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Cloud Computing in India A CIO Research Center Report

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Contents Summary of Findings.............................................................

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Background............................................................................

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Industry..................................................................................

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CIO-Speak on Cloud Computing Technology Vendors............

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Appendix A............................................................................

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CIO Research Center, provides in-depth research, analytics, and advisory services to CIOs and Technologists. We are focused on helping CIOs make the right technology decisions, both strategic and tactical. We are affiliated with the CIO Association of India, India’s largest independent association of CIOs.

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The CIO Association of India is a member-driven, national, nonprofit organization serving CIOs and Heads of IT in India. CAI serves as the leading voice of the Indian CIO with industry, government, media, and others.

Cloud Computing is no longer considered “hype” by most CIOs. Almost 80% of CIOs believe that it will be an important constituent of their IT strategy within the next one year.

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More than half of the CIO respondents have started evaluating Cloud Computing.

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‘Cost Savings’ is the most important benefit CIOs are expecting from Cloud Computing. This is followed by better scalability and the ability to switch from Capex to Opex.

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Security continues to be the biggest concern for CIOs when looking at Cloud adoption.

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It’s not about Public Cloud or Private Cloud; it is about both.

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Application Hosting (59%) and E-mail (48%) are seen as preferred services that CIOs expect to have on the Cloud in the near-term.

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According to CIOs, Microsoft is best suited for their organization’s Cloud Computing needs, followed by Amazon, IBM, Google, and Salesforce.

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In Large Enterprises (more than 500 PCs), Microsoft (24%) has emerged the strongest contender for providing Cloud based services, followed by Salesforce (13%) and Amazon (12%).

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In SMEs (less than 500 PCs), Amazon (16%) and Microsoft (16%) have a marginal lead over Google (15%). Google has a much stronger perception among SMEs than among Large Enterprises.

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One out of every four organizations is currently using Cloud Computing for (parts of) its IT.

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Among existing Cloud users, ‘Hosting of Applications’ is the most used service.

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Among existing users (overall), Amazon is the leading vendor, closely followed by Microsoft and Google.

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In Large Enterprises (more than 500 PCs) that are existing users, Microsoft is leading Cloud Computing adoption.

Summary of Findings

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In existing SME users, Google has gained the most ground as the Cloud Computing vendor.

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Background Often cited as the most path-breaking technology paradigm today, Cloud Computing is rewriting the rules of the game when it comes to scalability and availability of dynamic computing resources, software platforms and applications. While India is fast adopting global trends, CIOs in the country, have questions about the best way to harness the benefits of Cloud Computing in an evolving IT landscape. CIO Research Center, an affiliate of the CIO Association of India (CAI), launched this survey in November 2010, to understand what CIOs perceive to be the true state of Cloud Computing in the country. It is our belief that this survey report provides useful inputs to Indian CIOs for their cloud computing strategies. CIO Research Center provides in-depth research, analytics, and advisory services to CIOs and Technologists. We are focused on helping CIOs make the right technology decisions, both strategic and tactical. We are affiliated with the CIO Association of India, India’s largest independent association of CIOs. CIO Research Center is grateful to Microsoft for supporting this research initiative. Duration: The survey was launched on November 12, 2010, and responses were accepted till November 16, 2010. Reach: The survey was sent to the CAI member community and received 155 responses.

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Industry The survey received a good response from CIOs across the industrial landscape. IT/ITeS CIOs were the highest in number, followed by manufacturing and financial services.

Industry Education 4%

Media and Entertainment 3%

Telecom 1%

Others 14%

Financial Services 13%

Government and Public Sector 5% Healthcare and Pharma 6%

Manufacturing 17%

Hospitality 1% Infrastructure 2%

IT/ITeS 31%

Retail/Wholesale Distribution 3%

Size of Organization There has been a well-balanced response in terms of number of PCs in the organization. Organizations with less than 500 PCs have been categorized as SMEs and more than 500 PCs have been designated Large Enterprises for the purpose of the report.

