competitive landscape: eices in china and india · the iaas market in china and india is still in...

7/6/13 Competitive Landscape: Enterprise Cloud IaaS Services in China and India

www.gartner.com/technology/reprints.do?id=1-1CFEXBJ&ct=121009&st=sb 1/12

Competitive Landscape: Enterprise Cloud

IaaS Services in China and India

25 September 2012 ID:G00229240

Analyst(s): To Chee Eng, Vincent Fu

VIEW SUMMARY

Cloud infrastructure as a service is emerging in China and India, two underserved markets withenormous potential for cloud adoption in the long term. This report discusses how early providers areaddressing the market.

Overview

Key Findings

Cloud infrastructure as a service (IaaS) services are emerging in China and India, led by largedomestic players that are typically strong in a related segment such as hosting, telecom, or ITservices. Global cloud players are still largely absent.

There are significant differences between China and India. Chinese providers are focused on publiccloud services for the small or midsize business (SMB) market, leaving the large enterpriseunderserved. In contrast, there is a broader range of providers in India that target largeenterprises, besides several strong players targeting SMBs.

The players are investing in high-quality data centers and cloud infrastructure in their markets,with local service and support. The close proximity of their cloud infrastructure to customers in thecountry improves performance significantly and also addresses concerns over the location andsecurity of data.

Several innovative international companies are using partnerships with local players withcomplementary attributes, such as data centers or access to local markets, to mitigate their risksand gain quick access.

Recommendations

IaaS providers wanting to address enterprise opportunities in these markets need to set up localcloud infrastructure, sales, service and support to compete against domestic providers thatdifferentiate through their superior local market presence.

More international players will enter these markets in due course. Due to the large geography ofIndia and China, late entrants or those without deep financial resources will need local partners tocompete.

For most providers, there is limited differentiation at the cloud infrastructure level. They will needto offer added value or a broader portfolio of cloud and related services such as managed services,security, and communications and collaboration apps to enhance their value proposition.

TABLE OF CONTENTS

CONTENTS

AnalysisCompetitive Situation and Trends

Market Overview and RevenueDefinitionsPricing Options

Drivers and InhibitorsMarket PlayersThe Future of CompetitionCompetitive Profiles

China's Cloud IaaS ProvidersAliyun

Market Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

China Telecom Cloud CompanyMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

DatapipeMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

STRATEGIC PLANNING ASSUMPTION

More cloud providers will emerge in China and India by2015, allowing multinational companies to site their ITinfrastructure within these two big emerging marketsto support domestic requirements.



Table 1. Enterprise Cloud Providers in India and China

Grand CloudMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

IIJMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

India's Cloud IaaS ProvidersDimension Data and BSNL

Market Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

Reliance CommunicationsMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

Sify TechnologiesMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

Tata CommunicationsMarket Overview and RevenueGeneral Product/Service Marketing StrategyHow This Provider Competes

References and Methodology

TABLES

AnalysisIaaS providers are beginning to emerge in China and India, the two biggest emerging markets. This willenable multinational corporations (MNCs), which currently site their IT infrastructure in a regionallocation in Asia, to locate their cloud infrastructure in these markets. This will also improve performancesignificantly for their end users in these countries, due to the proximity of the cloud infrastructure. It'salso an important consideration in the long term as many MNCs are likely to have more business inChina and India than in the rest of Asia.

The IaaS market in China and India is still in the early stages of development, but there are sufficientplayers in the marketplace to jump-start the service. The early providers tend to be large domesticplayers already strong in related segments, such as hosting, telecom or IT services. In contrast, themajor international cloud players are absent, as their attention is focused on opening up developedmarkets such as Australia, Singapore, Hong Kong, and Japan, where the near-term opportunity ishigher.

While there are similarities between India and China, such as market size and IT maturity, there arealso significant differences between the two markets:

In China, the providers are more focused on public cloud services for SMBs. They have modeledthemselves on disruptive players such as Amazon Web Services (AWS), including its technologyapproach and service model. They are also leveraging China's booming e-commerce market, whichhas a huge ecosystem of SMBs, to draw customers to their services.

Some of the Chinese providers also target large enterprises. But they are generally not ready for thisopportunity, leaving a big potential market underserved. They lack the skills set and experience tosupport this segment. Their SLAs and support capabilities are also basic. They are likely to upgradetheir capabilities after they find some success in the SMB segment, but this will take time.There are very few foreign cloud providers in China, partly deterred by regulatory restrictions. Cloudproviders need a license to offer cloud IaaS services in China. As the licensing scheme is new and theevaluation criteria unclear, it is difficult for foreign providers to get a cloud license. So far, only a fewproviders such as Datapipe (U.S.) and Internet Initiative Japan (IIJ) have managed to enter themarket, offering services through partnerships with local players to support MNCs with cloudrequirements in China.

In contrast, India has a wider choice of service providers. Many of the large providers are focusedon large enterprises, but there are also up-and-coming providers offering public cloud services forSMBs.

In this research, we only highlight providers that target large enterprises, and whose business andservice profile are best suited for MNC requirements. Enterprises that want to widen their choice ofIndian providers or get a deeper understanding of the providers should see "Competitive Landscape:Indian Utility and Cloud IaaS Providers."The Indian providers in this report are large communications service providers (CSPs) and hostingplayers. They have experience supporting large enterprises, including MNCs, with their network andhosting requirements. They also have a portfolio of managed services, including remote IT andnetwork infrastructure, security, and communications services. While they don't have a strongmarket position in operating IT infrastructure, they are nevertheless better positioned to addresslarge enterprises than the Chinese providers.

