Cloud computing has huge potential to transform technology by providing on-demand access to computing resources over the network. It is growing rapidly with increasing adoption across industries like healthcare, education and small businesses. The future of cloud computing looks promising with continued growth driven by factors like increased internet access, industry adoption and government initiatives. Hybrid IT models that leverage both public and private clouds are expected to be the dominant architecture going forward.

1. CRISIL YOUNG THOUGHT LEADER 2014
How will cloud computing
transform technology?
Tarunabh
Goa Institute of Management
PGDM (2013-15)

2. i
Table of Contents
Executive Summary..............................................................................................................................1
1. Introduction.......................................................................................................................................2
2. Cloud Computing..............................................................................................................................2
2.1. Defining Cloud Computing .......................................................................................................2
2.2. Benefits of Cloud Computing....................................................................................................3
2.3. Cloud Computing Market Size.................................................................................................3
2.4. Riding the Cloud Wave – Some successful implementations of cloud services ....................3
3. Inhibitions in adoption of Cloud Computing .................................................................................4
4. The future of Cloud Computing ......................................................................................................4
4.1. Drivers of Cloud Computing growth .......................................................................................4
4.2. Growth opportunities for Cloud Computing...........................................................................5
4.2.1. Cloud Computing in Health care Industry.......................................................................5
4.2.2. Cloud Computing in Education Sector .............................................................................6
4.2.3. Cloud Computing for Small and Medium Enterprises (SMEs)......................................6
4.2.4. Cloud Computing collaboration with Big Data Analytics...............................................7
5. The future of IT deployment models – Hybrid IT is the way forward ........................................7
6. Conclusion .........................................................................................................................................8
Bibliography..........................................................................................................................................9

3. ii
Table of Figures
Figure 1: Cloud Computing Market in 2013......................................................................................3
Figure 2: Survey on Barriers to Cloud Adoption...............................................................................4
Figure 3: Healthcare Cloud Computing Market................................................................................5
Figure 4: Global Market for EHR.......................................................................................................5
Figure 5: Cloud Computing Market in Education ............................................................................6
Figure 6: Rise in Government Spending on Education.....................................................................6
Figure 7: Spend on Cloud Computing of Total IT Budget................................................................6
Figure 8: SME Cloud Services Market...............................................................................................7
Figure 9: MSME Employment in India..............................................................................................7
Figure 10: Cloud Analytics Market.....................................................................................................7
Figure 11: Hybrid IT Concept.............................................................................................................8
Figure 12: Cloud Market based on Deployment Models...................................................................8

4. 1
Executive Summary
Nowadays, cloud computing is one of the most frequent buzzwords in the technology world.
By offering simple, fast and efficient delivery of computing service, cloud computing has huge
potential to create value to the consumers. The benefits of cloud computing certainly position
it to be a disruptive technology.
This paper attempts to assess the transformational effect of cloud computing technology.
Through extensive secondary research, efforts have been made to find instances wherein cloud
computing is making a difference by its presence, and also determine the future potential of
cloud computing.
The paper has two broad constructs which probe the existing state of affairs of cloud computing
and its future. In the initial part of the report, cloud computing has been explained with its
benefits exemplified by implementation stories of cloud computing from industry. This part
also covers the concerns raised about cloud computing inhibiting its adoption. The latter of part
this report demonstrates future growth potential of cloud computing by exploring usefulness
of cloud computing in the industry, and opportunities for it to have gainful partnership with
other technologies such as big data analytics. This report also explains the future structure of
IT systems in organizations with the evolution of IT deployment models, and makes
recommendations on path for adoption of cloud computing.
This paper ascertains that there lies a promising future for cloud computing, and expects
benefits for its adopters if implemented properly.

