HYBRID CLOUD: The Next Frontier

1. HYBRID CLOUD: The Next Frontier This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov

2. India market presents a solid foundation for cloud uptake Cloud Market Landscape Ecosystem Drivers IT-BPO Market in India (2013) expected to reach $100 Bn by 2020 Large Enterprises in India; 56 Enterprise feature in Global 2000 Growth in Indian IT Market Higher than China Technology Ready SMBs; Many First Time IT Buyers >15% >10% 10Mn+ 5000+ 4X >30% $4 Bn $32 Bn+ Expected Cloud Spending in India between 2013-17 3rd Party Service Provider Revenues from Cloud by 2016 Current Growth of Public Cloud Market in India Increase in Indian Cloud ISVs since 2009

3. While cloud provides several benefits over legacy models, certain challenges exist Legacy Systems • Private Cloud Immensely capital intensive – high TCO High time to implementation On-premise infra or 3rd party managed service Shared infrastructure Dedicated IT staffing and increased administration costs • Public Cloud Hybrid Cloud Highest security for mission-critical data Enhanced flexibility & scale Lack of flexibility and Non-scalability Cost effective Capital intensive Reduced focus on core competencies High complexity Less security, privacy and compliance Limited integration to On-premise resources Subject to technology obsolescence Hybrid Cloud model combines the strengths of both Public and Private Cloud to provide an optimal solution

4. Several newer hybrid cloud scenarios are emerging and witnessing adoption Hybrid Cloud Storage • Moving Existing Workloads to Cloud Lift & Shift VMs Application Test Bed • Shift the VMs from private to public cloud to address peak loads • Keep confidential data locally & leverage public cloud capabilities for processing • While the development of an application can reside on private cloud, public cloud presents an ideal environment for scalability testing Novatium utilized on-demand virtual infrastructure to test & prototype their apps Ratnakar Bank signed a 5-year partnership for Hybrid Cloud bursting for dedicated resources during peak hours Savings on staffing, infrastructure set up and maintenance costs A B C D • As the IT infrastructure is moving to the cloud, customers expect the existing applications such as ERP, CRM etc. to work on the cloud similar to on-premise • Automatically tier the storage into hot, warm and moderate data and start pushing the in-frequently used data on to public cloud redBus migrated its app provided to bus operators (for ticketing etc.) onto the cloud SaaS to handle peak traffic MS acquired StorSimple in 2012 for Hybrid Storage solutions – keeps hot blocks of data locally & shifts cold blocks to Azure ~40% Cost Benefits realized and up to 3X increase in traffic to redBus ~50% Reduction in storage costs by Steelcase Inc. using MS StorSimple

5. Hybrid cloud deployments offer a flurry of benefits to end users Benefits of Hybrid Cloud Model On-Demand Elasticity & Cloud bursting by leveraging both public & private cloud infrastructure depending on the application needs Hybrid Cloud Enables the Customers to “Build their own cloud as they like” Security for Mission-Critical Data Control on data location and security (similar to private cloud) for mission critical applications Economies of Scale for Non-Critical Applications By putting non-mission critical data and mass usage applications on public cloud infrastructure High Flexibility and Scalability Highly flexible, self-serve and shared governance model for its customers

6. Consequently there is a massively positive outlook towards Hybrid Cloud deployments 1Wipro-Cisco joint CIO survey by Forrester; 2IDC Worldwide survey for Infosys; Company press releases; Articles; Zinnov Analysis Source: Cloud Vendor Quotes 78% Indian CIOs say Reduction in TCO for Infra-related spend is the major Hybrid benefit IT Stakeholders feel choosingbest cloud providers & ensuring integration is most critical More than 60% large enterprises will move to a Hybrid cloud setup over the next few years -Infosys Cloud VP & Global Head 52% Indian CIOs express readiness to implement Hybrid solution 40% Hybrid cloud is the platform that will dominate the industry moving forward… -Senior VP at Capgemini Hybrid infrastructure environments are natural for any enterprise these days to get benefited from the economics of scale… -MD, Cloud360 at Cognizant