This research offers senior executives and strategic planners of cloud service providers anunderstanding of the competitive landscape, so that they can participate successfully in thesepotentially fast-growing markets.



Table of Contents

Competitive Situation and TrendsMarket Overview and Revenue

Cloud IaaS is a standardized, automated, and multi-tenanted offering where computing, storage and

networking resources are owned and operated by a service provider, and offered to customers as a

service. The service is available on demand, and customers can self-provision the service through a

Web-based portal. Pricing is based on usage or a fixed monthly charge. Managed and professional

services are often included as options, and some providers provide API access to their infrastructure.

Definitions

Significant confusion exists in the marketplace about the types of cloud services available, largely due to

the different ways providers label their services, including public cloud, virtual private cloud, virtual data

center and private cloud.

Gartner defines cloud IaaS as:

Public cloud — This is a multi-tenant offering, hosted in the service provider's data center.

Customers typically subscribe on a per-virtual-machine basis with no commitment. But providers

targeting large enterprises are allocating part of their shared infrastructure to each customer,

allowing them to operate it like a virtual data center, with the ability to scale up or down

resources. Providers typically label this as a virtual private cloud or virtual data center, but since it

is essentially a shared environment, it is actually a public cloud.

Custom private cloud — This is a single-tenant offering, customized for each customer,

although a reference architecture may be used to provide some degree of standardization. It can

be hosted in the provider's data center or in a customer's data center.

This document focuses on public cloud IaaS services, based on the above definitions. Custom private

clouds are not essential to this report, because they are akin to traditional data center outsourcing and

managed hosting. Nevertheless, we briefly mentioned private clouds for providers that support hybrid

cloud or hosting services.

Pricing Options

Public cloud IaaS is commonly priced in one of two ways:

Paid by the virtual machine (VM) — The customer pays for each VM, based on the amount of

CPU, RAM, and storage allocated.

Shared-resource pool — The customer pays for an overall allocation of CPU, RAM, and storage

capacity, and decides how to allocate that capacity to individual VMs. The customer is often

allowed to oversubscribe his allocated capacity.

The full scope of options in the cloud IaaS market is discussed in "Evaluating Cloud Infrastructure as a

Service."Revenue for the cloud IaaS market in Asia/Pacific are expected to rise from $861 million in

2011 to $3,423 million in 2016, a compound annual growth rate of 31.8%. This is discussed in detail

in "Forecast: Public Cloud Services, Worldwide, 2010-2016, 2Q12 Update."

Table of Contents

Drivers and Inhibitors

The key competitive forces influencing the marketplace in China and India are:

Stage of market development — The cloud IaaS services market in China and India is at an

early stage of development, but is shaping up quickly. Service providers and offerings for the

domestic market are now available, which will, in turn, stimulate interest and demand for the

service.

Competitive landscape — The market is led by domestic players, eager to tap the potential of

their home markets and get a head start over global cloud players that are currently focused on

developed markets. In China, most providers are focused on SMBs, leaving the enterprise market

under-addressed. In contrast, there are more providers in India targeting the enterprise market.

Local infrastructure and presence — Providers are investing in high-quality data centers and

cloud infrastructure in cities in their country, backed up by local service and support, to

differentiate themselves from offshore cloud providers that lack local infrastructure and presence.

However, these capabilities are still new and basic.

Better performance and security — The close proximity of the cloud infrastructure to

enterprises in the market will improve performance significantly due to shorter network latency. It

will also address the question of location and the security of data, which is a major concern for

many large enterprises and government.

Competitive pricing — Competition is still in its nascent stage, but the increasing number of

providers in the marketplace will force players to keep their prices competitive, currently

benchmarked against public cloud pricing. This will stimulate demand for the service and

accelerating adoption.

Limited enterprise experience and differentiation — Most of the players in China and India

have little experience or track record of supporting enterprise IT environments. They also lack

sufficient differentiation. These factors will delay large scale adoption by big enterprises, even if

current take up is encouraging.

Table of Contents

Market Players



Cloud IaaS providers are emerging in China and India. They range from Internet players to IT service

providers to CSPs. They come with different strengths and weaknesses, and approach the market based

on their competitive attributes and business goals. The players were selected for this research based on

the following criteria:

They must actively offer cloud services to customers in the country.

They should have cloud infrastructure in the country.

They should preferably target large enterprises, including MNCs.

Preference is given to early innovative players. Innovation can be based on technology, business

model, go-to-market strategy or other relevant factors.

Large players with the ability to impact the marketplace.

We selected nine players for the study, as detailed in Table 1.

Table 1. Enterprise Cloud Providers in India and China

Business Type China TargetSegment

India TargetSegment

Internet players Aliyun

Grand Cloud

SMBs

SMBs

- -

Hosting providers Datapipe (U.S.)

IIJ (Japan)

MNCs

MNCs

- -

Communications service

providers

China Telecom Cloud

Company

Large

enterprises

SMBs

Reliance

Sify

Tata

Communications

Large

enterprises

MNCs

Large

enterprises

MNCs

SMBs, large

enterprises

MNCs

IT service providers - - Dimension

Data/BSNL

Large

enterprises

Government

MNC = multinational corporation;; SMB = small to midsize business

Source: Gartner (September 2012)

Table of Contents

It's important to note that the cloud IaaS services market in China and India are in their early days,

and none of the providers have substantial revenue or large market share. They have rolled out their

cloud infrastructure and introduced their services to the marketplace.