Number of PCs

Less than 100 17%

Between 100 and 250 13%

Between 250 and 500 22%

More than 5000 13%

Between 1000 to 5000 19%

Between 500 and 1000 16%

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Key Finding 1: Cloud Computing is no longer considered “hype” by most CIOs. Almost 80% of CIOs believe that it will be an important constituent of their IT strategy within the next one year. While most CIOs will look at Cloud Computing within the next year, there is still a small yet significant number of CIOs (18%) who are not sure about the Cloud. Clearly, CIOs are not unaffected by the benefits of the technology, with only 3% of CIOs disagreeing that Cloud Computing will be an important constituent of their IT strategy.

Cloud Computing will be an important constituent of your organization’s IT Strategy within the next one year. Disagree 3%

Strongly Disagree 0%

Not Sure 18% Strongly Agree 33%

Agree 46%

Key Finding 2: Despite the unique cost models involved, CIOs feel that among all the stakeholders, the CFOs’ interest levels could certainly be better. According to CIOs, there seems to be a fairly high level of interest in Cloud Computing within their organizations. But CFOs rank the lowest, in terms of interest in cloud computing. Overall, CIOs perceive a fair amount of interest in the models from the CEOs and the organization at large.

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Level of Interest 1 - No Interest, 5 - High Interest CEO

3.232

CIO

4.206

CFO

3.026

COO

3.187

IT Team

3.903

Overall Organization

3.394

Key Finding 3: More than half of the CIO respondents have started evaluating Cloud Computing. 54% of CIOs have evaluated Cloud Computing. 32% of the respondents have done an extensive evaluation. A substantial number of CIOs (46%) have yet to evaluate Cloud Computing. 36% of the CIO community indicated that it already has plans to evaluate Cloud Computing in the near future.

Has your organization evaluated Cloud Computing?

No plans 10%

Extensively 32% Planning to evaluate soon 36%

Basic testing 22%

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Key Finding 4: ‘Cost Savings’ is the most important benefit CIOs are expecting from Cloud Computing. While the push towards Cloud Computing seems to be largely from Cost Savings (79%), CIOs also look forward to the ability to scale better, switch from CapEx to OpEx, and benefit from easier maintenance – available from the Cloud vendor.

What are the key benefits you are expecting from Cloud Computing? Cost Savings

79.35%

Better Scalability

68.39%

Switch from Cap Ex to OpEx

54.84% 53.55%

Easier Maintenance

47.74%

Agility Improved Device and Location Independence

43.23%

Reliability Improvements

40.65%

Allows Core Business Focus

39.35%

Complexity Reduction

38.71%

Better Support

37.42%

Newer Technology

36.13%

Improved Security

27.10% 22.58%

Great IT Other

0.65%

Key Finding 5: Security continues to be the biggest concern for CIOs when looking at Cloud adoption. 66% of CIOs are apprehensive about security on the Cloud. Privacy Concerns come next, with 45% of CIOs pegging this as their area of concern. Another significant concern for CIOs is the over-dependence on vendors and whether that would lead to vendor lock-in – 33% of CIOs responded in the affirmative to this area of concern. Integration with existing systems (hardware and software) also figures high in the trepidations of CIOs (30%) with regard to Cloud Computing.

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What are your key concerns with regards to Cloud Computing? Security

66%

Privacy Concerns

45%

Vendor Lock-in

33% 30%

Integration Issues Unclear ROI

23%

Compliance

19%

Legacy Integration

19%

Immature Technology Lack of Features Others

17% 5% 5%

Key Finding 6: It’s not about Public Cloud or Private Cloud; it is about both. CIOs are influenced by the benefits of both the paradigms of Cloud Computing with 53% of CIOs responding that they would consider both the Private and Public Cloud. However, in direct comparison, Private Cloud seems to be a preferred model, as against the Public Cloud.

In the near future, your organization’s IT needs will be best managed by which of the following: None 5% Public Cloud 14%

Both 53%

Private Cloud 28%

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Key Finding 7: Application Hosting (59%) and E-mail (48%) are seen as preferred services that CIOs expect to have on the Cloud in the near-term. A fair number of CIOs also indicated their interest in using Storage (41%) and Files & Database Hosting Solutions (35%) on the Cloud.

