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How India’s CIOs choose cloud hosting

We asked 5 CIOs what really matters to them and what they look for when selecting a cloud hosting service. And we were surprised to find that cutting-edge technology was not on top of their lists. 

Setting up a data center to host a cloud involves massive seed capital and operational expenses. Every aspect and component in a data center needs multiple levels of redundancy. The expenses add up as the hardware is upgraded every few years. Surviving and leading in the data center business calls for huge investments in cutting-edge technologies.

A few years ago, Indian companies were reluctant to move their IT infrastructure to the cloud. There were concerns about data security, latency and the geographical location of data. With the entry of global cloud hosting majors like Amazon Web Services (AWS), IBM SoftLayer and Microsoft Azure into India, that sentiment has changed, and more companies are now moving to the cloud. These cloud hosting companies set up their own data centers and disaster recovery (DR) sites on Indian soil.

The CIOs that we spoke to are currently doing PoCs (proof of concept) with AWS, Google Cloud Platform, IBM SoftLayer and Microsoft Azure. Other data centers such as Netmagic Solutions, ESDS, NxtGen, CtrlS are also considered for co-location and IaaS (infrastructure as a Service).

The CIOs did not want to go on record when getting into the details about their preferences or experiences with cloud hosting providers. But we can tell you that they were generally unhappy with the level of service, competency and the commitment from some MNC service providers. So here are some of the questions CIOs are asking.

WHERE IS IT LOCATED?

N Jayanta Prabhu, Group CIO, Essar Group 
N Jayanta Prabhu, Group CIO, Essar Group

All CIOs were concerned about the location of the data center. AWS has just launched its data center in India. Microsoft set up 3 data centers last year. IBM has a data center here too. Google has not yet established a data center in India, though its nearest ones are located in Taiwan and Singapore. Netmagic, NxtGen, ESDS, CtrlS and others all have data centers in India, usually more than one, and in different cities.

Hosting one’s cloud in a local data center is important for 2 key reasons – Regulatory and Latency. The banking and insurance regulators mandate that companies in those industries should host their data within the nation’s borders. Keeping data centers within the country reduces latency; speed is crucial for accessing applications, workloads and data.

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T.G. Dhandapani, CIO, TVS Motors

T.G. Dhandapani, CIO, TVS Motor said: “The foremost question I would ask is about the location. Where is my data residing? Within India or outside? I am aware of which cloud service providers host data within the country.”

N Jayanta Prabhu, Group CIO, Essar Group shares that concern. He said: “I would prefer our cloud (applications and data) to be hosted in India. It may be a regulatory requirement in certain industries such as banking, but for us, it means reduced latency.”

CAN YOU OPTIMIZE THE COST?

CIOs want to pay on actuals – only for those resources that are actually consumed. This is known as pay-per-consume. Some cloud providers lock you into a plan with fixed costs, irrespective of how much of their resources you actually consume.

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Keyur Desai, Vice President & IT Strategist, Essar Group

Keyur Desai, Vice President & IT Strategist, Essar Group said: “One of our websites receives peak traffic only during the Indian festivals and special occasions. During the rest of the year the number of visitors are considerably a bit lower. So naturally, we would like to go with a service provider who can optimise the cost. We would pay extra only when the utilization scales up.”

Some cloud hosting providers have devised their own innovations to bring down the cost for the customer. For instance, Amazon has a concept of regions and Availability Zones. A region is a separate geographic area. Each region has multiple, isolated locations known as Availability Zones. So with this model, Amazon provides its customers the ability to place resources, such as instances, and data in multiple locations. And the pricing for this is much lower than that of a full-fledged DR service.

CAN IT AUTO SCALE ?

Some businesses require additional capacity and cloud resources only at certain times during the year. Traffic peaks during Indian festivals or sporting and political events. And that’s when CIOs want to scale up. But when those moments of peak traffic have passed, they want to scale down the capacity utilization. They expect this scaling to happen automatically and instantaneously (auto scaling), without going through a long process of requisitioning for additional resources.