Table of Contents

The Future of CompetitionWe expect the market to evolve in the following ways during the next three to five years, based on the

competitive forces at work today.

Competition will heighten — More players will enter the marketplace, as both China and Indiagain further maturity in cloud adoption. Due to the fairly closed nature of these markets, most of

the new entrants are likely to be domestic players, although we expect the entry of international

players as well.

Entry of international players — International cloud players currently focused on thedeveloped markets will turn their attention to China and India to tap the potential of these

markets. Most are likely to target the large enterprise market directly, offering premium solutions

with enterprise-grade service and support.

Potential of partnering — Due to the large geography of India and China, some of the moreinnovative international players will seek partnerships with local players with complementary

attributes, such as data centers or market access, to mitigate risks and gain access to customers.

This option has been explored in both markets, in particular China due to regulatory restrictions,

but will pick up as the markets gain more maturity.

Table of Contents

Competitive ProfilesChina's Cloud IaaS Providers



Aliyun

Market Overview and RevenueAliyun, a subsidiary of Alibaba group, was established in September 2009 with the objective of buildingan advanced distributed cloud computing service platform. Based in Hangzhou, Aliyun has R&D centersin Hangzhou, Beijing, and the Silicon Valley in the U.S. Strongly supported by its R&D team, Aliyun hasdeveloped its proprietary distributed computing platform called Apsara. Apsara has high reliability andcan process high-volume traffic and large amounts of data.

Aliyun has adopted open-source Xen to develop its hypervisor (a VM manager). The cloud-managementplatform is developed in-house. Aliyun focuses on public cloud computing services and offers IaaS,platform as a service (PaaS) and software as a service (SaaS). The company is committed to supportingthe growth of the Alibaba Group and the whole e-commerce ecosystem as well as external customers.

Supported by Alibaba, Aliyun can leverage its parent company's large business-to-business, business-to-consumer, and consumer-to-consumer user base and existing IT and data-center infrastructure. Itgives the company an advantage to achieve success in the early stages of the cloud market in China.

General Product/Service Marketing StrategyAliyun offers a choice of cloud to address broad requirements:

Elastic Compute Service (ECS) — Provides a wide choice of VMs in a multi-tenant environmentfor different use-case requirements. It uses self-service portal and online ordering andmanagement, supported by automated provisioning. Its hypervisor is based on Xen open-sourcesoftware. It offers subscription-based pricing with a choice of payment options using credit cards orAlipay, which is a popular e-commerce online payment system in China.

Open Storage Service (OSS) — It offers a scalable object-based storage service. Users canupload their data through a standard representational state transfer (RESTful) interface. It offersJava, .NET, Python and PHP (a scripting language) software development kit (SDKs) that allowusers to store Web data and backup business and application data.

Open Table Service (OTS) — It offers virtualized data-store services for applications that needreal-time and big data store and query.

Open Data Processing Service (ODPS) — It offers big data store and offline data processingservice.

Other cloud-based services — It also provides cloud-related services — such as security as aservice, monitoring as a service and software load balancing. It adopts distributed firewall toimplement the isolation between VMs and physical servers. It also offers relational databaseservices (RDS), cloud-search, cloud-map, and cloud-email services.

How This Provider CompetesAliyun uses its own three data centers in Beijing, Qingdao, and Hangzhou to support its public cloudservices. Its hardware infrastructure purchases are from major vendors;; for example, servers from IBM,Dell, and HP and storage from EMC. With support from the Alibaba group, Aliyun has developed itsproprietary infrastructure platform Apsara, which is a distributed computing and storage system. It canprovide high server availability through redundancy, and the capability to process large data rapidly. Thecapability to build high-availability Apsara infrastructure is often seen as one of the company's corecompetitive capabilities that differentiate it from its competitors.

Aliyun targets SMBs, B2B businesses, Internet technology companies, and midrange enterprises. Thecompany provides a choice of big data-oriented cloud services to address all requirements, such asserver hosting, data storage, e-commerce data mining, processing and so on. It enables Aliyun toprovide a one-stop-shop cloud service for e-commerce companies and SMBs. Aliyun is building up itscloud ecosystem by encouraging Alibaba's large number of e-commerce partners and developers tomigrate to its cloud platform.

Aliyun provides good data security for its customers. The availability of customer data is guaranteed bythe mechanisms of hardware isolation and redundancy. Since 80% of hardware failures are caused by ahard-disk error, Aliyun guarantees data safety by its distributed dispersed storage that stores multiplecopies of customer data in different nodes and cabinets. Customers can select the number of copiesneeded. It can guarantee single hardware or data-center failures won't cause the loss of customer data.

Besides a self-service portal, Aliyun's cloud services (for example, enterprise cloud services) also offer anopen RESTful API and SDK for their customers and developers to build their own applications, Aliyunmakes these available both online and through telephone pre-sales and post-sales engineers to supportcustomers.

China Telecom Cloud Company

Market Overview and RevenueChina Telecom (CT) is the incumbent local carrier in China. It also has a significant data center co-location and hosting business. CT has more than 300 data centers across China with over 1 millionsquare meters of space in total. More than 70% of Internet content service providers host their serversin CT's data centers. CT launched its cloud computing plan "e-cloud" in 2009. The trial of e-cloud hasbeen conducted in six cities and provinces including Beijing, Shanghai and Guangdong, Jiangsu,Zhejiang and Sichuan. In March 2012, CT established a stand-alone entity company named ChinaTelecom Cloud Company, which focuses on its cloud computing business.

