An interview with Vishwa Bandhu Gupta, a former income tax officer, went viral on YouTube in 2011. Gupta had offered a few priceless conspiracy theories in the five-minute clip, but what had everyone in splits was his literal explanation of cloud computing.

The gist of it: He believed all our data was stored in real clouds. As a result, the cloud was unreliable in a storm as the data might get washed away! Gupta was, of course, ridiculed for his bizarre views, but he did provide an insight into India’s “sometimes uncomfortable relationship with technology” as the New York Times’ India blog put it in 2012.

For a while now, the government has recognised the importance of technology for better governance. But digitalisation has been a haphazard, almost chaotic tale, where impressive achievements have too often been tempered by shortcomings.

Fortune India’s August cover story (‘Only India Inc. Can Save Modi’s Digital India. But Will It?’) suggested corporate India could offer a solution. But that doesn’t mean the government can allow things to amble on. Central to streamlining the government’s notoriously inefficient technology scene is a programme launched in 2013: GI Cloud, also known as Project Meghraj.

A parallel can be drawn to President Barack Obama’s “Cloud First Initiative”, which points out that cloud is essential for eliminating inefficiencies such as duplicative systems and fragmented networks that are hard to manage and lead to long delays. India suffers similar problems. In fact, the situation is much worse here, with a yawning digital divide, as well as poor Internet connectivity and speeds. The centre also has to persuade state governments to get on board.

"The government is much better served using cloud infrastructure for its Digital India mission"—Andy Jassy, CEO, Amazon Web Services.
"The government is much better served using cloud infrastructure for its Digital India mission"—Andy Jassy, CEO, Amazon Web Services.

Technology advisory Gartner estimates India will spend $7 billion (Rs 48,000 crore) on IT this year, though that budget is dwarfed by the U.S. and China.

Neeta Verma, director-general of the Ministry of Electronics and Information Technology’s National Informatics Centre (NIC), its first woman head, has the unenviable job of solving these problems.

When I met Verma in early September, her calendar spelt out the day’s priority: convince state transport commissioners across India to move to cloud and consolidate the vehicle registration system. The common platform would provide transport departments easy access to several analytics techniques, such as tracking usage and the life of their fleet.

It was almost 4 p.m.; she hadn’t eaten lunch yet. India’s enormous digitalisation effort, spread across myriad sectors from agriculture to transport, can pull her into projects anywhere, anytime of the week. Something unscheduled had come up the day I met her. Some people in remote areas had not enrolled for Aadhaar, now the main basis of identification for scholarship programmes. It was an urgent matter, as deserving students risked losing out because of technology migration. The anecdote highlighted the thorny realities of digitalisation.

If there is a success story brewing though, it is the cloud programme. “A large number of the Digital India initiatives have come up very fast,” she says. “The prime reason is departments need not go into a cycle of procuring infrastructure, issuing requests for proposals, installation, and so on. They now only have to get the software done, take machines from the NIC cloud, and go live.”

There is a method to the madness. “Whenever a department comes with a request to install servers in our data centres for their e-governance applications [like soil health card, vehicle registration], we suggest they migrate to our national cloud,” she explains.

Essentially, any department across states can buy storage and computing technology from NIC. They can now buy cloud space online and pay based on how much space they need; all they need to do is register and apply for it on

Whenever a project involves more than five states, each department contributes to NIC’s kitty. The servers are bought with those funds, and combined with the India Cloud. “We are supporting many initiatives on cloud like land records, property registrations, and e-courts [wherein more than 14,000 courts have been computerised, with cause lists, orders, and judgments available online],” Verma says.

Teresa Carlson, VP, worldwide public sector, AWS.
Teresa Carlson, VP, worldwide public sector, AWS.

Verma, who has worked for the NIC since 1986 when the first computers were introduced to government, has a team of 3,500 IT professionals, while contracted manpower from IT companies further bolsters her team.

To be certain, there is no shortage of cloud capacity at present. Verma estimates a little more than half of NIC’s data centre capacity has been deployed so far. But that will change quickly as more systems are brought onto the platform.

The cloud initiative offers huge promise for corporates. In the three years since Meghraj was launched, the opportunity to run large IT workloads and win government customers has lured the world’s biggest cloud services companies.

