shared resources, faster deployment/roll-out of applications (in minutes not months) — every organization would be tempted to move its infrastructure to the cloud. But the journey to the cloud isn’t all that simple and straightforward. There are numerous considerations in the areas of processes, policies, people, and applications. It’s not uncommon to see sheer lack of awareness and experience on cloud. Few understand cloud benefits/features such as rapid elasticity, on-demand self-service, automated provisioning/ de-provisioning, measured service, broad network access (across devices and platforms) and pooling of compute, storage and network resources. So what really is the cloud? Is it a product, a service or a technology? A new service delivery model? This is what the first section of this book (titled ‘Explore’) sets out to clarify. Many are less cognizant of the fact that the cloud (or any of its manifestations: public, private, hybrid, PaaS, SaaS, IaaS) may not work in every instance or scenario; certain applications are just meant to be on-premise. Is your business model compatible with the cloud? Is the nature of your business suitable for the cloud? Will your internal and external stakeholders be comfortable with it? Can the cloud address the regulatory and compliance aspects of your industry? How does one measure success of a cloud implementation and then measure ROI? What are the key considerations for selecting a cloud? These are some of the questions/issues CIOs grapple with, which are well addressed in To the Cloud. The information in this book is crisp, with a generous spread of tables, illustrations, checklists, and frameworks. The book is organized into four distinct sections: Explore, Envision, Enable and

Execute. It begins by exploring the cloud, explaining its definition, and examining the value proposition and then envisions how cloud computing can transform your organization. Where, when and how will cloud computing technologies benefit your business? After that, it discusses how one can go about enabling one’s organization with the necessary resources and skills. Here it explains the pros and cons of various adoption processes. Finally, it delves on executing the design, development, and operation of cloud workloads. The information is also updated to include emerging categories such as DaaS (Data as a Service) and BPaaS (Business Process as a Service). And of course you’ll want to know about the cloud in the context of India. Flip ahead to the Epilogue to read interesting notes on emerging markets and the advantage that India has to leapfrog ahead of other nations. Security is a big inhibitor of the adoption of cloud and the authors have addressed this from technology, policy and architectural perspectives. The examples and best practices outlined in much of this book are based on Microsoft’s journey to the cloud. To gain deeper insights, Microsoft decided to deploy its own cloud for internal use. Other IT organizations such as Intel and HP (to name a few) have done likewise (read about Intel’s account elsewhere in this issue). This book is authored by senior executives from Microsoft who were responsible for formulating a cloud strategy and then executing it, in conjunction with cloud development teams. An intense and focused book — it is a documentation of a company’s journey to cloud computing. Learning from the experiences of Microsoft and other companies like Infosys, your journey to the cloud could be wellplanned and smooth — just as you’d expect for your meticulously-planned, well-deserved summer vacation! Take this book along. u Brian Pereira brian.pereira@ubm.com

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Interview

‘Cloud Computing is one of the most misunderstood terms’

Co-author of the recent book, To the Cloud: Cloud-Powering an Enterprise – A CIO’s Essential Guide, Raj Biyani, Head, Microsoft IT India, shares insights from his tremendous experience, and tells us how the cloud can transform India, and why the cloud has the potential to offer CIOs a new job position

There have been a host of cloud computing books in the market? What made you and the other fellow authors to consider writing another one? When we started researching, we found out that the cloud was one of the most misunderstood terms in the industry. Let me give you an analogy to explain this. For most of us, snow is just snow. However, if you ask Eskimos, you would find out that they have a dozen definitions of snow. Cloud computing is in the same boat, as there are different definitions and it depends on who you ask. While a lot of books did a good job of explaining the technical side, there was no single place or resource, where one could get a holistic view. We believed that there was a need for a book , which gave a nice, simplistic overview of the various flavors of cloud, and the benefits that such a technology can deliver. During the course of your research for the book, did you find out any major surprises? My biggest surprise, and actually, an extremely pleasant discovery was the fact that way back in 1820, the top two economies in the world were China and India. And India was 17 percent of the world’s GDP. Today, India has a similar opportunity, and a potential to grow higher. The one word which is a speed breaker, is the ‘I’ word — which stands for infrastructure. Indian enterprises can now get over technology infrastructure issues by leveraging the cloud — the same way, as Indians leapfrogged the landline to adopt the cell phone. As many enterprises do not have a legacy infrastructure, this is a perfect opportunity to leverage technology and grow faster than the rest of the world. How should CIOs view cloud computing, and what can the cloud do beyond cutting costs and

increasing operational efficiencies? The cloud has the potential to offer the CIO a new job position — Chief Innovation Officer. The cloud can enable CIOs to incubate and deliver scenarios faster, which are impossible to deliver using traditional infrastructure. The cloud can change the equation from ‘Run to Govern to Transform’. Using the cloud, CIOs can move a lot of investments from ‘Run to Transform.’ In short, they can concentrate more on innovation, rather than spending most of their time in just keeping the lights on. More importantly, CIOs also have an opportunity to provide applications that will offer differentiated value to the business. Internally, at Microsoft, how do you see cloud as a strategic business enabler? The cloud delivers the same benefits for us as it does for our customers. For example, our appraisal system is accessed by a majority of our employees twice a year during their appraisals. During this period, we see a big spike in usage, and accordingly, we have used Windows Azure for handling peak loads. How do you see the impact of cloud computing on the opportunities for Indian IT service providers? For IT offshore vendors, I believe that the cloud computing model offers opportunities that are three times the current set of opportunities. As the cloud model matures, a lot of companies will want guidance to move to the cloud. This throws up migrationrelated consulting opportunities. In the next few years, a majority of applications will be on the cloud — which also offers opportunities to cloud-enable applications. u Srikanth RP srikanth.rp@ubm.com

may 2012 i n f o r m at i o n w e e k 49

Case Study

Intel shows how the cloud can transform internal IT The processor giant’s enterprise private cloud has already realized USD 9 million in savings, and reduced provisioning time from 90 days to 45 minutes By Srikanth RP

ntel’s adoption and deployment of an enterprise private cloud is a perfect example of how the cloud can transform and improve internal efficiencies. The enterprise private cloud has already delivered some big benefits for Intel. The processor giant has realized USD 9 million in savings and reduced provisioning time from 90 days to 45 minutes. Today, 80 percent of new business services are delivered through its enterprise private cloud. Intel started on its cloud journey by applying key lessons from its Design Grid Computing environment (deployed between 2006 and 2008). It started an architectural transition focused on building a secure, service-oriented enterprise private cloud inside Intel for its office and enterprise environment. Accelerated virtualization and building an on-demand, self-service, and measured services capability played a critical first-step role in this endeavor, along with addressing security, manageability, automation, metering, and employee use model considerations. However, 2011 was a year in which the journey towards private cloud adoption accelerated. “In 2011, we

“64 percent of our office and enterprise environment is virtualized; we are on track to reach our target of 75 percent”

Ajay Chandramouly

Cloud and Data Center Industry Engagement Manager, Intel IT

continued to make rapid progress in transitioning to our enterprise private cloud. We focused on virtualizing more demanding applications, including Internet-facing and mission-critical applications with higher security requirements, and migrating them to the private cloud. Sixty-four percent of our office and enterprise environment is virtualized, and we are on track to reach our target of 75 percent,” explains Ajay Chandramouly, Cloud and Data Center Industry Engagement Manager, Intel IT.

Tackling challenges head on

Intel’s deployment of enterprise private cloud is also a good case study to understand how an enterprise can tackle complex challenges. For example, like any other enterprise, there was a fear of the impact of a

To maximize asset utilization across its data center environment, Intel is refreshing its servers every four years. This has accommodated 45 percent annual growth in compute demand, while reducing the number of servers from 100,000 to 75,000

informationweek may 2012

new approach, and whether this approach would prove risky to its business. Intel tackled this challenge by taking a pragmatic approach. It utilized Software-as-a-Service for non-differentiated business processes, wherein there were enough providers who could use economies of scale to provide Intel software through the cloud with excellent results. Simultaneously, Intel also started its internal cloud work at its development environment, transitioned this to its test space, then to its tier 2-4 production environment. Depending on the requirements of the business unit within the company, Intel fine-tuned its approach to get the required buy-in. “We need to establish the business principles that compel adoption of cloud. If the business is TCO driven in some areas, then a thorough financial analysis along with clear tactics to maintain SLA will overcome resistance to change. If the business is driven by need for agility and rapid response, then POC/pilot projects demonstrating “click to deploy” speed of solution development can be a strong motivator to the organization,” states Chandramouly.

