Prospect of adopting cloud computing in indian manufacturing industry

Prospect of Adopting Cloud Computing In Indian Manufacturing Industry, Prof. Supriya Santosh.
Wagh, Journal Impact Factor (2015): 7.9270 Calculated by GISI (www.jifactor.com)
www.iaeme.com/ijm.asp 48 editor@iaeme.com
1
Research Scholar, Dr. D.Y. Patil University,
Pune, Maharashtra, India
ABSTRACT
Innovations are necessary to ride the predictable wave of change. Most of enterprises are
striving to reduce their computing cost through the means of virtualization. This demand of reducing
the computing cost has led to the innovation of Cloud Computing. Cloud Computing offers better
computing through improved utilization and reduced administration and infrastructure costs. Cloud
Computing is the sum of Software as a Service (SaaS) and Infrastructure as a service (IaaS) and
Platform as a Service (PaaS).
In this paper, I would first compare two related computing paradigms – On premise
Computing and Cloud computing in. Discuss the importance of Cloud to Manufacturing Industry in
India and study the prospect of the Adoption of Cloud Computing in Indian Manufacturing Industry.
Keywords: Cloud Computing, SAAS, IAAS, PAAS, IT budget, On-premise Computing,
Manufacturing Industry.
1. INTRODUCTION
CLOUD OVERVIEW
With the rapid development of processing and storage technologies and the success of the
Internet, computing resources have become cheaper, more powerful and more available than ever
before. This technological trend has enabled the realization of a new computing model called cloud
computing, in which resources are provided as general utilities that can be leased and released by
users through the Internet in an on-demand fashion.
Cloud computing is of growing interest to companies around the globe, but many are finding
greater costs and greater obstacles to the adoption of cloud computing than they anticipated.
PROSPECT OF ADOPTING CLOUD COMPUTING IN
INDIAN MANUFACTURING INDUSTRY
1
Prof. Supriya Santosh. Wagh
Volume 6, Issue 6, June (2015), pp. 48-56
Article ID: 10120150606006
International Journal of Management (IJM)
IAEME: http://www.iaeme.com/IJM.asp
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
IJM
© I A E M E

Prospect of Adopting Cloud Computing In Indian Manufacturing Industry,
Wagh, Journal Impact Factor (2015):
www.iaeme.com/ijm.asp
Fig 1.1
Source: www.wikipedia.org
1.1 Definition
There are many definitions of cloud computing. In 2009 the US National Institute of
Standards and Technology (NIST) Information
well-written definition distilled from a number of perspectives.
NIST DEFINITION OF CLOUD COMPUTING
Cloud computing is a model for enabling convenient, on
pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal manag
provider interaction.
This cloud model promotes availability and is composed of five essential characteristics,
three service models, and four deployment models. The emerging cloud abstracts infrastructure
complexities of servers, applications, data, and heterogeneous platforms.
f Adopting Cloud Computing In Indian Manufacturing Industry,
, Journal Impact Factor (2015): 7.9270 Calculated by GISI (www.jifactor.com
www.iaeme.com/ijm.asp 49
Fig 1.1.Cloud Computing Overview
Standards and Technology (NIST) Information Technology Laboratory developed a considered and
written definition distilled from a number of perspectives.
NIST DEFINITION OF CLOUD COMPUTING
Cloud computing is a model for enabling convenient, on-demand network access to a shared
services) that can be rapidly provisioned and released with minimal management effort or service
applications, data, and heterogeneous platforms. [10]
f Adopting Cloud Computing In Indian Manufacturing Industry, Prof. Supriya Santosh.
com)
editor@iaeme.com
Technology Laboratory developed a considered and
demand network access to a shared
ement effort or service