CT cloud's strategy is to integrate its internal network and IT resources as well as hire professionalsexternally to develop its own cloud platform and offer a full-range of cloud services. It has designed anaggressive product road map and plan to roll out all aspects of cloud services by the end of 2013 forboth business and personal cloud users. CT's business objective is more than 12 billion yuan in revenuefrom cloud services within three years.

General Product/Service Marketing StrategyCT Cloud offers a choice of services to address different use-case demands:

Compute cloud — Offers the choice of VMs and dedicated servers in a multi-tenant environment.



It offers a choice of predefined configurations to suit different use-case requirements. It providersusage-based pay-as-you-go pricing with payment granularity by the hour. It also providessubscription-based pricing with monthly or yearly charges.

Cloud storage — Offers virtualized, block-based storage services for applications which requirelarge data storage and backup. Pricing is based on a monthly subscription charge. Thedevelopment of object-based storage service is completed and will be commercially launched inSeptember 2012.

Enterprise cloud — Uses a multi-tenant environment and offers the choice of VMs and dedicatedservers. It targets midrange enterprises, large enterprises and government bodies. It uses HP andCisco servers and EMC storage. It provides enterprise-class SLAs and customized services, such ascustomized storage and firewalls to address different requirements.

Other cloud services — Includes elastic network services, cloud database services, SaaS andPaaS services. On-demand network services including on-demand bandwidth, virtual firewall andvirtual load balance and so on. Cloud database services offer relational database managementsystem (RDBMS) and NoSQL database services. SaaS includes cloud ERP, cloud open access and soon. PaaS encapsulates SMS, Multimedia Messaging Service (MMS), location-based services (LBS)and billing platform and capabilities.

How This Provider CompetesCompared to its legacy business, CT has adopted a different approach to developing its cloud computingbusiness. It has hired top management and professionals from the external IT industry to overcomeany obstacles from its legacy business.

CT Cloud has rolled out four high-grade data centers as regional hubs, which are located in Beijing,Shanghai, Guangdong and Sichuan provinces to support its cloud services in northern and easternChina and in the south and west of the country. CT Cloud has invested a total of 20 billion yuan to buildup its fifth cloud data center in Inner Mongolia, which has an abundant energy supply. The first phaseof the project will be completed in June 2013 with a 400,000-server capacity. CT Cloud also planned tobuild up another large data center as a backup facility. The location has not been chosen yet. CT Cloudinterconnects these data center facilities via high-speed Ethernet to provide better performance andcentralized management.

The company has developed its cloud management platform by itself in-house. It uses commonplatforms to support two hypervisors — Citrix XenServer and VMware vSphere. From the product roadmap perspective, CT Cloud's strategy is to gradually move its VMware hypervisor to open source.

CT Cloud provides standard SLAs for both of its cloud services. It includes 99.9% power availability and99.9% network availability as well as 99.9% server availability and 99.995% block storage availability.A self-service customer portal is available. It provides use of online ordering and service management,which is backed by an automated service provision.

CT is a large carrier, with deep pockets, that can bundle a whole range of related services, with someexperience supporting large enterprises with connectivity. It differentiates itself through its extensivenetwork infrastructure, data center resources, local service and support capability. It has a largeenterprise customer base. CT Cloud provides account management for its enterprise customers, andoffers customized services such as VPN, virtual load balance, virtual firewall and disaster recoveryservices to widen its value proposition.

Datapipe

Market Overview and RevenueDatapipe is a U.S.-based cloud provider offering managed and outsourcing services for ITinfrastructures. It has a global cloud infrastructure, with the ability to support large enterprises withregional requirements in Asia, in particular China. Its ability to support cloud services in China is fairlyunique as few foreign players are able to enter the market because of regulatory restrictions.

It supports multiple cloud environments, with management via a single customer portal. It offers a fullrange of IT infrastructure and related services, including cloud computing, hosting, security, storageand applications. It further differentiates itself through its managed services capabilities and enterprise-class service and support, comparable to traditional IT services.

General Product/Service Marketing StrategyDatapipe's Stratosphere Elastic Cloud offers the following choice of cloud services:

Virtual private cloud, using multi-tenant infrastructure

Hosted private cloud, using dedicated infrastructure

Hybrid cloud, via extensions to:Dedicated infrastructure in Datapipe's datacenters or customers' premises

AWS

It provides a choice of hypervisors, including VMware vSphere, open-source KVM, and Citrix Xen.Datapipe has a broad cloud ecosystem and range of tools for support, including the CloudStack API,VMware APIs, RightScale, enStratus, and New Relic. Customers can service their infrastructure via APIor portals or use Datapipe's managed support teams to provide management and governance functions.

For hybrid clouds, Datapipe provides integration capabilities across a variety of networks anddeployment models. These include Datapipe hosted services (for example, Oracle real applicationclusters as a service), customer on-premises data centers, and AWS (Datapipe is an AWS direct connectsolution provider and advanced consulting partner).

Stratosphere Elastic Cloud is available to customers directly, in partnership with data center partners(such as Shanghai Data Solution [SDS]), or via consulting and system integration partners that canwhite-label the solution as part of a bundled customer offering. The cloud management portal offersself-provisioning capability for different cloud platforms, including private clouds and AWS.