5. 2
1. Introduction
“Every kid coming out of Harvard, every kid coming out of school now thinks he can be the
next Mark Zuckerberg, and with these new technologies like cloud computing, he actually has
a shot.” - Marc Andreessen, Founder-Netscape
The above statement1
by Marc Andreessen on cloud computing highlights the liveliness that
surrounds cloud computing and the promises built around it. So overwhelming this technology
has been that many consider it to engineer the 4th
IT revolution2
, while others believe that next
industrial revolution3
will be kindled by cloud computing.
The numbers also testify that cloud computing has assumed the position of significance. A
recent survey4
by Forbes found that 59% of CIOs and IT Leaders believe that enabling
alignment of business and IT strategies using cloud infrastructure is their number one priority.
Another survey5
shows that 92% of CIOs think cloud is good for business.
Enterprises, large and small, have understood the business value of cloud computing.
Responding to this surge, global giants such as Google, Microsoft, Amazon, IBM et al. are
ramping up their investments in cloud-based infrastructure.
2. Cloud Computing
2.1. Defining Cloud Computing
Cloud computing is an information and communication technology that enables the delivery
of computing resources – computer application, storage, processing power etc. – over network.
It requires little availability of storage or processing power locally as majority of computation
happens remotely and delivered through the network.
For uniformity in the use of definition, NIST6
released the 16th
and final definition in the year
2011.
“Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access
to a shared pool of configurable computing resources (e.g., networks, servers, storage,
applications, and services) that can be rapidly provisioned and released with minimal
management effort or service provider interaction. This cloud model is composed of five
essential characteristics, three service models, and four deployment models.”
This definition exhibits that cloud computing equips users with anytime, anywhere access to a
pool of computing resources without actually owning it, and employing only that much of it
which is actually required and paying only for the services availed.
Nicholas Carr, in his book7
‘The Big Switch’, has compared cloud computing to utility service
like electricity. He says that just as electricity producers set up centralized power generation
stations and distribute it to distant customers through electric cables, cloud computing is a
similar technology transformation to deliver computing resources, owned by cloud service
providers, over a network. By availing cloud services, organizations can give up owning
computing resources themselves.

6. 3
2.2. Benefits of Cloud Computing
Cost
 Shift from capital expenditure to operating expense
 Low Total Cost of Ownership
 Economies of scale resulting in lower cost of cloud service
Scalability
 Elastic scalability and quick provisioning ensure appropriate
level of IT capacity, thus saving on cost and service quality
Business agility
 Assist to quickly accommodate market changes
 Shortens time-to-market
Maintenance
 Low maintenance efforts
 Frees up internal IT staff for value-adding activities
Innovation &
Experimentation
 Low cost, scalability and easy collaboration facilitate fast
development and testing of new products
Democratization of IT  SMEs can have enterprise scale IT resources
Availability  High uptime and speedy disaster recovery of IT systems
Eco-friendly  Reduces carbon footprints due to high resource utilization
2.3. Cloud Computing Market Size
Figure 1: Cloud Computing Market in 2013
Source: IT Candor
2.4. Riding the Cloud Wave – Some successful implementations of cloud services
HTC8
HTC uses Amazon Web Services to enable its mobile services such as HTC
Share, HTC’s image and video mash-up and sharing service
Max
Healthcare9
Partnered with Dell to integrate WorldVistA’s Electronic Health Record
(EHR) with own Health Information System and deploy on private cloud
Bajaj
Finserv10
Salesforce’s cloud app accelerated loan application processing from 1,500
per day to a peak of 8,500 in a single day during the festival season
Super Retail
Group (Aus)11
Implemented JDA’s cloud applications in its Boating, Camping, Fishing
(BCF) brand to reduce inventory holdings and safety stock by 20 percent
Toyota Motor
Europe12
Used Heroku’s cloud platform to run 40 different web applications
internationalized for different languages in 40 different countries
67
41
18
8
Total
SaaS
IaaS
PaaS
Cloud Market Size by Service in 2013
(in $ Billion)

7. 4
3. Inhibitions in adoption of Cloud Computing
1. Security Risk: A serious vulnerability of
cloud computing, security risks arise with
data loss, IP loss, network access security,
denial of service etc., thus proving
detrimental to the integrity and performance
of cloud service.
2. Compliance: Adherence to compliance
could be an obstruction in shift to cloud
computing. E.g. Payment Card Industry Data
Security Standard compliance restricts adoption of cloud to keep payment card data safe.
3. Privacy: Privacy concerns pertain to anonymity of identity while using applications over
cloud; tracking, storing and using personal data of customers etc. raising doubts over
migration to cloud services.
4. Vendor Lock-In and Interoperability: Absence of these capabilities in the cloud service
restricts customers to move from one cloud environment to another, or seamlessly integrate
the existing infrastructure and application with the cloud services.
5. Expense and complexity of cloud adoption: Move to the cloud is replete with challenges.
The challenges appear as high cost and complexity in project implementation. Successful
execution of cloud strategy requires several transformations to IT architecture, business
processes and organizational systems, thus adding to cost and complexity.
4. The future of Cloud Computing
Cloud computing shows lots of promise for the future, and the growth numbers corroborate
that it is here to stay.
Growth highlights for cloud computing
 An estimate13
suggests cloud computing will grow to $ 205.48 billion by 2018.
 A McKinsey report14
estimates cloud applications to have an economic impact of $1.7
trillion to $6.2 trillion per year by 2025.
 IHS report15
says that Cloud related spending by businesses to triple from 2011 to 2017.
4.1. Drivers of Cloud Computing growth
1. Rapid proliferation of internet and mobile devices: Total internet users16
is expected to
reach 4 billion by 2020. This coupled with rising penetration of Smartphones and tablets
will create massive demand for cloud applications to access online services.
2. Evolution of Application Programming Interface (APIs): APIs simplify interaction
between applications and platforms by creating conduits for communication. Cloud APIs
ease the issue of interoperability and vendor lock-in by creating of way to move from one
Figure 2: Survey on Barriers to Cloud Adoption (n=1,358)
Source: North Bridge Venture Partners & Gigaom Research