The NIST definition identifies essential characteristics, service models and deployment models.
Table 1.1 Summary of cloud computing features
Essential characteristics Service models Deployment models
On-demand self-service Software as a service (SaaS) Private cloud
Broad network access Platform as a service (PaaS) Community cloud
Resource pooling Infrastructure as a service(IaaS) Public cloud
Rapid elasticity Hybrid cloud Measured Service
Chart 1.1 Cloud Service Model & Deployment Models
Source: KPMG India Cloud Publication: Changing the ecosystem
1.3. Service Model
Following are the service models to categories the cloud services:
SOFTWARE AS A SERVICE (SAAS)
Cloud consumers release their applications on a hosting environment, which can be accessed
through networks from various clients (e.g. web browser, PDA, etc.) by application users. Cloud
consumers do not have control over the Cloud infrastructure that often employs a multi-tenancy
system architecture, namely, different cloud consumers' applications are organized in a single logical
environment on the SaaS cloud to achieve economies of scale and optimization in terms of speed,
security, availability, disaster recovery, and maintenance. Examples of SaaS include SalesForce.com,
Google Mail, Google Docs, and so forth.
PLATFORM AS A SERVICE (PAAS)
PaaS is a development platform supporting the full "Software Lifecycle" which allows cloud
consumers to develop cloud services and applications (e.g. SaaS) directly on the PaaS cloud. Hence
the difference between SaaS and PaaS is that SaaS only hosts completed cloud applications whereas
PaaS offers a development platform that hosts both completed and in-progress cloud applications.
This requires PaaS, in addition to supporting application hosting environment, to possess
development infrastructure including programming environment, tools, configuration management,
and so forth. Example of PaaS is Google AppEngine.

INFRASTRUCTURE AS A SERVICE (IAAS)
Cloud consumers directly use IT infrastructures (processing, storage, networks, and other
fundamental computing resources) provided in the IaaS cloud. Virtualization is extensively used in
IaaS cloud in order to integrate/decompose physical resources in an ad-hoc manner to meet growing
or shrinking resource demand from cloud consumers. The basic strategy of virtualization is to set up
independent virtual machines (VM) that are isolated from both the underlying hardware and other
VMs. Notice that this strategy is different from the multi-tenancy model, which aims to transform the
application software architecture so that multiple instances (from multiple cloud consumers) can run
on a single application (i.e. the same logic machine).Example of IaaS is Amazon's EC2.
DATA STORAGE AS A SERVICE (DAAS)
The delivery of virtualized storage on demand becomes a separate Cloud service - data
storage service. Notice that DaaS could be seen as a special type IaaS. The motivation is that on-
premise enterprise database systems are often tied in a prohibitive up-front cost in dedicated server,
software license, post-delivery services, and in-house IT maintenance. DaaS allows consumers to
pay for what they are actually using rather than the site license for the entire database. In addition to
traditional storage interfaces such as RDBMS and file systems, some DaaS offerings provide table-
style abstractions that are designed to scale out to store and retrieve a huge amount of data within a
very compressed timeframe, often too large, too expensive or too slow for most commercial RDBMS
to cope with. Examples of this kind of DaaS include Amazon S3, Google BigTable, and Apache
HBase, etc.
Fig 1.2. Cloud Computing Service Model
Source: http://en.wikipedia.org/wiki/Cloud_computing

1.4 Deployment Model
Four cloud deployment models have been defined in the Cloud community:
PRIVATE CLOUD
The cloud infrastructure is operated solely within a single organization, and managed by the
organization or a third party regardless whether it is located premise or off premise.Private Cloud an
option for many firms. Organizations always require full control over mission-critical activities that
reside behind their firewalls.
COMMUNITY CLOUD
Several organizations jointly construct and share the same cloud infrastructure as well as
policies, requirements, values, and concerns. The cloud infrastructure could be hosted by a third-
party vendor or within one of the organizations in the community.
PUBLIC CLOUD
This is the dominant form of current Cloud computing deployment model. The public cloud
is used by the general public cloud consumers and the cloud service provider has the full ownership
of the public cloud with its own policy, value, and profit, costing, and charging model. Many popular
cloud services are public clouds including Amazon EC2, S3, Google AppEngine, and Force.com.
HYBRID CLOUD
The cloud infrastructure is a combination of two or more clouds (private, community, or
public) that remain unique entities but are bound together by standardized or proprietary technology
that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).
Organizations use the hybrid cloud model in order to optimize their resources to increase their core
competencies by margining out peripheral business functions onto the cloud while controlling core
activities on-premise through private cloud.
Amazon Web Services (AWS) has recently rolled out a new type of deployment model -
VIRTUAL PRIVATE CLOUD (VPC), a secure and seamless bridge between an organization’s
existing IT infrastructure and the Amazon public cloud. This is positioned as a mixture between
Private Cloud and Public Cloud. It is Public because it still uses computing resources pooled by
Amazon for the general public. However, it is virtually private for two reasons. Firstly, the
connection between IT legacy and the cloud is secured through a virtual private network, thereby
having the security advantage of Private Cloud. In fact, all corporate security policies still apply to
resources on the cloud even though it is on the Public Cloud.
Second, AWS will dedicate a set of 'isolated' resources to the VPC. However, this does not
mean users have to pay these isolated resources up-front. Users still enjoy "pay-per-use" on these
isolated resources. VPC represents a perfect balance between control (Private Cloud) and flexibility
(Public Cloud).