Support covers the entire infrastructure, including compute, storage, network, and security. Customerscan also take advantage of Datapipe's cloud provisioning and scaling services, monitoring, database andapplication experts, as well as 24/7 issue response and resolution. Datapipe customers also have accessto its cloud architects and engineers to assist in designing and integrating cloud services.

How This Provider CompetesDatapipe operates two cloud data centers in Asia. Its Hong Kong data center supports both regional andChinese requirements while its Shanghai data center supports enterprises with intensive domesticneeds within China. The data centers are located in Tier 3+ grade facilities and are secured with longleases. They are connected via private high-speed connections to its cloud data centers in Europe andthe U.S. to form a global cloud platform.

Its cloud service in China is offered via a partnership with SDS, a major hosting provider in China withlicense to offer cloud computing services. In partnership with Equinix, SDS plans to establish new datacenter facilities in Guangzhou, Beijing, and Chongqing. Datapipe plans to leverage its geographicexpansion to provide better national coverage in China.

Most providers base their cloud platforms on a specific vendor technology such as VMware or VirtualComputing Environment. In contrast, Datapipe designed its offerings to support different enterprise usecases. It provides a neutral cloud infrastructure that can support multiple hypervisor technology, as wellas support the interaction with other private and public cloud platforms, such as AWS, using a singlecloud management portal.

It provides a suite of managed services for a fixed fee. Services include administration services for Webservers, OS, database, network and applications;; patch management;; application and systemmonitoring;; backup and restoration as well as 24/7 technical support.

It also provides enterprise-grade service and support, an important consideration for large enterprises.It provides 99.99% service availability, clear explanations about how it provides availability and securityof customer data, and 24/7 technical support. In addition, a project manager and client-relationshippartner are assigned to the customer throughout the service contract period.

Grand Cloud

Market Overview and RevenueShanghai-based Grand Cloud is a wholly-owned subsidiary of Shanda Interactive Entertainment, aleading interactive entertainment media company offering a broad array of online entertainmentcontent in China. Grand Cloud was established in 2011, focusing on public cloud computing services.Grand Cloud leverages its parent company's IT infrastructure and resources and is supported by thegroup's "innovation house" — Shanda Innovations. It operates an AWS-compatible cloud computingplatform, where the cloud management platform is developed in-house. Its cloud services and featuresare fairly similar to those of AWS. It reported more than 40,000 registered users as of July 2012,mostly SMBs.

General Product/Service Marketing StrategyGrand Cloud is one of the early public cloud service providers in China. It focuses on public cloudservices that provide a wide variety of cloud computing services in a multi-tenant environment in oneplace.

The company provides rich product portfolio, including:

Compute Cloud (C2) — Provides elastic compute resource with a wide choice of virtual serversin a multi-tenant environment for different use-case requirements. The company introduced itsElastic Compute Unit (ECU), similar to Amazon's ECU, as a basic computing unit for its users,where four elastic compute units (ECUs) provide the equivalent CPU capability of a 1.8 to 2.2GHzIntel Xeon or AMD Opteron processor. Grand Cloud allows users to scale up and down to selectcomputing resources in terms of ECUs or user requirements. C2 instances can be initialized withinminutes on demand, and various operating systems including Windows, CentOS, RHEL, andUbuntu, are supported. Pricing can be a usage-based pay-as-you-go model with paymentgranularity by hours. It also provides subscription-based pricing with monthly or yearly charges. Aself-service online ordering and management portal is also available for customers.

Block-Based Storage — Grand Cloud offers virtualized block-based storage services. It providesexpandable block storage devices for C2 to store persistent data such as database data and otherapplication data which requires high data durability. Pricing is a usage-based model that allowsusers to only pay for what they use. Grand Cloud is the first service provider that offers block-based storage services in China.

Cloud Storage (CS) — Grand Cloud's CS provides scalable key-value form of data storageservices. Data in CS is accessed via APIs that are compatible with HTTP REST. It offers a scalableobject-based storage service used for applications that need Internet-accessible storage,repositories for data, and backup. Pricing is usage based as well.

Other cloud services — Grand Cloud also provides Cloud Database Services (CDS) and on-demand content delivery network (CDN) services. Grand Cloud's CDS supports a variety ofdatabase types including relational databases such as MySQL and NoSQL databases such asMongoDB. It utilizes Grand Cloud block-based storage to ensure dynamic expansion of storageresources. and also uses cloud storage to store database data and operations logs. Grand Cloudprovides on-demand CDN services for websites or multimedia contents using a network of edgenodes across the Asia/Pacific region. Grand Cloud also provides other value-added services such asCloud Security Service (CSS) and Cloud Monitoring Service (CMS). Grand Cloud CSS scans Webpages and C2 ports and reports common Web security problems and network vulnerabilities. CMSprovides monitoring services to monitor website availability, home page response time, and serverresource utilizations.

How This Provider CompetesGrand Cloud's strategy is to build up a common cloud-based IT and data center infrastructure tosupport external public cloud services as well as its internal IT infrastructure transformation. GrandCloud currently uses two large data centers which are leased from carriers to support its public IaaS



services. The two data centers are located in Beijing and Wuxi with good interconnectivity with majornetwork service providers, which is important to solve access performance issues due to the well-knownnetwork interconnection issue in China. The available capacity of the data centers is around 10,000square meters with a Tier 3 rating. The company is planning to establish its own cloud data centerswithin the next few years in southern China and in the middle and west of the country to support itsbusiness expansion.

