Local datacenters to spur cloud adoption in BFSI

Public cloud vendors like Amazon and Microsoft set up datacenters in India to accelerate cloud adoption across enterprises. Will this work?


Last year, Amazon Web Services set up its datacenter in India – the first ever cloud datacenter to be set up in the country. IBM and Microsoft followed suit and Google is planning to do the same next year. While cloud computing is growing exponentially, the adoption of cloud in Indian enterprise has been very slow. ChannelWorld India spoke to cloud channel partners to find out whether this trend of large players setting up cloud datacenters in India would spur cloud adoption in the enterprise.

For Kavitha Singhal, MD of Kamtron Systems, business has changed post setting up of datacenters by cloud vendors and she sees a lot of optimism in the enterprise segment. “Data residency is a matter of concern for most CIOs but it is specifically a major concern for government organizations for their data security, accessibility and the laws governing those datacenters. Legal policies of the specific countries where the datacenters are set up is also a data security concern,” she says.

According to Manish Tandon, MD of Questa System Software, the Indian enterprise is unable to fathom the cost of connectivity when it comes to cloud computing. “It is tough to say how much has changed but after the datacenters have been set up, my new customers have all been from the BFSI sector," he said.Punit_Thakkar

Most of these companies are still not entirely sure if they should move to the cloud. “They are waiting for someone else to make the first move. Some advisory policies from the RBI, government of India and other financial agencies will help assure them of the security concerns,” Tandon adds.

He says that since these datacenters are managed by MNCs which are non-Indian companies, most banks are not highly confident about moving their critical financial data onto the public cloud. “A couple of customers said that they are not allowed to move to the cloud because of security reasons,” he adds.

Punit Thakkar, CEO and Director of Shivaami Cloud Services agrees with Tandon and says, “As per as IRDA guidelines, insurance companies, and as per RBI guidelines, financial companies are forbidden from having critical data residing outside the country.”

According to Sanjay Agarwal, Director of Umbrella Infocare, setting up of cloud datacenters in India has resulted in a huge shift in the mindset of these companies. “This move has enabled these companies to move to the cloud for specialized services which weren't available earlier,” he adds.

So, is it all about data residency? Tandon disagreed and added that the picture is still not very clear from the compliance perspective. “Unless these certifying agencies come up with a policy or with the right certifications, one cannot define a timeline for when Indian CIOs will be able to embrace cloud without any confusion,” he adds.


Google is yet to set up a datacenter in India and for Thakkar, a Google cloud partner, data sovereignty is not a major factor when it comes to wide adoption of cloud in the Indian enterprise. According to him, CIOs who choose Google as their cloud service provider are looking at the bigger picture. “While having datacenters in India does affect the way customers approach the public cloud, it is not the only significant criteria for the CIOs. Apart from a few industries, most are okay with their data residing in the USA,” he says.

Singhal believes that building cloud datacenters in India will help in the mass storage of data with efficiency and security. “CIOs can save on huge investments and can now work on Opex model as data residency will not be a concern in this case,” she says.

What are the other roadblocks? For Thakkar, latency is the biggest issue faced by CIOs when it comes to cloud adoption.

According to Singhal, bandwidth issues, shortage of skilled manpower for cloud adoption and migration are the bigger challenges faced by the Indian enterprise.

“Organizations are looking at cloud computing with optimism but it will still take more time for  the adoption rate to go up,” she says.