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As the cloud momentum picked up, Intel also faced a serious issue in overcoming over-exuberance, as everyone was excited about the possibilities and opportunities presented by cloud computing. Intel tasked a team for trying most of the various cloud solutions and determining what the best strategy was for Intel. Although, the team was convinced that internal IaaS and PaaS/ SaaS were the most likely goals for the near term, the team continually evaluated new cloud service offerings with an eye to potential adoption. The primary factors influencing the decision were TCO and business agility. Intel also has a large effort underway to move most of its existing legacy applications to its cloud foundation, which is its virtual infrastructure — Intel’s application teams take targets on execution, and as they get exposed to the virtual infrastructure, the organization starts exposing them to cloud attributes and how the new environment will help them with regards to productivity and time to market. “We also have clear and evident senior management support from the CIO. We will lead in cloud as it makes business sense, and we will aggressively work towards that goal. But we are careful to distinguish business needs from the exuberance that can come with hot new trends. Establishing the criteria for that threshold is key,” states Chandramouly.

Enterprise cloud rains benefits

Today, the enterprise cloud has delivered heavily in every factor that is measurable — from cutting down

Virtualization NOT VIRTUALIZED VIRTUALIZED 2009

2010

12%

42%

52% Increase from 2010 Source: Intel it Annual Performance Report 2011-12

costs, improving efficiencies, and reducing the time to provision new services. “With 64 percent of our office and enterprise environment virtualized, we are achieving average server consolidation ratios of up to 20:1 and have already achieved net savings of USD 9 million to date. We anticipate additional net savings of approximately USD 6 million per year over the next four years,” says Chandramouly. To maximize asset utilization across its data center environment, Intel is refreshing its servers every four years. Through this approach, Intel has accommodated 45 percent annual growth in compute demand, while reducing the number of servers in its environment from 100,000 to 75,000. Following the success of the private cloud deployment, Intel is now extending the value of the private cloud to more groups and more usages across Intel. To enable Intel’s services businesses to meet unpredictable spikes in demand, the firm has increased flexibility

Average Time to Deploy Infrastructure Services 2009 2010 2011

14 days 3 hours 45 minutes

2011

64%

Improvement from 2010 using private cloud

by deploying a rapid, elastic infrastructure-as-a-service scaling solution to support externally facing Internet applications. Simultaneously, Intel has embarked on a platform-asa-service program to bring hosted ondemand development environments to its internal software developers. “Our goal is to enable developers to turn innovative ideas into production services in less than a day,” explains Chandramouly.

On road to hybrid clouds

To further increase scalability, cost efficiency, and service resiliency, Intel has established a technology roadmap for the use of hybrid clouds. “In 2011, we began sharing capacity across multiple resource pools inside a data center; in 2012, we plan to share capacity across all 13 private cloud data centers and then expand to hybrid use of secure external clouds,” says Chandramouly. Intel believes that in order to create an interoperable private and hybrid cloud environment, open industry standards and software are required. In 2011, Intel began running and testing its first completely open-source cloud environment. Chandramouly says that Intel’s goal is to determine where open solutions can augment its existing cloud capabilities, which can enable it to move towards its cloud vision at an even faster pace. u Srikanth RP srikanth.rp@ubm.com

Source: Intel it Annual Performance Report 2011-12 may 2012 i n f o r m at i o n w e e k 51

Case Study

Essar’s journey to the cloud Having built a robust infrastructure foundation using virtualization, the Essar Group is now accelerating its journey towards the cloud By Srikanth RP

he Essar Group is a multinational conglomerate and a leading player in the sectors of steel, oil & gas, power, shipping, ports and logistics, projects, and minerals. With operations in more than 25 countries across five continents, the group employs 75,000 people and has revenues of USD 20 billion. As the group was expanding quickly, it recognized that a key ingredient to attain success in a competitive industry was providing superior customer service, enabled through a robust technology backbone. So, it constantly started looking for ways to use technology to enhance value for its enterprise customers. As it looked around at different options, the group recognized that cloud computing, as a technology could be used for reducing capital expenditure, improving application availability, and bringing about business process improvements. With this objective in mind, the group started consolidating and virtualizing its IT infrastructure. The virtualization drive, which started in the year 2008, focused on desktop virtualization and server virtualization. The group used technologies from firms such as Microsoft, VMware, HP and Citrix in this initiative — which formed the base foundation for the private cloud. “The Essar group plunged into the cloud arena through a planned consolidation approach that fulfilled our business needs. We looked at exploiting cloud technologies by optimizing existing investments in IT Infrastructure and also explored public cloud offerings from various cloud service providers,” states Dharmesh Rathod, Project Lead, CTO Office, Essar Group.

informationweek may 2012

“In-house private clouds will enable optimization of existing investments and shorten turnaround time for requirement fulfillments”

Dharmesh Rathod

Project Lead, CTO Office, Essar Group

Evaluating cloud offerings Simultaneously, the group started evaluating public cloud offerings from service providers. Before choosing the applications to be considered for moving to the public cloud, the group looked at factors such as application portability, backend support, and application criticality in terms of business and service operations. A cautious approach was adopted to host applications, as well as to migrate servers from physical to virtual, considering aspects such as performance experience on public and private cloud, information security requirements, and a detailed cost analysis with comparative data sheets for future plans. After evaluating potential cloud service models and providers, Essar chose Microsoft Azure’s public cloud infrastructure. In the first phase, Essar has migrated two web-based applications on the Azure cloud, and estimates approximately 23 percent cost savings. In the second phase, it plans to migrate 10 applications. As a result of its cloud computing initiatives, the group has been able to reduce its cost of maintaining IT infrastructure, in addition to freeing up IT resources to deliver innovative IT services. The group has improved its IT infrastructure performance due to centralized administration, a more agile IT

infrastructure, and reduced data center footprint. In the coming months, Essar has promising plans to leverage its cloud computing capabilities. “Dynamic resourcing with respect to compute, memory and storage will be the key drivers behind creating private clouds within the Essar group. We have several business units under Essar Group, which at times calls for dedicated infrastructure, and segregation of setups and solutions. In-house private clouds will result in better optimization of existing investments, shorten turnaround time for requirement fulfillments, enhance our scalability options — all this under an effective charge back model,” emphasizes Rathod. The group also plans to initiate SAP Development/ QA environments, internal test beds and mailing services using the cloud. The cloud also gives the business enhanced agility particularly in dynamic scenarios, such as mergers and acquisitions. While the cloud has delivered multiple benefits related to costs and efficiencies, at a broad level, the group is now more nimble-footed and faces minimal downtime and service disruptions.

u Srikanth RP srikanth.rp@ubm.com

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Case Study

How Hexaware is using the cloud to improve its competitiveness Hexaware’s cloud journey has not only helped it in driving productivity, but has also resulted in a reduction of nearly 2.7 million pounds of carbon and a positive environmental impact By Srikanth RP

ike other Indian IT services companies, Hexaware too embarked on the journey of setting up a private cloud by using the familiar and time-tested route of virtualization and consolidation. “As the first step to our cloud journey, Hexaware rolled out data center wide virtualization. We saved 50 percent on our datacenter space and reduced our energy consumption through virtualization,” states N Nataraj, Global CIO and SVP, Hexaware Technologies. Today, the firm has over 650 virtual machines. Thanks to this initiative, Hexaware has realized energy savings worth 1,718,876 kWh, which is equivalent to an environmental impact of planting 4,079 trees or taking 231 cars off a highway. This has resulted in carbon reduction of 1,234,216 kg. In private clouds, software services companies like Hexaware, also have a perfect platform to rapidly launch new services. For example, Hexaware announced the launch of its cloud service, wherein it proposed to offer clients services in the space of IaaS, PaaS and SaaS. The foundation for launching these services is a private cloud, called RAINMAKER. With RAINMAKER, Hexaware gets many benefits of cloud computing, including self-service, scalability, and elasticity — with additional control and customization available from dedicated resources. This is a single platform, built from unified computing, fabric, and storage technologies that lets Hexaware scale to meet the largest data center requirements without disruption or architectural changes in the future. RAINMAKER currently provides

“Our experience from creating and deploying the cloud infrastructure internally is now opening the doors for Hexaware into several businesses”

N Nataraj

Global CIO and SVP, Hexaware Technologies

two models for private cloud services for its internal users: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). With IaaS, Hexaware can use infrastructure resources (compute, network, and storage) as a service, while PaaS provides a complete application platform as a service. Today, the cloud-based approach has given Hexaware around 30 percent reduction in management and operational costs, with the additional capability to accommodate for future business growth without adding new IT infrastructure. “On an average, while we grew over 30 percent last year, we added just 5-6 physical servers,” states Nataraj. The cloud has also provided facilities and framework for emulation of DR/ BCP for all projects and all workloads. As projects and workloads are charged based on the actual usage and not on a traditional fixed hardware pricing, it has led to better utilization of IT infrastructure. Besides using the virtual machines to quickly provision IT infrastructure for its clients, Hexaware also uses this capability to conduct training on different platforms and technologies in its classrooms.

