There is this trick that Sankarson Bannerjee can show you. The chief information officer (CIO) of IndiaInfoline can show one of his 200-odd computers that run the trading platform of his company.
And then in the blink of an eye make one, two or even 10 of those computers disappear.
One moment, you can see those monster machines on a Web page, crunching and spitting out stock market data. The next moment there is nothing. The entire machine — even machines — disappears into nothingness.
And like Harry Potter, he can make them reappear as well. This is the way IndiaInfoline runs now. When the organisation needs an extra computer to handle the trading load, Bannerjee makes it appear and when it doesn't, he makes it vanish.
Something About the Cloud
This might appear like a cheap trick till you find out that he has managed to reduce IndiaInfoline's annual IT costs by a factor of five in a time span when the company's revenues increased 36 percent. What's more, his boys in the IT department are no longer procurement experts whose claim to fame is to know the ways of organisational bureaucracy. They are, if you allow for a little exaggeration, much like commodity traders. They scour for events when the need for computing power will surge and buy it just before the spike.
For instance, the day Coal India listed on the stock exchanges, the number of transactions done through IndiaInfoline jumped up 60 percent but the day was uneventful because Bannerjee's boys had already "bought" extra computers in anticipation. And once the surge was over, all those computers were "extinguished" without incurring any further costs. Muralikrishna K., the head of Infosys' Communications and Computers division, would empathise with Bannerjee. There are around 7,500 projects running on any given day at Infosys. Being a "software park", the company was bound by rules that allowed it to procure hardware only when projects arrived, he says.
Today, using cloud computing technologies, Infosys can set up to 100 servers for a new project within 30 minutes. Back in its data centre, Muralikrishna can fit 800 "virtual servers" in the area of a 165-litre fridge. "New projects would take up to six weeks to start. Now we can do it in just 30 minutes," he says.
This is just a glimpse of the potential cloud computing holds. So what is cloud computing? Cloud computing is when you can buy computing power the way you buy electricity. Today nobody manufactures their own electricity. Cloud computing promises to rid organisations of their need to buy physical hardware, expensive software and cumbersome storage. Organisations can buy the amount they need for a rental fee. If early signs are any indication, cloud computing holds the potential to allow rapid changes to their business model, deliver cost savings and change the way IT functions in organisations. Companies such as IndiaInfoline, Infosys, Tata Motors, ESPN-Star, Schiller Corp, and Mahindra Renault are using it to reduce either their IT hardware costs or software costs.
Build Up on the Horizon
Today, Google claims that "it has signed up over 2 million enterprise customers" on its Google Apps platform since launch, with about 100,000 enterprises (businesses, educational institutions and NGOs) in India alone. The arrival of companies like Salesforce.com and Microsoft could hasten that process with other big companies as their partners. Salesforce.com, which has 87,200 customers globally using 240,000 applications, says in India it has a variety of customers spread across small and medium businesses (SMB) and large enterprises such as Janalakshmi Financial Services, Bajaj Finance, Su-Kam and Tulip Telecom. Since Microsoft's Azure launch in February in India, through professional developers and independent software vendors, it has managed 6,000 apps to be developed on this platform and 600 enterprises have adopted it. As the broadband and IT infrastructure becomes much more reliable, one expects to see the cloud gathering storm. Zinnov Consulting surveyed 100 Indian CIOs recently. The survey says that by 2015, 40 percent of respondents plan to spend at least 5 percent of the their IT budget on cloud and 21 percent expect to spend close to 10 percent of their IT budget on this new technology trend.
If there is one technology trend that will dominate the next five years, it will be cloud because this is what the Internet was truly supposed to do: To create a global computing grid, always-on, cheap and easy to use. It takes a while to appreciate cloud's potential.
Why? Ok, name one area of spending where an organisation can add or decrease capacity at will. Actually there is none.
Office space has to be bought well in advance and with an assumption of future hires. You can't get rid of half your office space if you don't need it. Plant, machinery and even IT systems have to be bought in advance. Capital-raising has to be done mostly when you don't need the money. Increasing or decreasing debt in favour of equity always needs forward planning and expensive investment bankers. Ok, you say "people". Sure, people can be hired at will but only when the numbers are small and in today's India only in theory, but still. Can you let them go once you realise you've hired a few extra? It is an unlikely scenario. That's why cloud is so interesting. With cloud computing, IT costs can be adjusted on demand. "There is a taste test for cloud computing. You should be able to increase and decrease IT infrastructure and you should be able to pay for only what you use," says Sharad Sanghi, CEO, Netmagic, one of the companies that offer cloud computing solutions.
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