How CIOs can measure RoI from cloud investment

In the last couple of years cloud adoption has seen significant growth and has now become almost a main stream technology. Till only a year or so ago discussions were around cloud centered on issues like – cloud security, feasibility, performance, compliance and availability? While these questions still exist in the minds of customers, they are far less in intensity and focus due to the following reasons and trends

Every single industry today has a proven successful reference for adopting cloud. This has led to the increased confidence for the rest of the industry to follow suit. Leading Public cloud drivers like AWS, Microsoft, and Google have invested heavily in upgrading cloud security and protection of the customer’s data, get their Data Centers and operations certified and compliant to standards like ISO, HIPAA, PCI/DSS etc; this has resulted in enhanced confidence in adoption of cloud.

Platform for digital innovations

In todays’ age of agile development, an application development / roll out happens in a matter of a few days / weeks, for such quick development and delivery of solutions, cloud is an ideal platform with an automated, self-deployable and self-healing infrastructure capable for rapid composition and rebuild. In addition, cloud platform capabilities now available boosts of significant innovations in advanced data based analytical, IoT and cognitive tools all available on the Cloud as APIs. Cloud vendors like AWS, IBM, Google and Microsoft are launching some cutting edge innovations on the platform side of the cloud on a regular basis on the cloud which makes Cloud a very attractive platform for launching low cost bleeding edge innovations at rapid speed.

DevOps and automation

With the short life cycle and agile process of project development, development lifecycle of applications is reducing considerably. A company rolls out its product releases within weeks, automation driven by the concept of infrastructure-as-code is driving massive efficiency and enhancing innovations delivered as software at break-neck speed. Major Cloud vendors support DevOps capabilities as micro-services which can be integrated into the software delivery life cycle of projects.

Security issues

Security is still a major consideration with Cloud adoption. However, the confidence in adopting cloud is rising rapidly for some of the reasons stated in previous question. Hybrid cloud is emerging to be the most desirable cloud architecture patterns for many large corporations across the world. The most sensitive data in both regulated and relatively less regulated industries still reside in-premise, private cloud set up. As the confidence keeps rising with increased cloud adoption, so will the volume of work-loads with ‘mission-critical’ information on public clouds will also increase.

ROI from cloud investments

Return on Investment (ROI) is perhaps the most widely used measure of financial success in business. ROI is the proportionate increase in the value of an investment over a period of time. It can be measured in different ways, but there are four basic ways to improve it: optimize investments, increase revenue, decrease costs, and make the return faster. Cloud can have an impact on all of the above levers if addressed right. Using cloud computing, a customer can achieve all of these; but they all cannot be achieved at the same time. It is the relationship between the factors that counts, rather than the absolute values.

If a customer moves to public cloud, their investment generally decreases but cost increases. With private cloud, it is the other way round. Revenue can be increased by improving the delivered features and quality – which enable a higher price to be charged – or by operating on a larger scale. But improvements in features, quality, and scale generally also mean higher costs. One must strike a right balance to maintain their success in cloud deployment. It is therefore very important for an organization to engage with the experts to identify the core objectives of their Cloud adoption and build a road map for the realization of the same.

Challenges in cloud adoption

I expect the Indian market to see widespread adoption of cloud going forward as compared to last couple of years. With Microsoft and AWS setting up ‘Cloud Region’ in India this scenario is bound to change in the foreseeable future. This will give a fillip to Banks and Government. departments across State and Central Governments to consider and adopt cloud. Private sector will also benefit from this development; take manufacturing sector in India for example where a lot of innovation is happening in terms of digital India and make in India campaign, I suspect Cloud will play a central role in all of these initiatives spearheaded by the government. The revolution that happened on the mobile front of India, we can expect the same kind of revolution to pick up in the IT industry with the emergence of cloud.

The regulated industries like financial services are behind in public cloud adoption today because of privacy, compliance and security of the customer’s data. However adoption of Private clouds is rampant in these industries.  We see the adoption of public cloud much more in the domain like media, manufacturing industries, ecommerce, healthcare picking up this year as key technology vendors like Amazon and  Microsoft are establishing their data center in India this year to offer their cloud solutions here.

Future of cloud

The demand for a cloud infrastructure that is secure, compliant to data protection and privacy laws will accelerate in India in the next four to five years as big cloud technology vendors like Amazon and Microsoft will make a swift entry in this arena. Private sector will also gain a lot of momentum by the entry of cloud, as a lot of innovation is already happening in the number of industries, govt. initiative like digital India and make in India campaign will also accelerate adoption of Cloud in a big way.  In the next 3-5 years the cloud adoption in India will have grown multi-fold from current levels.  Financial, IT and healthcare services have already started adopting private cloud core solutions and I expect the amalgamation of public and private cloud which will therefore create a hybrid solution will be adopted in a massive way.

Small and medium businesses and startups both are taking the road towards cloud. SME’s and startups don’t have their own data center set up as the big enterprise do, therefore the need for cloud technology from their end. A large portion of small and mid-market companies are already decidedly moving the cloud way. For the big enterprises hybrid clouds appears to be preferred choice. Industries like health care, financial services will be accepting the hybrid solution of cloud, which will cover both public and private deployment of cloud. Media, entertainment, telecoms, CPG, manufacturing and other companies will aggressively adopt hybrid cloud in the upcoming years in India.

Madhavan Krishnan

Senior Director - Head of Cloud Computing Practice & Leader - Millennial Solutions Group, Virtusa. Madhavan is an experienced technology practitioner with a strong business orientation. He has more than 17 years of Global IT industry experience in multiple technology and business roles. In his current role, he is the head of Cloud computing practice in Virtusa with responsibility for competency development, client solutions, practice team development from Asia and P&L. Madhavan is an active contributor to the company’s millennial solutions strategy and an active exponent of impact of convergence effect of multiple technology trends at the intersection of Cloud, Mobility and Big Data. Madhavan’s experience cuts across different dimensions of the IT Services business including Global Delivery, Enterprise Architecture, incubating and scaling technology practices with P & L responsibility; presales and business development. Madhavan’s strength is in driving adoption of technology led business solutions for clients in both Global and emerging markets. He helped kick start and scaled several technology practices for a large IT Services provider from ground up including RFID /M2M and Mobility practice, Manufacturing and Retail Domain Solutions group and launching / running Cloud business. Madhavan is an active participant in various industry and client forums like CII, MAIT, RFID World Asia and was a member of RFID Integration Consortium in 2005. He has authored and published several technology and business papers over the years.

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