Cloud – A door opener for Hexaware

In the highly competitive IT services sector, the initiative led by the CIO, N Nataraj, has not only led to great business benefits internally, but is being used by the company as a competitive edge. “Our learning and experience from creating, deploying and fine tuning the cloud infrastructure internally is now opening the doors for Hexaware into several businesses, which are looking at deploying cloud computing technologies,” states Nataraj. While businesses ask for consulting expertise or advice in deploying cloud-based technologies, they have the potential to lead to several other business opportunities in related areas such as testing, migration or application development. Hexaware has already signed five customers using RAINMAKER. As Hexaware’s experience shows, RAINMAKER is not only showering gains for Hexaware internally, but is also preparing the ground for seeding and launching other high growth cloudbased initiatives. u Srikanth RP srikanth.rp@ubm.com

may 2012 i n f o r m at i o n w e e k 53

Case Study

Nilkamal furnishes better sales through Salesforce.com The reduction in communication gap between the front-end and back-end sales staff has resulted in average weekly time savings of 20 percent By Ayushman Baruah

isted on the NSE and BSE, Nilkamal Limited’s turnover for FY11 exceeded ` 1,499 crore. The company is into five core businesses — material handling crates, containers and bins; moulded furniture such as chairs, tables and cabinets; custom mouldings & OEM supplies for specific customers; @home, the mega home store retail chain; and service products for the hospitality industry. The leading manufacturer has seven large manufacturing plants in India and a wide sales network operating through 49 regional offices and 33 warehouses. The company was facing a challenge as its sales team lacked visibility of sales and found it difficult to keep customers informed of transactions on their account with paper records. Only regional sales managers had an idea of the future sales pipeline, whereas the head office was completely blinded from it. Consequently, the sales support staff was wasting time chasing account details instead of dealing with customers. “Earlier, we had a back-end team that helped them complete their sales, give information about their customers and also a lot of things happened over the telephone. So if the sales guys on

Benefits l

Full visibility over future sales pipeline Visibility and auto-alerts about payments-due has improved accounts payable collections New market intelligence about different product vertical opportunities

informationweek may 2012

“We selected Salesforce.com considering the speed at which it can be implemented and the ease of use it offers”

Karan Doshi

Project Manager-CRM, Nilkamal

the field wanted some information about a customer, they had to call the back-end coordinator, talk to that person and get back to the customer with the future plan of action. This, at times, created a communication gap between the back-end and front-end teams. The front-end teams were really getting pressurized because of this. That is when the requirement of CRM came in,” Karan Doshi, Project Manager-CRM, Nilkamal told InformationWeek. Nilkamal started exploring the horizon of CRM and narrowed down on three companies, namely Oracle, SAP and Salesforce.com. “We selected Salesforce.com considering the speed at which Salesforce.com can be implemented, the speed at which it can be active, and the ease of use for the sales guys,” said Doshi. Nilkamal went live with Salesforce. com in June last year and started training the sales team to start using CRM. Nilkamal uses CRM to generate quotes; receive pending payments and statutory forms; get additional details about the customer; and check enquiries that have directly landed at their head offices or regional offices. Post implementation, the back-end teams don’t have to look at hard copies of quotations, when a purchase order

(P.O.) is received from a customer. One just has to log in to the CRM system, verify the P.O. with the quote, and with the help of CRM itself, insert the sales order, and issue the plan. In terms of challenges, Nilkamal took some time to integrate everything into the CRM because of their multiple product lines. But according to Doshi of Nilkamal, this was a problem well managed by Salesforce.com and their implementation partner Compro Technologies. “They knew almost 50 percent of our business out-process and we really didn’t have to crack our heads to make them understand what needs to be done and what not.” The company has seen massive productivity increase with an average weekly time savings of 20 percent for 130 sales support staff. Managers now have full visibility over future sales pipeline and can better plan manufacturing. Also, the managers are able to use market intelligence about different product vertical opportunities to drive new businesses. From an expansion point of view, Nilkamal plans to increase its current base of 140 users to 200 and grow every year. u Ayushman Baruah

ayushman.baruah@ubm.com

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Case Study

dyllic Software is a web development company using Ruby on Rails for startups, small businesses, digital agencies and software development companies. The company was formed in 2009. Being a startup, the company wanted to keep the expenses low, and more importantly flexible. Thus, like most of the startups and SMBs, Idyllic Software adopted cloud solution. Idyllic Software is using EC2 cloud services from the time the company started operations. Presently, it is using virtual servers, S3 storage and cloud front services from Amazon. The web development company has a wide range of services living on the cloud. It has hosted websites, blogs and applications — ranging from job sites to billing applications and e-commerce sites to Facebook applications on the cloud. It has rented 11 servers for different projects from Amazon. The company feels that renting a dedicated server from a data center would have been more expensive and less flexible.

Cloud: Flexible and cost-effective

The key reasons for the company to take the plunge in the cloud were flexibility and cost savings it offers. With cloud, the company can pay as it goes without any long-term commitments. Idyllic Software uses Amazon EC2 instances, which are very easy to scale up or down. Also, it can quickly bring up a few servers just like the ones it has, in no time. The major benefits of the cloud that the company experiences are

“We are a small business, our expenses are also small. Thus, we wanted a solution that would help us to reduce our cost and cloud was the answer”

Jinesh Parekh

Founder, Idyllic Software

ease of usage, flexibility, complete control and cost savings. Jinesh Parekh, Founder of Idyllic Software explains, “Since, we are a small business, our expenses are also small. Thus, we wanted a solution that would help us to reduce our cost and cloud was the answer. We have experienced huge cost saving by using cloud. Also, based on the need we can easily scale the solution, save time, money and hassle of maintaining it.” He mentions, for instance, the cost incurred per virtual server (medium sized) ranges from ` 2,000 to ` 2,500, which includes usage of S3 storage services and their cloud front content delivery network. If Idyllic Software were to rent a decent sized dedicated server, the costs would have been at least ` 5,000 to ` 10,000. Of

Cost per server slashed from

` 10,000 to ` 2,500

course the cost fluctuates, based on the usage.

Security is not a concern

Idyllic Software’s applications and even their client’s applications are deployed on Amazon cloud but still the company is not concerned about security. The company believes that the concern of security is no different than how it would be on dedicated servers. Both require the same planning and due diligence on the company’s part. According to Parekh, clouds are like data stores, which have same control on security. The company’s clients have billing and e-commerce applications on the cloud. And till date none of its client has ever faced any problem on cloud. He says, “There is no difference between how you secure data on the cloud as compared to how you do it on dedicated servers. Both require you to trust the provider and employ best practices to achieve the result.” The example of Idyllic Software shows how SMBs and startups can utilize the power of the cloud to kickstart their operations.

u Vinita Gupta vinita.gupta@ubm.com

april 2012 i n f o r m at i o n w e e k 55

Opinion

Securing the nebulous cumulus: Cloud security

KS Abhiraj

Emerging facets vertically aligned with current cloud baseline are posing significant new security challenges. Understanding these challenges is the key for survivable systems for a cloud-ready environment

http://www.on the web Basics of cloud security Read article at:

informationweek may 2012

n the midst of implementing this new phase of instrumenting mixture of technologies what we see with respect to concerns impeding the momentum are varied niche of technologies, which aggravate cloud towards flexibility and innovation. At this peak snippet of cloud adoption, enterprises should turn security mechanisms to focus more towards creating survivable systems introduced through data center technology. Traditional security focusing more towards perimeter and server levels — be it applied in data center or any client-server environment, needs to be rejuvenated towards new cloud confrontations. For creating a form of survivable environment viz. refurbishing the management of new risks, for which firms need to re-evaluate their practices synonymously with respect to their environment, while implementing new network-centric capabilities to ensure the integrity of their services. The approach to see for survivable systems delivers benefits, such as scalability, abridging operations overhead, unified secure policy enforcement and visibility to application object — be it in virtual platform. New trends of computing do have major impact on data center architecture, incrementing the perimeter to provide security for data and systems residing in them. In traditional environment, applications, compute resources and networks have been tightly coupled with all communication gated by security applications/objects at key choke points. However, present emerging technologies and web services eliminate this coupling and create a mesh of interaction between systems creating a muddle of distributed network, which actualizes subtle and significant new risks. Understanding

these new security challenges is the key for survivable systems for a cloudready environment.