Source: http://en.wikipedia.org/wiki/Amazon_Virtual_Private_Cloud
1.5 Cloud Computing Characteristics
On-demand self-service: Depending on customers’ needs, cloud users can configure and deploy
cloud services themselves using cloud
Internet Accessibility: Once there is network connectivity, cloud users can access cloud service
through standard mechanisms irrespective of time and place.
Pooled Resource: Resources such as storage, processing, memory, and network bandwidth of
service providers are pooled to serve
physical and virtual resources dynamically assigned and reassigned according to
Elastic Capacity: Capabilities can be elastically provisioned and released as and when needed. This
enables users to rapidly respond to demands in a very effective way.
Measured service: Cloud systems automatically control and optimize resour
metering capability at some level of abstraction appropriate to the type of service (e.g., storage,
Processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and
reported, providing transparency f
ADVANTAGES OF CLOUD COMPUTING
Specifically, cloud computing offers the following key advantages:
• It dramatically lowers the cost of entry for smaller firms trying to benefit from compu
business analytics. These computational exercises typically involve large amounts of computing
power for relatively short amounts of time, and cloud computing makes such dynamic
provisioning of resources possible.
• It can provide an almost immediate ac
investments for users, leading to a faster time to market in many businesses. Treating IT as an
operational expense (in industry
also helps in dramatically reducing the upfront costs in
an adaptive infrastructure that can be shared by different end users, each of whom might use it in
very different ways. The users are completely separated from each other, an
infrastructure allows for computing loads to be balanced on the fly as more users join the system
http://en.wikipedia.org/wiki/Amazon_Virtual_Private_Cloud
Characteristics
: Depending on customers’ needs, cloud users can configure and deploy
cloud service catalogues, without the help of the service Provider.
Once there is network connectivity, cloud users can access cloud service
through standard mechanisms irrespective of time and place.
such as storage, processing, memory, and network bandwidth of
service providers are pooled to serve multiple consumers using a multi-tenant model, with
physical and virtual resources dynamically assigned and reassigned according to
Capabilities can be elastically provisioned and released as and when needed. This
enables users to rapidly respond to demands in a very effective way.
Cloud systems automatically control and optimize resour
reported, providing transparency for both the provider and consumer of the utilized service.
ADVANTAGES OF CLOUD COMPUTING
Specifically, cloud computing offers the following key advantages:
It dramatically lowers the cost of entry for smaller firms trying to benefit from compu
These computational exercises typically involve large amounts of computing
provisioning of resources possible.
It can provide an almost immediate access to hardware resources, with no upfront capital
leading to a faster time to market in many businesses. Treating IT as an
operational expense (in industry-speak, employing an ‘Op-ex’ as opposed to a ‘Cap
ramatically reducing the upfront costs in corporate computing. The cloud becomes
very different ways. The users are completely separated from each other, an
infrastructure allows for computing loads to be balanced on the fly as more users join the system
com)
editor@iaeme.com
: Depending on customers’ needs, cloud users can configure and deploy
service catalogues, without the help of the service Provider.
Once there is network connectivity, cloud users can access cloud service
such as storage, processing, memory, and network bandwidth of
tenant model, with different
physical and virtual resources dynamically assigned and reassigned according to consumer demand.
Capabilities can be elastically provisioned and released as and when needed. This
Cloud systems automatically control and optimize resource use by leveraging a
or both the provider and consumer of the utilized service.
It dramatically lowers the cost of entry for smaller firms trying to benefit from compute-intensive
These computational exercises typically involve large amounts of computing
cess to hardware resources, with no upfront capital
leading to a faster time to market in many businesses. Treating IT as an
ex’ as opposed to a ‘Cap-ex’ model)
corporate computing. The cloud becomes
very different ways. The users are completely separated from each other, and the flexibility of the
infrastructure allows for computing loads to be balanced on the fly as more users join the system.