Grand Cloud targets the following customers:

Internet technology companies, technology startup companies, and mobile applicationdevelopers — These segments put higher priority on "time to market" as the emphasis is onacquisition of users or traffic rather than just saving costs.

SMBs — The wide range of public cloud offerings can address their requirements oninfrastructure, security, and backup through a self-service portal.

Government agencies and education organizations — The public cloud offering can helpthem to host their portal and share information with their partners and users.

As one of early players, Grand Cloud provides the most complete public IaaS platform in China, offeringa wide variety of services and flexible pricing models for different requirements to differentiate fromother providers. Its price is competitive. For example, its standard C2 service with eight ECUs, 4Gbmemory and 60Gb storage costs 0.67 yuan per hour.

Grand Cloud provides SLA for its cloud services, including 99.9% network availability and 99.9% poweravailability. Grand Cloud also provides on-demand load balancing, auto-scaling services and AWS-compatible RESTful APIs, which is helpful to enterprises that are migrating from private cloud to itspublic cloud service platform.

Grand Cloud is starting to offer professional services and dedicated account managers to its strategicenterprises customers and government and education industry enterprises to help them assess andimplement a public cloud solution.

IIJ

Market Overview and RevenueInternet Initiative Japan (IIJ) is a leading Internet and network service provider in Japan. It offerssystem integration, data center hosting and Internet connectivity services in Japan. IIJ has developedits cloud computing service "IIJ GIO" by using in-house software from 2009, which enables IIJ toprovide price-competitive hosting services to Japanese MNCs. IIJ developed its cloud data centers byusing a shipping container that has been specially adapted to accommodate IT equipment.

In March 2012, it expanded its system integration service and hosting services to China. Partneringwith China Telecom, IIJ is rolling out "IIJ GIO" cloud computing services in China.

General Product/Service Marketing StrategyWith its cloud computing services rollout in China, IIJ focuses on the following:

Private cloud — It offers the choice of VMs and dedicated servers using dedicated infrastructurewith a single-tenant environment. It provides an Internet connectivity services option. It alsoallows customers to connect to it with their own private Internet Protocol (IP) address virtual LAN.Pricing is based on a fixed monthly charge.

Public cloud services are still in development, with availability planned in October 2012and January of 2013 — It uses a multi-tenant infrastructure and will support online billing andservice management via a self-service portal. The usage-based pricing model and self-serviceportal will be available in January 2013.

Internet connectivity service — Through partnerships with local ISPs, it offers Internetconnectivity services in China to help customers solve the well-known south-northinterconnection problem. Pricing is based on a fixed monthly charge.

How This Provider CompetesIIJ brings with it strong experience in the Japanese market, and also its support of Japanese MNCs thathave requirements in China. IIJ is executing a two-phased strategy in China. In the first phase, ittargets Japanese MNCs, especially large enterprise customers that have contracts in Japan and apresence in China, as well as emerging social-networking companies and game companies. In thesecond phase, IIJ plans to develop a domestic resale channel in China and provide cloud services toChinese domestic companies in the next few years.

To support its cloud services, IIJ operates a high-grade data center in Shanghai, which is leased from alocal service provider. The data center is around 1,000 square meters and can be physically expandedto accommodate growth in business. IIJ plans to expand its data center presence in the Guangdong andBeijing areas in 2013 and 2014. IIJ is expanding its GIO cloud services to Hong Kong as well.

IIJ supports VMware vSphere, Microsoft Hyper-V and open-source Xen hypervisors, which givesflexibility to its customers. Its servers are purchased from IBM, HP, Fujitsu, and NEC. Storage is fromEMC, Hitachi, IBM, and HP. The cloud management platform is developed in-house.

Utilizing the provision of container data center and in-house-developed service provision andmanagement tools, IIJ can offer price-competitive cloud services to its customers. The sample price forits virtual server V10 is 330 yuan per month with the following configuration: 0.5 core CPU, 1Gbmemory and 30Gb hard-disk drive.

IIJ doesn't offer a standard SLA currently. But it has a good track record of providing a good service andhigh availability in the past. IIJ also provides consulting and professional services for system integrators(SIs), and provides project management and operational account manager to support its customers.

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India's Cloud IaaS ProvidersDimension Data and BSNL

Market Overview and RevenueDimension Data India and Bharat Sanchar Nigam Ltd (BSNL) are jointly offering cloud services in Indiaunder a unique partnership arrangement. Under the agreement, BSNL provided the real estate andconnectivity while the data centers were designed, built, operated and managed by Dimension Data.The cloud service is marketed under the BSNL brand name. The partnership is based on a revenue-sharing model and will last 10 years.

Dimension Data is a global SI with strengths in networking, security, data centers, and communicationsand collaborations applications. It is building up its managed services business, including cloudcomputing. The company is part of NTT Group. BSNL is the incumbent domestic carrier in India, offeringboth fixed and mobile services. It has an extensive network infrastructure in India, including longdistance and access networks.

General Product/Service Marketing StrategyThe cloud service is marketed as a BSNL service. It offers a full range of cloud services, including IaaS,messaging, desktop virtualization, videoconferencing, Web and email filtering, and data backup andrestoration.

The IaaS service provides several options:

Public cloud — VMs in a multi-tenant environment

Virtual private cloud — VMs in a multi-tenant environment

Private cloud — Dedicated servers in single-tenant environments

A self-service customer portal with full cloud online and automation capabilities will be available to allcustomers in October 2012. It is based on the portal from OpSource, a cloud provider acquired byDimension Data.

