By: N Shivapriya

The technology world is witnessing its next big shift. A new class of service providers that did not exist in the past decade is now making their presence felt. These firms are changing how technology is delivered much in the same way that Indian service providers once did with the concept of offshoring.

Cloud Computing is now going mainstream and is serious business. Cloud application providers such as and specialist firms that help implement their technologies such as Appirio, Astadia and Bluewolf are pioneering a new form of service delivery that is on-demand and more cost efficient for enterprises.

The rising stakes has prompted software product giant, Microsoft, to also enter the market with Azure, its Cloud offering that competes with Googles Google App and Salesforce.coms Cloud Computing refers to software (software-as-a-service), hardware (infrastructure-as-a-service) or technology tools (platform-as-a-service) that are available for use on demand as opposed to licensed software and tools, or purchased hard ware. It uses internet technologies and interfaces and can be quickly scaled up to cater to higher demand or ramped down when demand drops.

Indian IT players have been the success stories of the past decade. We are exactly in the same breach today, said Vineet Nayar, CEO, HCL Technologies. The pay-per-use and on-demand software model is driving a huge change in traditional methods of technology and pricing, said experts. What we are seeing is a fundamental shift similar to shift from mini-computers to PCs (personal computer). PCs made computers more standard, affordable and as a result, usage went up dramatically, said John McCarthy, principal analyst, with Forrester Research.

Mr. McCarthy, who originally identified offshoring as the next big trend in the early part of the decade, said Cloud Computing and SaaS (software-as-a-service) are now becoming the dominant platforms. Firms such as Workday are getting big client wins and will go public soon. It may be on a small base, but their growth rates are 50%- 100%, added Mr. McCarthy.

It is very important to have an option in this (Cloud) space. You must have an option and you must be ready, said S Gopalakrishnan, CEO and MD, Infosys Technologies. Infosys, which is building a significant practice around, expects to eventually get one-third of its revenues from cloud-based services.

Appirio, a specialist player who helps enterprises implement cloud-based solutions, was co-founded by Narinder Singh, who quit his position with enterprise software leader SAP to start the firm. All our founders came from traditional enterprise software backgrounds from companies such as Borland, WebMethods, SAP and Accenture. Four years ago, we saw a shift happening in the marketplace and felt there was a need for a new type of partner to help enterprises move to the Cloud. Thats why we founded Appirio, said Balakrishna Narasimhan, senior director, marketing and strategy, Appirio.

Weve grown at a rate of over 2x during the worst economic conditions in the history of the US, which shows the potential of this business. There is over $1 trillion of IT spend that will be disrupted by Cloud Computing over the next few years, added Mr. Narasimhan.

Historically, these SaaS applications were do-it-yourself implementations but as they have become more advanced SaaS deployments require customisation and implementation. Major systems integrators such as IBM, Accenture, Deloitte and Capgemini, as well as offshore-based consultancies like TCS, Infosys, Wipro, Cognizant and UST are increasingly playing the role of an SaaS integration partner, said Liz Herbert, senior analyst, Forrester, whos authored a report on SaaS systems integrator options.

Accenture has designated a managing director, James Harris, for Cloud Computing who works across all the industry groups within the company to enable cloud-based services. Were at the end of the beginning, said Mr. Harris about the evolution of Cloud Computing in the market. There has been a significant adoption by large enterprises since last year, according to him.

While lower cost initially acted as a catalyst-especially during the recession-for adoption of cloud technologies, it is flexibility and significantly lower implementation time, which now driving its adoption, add industry players.

Originally published in The Economic Times, Ahmedabad dated: February 25, 2010