2. CLOUD VS ON-PREMISE COMPUTING
Source: http://en.wikipedia.org/wiki/Cloud_computing
The key aspects of IT infrastructure, hardware, facilities, and administration have
traditionally been the domain of IT departments within each company. Dedicated personnel install
and configure servers, routers, firewalls, and other devices in support of
This equipment requires dedicated housing as well as environmental controls, emergency power, and
security systems to keep it functioning properly. Finally, every company allocates additional space
where IT personnel work to sup
infrastructure has evolved on its own, yet
example, a company purchases software it needs and then purchases a server to run it. If data storage
is necessary for files or databases, disk arrays and hard drives are added into the mix to
accommodate the needs of the company. A local network is maintained to provide employees access
to IT resources, and high speed internet connectivity for voice and
account as necessary. Practically speaking, each IT system has its own management system, with
some systems requiring the addition of a specialized worker to the staff. Infrastructure as a service
takes the traditional components of IT infrastructure, takes them off site, and offers them in one
unified, scalable package to companies who can manage them through one management interface.
Infrastructure as a service results in IT services that easily conform to the changing require
business. Because the infrastructure does not reside on the premises, obsolete equipment, upgrades,
and retrofits no longer play a role in the company's decision to adopt new technology [4]
Table 2.1 Summary of the comparison of IT system used i
Characteristics
Ownership Buying of software, Hardware etc
Cost
Upfront investments and costs for
installation/maintenance
IT Function
Buys, installs, develops, implements
and maintains their own software
Expertise
needed
In-house software expertise needed for
control and maintenance
PREMISE COMPUTING
http://en.wikipedia.org/wiki/Cloud_computing
and configure servers, routers, firewalls, and other devices in support of their respective employers.
where IT personnel work to support the infrastructure that is in place. Every aspect of IT
infrastructure has evolved on its own, yet-until now - has not moved toward integration. For
to IT resources, and high speed internet connectivity for voice and data is added to the company
ts of IT infrastructure, takes them off site, and offers them in one
Infrastructure as a service results in IT services that easily conform to the changing require
no longer play a role in the company's decision to adopt new technology [4]
Summary of the comparison of IT system used in manufacturing industry.
On-Premise Cloud Computing
Buying of software, Hardware etc
Renting as-per-
ownership.
Upfront investments and costs for local
installation/maintenance incl. licenses.
Pay-per-use or pay
Buys, installs, develops, implements
and maintains their own software
Subscribe, plug in and use: no
need for an IT function and no
concern of updates
house software expertise needed for
control and maintenance
Usage expertise required
com)
editor@iaeme.com
their respective employers.
port the infrastructure that is in place. Every aspect of IT
has not moved toward integration. For
data is added to the company
ts of IT infrastructure, takes them off site, and offers them in one
Infrastructure as a service results in IT services that easily conform to the changing requirements of a
no longer play a role in the company's decision to adopt new technology [4]
n manufacturing industry.
Cloud Computing
-use without taking
se or pay-per-period
Subscribe, plug in and use: no
need for an IT function and no
concern of updates
Usage expertise required