The hardware infrastructure is based on equipment from Cisco and other leading vendors. For thevirtualization layer, it supports VMware vSphere, with plans to extend the support to Microsoft Hyper-V.It will use a common platform to manage both environments.

How This Provider CompetesThe service will address the domestic market in India, a potentially large market in the long term. It willinitially be aimed at government and public institutions and state-owned companies. This leveragesBSNL's status as a government-owned company, which gives it an advantage when addressing thissegment. The partnership will also leverage BSNL's existing enterprise business sales team. DimensionData has a dedicated local cloud team comprising sales, professional services, and service and support tosupport its partner.

The service is available from six cloud data centers, with a gross area of 62,000 square feet. They arelocated in Jaipur, Mumbai, Ahmedabad, Ludhiana, Ghaziabad, Faridabad. These are Uptime Institutecertified Tier 3 facilities, built to Uptime Tier III and Telecommunications Industry Association 942standards, in addition to International Organization for Standardization 27001 certification. The datacenters are connected through a high-speed backbone network, with a latency of less than 50milliseconds across the country. The ability to provide high-grade data centers in India, which lacksgood hosting facilities, is a major differentiator.

Dimension Data follows a five-level security framework when implementing security in the data center,including physical security, infrastructure security, operational security, audit and compliance, andclient data security. Another differentiator is the focus on security that is built into the cloud service.Unlike many offerings available in the market, the first action that a customer sets is the networksecurity level and firewall, even before a VM is provisioned. In most services today, the network and itssecurity are set once the VM is provisioned.

Other points of differentiation include a broad portfolio of cloud services, a single point of contact forhosting, IaaS, and connectivity, and local presence, service and support. Under its OneCloud PartnerProgram, Dimension Data is also enabling local CSPs in other Asian markets to offer cloud services,using variations of its model with BSNL. Partners include PLDT in the Philippines, Hutchison Telecom inHong Kong, and PT Indosat in Indonesia.

Reliance Communications

Market Overview and RevenueReliance Communications is a major carrier in India, with extensive network and data centerinfrastructure. It's also a market leader in hosting services, with more than 600 enterprise customers,including foreign companies with requirements in India. It is leveraging its strengths in infrastructure,hosting, and managed services to enter the cloud computing market. It is targeting the SMB market,and will provide customized solutions to large enterprises.

General Product/Service Marketing StrategyReliance has been offering an infrastructure utility service for some time, and is scheduled to launch itspublic cloud IaaS service in 4Q12, with full cloud online and automation capabilities.

It will offer:

Public cloud, using multi-tenant infrastructure

Virtual private cloud, using multi-tenant infrastructure

Private cloud, using dedicated infrastructure

It offers a choice of usage-based or subscription-based pricing for its infrastructure utility service. Theprice for a basic configuration is 5,000 rupees ($94) per month. It includes a single core, 1GB RAM,40GB storage, and 100GB of data transfer. The price also includes remote desktop connection,



administration access and control, backup, firewall, IDS and IPS, antivirus, and Windows OS.

The cloud platform is based on the following technologies:

Virtualization software — Microsoft Hyper-V

Server and storage — Vendor neutral

Cloud management platform — NEC, ExtendASP

How This Provider CompetesReliance Communications is setting up two Tier 3 cloud data centers, located in Mumbai and Bangalore,providing a choice of locations as well as redundancy. The data centers are connected to itsmultiprotocol label switching (MPLS) and Internet network.

It has ample room for expansion, either within the facilities or in its other data centers. It has nine datacenters — four in Mumbai, three in Bangalore, one in Chennai, and one in Hyderabad. It is building itstenth data center with 500,000 square feet of capacity.

Reliance offers high reliability, with a 99.99% service availability guarantee. For data availability, itprovides enterprise-class storage with built-in redundancy. Backup data is stored in an off-site secureand fire-proofed facility.

It also provides a suite of security services, including vulnerability assessment, penetration testing,managed firewall, intrusion detection system (IDS) and intrusion penetration system (IPS), securesockets layer virtual private network (SSL VPN), and unified threat management. It also offers otherservices such as hosted Microsoft Exchange, system integration, and data center build and migration.

Sify Technologies

Market Overview and RevenueSify is a major provider of managed network and IT services in India. Based in Chennai, it has morethan 3,500 enterprise customers, including western MNCs with networking and IT infrastructure needsin India. It operates a national IP backbone, with extensive wireless access infrastructure. It is also amajor hosting provider, with a chain of data centers across the country. It is leveraging its network anddata center infrastructure and managed services capabilities to extend into cloud computing. Sifytargets large enterprises and government with a strategy to support them in every aspect of ITinfrastructure requirements, ranging from traditional IT to cloud solutions, with end-to-endmanagement.

General Product/Service Marketing StrategyIts Sify cloudinfinit service offers a choice of services, including:

Public cloud, using multi-tenant infrastructure

Virtual private cloud, multi-tenant infrastructure

Private cloud, using dedicated infrastructure

It offers a choice of usage-based or subscription-based pricing. Its cloud offerings are available throughits cloud portal that allows customers to self-register and subscribe to services by making onlinepayments. Sify also allows check and other traditional modes of payment, with an executive-assistedonboarding program.