Arun Gupta, Ex-CIO & Master IT Strategist said: “Scalability in both directions is important. Most service providers offer up-scaling. But what about down-scaling when I do not require capacity? Interoperability with my existing infrastructure is also important. It should work well in heterogeneous and hybrid environments.”

HOW EASY IS THE EXIT?

Another top concern is ease of exit. CIOs do not want to be locked in to a single cloud hosting provider. If they are unhappy with the service or if the service provider is unable to deliver on their new requirements, then they take the decision to move to another service provider. This is called cloud migration.

Migrating data, applications, workloads and other business elements from one cloud provider’s infrastructure to the next is not an easy task. There are numerous aspects to be considered: compatibility of systems, operating systems, network architecture, topology, data connectors etc. In fact, cloud hosting companies have a separate division with specialists assigned for cloud migration.

Suneel Aradhye, Co-Founder of Ideas to Impacts 
Suneel Aradhye, Co-Founder of Ideas to Impacts

Suneel Aradhye, Co-founder of Ideas to Impacts, Ex CIO of RPG Group and Essar Steel said: “Exit is absolutely the last resort when business starts getting impacted. Transitions are always painful involving significant costs. It is waste of precious resources, cost of overlapping service providers and also cost of integrating / making them work together. Rebuilding the whole network architecture also presents a significant challenge. So I would rather engage aggressively from day one and make the relationship work rather than exit.”

WILL THEY OPTIMIZE MY CLOUD?

Once an organization’s IT infrastructure is hosted on the cloud, it needs to be monitored and tended to, regularly. That means the service provider needs to fine-tune and optimize, in line with the customer’s changing business requirements. This requires commitment, expertise and a thorough understanding of the customer’s business.

One CIO (who did not want to be named) was very happy with Amazon’s service but unsatisfied with Microsoft Azure. We quote him anonymously: “Amazon is 3 or 4 notches ahead of the others in terms of understanding the public cloud and giving benefits back to the customer. We moved certain loads on to the AWS cloud. They visit us every month and optimise the utilization of that cloud. We also have some loads on the other clouds but once you sign the contract those guys are not concerned about optimizing the solution as per our varying requirements.”

This CIO had a specific requirement and the AWS team in India took it up as a challenge and came out with a solution. “SUSE Linux in a cluster mode on production ERP load (SAP) was not heard about so the AWS team took this up as a challenge, took some time, but gave us a solution,” he added.

Suneel Aradhye has a similar opinion. He said: “For me, what matters most is who is the service provider? Who is the mediator, who is the service providing agency, how is the service catalogue looking like? Are there any gaps in any service catalogue? My worry is what happens when the ball falls into the crack? Will they keep passing the buck or take ownership of solving the problem first? We want to know and engage at all levels of service provider organization. This is essential as escalation management becomes a big challenge otherwise.”

While AWS holds the lion’s share in the cloud services market for now, a survey shows that Microsoft Azure is catching up very quickly. A recent survey of 100 CIOs (75 from USA and 25 from Europe) suggests that by 2019 Microsoft’s Azure will overtake Amazon’s AWS with more than 30% of Infrastructure as a Service (IAAS) market share.

The survey, conducted by Morgan Stanley, shows roughly 31% of the CIOs will be using Azure for IaaS, up from 12%, versus around 30 percent using AWS (up from 21% at present).

The survey found Azure (18% share) is already leading AWS (16% share) in PaaS, and Azure will grow even further to 27.8% vs 22.4% for AWS.

If you’ve read this far in the article, you can gauge that the emphasis is on dependability, optimization and cost rationalization. It seems hardware and infrastructure have become commoditized now and the real differentiator for cloud hosting providers is quality of service and commitment.

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Brian Pereira

Brian Pereira has over two decades of journalism experience. He is the former Editor of CHIP and InformationWeek magazines in India. You can write to Brian at: brian9p@gmail.com Twitter: @brian9p Linkedin: https://in.linkedin.com/in/pereirabrian

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