Impeding security brazenness

Consolidating an organization’s data, applications and other resources simultaneously increase the level of risks that a single system breach represents. Mapping a conventional server, which used to house one application with today’s virtualized servers, wherein having the expanse for multiple applications and components pose severe critical pathways. Some of the emerging facets vertically aligned with current cloud baseline pose significant new security challenges, which must be addressed: Server Virtualization: Virtualization security disarrays the traditional IT security model where one examines the threats and vulnerabilities inheriting in systems and look at some common management solutions to those threats. Connoted as ‘The heart of cloud,’ virtualization has been the key for environment consolidation, allowing enterprises to squeeze the most out of their resources. However, some assertory concerns come in towards certain elements with respect to monitoring and controlling of what goes on inside and between virtual machines (VM), which showcase whole new set of significant security risks. For facilitating communication between VMs on same host, there are applications, which simulate an Ethernet switch. Switches in VM hosts cannot be monitored by the same devices used to monitor the physical network, as traffic passing back and forth between VMs on a single server does not travel out into the rest of the data center network, and thus cannot be seen by regular network-based security platforms posed with traditional

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security mechanisms. This disparate lack of visibility into and control over intra-server virtual machine communication creates strenuous security risks. The lack of enforcement points inside the virtualized domain allows rogue script-based worms and other malicious traffic to propagate unchecked between virtual machines and potentially onto the data center network. Such lack of visibility also presents compliance problems. Organizations need a new set of practices to secure this new infrastructure tier. Distributed architectures: Architectonically, the classical n-tier design, segmentation and asset

of concern in highly distributed application environments. Since, communications today are targeted at a larger set of environments, the possibility of an eavesdropper intercepting a communication stream increases, making encryption a requirement for communication. Yet, adding overhead with encryption with live migration comes again as a concern, adding overhead to the total momentum of environment. Storage over IP networks: Leveraging a common IP infrastructure to support data, voice, video, and storage yields economies of scale and simplifies operations.

who has access to your data, now the potential is if one misconfigures something, one sets up the wrong security zone, incrementing the probability of getting ones information exfiltrated. Today, with the combination of these enormous technologies building a massively scalable botnet is a matter of minutes if one desires. Also, stealth web borne malware through rogue scripts (which forms into highly organized botnets that open a callback channel out of the network to exfiltrate data) increase the spectrum of impact if damaged. Traditional security mechanisms do not provide a sufficient defense against these attacks, which come in

Enterprises should turn security mechanisms to focus more towards creating survivable systems introduced through data center technology grouping methodology that was used earlier will no longer apply based on how the networking and platform of cloud performs. Applications are likely not composeable this way anywhere now because they are really being very distributive as the shift of architecture and environment (as talked about) is tending to become topologically and infrastructurally insensitive than before. Therefore, in many cases refurbishing of application as in whole is required for utilizing the platform. So, the security models have to change according to the environment, which acts as dynamic. The concern which impedes the momentum of putting the application in cloud spheres when one has to secure something with ‘no long / norm state’, which ultimately is not persistent, does not survive a reboot, that could change every 10 min. Thus, adjusting the security models with respect to former gets treacherous. Despite their many advantages of distributed application technologies for cloud, it’s indeed arduous to enforce access entitlements. Data privacy emerges as another niche

In addition, network attached storage (NAS) technologies along with storage area network (SAN) technologies such as iSCSI, enable organizations to deploy large storage pools, which require fewer network interconnections — thus round-acorner incrementing the radius of security. Since, now it’s also a part of composite IP infrastructure, the network must be protected from traditional critical concerns with respect to data. Data availability can also be compromised by contention on the IP network or overhead due to levels of encryption on data traffic. Misconfiguration in hypervisor level or fluctuations in hypervisor security model may lead to unauthorized access to certain shared elements. For example VM’s of Subscriber1 and Subscriber2 having their virtual storage in the same shared LUN (Logical Unit Number) inside a SAN, Subscriber2 may be able to map the storage of Subscriber1 to its VM and thus see or use the data. Service based attacks: With an enormous source and connectivity, instead of being able to chop down

through multiple fronts thus leading enterprises to rejuvenate their security mechanisms. To evolve and thrive with these evolutions, enterprises should revisit existing information security best practices, technologies, and design approaches in light of these risks. An approach towards survivability, thus securing the virtualized, cloudready environment offers a number of benefits including preserving scalability and operations in the phase of attack. Ultimately, enterprises have to complement the current risk assessment methodologies, which doesn’t actually requires one to go out and make a left hand turn to understand how risks changes. u KS Abhiraj is Chief Security Researcher and Strategist at whitehat’People’

KS Abhiraj is a speaker at Cloud Connect Bengaluru, to be held on May 24 and 25. To know about the Conference Agenda, visit: www.cloudconnectevent.in

may 2012 i n f o r m at i o n w e e k 59

Opinion

Who is using cloud computing: Five observations

Anuj Kumar

Observations on how cloud computing is being used today and which approaches are striking chords with users — and those that aren’t

n many respects, cloud computing in all its myriad forms is young. In part this is a matter of the time needed for various technologies to mature. For example, the whole area related to handling the huge, unstructured data sets often associated with large-scale clouds arguably hasn’t even established a consistent vocabulary yet. Even beyond basic technology underpinnings though, the integration of component tools into useful systems and making them consumable by IT organizations is, for all the useful offerings in the market today, still in its early phases. That said, there’s been enough practical experience with cloud computing that we can start to discern some patterns. These patterns will doubtlessly evolve over time as new offerings become available or impediments to adoption recede. However, the following five observations tell us a lot about how cloud computing is being used today and which approaches are striking chords with users (and which aren’t). Software-as-a-Service (SaaS) — Yes, but narrowly. Applications, not computing infrastructure or development frameworks, are the things with which end users interact. That’s why a company like Salesforce.com became one of the early poster children for cloud computing. And, indeed, SaaS and related forms of online web services dominate in certain verticals, such as customer relationship management. However, in what will emerge as a familiar pattern, legal and other risk management concerns give many enterprises pause when considering SaaS for even a seemingly innocuous function like e-mail. They ask questions about, for example,

http://www.on the web Cloud computing is still in its adolescence Read article at:

informationweek MAY 2012

notification procedures in the event of a data breech or a judicial order— and often don’t get clear answers. For certain types of applications (typically those that are relatively standardized across different companies), SaaS will doubtlessly continue to grow, but enterprise adoption will require offerings that are operated under processes that have enterprise needs in mind. Enterprises are building private/hybrid clouds. Medium to large enterprises in both — private and public sector have begun to move past the planning stages and are building clouds. They’re building rather than renting from public providers, partly because of the aforementioned compliance and risk management issues — their own infrastructure may not be inherently more secure or reliable but they have visibility into and control over it. However, it’s also the case that large organizations have complex needs and are required to accommodate an existing portfolio of applications and infrastructure. They want to start gaining efficiency from public clouds and offer their own users the sort of self-service and speed of ramping up new compute resources they see in public clouds — but to do so under their own terms. This means they can’t just build a new IT infrastructure from scratch or add an additional set of cloud resources alongside their legacy infrastructure. Their goal is to build a cloud that leverages as much of their existing IT as possible.

Maintaining future flexibility is a core concern. And, as organizations build clouds, we hear repeatedly from them that they are determined that cloud computing does not become yet another means to lock them into

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a specific product set or technology. It’s telling that the original thrust behind cloud computing was not so much the vendor community, but end users looking to deal with exploding complexity and scale. This is also why Open Source software is a major player in both public and private clouds. It offers great value, sure. But it also introduces the opportunity to shape projects in ways that respond to your priorities and requirements. Thus, organizations are generally taking approaches that maximize portability and interoperability across different clouds. It’s no coincidence that even those cloud computing offerings that don’t really meet any reasonable definition of open, nonetheless promote themselves as if they were. Compliance and risk management are also core concerns. I mentioned this already but it’s worth discussing in a bit more detail because it arises so often in cloud computing discussions — and is intertwined with so many decisions. To be clear, this isn’t a comment on the relative security or safety of public versus private clouds or anything that simplistic. Rather, it’s the observation that cloud computing needs to be systematically considered as part of an integrated IT governance process. The outcome of such a process may well be that certain types of data and applications can’t run in a public cloud, or can only run in certain public clouds, or can only run when certain conditions are met. (For example, perhaps data can’t be stored or replicated in a different country.) Nor is risk management solely about external providers. For example, private clouds can provide self-service access to users. This implies access controls, the establishment of policies and workflows, and appropriate auditing.

Platform-as-a-Service (PaaS) is intriguing developers. PaaS is the newest aspect of cloud computing and the most

nascent. PaaS can be thought of as providing developers with useful abstractions that let them create applications more easily. It can also provide them with the means to then run applications without getting overly involved with the mechanics of the underlying infrastructure. This touches on a relatively new concept called DevOps, which talks to the idea that the traditionally distinct roles of operator and developer are starting to blend in some contexts. PaaS takes a number of different forms, but keeping with the way organizations are thinking about clouds, the most widespread momentum seems to be behind approaches that provide portability between clouds. This means that a developer could use one PaaS to develop an application and later decide to deploy that application somewhere else making minimal or no changes. We’ve covered several different cloud computing threads. But there’s a unifying thought. Organizations are adopting clouds that recognize the value of the IT investments that they have already made, and the legal, regulatory, and risk management regime under which IT must operate. And they’re doing so in ways that maximize their future flexibility.