Its cloud platform is based on technology from the following vendors:

Virtualization software — VMware vSphere, and VCloud Director, as well as Microsoft Hyper-Vfor private cloud

Servers — HP

Storage — HP and Hitachi

Cloud management platform — VMware vCloud Director, Sify's internal development portal,and HP CloudSystem Matrix

It offers a suite of related managed services, including network and IT infrastructure monitoring andmanagement, analytics, security, and disaster recovery and backup.

How This Provider CompetesSify has two cloud data centers, one in Mumbai and the other in Bangalore. It is building a third inNoida, near Delhi. They are Tier 3 facilities and are connected via Sify's MPLS network to provide anational cloud platform. It is a standard SLA with guarantees of 99.5% to 99.99% service availability,depending on which service is used.

It offers disaster recovery for critical workloads as well as backup and long-term storage of data. Backupdata is stored in fire-proof vaults in a separate data center, either in the same city with a minimumdistance of 25 kilometers or in a geographically distant location specified by the customer. Sify has 24data centers, of which five are Tier 3 facilities and 15 are Tier 2 facilities.

Besides standard security measures for protecting customer data on the cloud platform, Sify alsoprovides a full range of managed security services, including firewalls, distributed denial-of-service(DDoS) detection and mitigation, Web integrity, and Fort Knox services such as OS hardening,vulnerability assessment, patch management, IDS and IPS, and log monitoring. It provides service-levelguarantees for response and resolution time for security incidents.

Sify leverages its existing strengths as an IT services provider, ranging from professional services,system integration, and security, to complement its new cloud infrastructure capabilities. It also has astrategic partnership with HP in India, leveraging HP's Converged Infrastructure to power its cloud IaaSplatform. It has also joined the HP Cloud Agile Program to jointly expand the cloud adoption in India andbuild strong go-to-market initiatives to reach targeted segments.



Tata Communications

Market Overview and RevenueTata Communications is a major carrier in India with an extensive network infrastructure and a widerange of products and services targeted at enterprises. It is an early provider of public cloud IaaSservices in Asia. Its cloud service is innovative, user-friendly and price competitive. Its key targetsegments are midsize and large enterprises in India. On the international front, it supports MNCs withglobal requirements, including networking and IT infrastructure needs in Asia and India.

General Product/Service Marketing StrategyIts InstaCompute is a public cloud service that provides VMs in a multi-tenanted environment. Access isvia the Internet or private network. Tata Communications' MPLS customers can connect directly andsecurely from their network to InstaCompute at no additional charge.

Most cloud providers targeting large enterprise open their portal to select customers only. In contrast,InstaCompute is open to the public, like a typical public cloud service. Customers can order, provisionand manage their resources online in real time. Prices are listed publicly for easy comparison. Pricing isbased on usage, charged hourly, with no term commitment.

Prices are competitive, ranging from 55 cents to $2.49 an hour, depending on the amount of computeresources required. These prices also include free use of firewalls, load balancers, public IP addresses,and inbound data transfer. Customers have a choice of four currencies — rupees, U.S. dollars,Singapore dollars, and euros — for billing purposes.

The company provides service availability guarantee of 99.95%, calculated monthly. Customers get24/7 support via phone, email and customer portal at no additional cost. Large customers will also begiven an account manager.

Besides the public cloud, Tata Communications also offers virtual private cloud on multi-tenantedinfrastructure and hosted private cloud on dedicated infrastructure. It also has a strategic alliance withSAP to provide subscription-based hosted SAP solutions to enterprises through SAP's partnerecosystem.

How This Provider CompetesTata Communications operates two Tier 3 cloud data centers, one in Hyderabad to serve domesticrequirements and the other in Singapore to serve regional requirements. By providing facilities in theselocations, it improves processing performance for customers in Asia due to shorter network latency. Inaddition, it allows customers to host data locally in these locations to meet compliance requirements.The Hyderabad facility is 18,000 square feet, and the Singapore facility is 25,000 square feet. It plansto extend its cloud infrastructure to the U.K., the U.S. and South Africa to provide MNCs with a globalcloud proposition.

Its cloud platform is based on open source software and price-competitive hardware to avoid vendorlock-in and to keep its prices competitive in the long term. It uses Citrix XenServer for virtualization andCitrix CloudStack for its cloud management platform. In contrast, many other providers in Asia arebased on VMware, EMC and Cisco, which offer limited differentiation at the infrastructure level.

InstaCompute has good usage spending control and project governance capability. It offers ahierarchical account management system that allows customers to create multiple projects andconfigure user access according to business needs and policies for security and cost control. Costmanagement is integrated into the service portal and includes configurable spend limits on a per-projectand per-user basis, and the ability to configure spending alerts.

Besides standard security measures for protecting customer data on the cloud platform, TataCommunications also provides a range of managed security services, including DDoS mitigation, IDSand IPS, next-generation firewalls, log analysis, network-based antivirus and anti-spam, penetrationtesting, and vulnerability scans. It also offers a portfolio of related services, which widens its valueproposition for large enterprises. Besides IaaS, Tata offers managed hosting services, communicationsand collaboration services, MPLS and Internet services, and CDN.

Tata Communications is targeting InstaCompute at specific use cases, including test and developmentsand boxes and scale-out Web hosting. At the next stage, it plans to launch an Enterprise Edition IaaSservices incorporating variable multi-tenancy, complex enterprise IT features, hybrid enterpriseintegration and hybrid bursting capabilities.

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References and MethodologyGartner undertook a detailed survey of all providers in this report in mid-2012, to obtain accuratecurrent and road map information. In addition, inquiries and survey data gathered from both providersand end users were used to build its view of the trends in this market.

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