In the near future, which Cloud Computing services are of interest to your organization? 59%

Hosting of Applications E-mail

48% 41%

Storage Files and Database Hosting

35%

CRM

34%

Computing Power/ Server Capacity

33%

Productivity Software (like Office)

30%

ERP

30%

Application Development and Testing Content Management System

29% 26%

BI

24%

Desktop Operating System

21%

Desktop Software Other

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17% 5%

Large Enterprises: In the near future, which Cloud Computing services are of interest to your organization?

Large Enterprises: In the near future, which Cloud Computing services are of interest to your organization? Hosting of Applications

61.33%

E-mail

45.33%

Storage

37.33%

Application Development and Testing

32%

CRM

32%

ERP

32%

Computing Power/ Server Capacity Files and Database Hosting Content Management System Productivity Software (like Office)

30.67% 30.67% 29.33% 26.67%

BI

22.67%

Desktop Operating System

18.67%

Desktop Software Other

14.67% 4%

SMEs: In the near future, which Cloud Computing services are of interest to your organization?

SMEs: In the near future, which Cloud Computing services are of interest to your organization? Hosting of Applications

57.50%

E-mail

50%

Storage

45%

Files and Database Hosting

40%

CRM

36.25%

Computing Power/ Server Capacity Productivity Software (like Office)

35% 32.50%

ERP

27.50%

Application Development and Testing

26.25%

BI

25%

Content Management System Desktop Operating System

23.75% 22.50%

Desktop Software Other

20% 6.25%

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Key Finding 8: Based on CIO perception, Microsoft is best suited for their organization’s Cloud Computing needs, followed by Amazon, IBM, Google and Salesforce. CIOs were asked to select one vendor, who according to them would be best suited for their organization. Responses helped tabulate the top ten Cloud Computing vendors in India, based on CIO perception. Microsoft (19%) is currently perceived to be the most preferred Cloud Computing technology provider, followed by Amazon (14%) in the second place, and IBM and Google in the third place (11%). Salesforce comes in at the fifth position (at 10%).

Overall : Which vendor is best suited for your Cloud Computing needs? 19%

Microsoft Amazon

14%

IBM

11%

Google

11%

Salesforce.com

10% 9%

VMware HP

6%

Oracle/Sun

6% 3%

Citrix EMC Other

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1% 11%

CIO-Speak on Cloud Computing Technology Vendors This is what CIOs had to say: 1. Microsoft According to CIOs, Microsoft scores over the other vendors because: “[It provides a] complete productivity suite including e-mail, Live Meeting, Sharepoint on the Cloud...”. “Most of our applications are built on Microsoft technology and my team works almost exclusively on Microsoft. Hence, if we need to migrate to the Cloud, the training and level of understanding would be much better and easier.” “[It brings in] savings on licence costs, wider integration, scope of CRM applications, scale and maturity of solutions.”“Brand value, reach, and channel-play.” “[Of the] reduced learning curve [with Microsoft Cloud offerings] as these are the applications I am familiar with [and] migration is very easy.” “We work mostly on Microsoft platform and hence it makes best choice for us to consider [Microsoft’s] Cloud Computing, as there would be better sense of accountability and ownership from Microsoft.” “Constant upgrade support and strong research group.”“Very huge user base.” “A reliable and responsible partner for Cloud Computing needs.” “A very long relationship and the people from this vendor know [our] business”.“Enterprise agreement [and] clear roadmaps from the company.” “[Organizational] focus, [we are] aligned to the organization and product suite, [and have] invested a lot on strategy and implementation of the same.”

2. Amazon CIOs’ reasons for choosing Amazon, are: “Our company has already tied up with Amazon. It supports all the deployments in Cloud Computing.” “The service and support they provide are valuable. [They have] good technology enhancements lined up.”