3. PROSPECT OF ADOPTING CLOUD COMPUTING IN MANUFACTURING INDUSTRY
IN INDIA.
As Cloud Computing is still in its infancy in India, current adoption is associated with
numerous benefits.
The manufacturing sector plays an important role in the Indian economy, both as a significant
contributor to GDP, as well as a source of employment to a large section of the Indian population.
Consisting largely of medium and small sized enterprises, the Indian manufacturing sector is
highly fragmented. it is estimated that SMEs account for 45 percent of industrial output. The rest
comes from either the large companies (domestic companies and MNCs operating in india) or the
micro enterprises spread all across the country. A large part of the MSMEs are present in clusters
spread across the country.
CURRENT IT ADOPTION AND BUYING BEHAVIOR:
On an aggregate level, the larger companies have higher adoption of it, as compared with smaller
businesses. The current it needs and buying behavior are summarized below:
Large enterprises: this segment can be divided into two parts
i) Late adopters of IT (old set–ups with greater dependence on legacy systems)
ii) Early adopters. while the former are focusing largely on having the basic systems upgraded, the
latter are looking at enhancing their operations through greater application of it over and above the
standard ERP and CRM solutions. In terms of the need for IT, most of the IT purchase is based on
smaller contracts and large outsourcing deals.
SMEs: This segment accounts for about 45 percent of the country’s total manufacturing output, but
does not spend much on IT. They tend to use IT only for the most critical applications, based on the
respective industries they operate in. Most of them do not have a complete ERP implementation in
place, and tend to use only the parts of it that are most critical to their functioning. Being cost
sensitive, SMEs prefer to use the cheaper local versions of ERP software. The buying, therefore, is
largely through local vendors.
Micro–enterprises: The smallest of the companies use IT primarily for document processing and
management.
The IT system in automotive companies needs to be linked to those of their vendors
(ancillaries) so that just–in–time delivery can be ensured.
Most manufacturers are price sensitive, and hence have typically not spent much on IT. Most
companies in this sector spend less than a percent of their revenues on IT.
BUSINESS TRENDS DRIVING IT ADOPTION
Operational improvements: Indian manufacturing companies are facing challenges from foreign
players that are setting up shops in the country, as well as from new domestic players arriving on the
scene. In the face of this competition, it is important for industry players to move toward better and
more efficient processes, and to bring about these changes, greater use of technology is inevitable
Cost optimization: In the light of the recent slump in demand, as well as the massive influx of
cheaper products from other low–cost countries, Indian companies are actively looking at ways to
reduce their operational costs and discretionary spending.

Government initiatives promoting use of technology: The Government is taking steps to
make the sector more competitive by setting up the NMCC (national manufacturing competitiveness
council).It has also taken specific steps to give a fillip to the use of technology in this sector
I) Reducing duties or providing subsidies for technology upgrades in pharmaceutical, textile and
food processing companies.
II) Introducing schemes for technology development in MSMEs, sensitizing smes to it and
emerging trends like cloud
CONCLUSION
Adoption of Cloud Computing is Low–cost solutions and delivery for MSMEs. Considering
that this is a highly price sensitive segment, cloud based solutions for both applications as well as
infrastructure could well be the answer to the demands of MSMEs. Shared applications and
infrastructure will provide them access to the IT at affordable rates. subscription based deployment
models (SaaS—Software as a Service) for various applications, including ERP, could be the way
forward for MSMEs. This helped them increase productivity, shorten sales cycle and improve
decision making due to greater visibility and insight.
Greater infrastructure outsourcing by larger companies: a large number of the bigger
enterprises still manage their IT in–house. As they look for cheaper alternatives, many of them,
particularly those with higher IT adoption and multiple locations, will find it cheaper to outsource
their IT infrastructure. Private Cloud could also be a potential area of investment. Hero motocorp,
for example, has put its entire dealer management system on the cloud
At its highest level of impact, cloud computing is ushering in an era in which enterprises
themselves will become virtual. Corporations will manage complex ecosystems of cloud providers,
IT suppliers and business process outsourcers as well as a host of other parties, both internal and
external.
REFERENCE
1. “5 Essential Characteristics of Cloud Computing, Giving Meaning to Cloud Computing Jargon
By Eric Chabrow, October 25, 2011 http://www.inforisktoday.com/5-essential-characteristics-
cloud-computing-a-4189 (12/11/2014).
2. “Cloud Computing-A New Way To Roll Out E-Governance Projects In India” by
International Journal of Computer Engineering and Technology (IJCET), ISSN 0976-6367
Volume 4, Issue 2, March – April (2013).
3. Ministry of Communication and Information technology web Site, Government of
India, www.mit.gov.in.
4. http://cloudstoragestrategy.com/2010/01/cloud-storage-for-the-enterprise---part-2-the-hybrid-
cloud.html By Steve Lesem .
5. http://aws.amazon.com/security/.
6. http:// www.wikipedia.org/
7. http:// www.ibtimes.com/articles/33477/20100708/car-sales-indian-auto-industry.htm.
8. Gartner Hype Cycle for Cloud Computing, 2009.
9. KPMG India Cloud Publication: Changing the ecosystem.
10. http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf.
11. S.K. Gupta, Dr. R.V. Singh, Dr. V.K. Mahna, Rajender Kumar, “Lean Implementation In
Manufacturing Industry: A Case Study” International Journal of Industrial Engineering
Research and Development (IJIERD), Volume 3, Issue 1, 2012, pp. 13 - 20, ISSN Online:
0976 - 6979, ISSN Print: 0976 – 6987.

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