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December is peak season for bus ticket bookings in India. Every winter, redBus, an online bus ticketing service, would see its website crash as its systems proved inadequate for handling huge surges in online traffic. But that changed when the fast-growing startup went on the cloud.
In December 2010, with much of its data on Amazon Web Services (AWS), redBus was able to quickly scale up capacity and manage a huge increase in sales. "We achieved a crazy number. The board had given us a high target for December and had told us that if we achieved it, they would take us out for a party. The actual number turned out to be 30 per cent higher than even their target. That was the most exciting thing for me about the cloud, " says Charan Padmaraju, co-founder of the company.
Many today believe that cloud computing will be as transformative for businesses as ERP (enterprise resource planning systems that integrate internal and external information across an entire organisation) was in the 1990s.
Consider the economics of the cloud: barring display devices (to access and view content), and some basic processing power, you don't have to buy any hardware or software;you get everything from a cloud service provider like AWS. You pay for only what you use. You don't have to hire engineers to maintain your IT infrastructure. You don't have to worry about upgrades;the cloud service provider does it, and you get immediate access to it.
Strictly speaking, cloud computing is not terribly new. What's new is the availability of fast and stable internet lines, which has enormously increased opportunities for 'the cloud'. But consumers have been used to clouds for a while. When we use email applications like Gmail or Yahoo, or when we use Google Docs, we are computing in the cloud. Besides, 'the cloud' always refers to an array of servers in a remote location that hosts computing applications that serve multiple users. Since that faraway data centre does most of the computing, we are able to dispense with that big CPU box that sits alongside our monitors;and those big IT systems rooms that companies rely on.
For startups and small businesses with limited monetary resources, the cloud provides computing capabilities that previously only big firms could splurge on. Enterprise software giant SAP has a cloud offering of its own called Business By-Design.
Delhi-based Prognosys, a provider of market intelligence services, was Business By-Design's first Indian customer. Sandeep Ranjan, its promoter, says if he had used a traditional ERP application, it would have required a capital expenditure of Rs 25-30 lakh, and another Rs 10-12 lakh a year to maintain it. SAP now hosts, maintains and upgrades the solution while Prognosys uses a 2-Mbps line to use it, and pays SAP a monthly usage charge of about Rs 5, 600 per user. Ranjan initially took it for 25 users, so the total cost came to just Rs 1. 4 lakh a month. He also points out that Business By-Design has helped increase visibility for his business, and reduced cash collection time by 10-15 days, significantly increasing his cash flows.
The economics of the cloud are also enabling the use of computing applications in ways that are proving to be socially relevant. iNube Software Solutions, for one, has developed enrolment and claims management software on Microsoft's Azure cloud for the government's Rashtriya Swasthya Bima Yojana, a medical insurance scheme for people below the poverty line. Even while ensuring that insurance companies and their third party administrators find the project viable, both processes (enrolment, claims management ) have now been significantly simplified for the vast multitudes that are part of this scheme.
Gradatim has also developed solutions on Azure for banks and insurance companies that enable them to offer products to segments of the population that are rarely addressed by many. "These could be small trade loans or agricultural loans or loans to, say, taxi drivers to buy low-cost homes, " says Gradatim's founder CV Prakash. Such consumers must typically be offered special prices, and the process of evaluating many of them is very different from those used to evaluate bigger businesses and middle class consumers. "Banks can't do it through their traditional core banking solutions, because that technology is very expensive. Cloud makes it economical, " points out Prakash.
Remote education could also benefit greatly. Companies can now easily host books, video lessons and live teacher sessions that millions of students can access. HP India MD Neelam Dhawan says that the cloud is the only answer to rapidly resolving India's problem of illiteracy.
Applications are also emerging for the healthcare and banking industries. IT majors Wipro and Infosys now offer 'core banking' cloud solutions for cooperative banks and regional rural ones. The advantage in all these cases is virtually the same - the companies have to create just one solution, host it on a data centre, and scores can use that solution over internet lines. The cost comes down dramatically compared to individual solutions.
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But the sharing of data centres and solutions is often a worry for bigger companies. Many are likely to wonder if data outside their immediate control is rendered more vulnerable. Partly for this reason, and partly because many would have already installed IT infrastructure, big enterprises have been relatively slower in moving to the cloud.
But that's changing, thanks in large part to a combination of the cloud's economics and the entry of many big IT and telecom brands as cloud service providers. And they all offer levels of security that perhaps only a focused IT infrastructure
provider can offer.
Many biggies are showing the way here. Gaming company Zynga and movie rental service Netflix are now almost entirely on the cloud. NASA runs various missions, including its Mars Exploration Rovers programme, on the cloud. ESPN has used it to stream the T20 World Cup. TV channels in India use it handle major breaking news, because loads spike at those points and it is expensive to buy additional IT infrastructure just to handle such occasional spikes. Manipal University uses it to handle the peaks during admissions and results announcements. Ogilvy India does ad campaigns on the cloud.
Andy Jassy, the man who Amazon. com founder Jeff Bezos entrusted with the task of building what went on to become Amazon Web Services, the world's first public cloud, says enterprise adoption of cloud rose sharply after the last recession - when time and cost savings became acutely import ant. With many Western economies still stagnant, this move is only likely to accelerate further.
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