Organizations are generally taking approaches that maximize portability and interoperability across different clouds

u Anuj Kumar is GM, India Subcontinent, Red Hat

MAY 2012 i n f o r m at i o n w e e k 61

Opinion

6 S

Smitha Murthy

Taking on SaaSbased software services is not an option anymore, it is a necessity. If you are considering the offerings of security SaaS software vendors, be sure to enquire these six questions

http://www.on the web 5 steps to secure SaaS Read article at:

informationweek may 2012

questions CIOs must ask a security SaaS vendor

ecurity Software-as-aService (SaaS) is a security control that is available by subscription and is managed and delivered via the Internet by a software vendor. The Security SaaS model is generally well-suited for businesses that either have few IT resources or none at all in-house. It also works for businesses that are not interested to invest in security hardware or do not have time for managing security or a large number of remote users. In other words, this model serves a broad spectrum — all the way from SMBs to large enterprises. For most CIOs around the world, taking on SaaS-based software services is not an option anymore, it is a necessity. Enterprise CIOs have realized that in order to remain competitive, they need to optimize their IT budgets and leverage the cloud for greater security in the ever-changing threat landscape. For CIOs of large enterprises, the paramount security concern without a SaaS/cloud-based security offering is that often the remote workers do not VPN into the corporate network to get the latest security updates and policies. With SaaS, security is always on, always up-to-date and CIOs can rest assured that security policies are uniformly applied, regardless of the employee’s location. The next big challenge that a CIO faces is ensuring remote workers are compliant with the organization’s security policies. The relinquishing of control is a tough pill for IT administrators to swallow. Most large enterprises have not quite adopted cloud all the way yet because of this very reason. The optimal way to look at this situation is to do a TCO and ROI analysis, factoring in the risk of remote employees not keeping their systems up-to-date with security. Finally, in today’s scenario, most CIOs face a hybrid requirement — managing employees who come to the

office campus with on-premise security solutions and managing the remote workers with SaaS. Then the problem to solve becomes how to have a single security view of the enterprise. If you are considering the offerings of security SaaS software vendors as the solution to the problem, be sure to enquire about the following: l Has the vendor been in the security SaaS business for a significant length of time and earned the reputation for being the best in class? l Can you reduce or eliminate the on-premise hardware and software costs, deployment and maintenance by offloading the server management to a third-party software vendor, thereby optimizing your IT budget? l Does the vendor offer a hybrid solution with a single management view of security across the enterprise? l Does the SaaS management platform hosted by the software vendor on their infrastructure offsite provide centralized deployments, reporting and management online? l With an Internet connection, regardless of connection to corporate network, are all users constantly protected with a “version-less” solution — with transparent updates and upgrades, and policy management? l From a longer-term investment perspective, does this software vendor have the breadth of security portfolio so that you can get all security SaaS solutions, with a single, centralized management console from the same vendor for greater ROI? If the answer is ‘yes’ to all the questions, you have likely found your SaaS match. u Smitha Murthy is Head of Product Management, McAfee, India

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Opinion

A cloud-enabled mobile workforce

Sunil Lalwani

A number of industries across verticals are leveraging mobility and cloud in a variety of ways

http://www.on the web HP uses mobility to fight fraud Read article at:

nterprise mobility is the Number 1 subject of discussion in IT strategy meetings. A combination of forces is driving the trend. The first is what has come to be known as the consumerization of IT, where everyone is bringing their own mobile devices to work. The second is improvements in network bandwidths that have made the experience of using smartphones better. The third is lowered costs of access, as well as the device. And finally, rapidly moving to the core of the phenomenon is the proliferation of mobile apps. The apps story is unique — when you combine it with cloud technologies, the impact is magnified by magnitudes. A January 2012 study by IDC says that the world’s mobile worker population will reach 1.3 billion by 2015, representing 37.2 percent of the total workforce. Businesses need to prepare for this mega transformation in workforce distribution and dispersion. The barrier for businesses until now was creating customized, device agnostic apps for their businesses while keeping costs down. The proliferation of mobile platforms, heterogeneous networks with varying characteristics and capacities and varied device form factors haven’t helped the situation. Developing apps in such an uncertain technology environment and upgrading them was expensive. But new app development models have quickly evolved. For example, the SAP mobile enterprise app store has decided to embrace the collective power of the global independent developer community. These developers are building apps that work with SAP products for finance, HR, procurement, sales and supply chain on various platforms. Employees visit the SAP store, download what works on their device and use it. Everyone wins: the developer makes revenue from a vast number of enterprise

users; SAP wins because it is able to extend the business boundaries of its customers by mobilizing its applications; the enterprise wins as employee productivity improves; and the employee wins as he/ she gets to use an app they are comfortable with. The apps are delivered — with updates automatically and intelligently pushed to the users based on device and OS version using a cloud hosted app store. The advantage of a cloud environment is obvious: costs are in line with usage; when demand for apps grows, the infrastructure capacities and bandwidth availability grows; and cloud service ensures improved availability and reliability. Many apps also have compute abilities in the cloud, freeing the remote device for other applications. A number of industries are leveraging mobility and cloud in a variety of ways. Businesses in the financial services and insurance industry are providing access to real-time data to employees for client meetings and sales calls. Insurance sales teams are able to create customized packages on the fly using mobile devices. The energy, oil & gas, utilities, logistics and transport industries — which have traditionally spread out teams — are leveraging mobility to optimize field service management. Startups, small businesses and independent developers have found an opportunity to innovate. They are helping enterprises move beyond e-mail on their mobile devices. The key is to rapidly deliver apps at low costs and across platforms, leading to an accelerated growth in mobile adoption. On the other hand, standardization of cloud-based infrastructure is helping enterprises adopt cloud technologies with greater confidence.

u Sunil Lalwani is Director, Enterprise Sales (India), Research In Motion

MAY 2012 i n f o r m at i o n w e e k 63

Opinion

Dispelling the vapor around cloud security

Jayabalan Subramanium

Cloud computing has matured to the point that it can be a secure, viable and highly effective approach

http://www.on the web Critical security questions to ask a cloud service provider

Read article at:

informationweek MAY 2012

ata security keeps chief information security officers (CISOs) up at night, and with new computing models such as cloud, the stakes can be perilously higher. The possibilities of data loss, data leakage, service downtime, regulatory constraints, and risk of intellectual property theft create a treacherous risk environment. These security issues illustrate the significant hurdles a business must clear before adopting cloud computing. Any organization considering a move to the cloud must carefully assess what applications and data it can migrate to a cloud environment because cloud computing may not be appropriate for all business processes. Organizations must carefully examine the capabilities of any potential cloud services provider. Security, compliance, availability, and scalability are all factors that must be thoroughly evaluated before embarking on the journey to the cloud. At the same time, it is important to consider the financial viability of the service provider. A business does not want a service provider to disappear the month after it moves its processes into the cloud. In today’s harsh operating environment, adding value and increasing efficiency are imperative. Cloud computing has matured to the point that it can be a secure, viable, and highly effective approach. But without careful planning and consideration of market concerns, the gains can be overshadowed by the risk exposure. Security considerations differ, depending on whether you use a public or private Infrastructure as a Service cloud offering. What’s the difference? l In the private cloud, you own and run everything — from layer 1 (the hardware and the building and the

physical security) to layer 8 (the “political” or “human factor” layer). You are completely responsible for the entire security stack with the Private Cloud Infrastructure as a Service deployment. l In contrast, when you use a Public Cloud Infrastructure as a Service provider, you share the security duties. There are components of the Infrastructure as a Service offering for which the Cloud Service Provider (CSP) is responsible, and there are things for which you as the customer are responsible. The demarcation of security responsibilities between you and the cloud service provider should be well understood, clearly defined, and explicitly agreed upon.

