The launch of new technologies and the widespread use of IT-enabled services in running businesses have improved the acceptability of these services in meeting the requirements of enterprises. Such enterprise services are in high demand as they provide an easy means of managing programming solutions, thereby enabling business management and information accessibility for internal and external clients. These IT services include email and VoIP communications, storage of data and office software, creation of a sophisticated database and data recovery. With more enterprises shifting their business to online portals, these solutions are gaining traction in sectors such as manufacturing, retail, distance education and health care.

Unlike the traditional method of operating a business, today, data and programmes are stored not on users’ computers but outside their computing environment, on a cloud. Cloud computing comprises system infrastructure (computing, storage), application infrastructure (process server, database), and information and business services. Given the flexibility and modularity it offers, cloud computing has surpassed other business solutions in terms of its prevalence in the daily operations of enterprises. It is estimated that the Indian cloud computing market will be worth $3 billion by 2015.

Cloud computing models

Cloud computing is a business solution that allows the delivery of hosted services on the internet. It helps in managing businesses and resources online while creating a virtual office to store and access data through an internet connection. What makes cloud computing different from traditional hosting is its basic characteristics of sale on demand, elasticity in the amount of service to be used and fully managed services.

Based on the prerequisites of operation, enterprises can choose from three models of cloud computing. Software-as-a-service (SaaS) is the most common of these, especially among small and medium enterprises. It allows access to internet-hosted software applications using a browser rather than applications stored on the company’s server. For instance, the web mail services and customer management services used by retail and logistics firms are based on SaaS. By 2015, it is predicted that 50 per cent of all new application-independent software vendors will be pure SaaS providers. Businesses involving high data intake generally use infrastructure-as-a-service, which allows users to either buy or rent computer power and disk space from an external service provider accessible through a private network, or on the internet. Platform-as-a- service is a hybrid of the above models and provides not only the hardware, operating systems, storage and network capacity, but also the software servers and application environments.

In terms of usage and accessibility, clouds can be private, public, community or hybrid. Private clouds allow consumers the benefits of cloud computing within their own virtual private network while public clouds are accessible by many users on a public network such as the internet. A hybrid cloud is a cloud computing environment in which an organisation provides and manages some resources in-house and others are provided externally. It is expected that by end-2020, the hybrid model, combining on-premises and external cloud services, will be the most commonly used cloud service.

Applications in enterprises

Cloud computing, which brought in the convergence of many existing and new technologies, has created the illusion of infinite capacity and invisible infrastructure to support that capacity. It has extensive uses for enterprises. One advantage of using cloud computing is that the performance of operations remains the same with consistent service-level characteristics and is not affected by the scaling of data. Enterprises are then allowed to use applications that are not locked into devices and locations. The information can be accessed from any point given a device and connection. The other advantages of cloud computing include:

• There are no upfront investment costs associated with cloud computing; enterprises can pay as they use the service.
• Since the service is elastic to demand, no forward planning is required for operation scaling.
• Unlike traditional IT, cloud-based services are based on actual demand and not on peak demand.
• Although non-disruptive technology solutions also provide such advantages, the rate of cost reduction and specific technical performance impact is higher in cloud computing.
• The cloud also allows companies to enhance data security by centralising data.

The cloud computing as an enterprise business solution provides low-cost arbitrage along with value-added quality of service. It is different from other business solutions as it is not just a utility infrastructure computing service but also includes all higher-level services that enhance and build business service value. Therefore, the cloud as a service can be seen as the movement from IT-centric to business-centric services, with utility services for infrastructure at one end and business-centric SaaS from the cloud at the other.

Of late, enterprises in the retail, banking, finance, education, health care and IT sectors have been adopting cloud services, given their increased expenditure on IT and data applications. The increasing globalisation of retail, both in terms of point of sale and point of supply, has led to a significant increase in IT and telecom spending by retail companies trying to deal with competition. Cloud computing has made it possible for retailers to meet consumer expectations and deliver a seamless shopping experience. Its pay-as-you-go offering has helped retailers improve their business agility and customer engagement levels. According to industry estimates, cloud adoption in the retail sector will reach $15.1 billion in 2015.

The health care sector is also moving towards a digital platform, with big players such as Microsoft, Philips, Verizon and AT&T launching cloud-based vertical solutions. Globally, cloud solutions are supporting greater sharing and accessibility of health data. In this regard, medical imaging has become the most important use of cloud in health care. Further, the use of cloud solutions for storing and sharing large data files is saving hospital costs while boosting speed and efficiency.

For banks, and finance and insurance institutes, the benefits of cloud are enormous. These enterprises are built on massive IT infrastructure that processes huge volumes of data on a daily basis and cloud computing clearly benefits them by keeping up with technology changes while reducing costs. To encourage the cooperative sector to benefit from the cloud technology, the National Bank for Agriculture and Rural Development recently showcased a cloud-based core banking solution with NetApp’s data storage solutions to provide basic banking facilities to 7,000 branches across 19 states and union territories.

The cloud enables educational institutes to focus on their core activities and improve the consistency of teaching course content across different branches. Cloud-enabled remote classrooms help in running multiple classrooms through a small group of teachers. Further, cloud services help students and teachers collaborate on studies and projects. Though the use of cloud in education has not been extensive so far, it is expected that the sector will develop with the involvement of IT and the cloud, especially in distance learning programmes and online courses.

Market size and growth prospects

Research companies estimate strong growth in cloud computing services globally and in India. According to the Cisco Global Cloud Index, by end-2018, the annual global cloud IP traffic will reach 6.5 ZB (541 EB per month), up from 1.6 ZB per year (137 EB per month) in 2013. Moreover, it will account for more than 75 per cent of the total data centre traffic by 2018. The Asia-Pacific region will have around 1.17 billion consumer cloud storage users, accounting for 58 per cent of the total internet user base.

Meanwhile, Gartner’s cloud forecast indicates that India will be the fastest growing market in terms of the adoption of cloud services, given the increased demand for business benefits and cost efficiencies. It is expected that business-process-as-a-service will grow from $61.9 million in 2013 to $154 million in 2017. According to the International Data Corporation, the Indian cloud computing market is expected to grow from $688 million in 2012 to $3.5 billion by 2016.

With data-supported predictions, the significance of cloud computing in enterprise operations will become greater in the near future. Also, with the rise of the internet of things, the data and information available online will increase, compelling enterprises to use easy-to-manage and integrated services like cloud computing.