Cloud is for everyone, but not for anyone

Looking at some recent forays made by cloud behemoths like AWS triggers a new question in the cloud market—are new segments like startups and PSUs the next pot of gold? How easy is to slide on the rainbow that lies ahead of this pot—especially when there are bumps like need for customization, customer responsibility, and legacy baggage dotting this curve?

Tis the winter season. The time for looking at ‘white’ in a new way. And what’s whiter than snow? Cloud? A snowball? Both, together?

A snowball always starts with some silent snowflakes that start rolling at some point, at some place.

It was in 2011 that AWS announced the opening of its first office in Mumbai. Later in 2016, the AWS Asia Pacific (Mumbai) Region was launched with two Availability ones (AZs) - marking it as the sixth AWS Region in Asia Pacific (APAC). In May 2019, AWS came with a third Availability Zone in the AWS Asia Pacific (Mumbai) Region, which, as it said, was needed to support the rapid growth of the AWS customer base in India. In November 2022, AWS rolled out its second region in India – the AWS Asia Pacific (Hyderabad) Region, consisting of three AZs. The construction and operation of the AWS Asia Pacific (Hyderabad) Region is estimated to add approximately US$7.6 billion (approx. ₹63,600 crores) to India’s GDP by 2030.

In India, the legacy issue is an advantage rather than a problem. What matters is the mind-set. - Shalini Kapoor, Director and Chief Technologist, Public Sector, AWS India

This – the company said – was to boost India’s digital transformation and was a part of its long-term investment in the country so that customers and partners in India can have additional regional infrastructure to deploy applications with greater resilience, availability, and even lower latency. In October 2022, AWS added a new AWS Local Zone (LZ) in Delhi. Also, Amazon CloudFront has 33 Points of Presence in India, across Bangalore (four), Chennai (seven), Hyderabad (three), Kolkata, India (two), Mumbai (ten), and New Delhi (seven).

In short, AWS—as stated by it—has a long-term commitment to India—reaffirmed in May 2023,

with plans to invest US$12.7 billion in India by 2030 into its local cloud infrastructure.

Between 2016-2022, AWS invested US$3.71 billion in India. The market and potential for companies like AWS, in other words, have been snowballing into something bigger and different—and at quite a breakneck flow.

With all this infrastructure and availability—footprint in place, there has to be a lucrative white space untapped in many corners of India (not geographically but vertical-wise). There must be segments still raw and new to the cloud wagon that the company can encourage—for investing both confidence and money in cloud. At AWS Re:invent, at least two of these segments came up strongly on the radar: Startups and PSUs.

While the abundance for cloud-native workloads is a big green flag in startups, even the PSU market is making a flip of sorts with India’s recent digital strides. On one hand, this could open up the cloud for many new customers; but on the other hand, it would take a lot of new strategy, solutions and customer’s own role to make sure that cloud actually works here. It won’t be that easy to shake this snow-globe. But once it happens, it could be lovely.

White Space – How White? How Wide?

Let’s start with startups.

As Kumara Raghavan, Head, Startups, AWS India puts it, AWS was a startup when it began. “We still think of ourselves as a startup, just a larger one. India holds a lot of potential—as the 3rd largest start-up ecosystem in the world. Despite reduced funding, India has seen a lot of maturity and new tailwinds. Cloud has helped a lot. Startups can fail fast, and those who can pick everything up and run again—often, succeed. That needs agility.”

Raghavan points out how using unit economies is driving price advantages also—helping startups to optimise costs and innovate. “That’s an area where we are working with startups to explore the Flywheel effect and lower prices consistently.

He gives examples of startups that have helped customers manage wealth and fix needs in healthcare. “We have done it with cloud and AI helping with contextualised image generation, enhanced call experiences and a lot more. For India, which has so many startups, we have six different accelerators for different verticals. Like FinTech, ClimateTech, logistics, SaaS etc. Having availability zones and high resilience in India helps to deliver on low-latency needs for various businesses.

An apt example is how HDFC Securities Ltd launched its new mobile trading app, HDFC SKY on the cloud. HDFC Sky serves 75 million customers with AWS, as the company shared, HDFC Securities will reduce its annual IT infrastructure and management costs by up to 50 per cent compared to using on-premises infrastructure. “AWS helped us to create a culture of builders within HDFC Securities by enabling us to rapidly experiment at a lower cost so that we can innovate on behalf of our customers,” as shared by Sandeep Bhardwaj, chief operating and digital officer at HDFC Securities during the announcement.

As Shahin Khan, Founding Partner and Analyst, OrionX dissects it, startups are especially interesting since there is no internal data center capability, no legacy apps, and no existing IT relationships. “It is also likely that the startup’s offering will be SaaS. That makes it natural and beneficial for cloud. The trick is to have many of them, to make it easy and economical for them, to increase the chances that the ones that grow are already with you.”

As you move from on-premises to Cloud, there is more cost optimisation. - Prabhakar Appana, SVP and Head of AWS Ecosystem, HCLTech

What about PSUs?

The first word that pops when one thinks of the government vertical is the problem of legacy. It is always considered to be a lot of spadework before any digital make-over can happen. In India, interestingly, the word takes different contours.

Ask Shalini Kapoor, Director and Chief Technologist – Public Sector, AWS India and South Asia if the opportunity and logic for cloud are same for Indian and other global regions, and she explains, “The concerns and use-cases are similar. The adoption journey may be different. In Europe, digitisation happens much faster, so legacy is higher there. In India, digitalisation happened 20 to 30 years later than others; so our applications are comparatively newer. Legacy modernisation is not a problem here, but an advantage.”