Demystifying Cloud security myths

Myth 1 – The Cloud is inherently insecure The cloud environment can be absolutely secure — in fact, it can be even more secure than your own data center or IT infrastructure. A key advantage of third-party cloud solutions is that a cloud vendor’s core competency is to keep its network up and deliver the highest level of security. In fact, most cloud service providers have clear SLAs around this. In order to run a cloud solution securely, cloud vendors can apply for becoming PCI DSS compliant, SAS 70 certified and more. Undergoing these rigorous compliance and security routes can provide organizations with the assurance that cloud security is top of mind for their vendor and appropriately addressed. The economies of scale involved in cloud computing also extend to vendor expertise in areas like application security, IT governance and system administration. This makes the case for an

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enterprise hybrid cloud model very compelling, where the same common security standard can be delivered across both public and private environments without compromising enterprise-class requirements or costs. Myth 2 – Coud is a new concept; hence security is a challenge There’s a misconception that cloud is a new technology and, therefore, cloud security is a brand new challenge that has not been addressed. Although, it is true that the cloud represents a brand new target for attack that hackers love to go after, but the vulnerabilities and security holes are the same ones that exist in traditional infrastructure. In fact, today’s cloud security issues are much the same as any other outsourcing model that organizations have been using for years. What enterprises need to remember is that when you talk about the cloud, you’re still talking about data, applications and operating systems in a datacenter, running the cloud solution. In fact, virtualization of IT infrastructure can make the cloud more secure than the physical environment and an investment in virtual security can provide the needed control and visibility for cloud. Myth 3 - Compliance means security Many enterprises believe that being compliant ensures that their systems are secure and invulnerable to attacks. However, compliance does not ensure security, but only attests to the state of security at a specific moment in time. Compliance standards are reliant on human adherence to policies and procedures and not on

automation. This can lead to errors and misjudgment. In the long run, equating security to compliance — and vice-versa — can put the business at risk. Myth 4 – All Clouds are created equal While the cloud can absolutely be as secure as or even more secure than an on -premise solution, all clouds are not created equal. There are huge variances in security practices and capabilities, and you must establish clear evaluation parameters to make sure any solution addresses your security policies and compliance mandates.

Changing realities

While security emerges as a major concern among the barriers to the adoption of cloud computing, the key to understanding security in cloud computing is to realize that the technology is not new, or untested. It represents the logical progression to outsourcing of commodity services to many of the same trusted IT providers, we have already been using for years. Organizations that approach cloud computing in a mature manner need not be worried about the security concerns that surround cloud computing today. And there are steps you can take to make cloud security just as effective (or even more) as your internal IT. In the end, the question that needs to be answered is not if the cloud is secure but whether the service provider you have chosen to outsource your IT infrastructure to, is offering you a secure cloud environment.

The cloud environment can be absolutely secure — in fact, it can be even more secure than your own data center or IT infrastructure

u Jayabalan Subramanium is CTO, Co- founder, Netmagic Solutions

Jayabalan Subramanium is a speaker at Cloud Connect Bengaluru, to be held on May 24 and 25. To know about the Conference Agenda, visit: www.cloudconnectevent.in

MAY 2012 i n f o r m at i o n w e e k 65

Analyst Angle

Top 10 mobile technologies for 2012 and 2013

Nick Jones

Ten mobile technologies that should be on every organization’s radar screen

http://www.on the web Education 2.0: Mobile technology in education Read article at:

informationweek may 2012

t is a fact well-accepted that mobility is a once-ina-decade opportunity that will enable organizations to deliver genuinely innovative applications or services, and to interact with customers and employees in new ways and new places. Let’s discuss 10 mobile technologies that should be on every organization’s radar screen. While these are not the only important mobile technologies, these should be explicitly addressed in every organization’s mobile strategies.

applications such as smart posters, discount tokens, mobile tickets, authentication and check-in to locationbased services. Some smartphones incorporating NFC are already available, but we expect that by 2015 over 30 percent of all handsets shipped globally will include NFC. The proportion will be higher in mature markets. Payment and perhaps other NFC applications are likely to become a battleground among banks, network operators and megavendors such as Google, which may slow adoption.

1 ) HTML5

3) Platform-Independent App Developmen Tools

HTML5 is the next generation of HTML and is strongly supported by key mobile vendors, including Apple, Google, Research In Motion (RIM) and Microsoft. HTML5 substantially enhances mobile web application features, and will cause a shift of architecture from native applications to hybrid and web approaches. It will also displace more proprietary technologies such as Flash and Silverlight. HTML5 is already available on the browsers of many new smartphones and tablets, but will take several years to penetrate the installed base of devices. HTML5 will reduce but not eliminate the need for native applications, as many underlying platform features aren’t available to JavaScript. It will likely fragment as vendors add platformspecific extensions. Low-end feature phones won’t support HTML5, and the new generation of low-cost Android smartphones may not have powerful enough processors or graphics to run complex HTML5 well.

2) NFC

NFC is a technology for very short range (less than 10 centimeters) of communication, which will be incorporated in many future mobile handsets. Although it’s often portrayed as a payment technology, it’s more appropriate to think of it as a “touch to act” technology that will enable

In most regions, between three and five smartphone platforms will have significant market share. Native applications will be required for sophisticated interactions and services, and platform-independent AD tools will substantially reduce the cost of maintaining multiple platform versions of the same application. A wide range of multiplatform tools is available now — some offering both HTML5 and native code generation options. In the future, we expect such tools to extend their definition of multiplatform to other devices such as smart TVs and other areas where fragmented mobile APIs exist, for example payment. The market for such tools is immature and volatile, so expect mergers, acquisitions and consolidation. The current separation between enterprise and consumer is vanishing, which will impact many vendor strategies. “Write once, run anywhere” remains an illusion for sophisticated applications, although “write 80 percent once and customize 20 percent per platform” is achievable and remains more cost-effective than maintaining separate program versions.

4) Location and Context

Location is the first step towards contextual applications that are proactive and hyper-personalized,

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matching services to employee or customer needs at a specific time and place. The long-term vision of context will involve location, knowledge of individual needs, social networking, sensor information and many other clues to suggest appropriate offers and services. Location determined by cellular networks, GPS, Bluetooth or indoor Wi-Fi systems is already used for navigation and simple services such as location-aware marketing. However, we expect location-sensing technologies and principles such as context to evolve for a decade. The principles and enabling infrastructure for context are very immature. Context will raise challenging issues related to privacy and the use of personal information.

5) Bluetooth 4

The headline feature of the latest Bluetooth 4 release is low energy (LE) operation, which allows a mobile handset to talk to a wide range of low-power peripherals and sensors. It will enable new mobile accessories and business models — many of which will use the mobile device as a channel to communicate with cloud services. In 1H12, a few Bluetooth 4 handsets are shipping (for example, the iPhone 4S), and a few Bluetooth 4 peripherals are available. Although, it will take two to three years before the majority of the handset installed base in mature markets supports the technology.

6) 802.11ac

802.11ac boosts Wi-Fi performance to 1 Gbps level — this and other new Wi-Fi standards, such as 802.11ad (60 GHz, multi-Gbps in-room Wi-Fi) and 802.11ah (low-frequency Wi-Fi), will continue to expand the capabilities of the Wi-Fi family of technologies. The strong Wi-Fi road map will enable it to address new application areas such as highdefinition video streaming telemetry and offloading traffic from cellular networks. 802.11ac is likely to be officially approved around 2013, although pre-standard equipment will become available before that date. 802.11ad is likely to become an official standard in

2012 and 802.11ah in 2013. As with all wireless technologies, real-world performance will be substantially less than peak theoretical speeds and will depend on many factors. Organizations purchasing equipment before the standard is ratified should seek to understand which features may be incompletely implemented and what the implications may be when the final standard is available.

7) Machine to Machine (M2M) and Smart Products

M2M wireless will be implemented using a range of protocols and bearers, including cellular, Wi-Fi, ZigBee and Dash7. M2M will enable a wide range of smart networked products and business opportunities such as converting ownership to pay-as-youuse models. Wireless M2M will comprise a substantial proportion of the future “Internet of things.” Many non-phone wireless devices are already viable, for example, information products such as Kindle or cars with built-in cellular telemetry. Many leading cellular network operators have formed M2M business units to accelerate adoption, and M2M is already around 10 percent of some cellular networks’ total subscribers. In the long term, machines will outnumber human cellular subscribers.

8) Augmented Reality (AR)

AR overlays information onto a real-time video of the world (usually displayed on a smartphone or tablet). This can take the form of tagging objects in view with information, or overlaying more complex video and gaming animation onto world views. Vendors and tools such as Aurasma, Layar, Wikitude and Qualcomm’s AR toolkit are already used to create sophisticated AR experiences; however, we expect AR to continue to evolve for at least five years. AR demands high-end devices with significant processing power and sensors to indicate handset location and attitude. It’s also a very proprietary technology, and is unlikely to become standardized and embedded in web

browsers for at least five years. The quality and experience of AR are dependent on factors such as location precision, which varies depending on how the location is sensed.

9) Multiplatform MDM

Surveys show that the average CIO expects to support more than three smartphone platforms by 2012, and many will have more. The challenges of managing employee devices are compounded by the fact that knowledge workers typically use at least three different mobile devices (e.g., smartphones, laptops and tablets), — not all of which are owned by the enterprise. Therefore, enterprises must be prepared to manage and secure a wide range of devices, some of which they don’t own. Multiplatform MDM tools are one way to achieve this. Multiplatform MDM is available now from a very wide range of vendors, such as those described in “Magic Quadrant for Mobile Device Management Software.”