8. 5
cloud to another. APIs also help to build useful applications by integrating other
applications. E.g. APIs can build application data generated from ERP and CRM systems
to have a comprehensive customer view. Cloud APIs will gain in significance as they would
look to integrate data coming from social media, mobile devices, M2M communications.
According to a survey17
cloud APIs are generating YoY growth of 11.3%.
3. Across the board industry adoption of cloud services: Cloud services will expand across
different industries – Healthcare, Banking & Financial Services, Education et al. Unique
tailoring and industry specific service will accelerate acceptance cloud computing
4. Government thrust on cloud: Governments, across the globe, are building roadmaps and
strategies to harness the potential of cloud and address the concerns associated with cloud
service. E.g. Government of India’s GI Cloud Initiative (Meghraj), US Government’s
Cloud Computing Technology Roadmap by NIST, UK Government’s G-Cloud etc.
4.2. Growth opportunities for Cloud Computing
4.2.1. Cloud Computing in Health care Industry
Cloud computing is benefitting health care in several ways –
 On demand accessibility of computing resources saves hospitals and health clinics large
investment in IT infrastructure
 Applications for clinical use – Electronic Health Record (EHR), Laboratory Information
System (LIS) etc. – and administrative use – appointment booking, claim settlement,
Payroll etc.
 Easy sharing of EHR with other hospitals and across different geographical locations
Future outlook for cloud computing in Health care
 Cloud market in healthcare is set to grow fast in future
 Regulations like American Recovery and Reinvestment
Act and patient’s propensity for more control of their
data will fuel growth of EHR.
 Cloud computing can assist to reach far-off areas devoid
of proper health care facilities. Initiatives such as
mobile health care spot that are linked to cloud-based
platforms will serve areas with poor access to health
care. Such facilities will help in maintaining patient
records and enable services such as blood tests, scans,
health monitoring etc.
In India, BSNL launched six data-centres to leverage
cloud computing for healthcare18
.
 Cloud-based analytics will grow in significance to
harness patient data for preventive intervention.
Figure 3: Healthcare Cloud Computing Market
Source: Markets and Markets Research
Figure 4: Global Market for EHR
Source: Accenture
18.8 19.8
20.9
22.3
2012 2013 2014 2015
Global Market for EHR
(in $ Billion)
1.8
5.4
2011 2017
CAGR from 2012-2017 : 20.5%
Healthcare Cloud Computing Market
(in $ Billion)

9. 6
4.2.2. Cloud Computing in Education Sector
Cloud computing is assisting the educational sector in many ways -
 Cloud-enabled virtual classrooms and online courses help to reach out to students in far-
off places not having good education facilities.
 Learning flexibility with 24*7 course accessibility and online labs and assignments
 Cloud-based online platforms facilitates collaboration among peers and teachers located at
different places.
 It also eases administrative efforts by managing electronic data on the student’s
performance in academics and extra-curricular activities.
Future Outlook for cloud computing in Education
 Strong future growth of cloud service in this sector
 Cloud will have a larger share of total IT spending
in the future.
 Government initiatives such as Right to Education
in India will increase spending on education. The
Cloud will assist to reach more pupils through
additional mediums. E.g. –
1. Government of India19
has decided to spend 100 crore
on Virtual classrooms.
2. Government of Karnataka20
in India has partnered with Cisco to use its cloud solution for
education, called Cisco Education Enabled Development (CEED) 2700. Dwara, to deliver
to students in multiple locations in real time.
4.2.3. Cloud Computing for Small and Medium Enterprises (SMEs)
Cloud deliver lots of advantages to SMEs such as
 Low capital expenditure and availability of IT services as operating expense
 Quick scalability at low cost helps innovation and expansion
 Focus more on core strategy and business proposition instead of running IT system
 A survey21
by Deloitte shows the impact of cloud services on SMEs –
26% faster growth; 21% more profitable; enables 3/4 of startups to focus on strategic
projects; enables 77% of SMBs to access new markets; 2/3 SMEs beat competitors.
Figure 5: Cloud Computing Market in Education
Source: Markets and Markets Research
Figure 7: Spend on Cloud Computing of Total IT Budget
Source: Tech Page One
Figure 6: Rise in Government Spending on Education
Soucre: World Bank Data
10.10% 10.50%
11.30% 11.30%
2010 2011 2012 2013
Percentage of Governemnt Spending on
Education (in India)
Expected IT Budget in K-12 in the US
(in 2017)
Cloud
Spending =
35% of Total
IT Budget
5.05
19.9
2014 2019
CAGR from 2014-2019 : 19.9%
Cloud Computing in Education Sector
(in $ Billion)