What is a stumbling block, however, is the mindset-makeover, she unveils. “The needs for mindset and skillset are higher here than in the US or Europe. But the path is not tough.”

There are many examples that Kapoor offers. Take CoWIN. AWS has enabled CoWIN to support more than 2.2 billion vaccinations to date (with the ability to support 10 million vaccinations per day). Then there is DigiLocker which has the potential to revolutionise e-Governance by enabling paperless service delivery. One of Kapoor’s favourite examples is that of Poshan Tracker, an application that collects daily data from over 1.4 million Anganwadi centers – towards fighting malnutrition. It was initially grappling with substantial write-intensive operations, and the application encountered a significant 4-hour lag in writing transactions to an open-source relational database, even with the deployment of over 8000 database connections. When it moved to the AWS Cloud, the switch allowed the application to scale from handling 10 million API calls per day to an impressive 160 million API calls within a mere 3 months post-migration.” Kapoor expands.

Khan reckons this segment by reminding that in many ways, PSUs would be the other end of the spectrum. “They are—Often dotted with significant legacy infrastructure and processes, with a significant need for compliance and certification, and complex approval cycles. But there is little question that they will ramp up and will likely stay with the same cloud provider.”

And the ball does not stop there. There are many nascent verticals and formats that cloud can still take into its ambit. Companies like HCLTech are confident about India’s promise and appetite. “We have worked with AWS for over a decade, and we are driving more cloud adoption working closely with AWS.” As Prabhakar Appana, SVP and Head of AWS Ecosystem, HCLTech tells.

Will there be industry-specific cloud co-built by customers and AWS—now that there is so much greenfield space opening up in new verticals? “We will help our customers regardless of which industry or business they are in—with the use of business-specific solutions,” answered Anupam Mishra, Head of Technology and Solution Architecture, Commercial Sales, AWS India and South Asia during a chat at Re:Invent this year. He cited examples like Analysis of sentiments in contact agent centres. Appana also added how solutions like PLM Cloud have been built together with manufacturing and auto customers.

Sticky Notes

The emergence of new pockets of traction and investments is AWS-ome for sure, but there are a lot of on-ground issues that have to be ironed out on this ski-worthy slope.

What cannot be brushed under the Cloud carpet is the issue of cloud wastage that has come up very prominently all across the globe. Mishra assures that sustainability is a big focus for AWS. “In fact, as per some data from 451 Research, cloud can be more efficient and lead to cost reductions when compared to traditional data centres.”

As to the good-old cloud overprovisioning problem, Mishra argues that visibility is a strong point at AWS. “We are transparent about data- on which instances and which machines. We have features for budgeting, for alerts, for the right architecture choice and for shutting down machines when not in use. We take pride in helping customers lower their costs.”

For PSUs, things are not that cloud-ready as they are for startups—because not everything is cloud-native and a lot has to be kept the on-premise way for security reasons. Does that put a spanner in the works?

Kapoor contends here that cloud is a journey, “And we are just starting. There is so much that we can do. The mindset to move to cloud is a big thing. We aim at cost-optimisation, savings and skills. We work with departments to make sure that adoption can happen smoothly, and we help with migration as well as modernisation of applications (with microservices).”

Optimisation is key, echoes Appana. “As you move from on-premises to cloud, there is a focus on optimisation of costs. We have a FinOps strategy and we are a certified partner. Improving productivity is where the CIO can help the business in a big way.”

While all that is happening, the very relevance of cloud ahead can be a pebble in the snow pillow too—albeit, a tiny one for now. With the unmistakable, in-your-face, neon-lit and explosive rise of AI in every conversation and conference in the last few months, one may wonder if cloud is moving into the shadows. Mishra dismisses that concern. “Cloud is the foundation of all the work we do here. It allows customers to scale up and scale out. It allows them to be secure, to add application frameworks and data capabilities. Cloud handles data very well and ML or AI is all about data, especially when we are thinking of low latency.”

Let customers focus on the differentiators in what they do and we will do the undifferentiated heavy-lifting for them. AWS is a key partner to help them move in this journey of fast responsiveness, sums up Mishra.

As Kapoor adds, “Our mission is to cater to the citizens of India by building national platforms, vertical solutions and bridging the digital divide. With platforms like CoWIN, and many Central- and State-government projects, we are helping the nation turn into a major digital economy. Cloud plays an important role in making this possible. We have show-cased our potential with multiple projects—and we have also proven that we are the best in price performance and compute capability with cloud.”

A lot of the success from cloud-investments lies in how the customer makes the most of it. As Khan recommends while discussing the role that a customer plays to make sure cloud delivers the gains it is supposed to – “The ideal scenario in any outsourcing project is that you do it for quality not cost, you have enough experience to tell the difference between a good and poor quality service, and you have a clear understanding of supply chain risks and switching costs. So it is ultimately self-awareness. “He suggests to ask: What capabilities do you have (and will have) in-house, what you need from a cloud provider and why, what it’s worth to you, and what recourse is available to you in case service is interrupted or you can no longer use your supplier. It is not just about Service-Level Agreements and penalty schedules but scenario planning, governance, and risk management.

For now, the snowball is rolling well. There is a difference between making a snowman and a straw-man. It is not so much in the effort or the ‘how’. It is also not so much about ‘who’ makes it. But in the ‘why’. And Indian businesses – be it start-ups or PSUs—can spot that soon. Snow may be silent. The skid is not. And the toboggan – never.

 By Pratima H

pratimah@cybermedia.co.in