10) LTE

LTE is a next-generation cellular wireless technology that pushes peak theoretical speeds to hundreds of megabits per second and reduces latency. LTE will be adopted by code division multiple access (CDMA) and Global System for Mobile Communications (GSM) network operators. By the end of 2011, 24 cellular networks had already started to deploy LTE; over 200 have committed to doing so in the future. However, major generations of cellular technology like LTE take about a decade to penetrate the entire population. Japan is likely to lead LTE deployments, with North America and Western Europe having fewer than 20 percent of subscribers using LTE by 2015. Although LTE coverage will be far from complete in 2012 and 2013, some organizations will find applications that can benefit from LTE. Examples include data connectivity in urban areas. u Nick Jones is Vice President and Gartner Distinguished Analyst

may 2012 i n f o r m at i o n w e e k 69

Technology & Risks

How a pickpocket gets your ATM PIN

Avinash Kadam

If your ATM pin is your birth date or a repeated number like 1111, then you need to change it right away

http://www.on the web ATM security: Should we be concerned? Read article at:

informationweek may 2012

ore often than not, our ATM PIN (usually a 4-digit decimal number) is either our own birth date or a family member’s birth date or some important date in our lives like wedding anniversary or graduation day. The reason is plain and simple — these dates are easy to remember. And then where can a pickpocket find these dates? Well, to answer that — don’t we carry a photo ID like a PAN card, driving license or voter’s ID card in our wallet? As per the findings of the paper, A birthday present every eleven wallets? by Joseph Bonneau, Soren Preibusch and Ross Anderson of University of Cambridge, 99 percent individuals carry the combination — ATM card and some ID card with birth date. So, clearly getting the birth date is easy. Also, if the pickpocket is tech savvy and determined, he/she may be able to get other dates from our Facebook account. Phone number or an ID number given by the government, employer or college is another popular choice for selecting an ATM PIN. Again, these are also normally present in the same wallet as the ID card. Still another popular way of selecting a PIN is choosing a pattern on keyboard — like box (1425), corners (9713), cross (8246), diagonal swipe (1590), horizontal swipe (5987) and vertical swipe (8520) — or repeated number like 1111. Also, it could be repeated pairs (2525), repeated quads (6666), sequential down (3210) or sequential ups (4567). As per findings of the survey conducted by researchers of University of Cambridge, 1234 is the most common pin and 8439 is the least common ATM PIN. Do you think choice of secure pin will increase with the possibility of 6-digit pin as compared to a 4-digit pin? Definitely 6-digit PIN will give

1,000,000 possible combinations, as against 4-digit’s 10,000 combinations. But won’t people (even with the larger selection space for the PIN) still use some common number or pattern, which they can remember. So, with a 6-digit PIN, instead of only using DDMM from their birth date, they will now use DDMMYY — which too will be available in the ID card. There are two possible measures of safeguarding the PIN that banks should follow. First, the bank should maintain a blacklist of PINs. Some numbers like the ones described above could be common in the blacklist for all card holders but some numbers, like the birth date, PAN card number etc. may be person-specific. In any case, the bank collects all these documents as a part of their KYC norms — these may as well be put to some good use. Second, the bank should generate the PINs and disallow customers from choosing the PIN. It appears very unlikely that an insider from the bank will have access to both — the ATM card as well as the PIN. Controls like segregation of duty should be implemented to further minimize any collusion. Banks generate one-time password for financial transactions. They could also generate a one-time PIN. After every ATM transaction, the next PIN could be sent through SMS. It appears that the time has come to deploy biometrics on ATMs also. One of the uses the UIDAI has planned is to provide biometric authentication on the micro-ATM devices to be used in remote villages. I am sure the same approach could also be used for the normal ATMs, thus saving the hassles of creating a difficult-to-guess PIN. u Avinash Kadam is at MIEL e-Security Pvt. Ltd. He can be contacted via e-mail awkadam@mielesecurity.com

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Global CIO

If Bono loves Dropbox, shouldn’t you?

Chris Murphy

‘Bring your own cloud’ is coming to an enterprise near you. It’s time for CIOs to study their options

LOGS Chris Murphy blogs at InformationWeek. Check out his blogs at:

f you’re looking for one of those oh-so-subtle signs that a tech trend has gone from hot to hysterical, the arrival of Bono and the Edge on the scene is a pretty strong indicator. That’s where we’re at with personal cloud storage, as the U2 rock stars recently invested in startup vendor Dropbox, which says it has more than 50 million users. You’re probably only a year into coming to grips with the “bring your own device” movement. And sometime in the not-so-distant-future, if not now, your employees will expect a “bring your own cloud” policy that mimics their consumer experience with such services. BYOC. Personal cloud storage is as simple as it sounds: free online storage in the 2-GB to 5-GB range. While big tech vendors such as Apple and Microsoft are all over this trend, get to know Dropbox and its enterprise-focused (and unaffiliated) equivalent, Box. Dropbox makes saving files online mindlessly simple. Want to give a bunch of people access to your 12-MB PowerPoint presentation without crushing their inboxes? Save it to Dropbox and give them access. Dropbox is a consumer-first service, but it has been working to make it more business friendly, adding a Dropbox Teams option that provides administrative controls and 1 TB of data priced at USD 795 for the first five users. It’s mostly a small business service, but departments of large companies are using it for tasks like sharing large graphics with outside partners, says ChenLi Wang, the company’s Head of Business Development. Box is the opposite of Dropbox. Box started with an enterprise vision for online personal storage. It has raised USD 125 million in venture funding and has 400 employees, and “we focus most of our improvements on security and administrative controls,” says Box

CFO Dylan Smith. He informs that companies are using Box alongside collaboration tools such as Jive, Chatter, and Yammer, so that they can share the PowerPoints or PDFs or other files they’re discussing. Some have used it as a front end to existing content management systems, such as Microsoft SharePoint. Procter & Gamble has 18,000 users on Box, he says. Here’s one rub for CIOs: From what I can tell, Box isn’t going to replace something for you, at least not for awhile. It has a lot of potential to be a nifty productivity gainer. However, it’s looking like a net additional cost, at least near term. But IT won’t have much choice. Jerry Johnson, CIO of Pacific Northwest National Laboratory, predicts that IT leaders who don’t think public services such as Box meet their security or functional needs will have to replicate this kind of service, as people will insist on bringing their clouds — storage, apps — to work just as they insisted on bringing their iPhones. Jason Maynard, the Wells Fargo software industry analyst makes his point, “The output of knowledge workers is a PowerPoint, a PDF, a project management plan. Those are of no use until they’re shared.” Mobile devices will increase that pressure: I want an easy way to move things from my PC to my smartphone or tablet, and to share huge files without exceeding corporate inbox limits. Delivering consumer IT services in a business environment isn’t easy. IT teams have tried to replicate Facebook inside the enterprise, and the results have been disappointing. BYOD, on the other hand, has been an IT success — once IT embraced the challenge. The pressure to deliver on BYOC is coming fast. u Chris Murphy is Editor of

InformationWeek. Write to Chris at cjmurphy@techweb.com

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Practical Analysis

Does the cloud keep pace with Moore’s law?

Art Wittmann

The cost “advantages” of infrastructure-asa-service aren’t always real or long term

LOGS Art Wittmann blogs at InformationWeek. Check out his blogs at:

informationweek may 2012

hen evaluating infrastructure-as-a-service offerings, the challenge is to compare the value proposition with what you already have in your own data center. The obvious wins for IaaS include so-called cloud bursting, where you need lots of computing power for a relatively short time. Obviously, building out infrastructure for peak loads is wasteful, so wise use of an infrastructure service for demand spikes can level out your costs. But that’s not the usual case, so understanding the cost benefit of IaaS is a tricky business. There have been many discussions lately of calculations that assess the incremental cost of using a system versus the cost of it just sitting idle in your data center. That incremental cost plus the baseline cost during the period of real use “feels” like the cost that should be incurred for a cloud service. Even if you paid a premium on top of that cost, you’d still be saving money, right? Well, maybe. One problem is that calculating these scenarios isn’t easy. So let’s take a very simple example. Say a company decides it will offer hammer as a service to carpenters. The conventional alternative, according to HaaS Inc., is that a carpenter buys a hammer, which is a capital expenditure and then that expensive hammer sits in the toolbox, unused, most of the time. HaaS will provide a hammer just when the carpenter needs it, and it will charge just USD 0.001 per nail driven. So how does the carpenter know if that’s a fair price? The answer is different depending on whether our tradesman is a framer who pounds relatively few nails, or a roofer who tosses down a piece of plywood and proceeds to hammer about 100 nails into it as fast as he can. At 250 days a year, that’s 90,000 nails driven per year. The HaaS bill would be USD 90 a year. So even at one per year, the HaaS proposition is about

a wash. But the calculation would change radically if hammers were subject to Moore’s Law. In that case, every 18 to 24 months, they would cost half as much to produce and be able to pound twice as many nails. If carpenters can pound six nails per minute now, Moore’s Law says that in 10 years they’ll have a USD 2 hammer that will let them nail down an entire sheet of plywood. In 20 years, hammers would cost about a dime and could nail an entire roof in a flash. Moore’s Law advantage is immense and isn’t something you should give up lightly, but some cloud providers are asking you to do exactly that. There’s been some crowing about the fact that over the five years it’s been in this business, Amazon has cut prices more than 40 times. Given the improvements in processor performance and storage capacity per drive, customers should demand that prices continually fall. In fact, the U.S. Department of Energy, in a recent report concluded that Amazon pricing isn’t keeping pace with Moore’s Law. “For example, the cost of a typical compute offering in Amazon has fallen only 18 percent with little or no change in capability. This translates into a compound annual improvement of roughly 4 percent. Meanwhile, the number of cores available in a typical server has increased by a factor of 6x to 12x over the same period with only modest increases in costs.” If you don’t hold your cloud vendors feet to the fire on pricing, you’re giving up the fundamental advantage that IT has exploited for almost four decades. That might be OK, but you’d better get something incredibly valuable in return. Make your infrastructure-as-a-service provider prove that value to you. u Art Wittmann is Director of