10. 7
 A report22
by Business Standard found that 90% of SMEs in India are looking to cloud
solutions for efficiency.
Future outlook for cloud computing in SMEs
 SME sector shows strong demand for cloud services in future
 SMEs will contribute significantly to the GDP and employ more people
 Organizations like World Bank supports the efforts of SMEs. World Bank23
has an active
portfolio of $3.2 billion for SMEs across 60 countries. Governments also provide financial
aid and other assistance to help SMEs grow.
 Technology companies are developing cloud based solutions targeting SMEs. Examples –
SAP Business One Cloud, TCS iON cloud ERP
4.2.4. Cloud Computing collaboration with Big Data Analytics
Big data analytics helps organization to get actionable
insights for better decision making. Doing big data analytics
requires a setup of storage, processing and applications
stacked together. Cloud computing steps in as a perfect
collaborator for big data analytics as it provides the requisite
structure of servers, storage and networking resources to run
analytics.
Cloud's utility of low cost, flexible scalability and rapid
provisioning relieves organizations from the concerns of
storage of data and shifts focus to making sense of data.
5. The future of IT deployment models – Hybrid IT is the way forward
 Arrival of cloud computing has initiated debate that cloud is going to deluge traditional IT
systems and make captive data centres a thing of the past. However, not all applications
and data will go on the public cloud, and some elements of IT systems remain in-house in
the traditional data centres.
 Organizations are using Virtualization mechanisms, shared storage and network resources
in their captive data centres to build a private or internal or corporate cloud. These clouds
follow the same service model as that of the public cloud service.
Figure 9: MSME Employment in India
Source: Ministry of MSME, India
Figure 8: SME Cloud Services Market
Source: Parallels
88.1 92.2 96.5 101.2 106.2
2008-09 2009-10 2010-11 2011-12 2012-13
Employment in MSME Sector in India
(in million)
45
95
2012 2015
CAGR from 2012-2015 : 28%
SME Cloud Services Market
(in $ Billion)
5.25 16.52
2013 2018
Cloud Analytics Market
(in $ Billion)
Figure 10: Cloud Analytics Market
Source: Markets and Markets
Future outlook for cloud analytics

11. 8
 The future of IT deployment model
is hybrid IT which is a mix of public
cloud and private cloud, both internal
(organization’s own IT resources)
and external (3rd part resources).
 Public cloud is affordable and highly
scalable but it has its trade-offs on
security, latency and control, while private cloud offers low latency and are high on security
and compliance but it requires more investment and has capacity constraints.
 Hybrid cloud combines best of the two models with better cost efficiency and high
performance using features such as cloud bursting.
 Public cloud is more suited to non-core functions like email, development and testing etc.,
while private cloud is suited to core-activities like ERP, CRM and other mission critical
applications.
Future outlook of cloud computing models
 Public cloud will have the largest volume of
cloud market followed by hybrid and
private clouds.
 Growth rate will be higher for Hybrid cloud
followed by public cloud. Private cloud will
have a flatter growth path.
6. Conclusion
Cloud computing harbingers transformation of computing services which is radically different
from its traditional form with the way services are delivered, consumed and paid for in cloud
model. This new form of computing is perfectly fitted to serve small and large businesses and
catalyse their growth. Cloud computing’s considerable monetary and non-monetary benefits
establish IT in a strategic role in an organization to solve business problems.
Utility of cloud computing is undeniably an exciting proposition for businesses; however, cloud
computing has its issues of vulnerabilities that cannot be overlooked. But the benefits of cloud
easily dwarf these concerns, and make cloud services too appealing to relinquish. Thus, the
onus lies on the organizations to plan and execute their cloud shift happen with thorough
diligence to avoid any undesirable consequences.
The Time is now ripe for organizations acknowledge the technological change being
engineered by cloud computing. Ability to adapt to this new model of computing will clearly
have a significant impact on the top lines and the bottom lines of businesses. By admitting
cloud-orchestrated technological change and making suitable changes in the business model,
companies will get the odds in their favour.
47.4 12.3
21.27108 22.2 79.54
Public Private Hybrid
2013
2018
Cloud Market based on Deployment Models
(in $ Billion)
Figure 12: Cloud Market based on Deployment Models
Source: IDC - Public & Private | Research and Markets
Figure 11: Hybrid IT Concept
Source: Accenture Insight

12. 9
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