How customer needs are driving cloud market changes

Cloud computing has rapidly evolved since its inception, with constant advancements and innovations introduced by hyperscalers both public and private. However, the initial euphoria around the cloud has waned, and customer buying patterns have changed significantly. Today, customers are seeking "fit for purpose" cloud services that are tailored to their specific business requirements. They are also focusing on cloud economics, including cost and service response, as key drivers for their adoption and continued use of cloud services. 

As a result, cloud service providers are constantly refining their offerings to meet these changing customer needs, which in turn is driving the ever-changing landscape of the cloud market. By responding to these customer demands and providing cloud solutions that are cost-effective, reliable, and tailored to specific business needs, cloud providers can stay competitive and relevant in an increasingly dynamic market. In the same vein, Ashish Varerkar, Head of Cloud Native, LTIMindtree recently spoke to Dataquest

DQ: What’s changing in the Cloud market - specially with Cloud costing, Cloud bundles and Verticalisation?

Ashish Varerkar: Cloud market is everchanging. We see tons of services launched by hyperscalers both Public and private. The initial euphoria around Cloud has waned and we lot of change in customer buying pattern driven by “fit for purpose” cloud services, cloud economics / cost and service response. 

Cloud Cost: Cost is the biggest driving factor for all strategic decisions, be it digital, data or innovation initiatives.  Almost all the customers are aware Level 1 FinOps.  The levers like reserved instances, right sizing, auto or scheduled shutdowns etc. have become hygiene factors.  Cloud Providers are enabling customers and continuously enhancing the cost monitoring and advisory tooling and innovating on usage based services, free tiers and VM class or types. 

Cloud Bundles: Not much innovative ideas from Cloud providers. The service bundling for integration, or IIOT, AI/ML workloads may bring some cost impact. This is helpful for customers who are bit high on maturity curve.

Cloud Verticalization: Industry Cloud or Vertical Cloud combines & tailors cloud services required for specific Industry vertical cases. The pre-configured cloud services with industry-specific add-ons in terms of ML /AI models, and data schema accelerate and amplify the needed business outcomes. Standardized configuration, optimal spending, and operational efficiency leading to deep customer engagements, are a few things businesses are eying for.  We have seen a mixed take on this.  While verticalized cloud offerings in Manufacturing / IIOT are quiet matured and there is a demand. Other areas like Finance, Lifesciences etc don’t have much pull.  CSPs are constantly enhancing and adding new verticalized areas.  AWS, Azure, and GCP have more than 25-30 industrialized offerings 

DQ: Any specific market needs that you have picked from Indian enterprises - any customer examples you can cite?

Ashish Varerkar: Indian enterprises are mostly Cost Driven and selection of the CSP is very much dependent on Enterprise Agreements and type of discounts and pricing quoted.  A very interesting trend is about adopting to Open Source and Cloud born or cloud supported databases while moving away from enterprise licensing. Other important buying pattern is about moving towards portability by adopting Cloud Native.  We find more and more net new workloads adopting Containerization at scale.  Notable with media / OTT streaming customers, Banking & Finance customers with Digital offerings.

DQ: What stops CIOs from realising ROI from Cloud?

Ashish Varerkar: Foremost reason which we saw was lack of clear strategy. 

• The cloud objectives, if not aligned with the business goals, are likely to create disillusionment. Poor understanding of the Cloud Economics and FinOps area is another reason.  
• Lack of awareness of Cloud Operating Model for important services for scaling, resiliency, DR , HA, etc. and relying on traditional patterns by treating Cloud as extended Data Centers is another gross negligence resulting in poor ROI. 
• Unleveraged cloud native services for autoscaling, serverless, containerization etc. cause high TCO scenarios.
• Lastly inadequately skilled staff, training results into long and costlier implementation and migration initiatives.

DQ: How much would trends like Multi-Cloud, Super-Cloud and Edge affect the industry?

Ashish Varerkar: Multi-cloud is here to stay and multi-cloud strategy should be part of every medium to large enterprises.  Strategy driven implementation will help drive down to overall cost and help purposeful distribution of workloads. With 5G edge, we see a lot traction in in containerization at edge cases and this has made all IIOT cases possible which were not being realized a few years ago. 

Super cloud is very nascent & conceptual.  It has always been hidden desire of our industry to create a timeless, scalable and fundamentally supreme architecture.  The concept means different to people and is still evolving.

DQ: Lessons learnt by the industry from Cloud outages seen across the globe in the last few years? 

Ashish Varerkar: One of the most important lessons industry has learnt about importance of having multi-cloud implementation and a robust disaster recovery plan.  Planning multi-regional DR zones across cloud providers for mission critical / business critical apps is absolutely imperative. Proactive monitoring, keeping up with the CSP updates and regular testing in business continuity and recover plan as part of rigorous process with defined RTOs, RPOs will help minimize the impact. 

DQ: Are enterprises dealing well with multi-Cloud sprawl, shadow IT, over-permissioning and supply-chain threats?

Ashish Varerkar: We have witnessed this phenomenon in the industry where there is no central cloud governance or the cloud governance policies incorrectly implemented or non-automated. More in M&A or spin-off cases where the governance is in flux. Organizations with high maturity we have seen like effective cloud management using zero-trust security, policy driven provisioning etc. 

DQ: Do Indian players and other players find it easy to exist against the top3 Cloud hegemony? How?

Ashish Varerkar: It's not easy at all for Indian Players to compete with TOP 3 Public CSPs. Indian player thrive by partnering with top 3 and providing niche solutions catering to local needs where compliance and regulatory statutes take precedence. Innovating for highly regulatory industries like health, finance etc. require regional players who can provide compliant and low bandwidth solutions. Re-selling Cloud licenses and offering discounts & premium support services is also an area where Indian players do better.

DQ: What’s exciting here from your portfolio and white-board ahead?

Ashish Varerkar: Portfolio ahead is quiet exciting.  We are perfecting our Scaled Cloud Migration and App Modernization area by offering solution led discovery and execution with LTIMindtree Infinity platform. Purposeful and business led Cloud strategy, multi-cloud governance are another area where we are innovating with our Infinity Platform. We see lot of demand in areas of Observability, Level 2 FinOps, Sustainability. We are working with TOP 3 to provide single pane visibility to our customers.