InformationWeek Analytics, a portfolio of decision-support tools and analyst reports. You can write to him at awittmann@techweb.com.

www.informationweek.in

Down to Business

7 habits of innovative IT leaders

Rob Preston

There’s no manual for innovation, but consider these expert best practices and reader lessons learned

LOGS Rob Preston blogs at InformationWeek. Check out his blogs at:

riting about innovation is a lot like writing about politics or the environment: The subject matter is so broad and complex that it defies tidy overviews and prescriptions. So with that qualifier in mind, allow me to proceed with a handful of takeaways from the “Innovative CIO” program I attended recently at Stanford University, as well as from readers who responded to my recent column “Innovation Doesn’t Happen By Chance.” Permit innovation. That’s a no-brainer — far from an unconventional concept, you might think. But the reality is that most people simply don’t carve out the time to think about innovation because there’s no directive or permission from the top to do so. In most IT organizations, people are so busy keeping the lights on that they’re not anticipating what’s next — the innovative business applications, systems, and processes that could yield a competitive advantage. InformationWeek has written about companies that have set up IT-centric innovation teams to get their people out of their day-to-day comfort zones. Payroll and HR outsourcer ADP, for example, last year started an innovation lab, led by CIO Mike Capone, that consists of four or five permanent people, including so-called innovation experts, and another 15 to 20 IT pros who rotate into and out of the lab in six-month cycles. Casino company Caesars Entertainment several years ago created an innovation group, now led by CTO Katrina Lane, that draws talent from IT, marketing, financial planning, and other disciplines. It uses a rigorous process to propose, finance, pilot, and evaluate the results of its leading-edge technology initiatives. David Robinson, CIO of Kansas City-based insurance brokers Lockton

Companies, wrote me to advocate the old skunk works approach. Lockton’s IT organization presides over no formal innovation team, but its people don’t have to ask permission to go outside their everyday jobs. “Give people a specific challenge and then empower them to solve it without rules,” Robinson says. “Most folks have the resilience and drive under such circumstances.” Mutual fund company Vanguard is more ad hoc with its permissioning. When its IT organization is assembling a team for a cuttingedge project, it looks for volunteers, who log extra hours to work on the project while keeping their day-to-day responsibilities. Get people jazzed. The process of innovation isn’t an analysis of actuarial tables. It should be energizing, exciting, and inclusive of different job functions and personality types. A famous Stanford case study of software development and engineering company Rite-Solutions and the internal innovation tool it created, a stock market game called Mutual Fun, provides a good example. In a nutshell, Rite-Solutions employees propose ideas — to save the company money or develop new products — as stock listings on the internal Mutual Fun exchange. Other employees help pick the winners (and losers) by bidding (or not bidding) their own virtual money on those stocks. So everyone at the company is encouraged to join the innovation process and have some fun in the process; it’s not an exercise for a committee of the good and great. (Caesars is quick to note that its innovation group doesn’t “own” ITbased innovation at the company but is charged with driving it.) Mutual Fun appeals to a basic human need: social recognition. And because the collective bids ideas up or down, it’s easier to kill the bad

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Down to Business ones. “Bad ideas often win because of the skills of the communicator,” observes Brian Lillie, CIO of data center operator Equinix, who helped organize the Stanford innovation program. “The organization becomes an echo chamber of the boss.” Get comfortable with failure. “In the corporate world, failure is an F word, and you just don’t talk about it,” laments Steve Schlecht, CEO of clothing maker Duluth Trading Co. IT pros in particular gravitate toward peace of mind, what Stanford marketing professor Baba Shiv and his colleagues call the Type 1 mindset. They fear making mistakes. Organizations need to cultivate a Type 2 mindset, a fear of missing out on opportunities. It’s the innovator’s mindset. Legend has it that in the early days of MTV, overseer Steve Ross would fire employees who didn’t fail enough. Caesars’ innovation group “pushes” for a 50 percent failure rate — it’s an internal metric, not something Lane’s team brags about. She figures that if the team’s not failing that often, it’s not pushing the envelope hard enough. That doesn’t mean these innovators like to fail — that is, don’t get too comfortable with failure. Caesars, for instance, is very careful to manage risk and exposure as part of its innovation process. The idea is to fail fast (you’ve heard that before) and cheaply and learn from your mistakes, potentially sparking ideas for related innovations. Start out raw. When putting ideas on the table and whipping them into shape, don’t pine for perfection. In fact, it’s better to set vague innovation goals and build rough prototypes, the Stanford experts say. Shiv talks about jugaad, a Hindi word that roughly means innovation on the cheap. The thinking is that you don’t stimulate innovation by acting like you have most of it figured out from the start. It’s a process that benefits from lots of starts and restarts involving lots of different people’s input. If you build a polished prototype, others will tend to look for flaws.

informationweek may 2012

But if you build a rough prototype, colleagues will tend to see opportunities and will jump into the “co-creation” process to make it better, Shiv says. “Ideas become their baby,” he says. This approach is taught at Stanford’s renowned Hasso Plattner Institute of Design, where the 40 or so participants in the three-day Innovative CIO program gathered for a couple of hours of hands-on learning. We were broken into groups of two and given an hour to discuss with our partners a recent gift we had given and then prototype a better gift-giving process, using only paper, marker, pipe cleaners, and other rudimentary materials. The exercise produced some clever ideas. (One entailed setting up a Mutual Fun-like gifting exchange for friends and family.) Raw prototypes also encourage more honest feedback, says the design school’s Evelyn Huang. If you put a lot of time into polishing up your presentation, your (generally nice) colleagues are apt to not want to hurt your feelings by criticizing it. Take the approach: “I know it’s crap, so let’s build from here,” Huang says. (Back to learning from your failures.) Instill a sense of desperation. When times are tough, like during a recession, the tendency is for everyone’s head to stay down. When business is brisk, the tendency is to not mess with success. Neither environment is a petri dish for creative ideas. In bad times and good, organizations must apply innovation pressure on themselves. Shiv recommends doing a “pre-mortem” exercise: Look ahead two, three, five years and assume that the business or some foundational IT project has failed. It forces organizations to face potential threats and address opportunities now, not when a crisis throws everyone into a frenzy. Start off by talking with people. This beats fielding surveys. Our little gifting exercise started with a discussion with a real-life gift-giver, the “customer” of the process we were tasked with

improving. It’s amazing what you can take away from such informal chats. Ken Stewart, CEO of change management advisory firm ChangeForge, agrees. “I’m a firm believer that true insights come from interaction,” Stewart wrote me in response to my recent column on innovation. “Executives who are most in touch with their customers and their markets often have the strongest ‘innovation quotient.’” Beware unintended consequences. Understand the difference between innovation to achieve a defined benefit and change for the sake of change. “The former is great; the latter can be both costly and disastrous,” says reader Christopher Engel, a Network Infrastructure Manager with software company Conxeo. “Even when change can be quite beneficial in one area it can lead to some pretty serious unintended consequences in others.” Engel cites social media and mobility. Many organizations that rushed into those areas got burned because they didn’t take the time to consider the risks, such as exposing sensitive company information. “It’s great that many organizations have ‘innovation’ champions,” he says. “At the same time, they badly need individuals who can take a step back and take a long hard look at just what practical effects any given innovation is designed to achieve, along with the costs and potential unintended consequences. Unfortunately, whenever I hear someone pitching ‘innovation,’ a picture of the Titanic comes unbidden to my mind. The ship’s hull design was supposed to be quite the innovation for the day. Unfortunately, White Star Lines was so enamored of their unsinkable innovation that they didn’t spend enough time thinking about the lifeboats.”

u Rob Preston is VP and Editor in Chief of InformationWeek. You can write to Rob at rpreston@techweb.com.