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“With EC2, maturity levels are higher.” “Range of features.” “Superior scalability and reliability.” “Constant investment in feature enhancement.” “Cost-effectiveness.” “Firstmover advantage and maturity of infrastructure.”“Brand, trust, and uptime.” “Multi-environment Operating System, pay-after- use.” “Hardware vendor neutral.” “Pricing model and services” (however there was also an area of concern pertaining to “SLAs and payment structure – you must have a credit card to make payment, which a lot of companies simply do not do.”) “Providing Windows/SQL server machines images that are best suited to host existing products/applications. It also provides Content Distribution Servies (CDS) that helps in large content distribution.” “Migration efforts [are] limited.” “Scalability, reliability and bandwidth.” “Proven track record.”

3. IBM CIOs preferred IBM as a vendor for the following reasons: “Past performance and after sales service”. “IBM is in the services business in India and having dealt with it, we feel confident, [it is] secure for both hardware and software and technically competent.” “Industry leader with state-of-the-art technology.” “Reliability and long-term partnership.” “Improved technology, low costs, good support.” “Most advanced offerings in the areas of my needs...” “More broad-based expertise.” “Scale and large list of customers.”

4. Google (Tied with IBM) CIOs preferred the Google Cloud offerings for the following reasons: “Already working with us.” “Office and email apps.” “Our mailing service is partly on Google’s Public Cloud and as such we are quite satisfied with their service in terms of performance as well as support.” “Good performance till date.” “Reliable.” “Established infrastructure.” “Continuous technology upgrades and the price – not always.” “Big, reliable, scalable, thus cheap and with open mindset.” “Flexible, forwardlooking, continuously improving, agnostic to vendor/platforms.” “Adoption of the [Google] Cloud SAAS services has been effective, especially its developer partner programs.”

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“Already has a lot of good solutions on the Cloud.” “Innovation.” “Adaptation of customer requirement is guaranteed.” “Google has shown the world that yes they can deliver the Cloud services and that too in a very secure way. It is affordable too.”

5. Salesforce Salesforce.com is a preferred vendor among CIOs because: “[We are] currently using this.” “[It’s] presence in market, large customer base, good agility between current IT Infrastructure to accommodate newer platforms and business needs.” “For CRM they have good deployment experience.” “Offers the best-fit solution in accordance with our Relationship Business Model.”“The application is clutter breaking and mostly idiot-proofed. It doesn’t require much by way of adaptability unlike SAP applications.” “Cost-effectiveness and reliability.” “Services are the best available as of date in the industry.” “They have most of what we need… least complicated processes.”

Other vendors: VMware “It is becoming popular with the number of clients and also affordability for smaller organizations is better.” “It also has tie up with public clouds such as Google, etc.” “Market leader.” “Mature product.” “Existing vendor....meeting our business needs.” “Already in use and heavily integrated with our systems.” “Features, Velocity”, “Comfort”

HP “Technology, experience of working with vendor; have good relations from a long time.” “Existing vendor. [We are] already a customer of HP.” “Has a strong capable team in India, who can support us in the maintenance and operations phases.”

Oracle “Since Oracle is a database and infrastructure provider, I feel they can actually support the real demand for the database hosting with a commitment to take care of any performance-related issues, etc.”

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“Established infrastructure and platform with host of Application Suites.” “Our business applications have been built on J2EE using Oracle’s Application Development framework and are on Oracle’s 10g Application Server, connected to an Oracle 10g Database. So probably, technology expertise, may be an edge for them.” “We are using Oracle ERP E-business Suite modules for all our group companies and as it is on Private Cloud so far, our training investement and human resources knowledge base will be protected.” “Well established and reliable.”

Key Finding 9: In Large Enterprises (more than 500 PCs), Microsoft (24%) has emerged the strongest contender for providing Cloud based services, followed by Salesforce (13%) and Amazon (12%).

Large Enterprises: Which vendor is best suited for your Cloud Computing needs? Microsoft

24%

Salesforce.com

13% 12%

Amazon IBM HP

8%

Google

8%

VMware

8%

Citrix

3%

Oracle/Sun

3%

EMC Other

16

11%

0% 11%

Key Finding 10: In SMEs (less than 500 PCs), Amazon (16%) and Microsoft (16%) have a marginal lead over Google (15%). Google has a much stronger perception among SMEs than among Large Enterprises (as a Cloud Computing vendor).