7. Several key factors have to be considered for planning a hybrid cloud deployment (1/2) Public Private Case for Hybrid Deployment Consistent 1 Seasonal High 2 Low High 3 Low High 4 Low High 5 Low Hybrid Cloud provides high integration of legacy systems with Cloud infrastructure Hybrid Cloud can address the Seasonal variations and peak loads adequately • Hybrid Cloud can support both: • High security requirements for mission-critical applications & data • Low security needs for Non-critical applications & data Strong case for Deployment Medium case for Deployment Negligible case for Deployment

8. Several key factors have to be considered for planning a hybrid cloud deployment (2/2) Illustration for a Hybrid Cloud Deployment • Consider a large e-tailer using an e-commerce application: • Multiple city offices and delivery centers • Website witnesses predictable traffic except for October where traffic is ~10X • Invested in both public cloud (for non critical applications) and private cloud infra Customer information is highly confidential in nature The website is the only medium of engagement with customers & navigation experience is critical Customer uses his credit/debit card for online payment Data Security & Regulatory Requirements High Criticality of the Application for Business High      Criticality of the Process Under Consideration High      Private Public Private Private Private Public Public Public Private Public ~10X spurt in traffic on website during festive season (October) Transaction link back to customer profile in CRM tool Quantum of Load & Freq. of Application Usage Seasonal Interoperability between Cloud & Legacy Systems High

9. The economics already favor a hybrid cloud approach Aggregate Cost Savings against Private Datacentre over 4 Year Period1 Hybrid Cloud Savings against Private Datacentre (500 VMs)2 Cost Savings (%age) Cost Savings (%age) Cost Savings ($) Number of VMs in the Datacentre (Private Cloud) Notes: 1,2Cost factors include only server (hardware & software), storage, data transfer and system management software costs. Assuming VM growth in the considered enterprise is 5% and storage growth is of 8%. Percentage of workloads moving from private datacenter to public infrastructure is assumed to increase from 5% in initial year to 35% in year 3. The models considers Microsoft infrastructure (including Windows server R2 and System center R2 software deployments) for both public & private cloud scenarios; 3Steady state depends on the growth of virtual machines in an enterprises datacenter and a proportion of workloads moving from private datacenter to public cloud infrastructure 35-45% Cost savings in Hybrid deployment at a steady state3 as compared to Private cloud datacenter 9-17% Aggregate Cost savings in Hybrid cloud over a period of 4 years 2-3X Reduction in Total Cost of Ownership (TCO) with Hybrid deployment over 4 years

10. However, certain constraints currently keep the IT decision makers wary of hybrid deployments Addressing the Key Barriers to Hybrid Deployments • Efficient local and remote management of server resources is a critical requirement cited by the IT stakeholders • Cost effective management of hybrid deployments is a key consideration 1 Need for increased management efficiency for a diverse datacentre • Common user identity to access on premise and cloud resources is quintessential for successful hybrid cloud deployments • Protecting corporate data and ensuring regulatory compliance is a must have 2 Consistent and flexible user access to corporate resources while protecting data • Integrated billing & provisioning of all services in all locations across multiple clouds is important (due to higher TCO and complexity in managing multiple cloud vendors for Hybrid) • IT departments prefer working with vendors who can offer unified management framework of the hybrid cloud deployments 3 Complexity of managing multiple vendors

11. Recommendations Recommendations for CIOs/IT Decision Makers Recommendations for Hybrid Cloud Vendors Up level Knowhow of Hybrid Cloud Scenarios Suitable for Current IT Set Up Develop Robust ROI Models For Hybrid Cloud Adoption Specific to Indian Customer Scenarios Leverage One-Stop-Shop Vendors for Successful Hybrid Deployments Evangelize Business Growth Led Use Cases for Hybrid Cloud Framework Driven Approach to Prioritize Workloads for Hybrid Cloud Drive SI & ISV Partnerships and Offer One-Stop-Shop Hybrid Cloud Solutions Attach Hybrid Cloud Strategy to Business Growth and Not Just Cost Savings Invest in Developing Hybrid Cloud Focused Talent in the Ecosystem

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