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Table of Contents

Mitigating Risk in the Race to the Cloud: Editor's Corner: Ed Anderson, Chief Strategy Officer, CompuCom

Why Cloud Computing Is Here to Stay (Even Though No One Is Closing Their Data Centers Just Yet)

Trends in Outsourced Product Development and Accelerated Time to Market

Outsourcing Buyers: Is Now A Good Time to Play Catch-Up?

How to Improve Knowledge Management in New Product Development Projects

How Outsourcing Can Help Retailers Survive the Recession

Morrison & Foerster's Study: How the Recession Has Changed Outsourcing

Enabling Offshored Call Centers to Move Back On Shore

The Role of Application Management Outsourcing in Improving IT Agility

Insourcing, Outsourcing & Cosourcing - Automating the Procure to Pay Process

The benefits of a U.S.-based Order to Cash solution

The Impact of Technology on Cost in Business Process Outsourcing: The Complete Business Process Outsourcing Cost Picture

7 Procurement Outsourcing Myths, Demystified!!

Demand Forecasting: Helping Drive Business Results

The search for gold: Helping banks to tap alternative funding sources

Building Your Business Case for Best-Practice IT Services Delivery

Street Smarts: How Intelligent Transportation Saves Money, Lives and the Environment

How Outsourcing Drives Business Process Improvements

Outsourcing your J.D.Edwards Financials to save on bottom line

Kofax BPO Use Case

The hottest topic on earth is actually up in the clouds. Cloud computing may be the next game-changer in IT.

What exactly is cloud computing? According to Anand Ramakrishnan, General Manager of Cloud Computing Services for Wipro, cloud computing is "a mode of delivering services on a scalable and virtualized platform using Internet technologies."

Why is it creating such a buzz? Because the cloud "enables users to have access to highly available services with charges based on utilization," he explains. In addition, cloud computing eliminates the need for buyers to invest in high-tech equipment. "That removes the risk of technology obsolescence," Ramakrishnan points out.

Is cloud computing simply hype? The Wipro executive believes cloud computing "has a lot of substance. There's not a large-scale adoption yet. No one is closing down their data centers. But we've seen much interest," he reports.

Why cloud computing is here to stay

Wipro thinks the market will succeed for the following reasons:

• The economic recession. Ramakrishnan says the increased uncertainty is causing companies to study the cost savings possible by migrating to the cloud.
• Technological advances. The Wipro executive says "the attributes of software are increasing, so moving to the cloud will give a company a significant technological advantage." All too often, companies invest in technology with a five-year amortization and then two years later something better comes along. "The technology advancement rate will lead to cloud adoption because the supplier is the one keeping up with the advances," Ramakrishnan predicts. Buyers can simply choose what they want to use.
• The new emphasis on green IT. Environmental and electrical costs and government regulations all contribute to a company's IT bill. Ramakrishnan points out companies want to optimize their power utilization. "Cloud computing does just that because all the users share the infrastructure," he notes.
• Cost savings. The cloud eventually will allow companies "to do more with less." Today, however, the costs are still high, he points out.

How will companies use cloud computing?

The Wipro executive is certain few companies will move their transactional processing to the cloud. Core processes will stay on terra firma, too. "What will go is content and data," he predicts. For example, he says a financial institution will keep its core banking applications in its data center but will move its documentation management system and legal contracts to the cloud.

Other good cloud candidates include disaster recovery and testing, which have peaks and troughs.

Wipro sees the cloud as a great opportunity for small organizations in India and the rest of Asia. These companies don't have the cash for large IT expenditures but need the IT expertise because they are part of a global supply chain. He says large players like Wal-Mart "force these smaller players to obtain sophisticated IT processes and ERP systems. For them the cloud will be tremendously beneficial," he says.

Public or private cloud?

For example, a large financial institution may have separate IT teams for its banking, insurance, and credit card divisions. Each team would procure its own servers, applications, and infrastructure. The teams build the utilization rate at 50 percent, but the Wipro executive says the rate may be as low as 30 percent. "Enterprises don't use a tremendous amount of server capacity," he says.

Ramakrishnan says private clouds, which remain within the enterprise, can tie these disparate servers together, increasing the utilization rate.

Software-as-a-Service (SaaS) is already happening in the private cloud. Wipro systems integrators helped build a SaaS platform for a Japanese customer that allows third-party organizations to build and host their applications as services. "The easiest way for an application vendor to reach multiple users is to offer the application in the cloud. It's the least expensive way to market," says the Wipro executive.

Wipro also built an e-commerce site for a U.S. retailer using SaaS. The cloud meant the retailer treats the e-commerce site in every country as a tenant on its cloud. "Now the retailer has a single platform that's available everywhere in the world," says Ramakrishnan.

The executive reports Wipro also created its own cloud using servers from 50 centers of excellence. It is a multi-tenant cloud hosting the applications Wipro developed. The executive says this cloud:

1. Reduced procurement time from 30 days to a few hours and procurement costs by 30 percent.
2. Reduced energy consumption substantially.

Ramakrishnan predicts the entire company "could go to the cloud eventually."

Wipro's cloud computing offerings

Wipro looks at the cloud in four layers.

1. Strategy Consulting Services. The supplier helps its buyers take a strategic look at cloud services. Should a buyer migrate to the cloud at all? What should migrate to the cloud? This division helps companies determine their IT objectives, then helps them build a business case complete with the total cost of ownership (TCO.)
2. System Integration Services. This division creates private clouds for large enterprises. Its experts create the integration between applications required for virtualization.
3. Engineering Services. Software vendors that want to put their applications on the cloud will need someone to re-code it for multiple users. Buyers demand their data be safe in the database. Wipro engineers will make the application cloud compliant.
4. Cloud solutions. This is Wipro's public cloud. It offers e-mail, ERP, storage, back-up, and security in the cloud. The supplier designed it initially for the Indian market; it will be available for buyers worldwide.

Lessons from the Outsourcing Journal:

• The economic recession, technological advances, green IT, and cost savings will encourage companies to move to the cloud.
• Core functions will probably stay in the corporate data center; but storage, legal, and disaster recovery are good things to move to the cloud.
• Small companies everywhere, but especially now in India, can benefit from going to the public cloud because it is an affordable way to obtain very expensive, sophisticated IT applications.
• Software-as-a-service is working in the cloud for software vendors because it is a cost-effective way to reach their market.

Wipro set up the Council for Industry Research, comprised of domain and technology experts from the organization, to address the needs of customers. It specifically looks at innovative strategies that will help them gain competitive advantage in the market. The Council in collaboration with leading academic institutions and industry bodies studies market trends to equip organizations with insights that facilitate their IT and business strategies. For more information on the Research Council visit www.wipro.com/industryresearch or e-mail industry.research@wipro.com.

Publish Date: September 2009

Copyright © 2009 - Everest Partners, L.P.

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