SMEs: Which vendor is best suited for you Cloud Computing Needs? Amazon

16%

Microsoft

16% 15%

Google 12%

IBM 11%

VMware 9%

Oracle/Sun Salesforce.com

7% 4%

HP Citrix EMC

3% 3%

Other

12%

Industry-wise findings: In the Manufacturing industry, CIOs find Microsoft (22%) better suited for their Cloud Computing needs, followed by IBM (15%) and Salesforce (11%). Amazon does not have a strong presence here.

Manufacturing Microsoft

22%

IBM

15% 11%

Salesforce.com

IT/ITeS CIOs prefer Microsoft (23%), Amazon (19%), and Google (15%) over the others.

IT/ITES 23%

Microsoft Amozon Google

19% 15%

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Financial Services CIOs prefer Amazon (20%), Microsoft (20%) and Salesforce (15%) as their Cloud vendors.

Financial Services Amozon

20%

Microsoft

20%

Salesforce.com

15%

In the Government and Public Sector, IBM (27%) and Oracle/Sun (18%) have the strongest perception.

Government / Public Sector 27%

IBM Oracle/ Sun

18%

HP

9%

VMware

9%

Key Finding 11: One out of every four organizations are currently using Cloud Computing for (parts of) their IT. Almost 75% of CIOs have not adopted Cloud Computing yet, but a large number of them plan to deploy within the next one year. A smaller, yet significant, number–18% of CIOs however, have indicated that they have no plans of adoption at this time.

Stage of Cloud Computing Adoption Already using

26%

Deployment in progress In the next 3 months 3-6 months

8% 7% 13%

6-12 months 12 months hence No plans at this time

18

14% 13% 18%

Key Finding 12: Among existing Cloud users, “Hosting of Applications” is the most used service. Among the current users, application hosting seems to be the most common use of Cloud Computing. E-mail on the Cloud and CRM are other popular applications.

If you’re already using Cloud Services or deployment is in progress, which Cloud Computing services are you using/deploying? Hosting of Applications

56% 44%

E-mail CRM

35%

Computing Power/ Server Capacity

31%

Application Development and Testing Content Management System Files and Database Hosting Productivity Software (like Office)

30% 24% 22% 22% 20%

Storage BI

19%

ERP

15%

Desktop Operating System

13%

Desktop Software Other

6% 11%

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Key Finding 13: Among existing users (overall), Amazon is leading other vendors, closely followed by Microsoft and Google.

Overall: If you’re already using Cloud Services or deployment is in progress, which vendor(s) are you using? Amazon

33%

Microsoft

30%

Google

30%

Salesforce.com

24%

VMware

20%

EMC

7%

Citrix

6%

IBM

6%

Oracle/Sun

6%

HP

2% 39%

Other

Key Finding 14: In large enterprises (more than 500 PCs) that are existing users, Microsoft is leading Cloud Computing adoption.

Large Enterprises: If you’re already using Cloud Services or deployment is in progress,which vendor(s) are you using? Microsoft

39%

Amazon

36%

Salesforce.com

29%

VMware

21%

Google IBM

7%

Oracle/Sun

7%

Citrix

4%

EMC

4%

HP Other

20

18%

0% 29%

Key Finding 15: In existing SME users, Google has gained the most ground as the Cloud Computing vendor.

SMEs: If you’re already using Cloud Services or deployment is in progress,which vendor(s) are you using? Google

42.31%

Amazon

30.77%

Microsoft

19.23%

Salesforce.com

19.23%

VMware

19.23%

EMC Citrix

11.54% 7.69%

HP

3.85%

IBM

3.85%

Oracle/Sun

3.85%

Other

50%

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Appendix A (List of respondent companies) 24/7 Customer ABC Consultants Pvt. Ltd. Accenture ACMIIL Adani Logistics Ltd. Aditi Technologies Advanced Enzyme Technologies Ltd. Aeroprise Inc. AFL Pvt. Ltd. AGC Networks Ltd. Altran Technologies India Pvt. Ltd. Amway India Aniba Solutions Ashok Leyland Assyst International Pvt. Ltd. Atotech India Ltd. Automotive Manufacturers Pvt. Ltd. Axis AMC Ltd. B. N. M. Institute of Technology Beam Global Spirits & Wine (I) Pvt. Ltd. Biologicale Ltd. CB Richard Ellis South Asia Pvt. Ltd. Center for CIO Leadership CESC Ltd. Cisco CloudSwitch Inc. CLP India CODELCO Cognizant Technology Solutions Compegence Concept Pharmaceuticals Ltd. Cordys CRY - Child Rights and You CSIL Deepak Nitrite Ltd. Delhi Metro Rail Corporation Delhi State Cancer Institute Deloitte Destimoney Group Dewan Housing Finance Corporation Ltd. Droisys Einfochips Eliokem India Pvt. Ltd. Entertainment World Developers Ltd.

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Eveready Industries India Ltd. Excel-soft Technologies Pvt. Ltd. Eyes on Watch India Pvt. Ltd. FACOR Steels Ltd. Fannie Mae FINO Ltd. Frameboxx Animation & VFX Ltd. Futuresoft Solutions Pvt. Ltd Genesis IT Innovations Ltd. Glencore India Pvt. Ltd. Globelink WW India Pvt. Ltd. Glopore IMS GMR Group Godrej Properties Ltd. Grasim Pulp and Fiber dn GRIET, Hyderabad GVK Biosciences Pvt. Ltd. Harrisons Malayalam Ltd. HDFC Bank Hero Honda Motors Ltd. HSIIDC identLogic Systems INBISS Indian Renewable Energy Development Agency Infosys Infotech Enterprises ITTIAM Jamcracker Inc. Jawaharlal Darda Inst. of Engg. & Tech. JCB India Ltd. JSL Stainless Ltd. Jubilant Life Sciences K.L.E.Institute of Technology KEI Industries Ltd. KLA-Tencor Software India Pvt. Ltd. KNP Sec Pvt. Ltd. KPIT Cummins Infosystems Ltd. KSB Pumps Ltd. Lenovo Leon Computers Pvt. Ltd. Loyalty Square Maharashtra State Electricity Distribution Co. Ltd. Mahindra Satyam

Mecklai Financial Services Ltd. MercuryMinds Technologies Metso Minerals (India) Pvt.Ltd. Mahindra & Mahindra Financial Services Ltd. Microland Ltd. Ministry of Road Transport & Highways MTR Foods Pvt. Ltd. MTS India National Informatics Center (Govt of India) Netcellence Technologies Nicco Corporation Ltd. Nihilent Technologies NISE NPCIL NTPC Ltd. Oasis Investment Company LLC. Alshirwi Group Old World Hospitality Pvt. Ltd. Orbis Financial Corporation Ltd. Orix Auto Infrastructure Services Ltd. (an IL&FS Company) Pappilon Software Solutions Pvt. Ltd. Persistent Systems Ltd. Power Grid Corporation of India Ltd. Quatrro BPO Solutions Pvt. Ltd. Rain CII Carbon (India) Ltd. RECL Reliance Infrastructure Ltd. Religare Asset Management Co. Ltd. RMD Engineering College Roots Industries India Ltd. Royal Banck of Scottland Safexpress Pvt. Ltd. Sakal Media Group Sakthi Finance Ltd. SAP Sara Infoway ITES India Pvt. Ltd. Shriram Pistons & Rings Ltd. Sierra Atlantic Sikkim Manipal University SJM Technologies SKS Microfinance

Societe Generale SSIPL Retail Ltd. SSL Stewart & Mackertich Wealth Management Ltd. Tata Sky Ltd. TCL - Transition Consulting Ltd. TECHGYAN The Calcutta Medical Research Institute TIL Ltd. Tratum Technologies Trignon Truetzschler India Pvt. Ltd. UCB Unichem Laboratories Ltd. Unilog Universal Cables Ltd. UTI Mutual Fund Vaishnavi Corporate Communications Vallabhdas Kanji Ltd. ValueSource Technologies Pvt. Ltd. Varun Beverages Ltd. Virtusa Watson Pharma Pvt. Ltd. West Asia Maritime

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Cloud Computing CIO Survey Report