In late 2014, IBM, one of the first technology services companies to operate in liberalised India, unveiled a cloud data centre in Airoli, on the outskirts of Mumbai. By September 2015, Microsoft had opened three data centres in Mumbai, Pune, and Chennai.

In February, IBM’s CEO Ginni Rometty visited India after the company opened a public cloud data centre in Chennai. Within three months of her visit, Microsoft CEO Satya Nadella was reciting Urdu poet Ghalib’s ethereal couplet Hazaaron Khwaishein Aisi (A thousand desires such) in Delhi; the potential here had everyone excited.

At the same time, Amazon, the company that has become almost synonymous with cloud services, also had its eye on the prize. Amazon Web Services (AWS) CEO Andy Jassy and a passel of executives, including Teresa Carlson, vice president of AWS’s worldwide public sector division, recently visited Delhi, Mumbai, and Bengaluru. The agenda in Delhi was to meet government officials; in Mumbai, AWS was opening two data centres with chief minister Devendra Fadnavis in attendance. The whirlwind tour concluded in Bengaluru, where they met AWS’s fertile developer community. Even before AWS opened a data centre here, it had 75,000 customers, thanks to the startup boom from 2009 onwards.

“The government is much better served using cloud infrastructure to accomplish its [Digital India] mission in a relatively quick time frame with the operational performance, security, and scale that is required in India,” Jassy tells Fortune India. In the U.S., AWS has won government clients like NASA, the Department of Health and Human Services, the Department of Defense, and the CIA.

"You have to have different models that have not been there historically in the government sector"—Vanitha Narayanan, managing director, IBM India.
"You have to have different models that have not been there historically in the government sector"—Vanitha Narayanan, managing director, IBM India.

AWS’s Carlson says open data leads the way for providing citizen services. “In many countries, we host the open data sets for free.” Paying customers are usually researchers and scientists who open AWS accounts to tap that data, she tells me. For example, when AWS hosted the 1000 Genomes Project dataset for the National Institute for Health, it attracted 3,400 new researchers within a week.

The competition for big-ticket government deals will only intensify from here on. While AWS guarantees speed and experience in cloud services, IBM’s Watson cognitive computing platform has been touted as a game changer. IBM wants to capitalise on its early-mover advantage in India.

Since 2013, it has upped the ante, growing its ecosystem of developers on its Bluemix cloud app development platform. Vamsicharan Mudiam, country manager for cloud solutions at IBM, says state governments can leverage data centres to take one application across towns and cities if the conditions and requirements are similar. This saves time and money.

A water management app written on Bluemix, for instance, can be deployed on a private cloud for a customer like the Rashtrapati Bhavan, but city and municipal corporations may not have the resources to buy and maintain their own servers. This can be resolved quickly thanks to cloud infrastructure.

Meanwhile, Microsoft, which offers its cloud services to more than 3,500 startups here, is banking on the power of its platform. The company has already won several major government contracts. In Andhra Pradesh, the company is working with the state government to build applications based on student enrolment data to predict dropouts. Anil Bhansali, managing director of Microsoft India Development Center, says the project began as a pilot to understand the risk of post-10th standard dropouts, from 1,100 schools in the state’s Chittoor district. “The programme mined data across parameters like student performance, school infrastructure, teachers’ skills and socio-economic aspects,” he says.

The pilot was so successful it was expanded to cover the entire state with more than 10,000 schools. The machine learning model has highlighted 600,000 instances of potential dropouts so far.

Microsoft India also organised the Hack4farming initiative in collaboration with Icrisat (International Crops Research Institute for the Semi-Arid Tropics). The purpose of the two-day hackathon was to apply intelligent cloud solutions in agriculture.

The winning team ‘DARe-’ (Digital Agri Rural e-Marketing) pocketed $2,000 for creating an application that minimises the margins of middlemen as well as farmers’ transactions cost, while connecting smallholder farmers with several buyers. With so much competition, cloud has become a battle for high-quality services at low cost.

In a story titled ‘Why the U.S. Government Finally Loves Cloud Computing, Perhaps More Than Corporate America Does’, Fortune magazine wrote: “Agencies that run their own IT gear must deal with hardware, software, networking updates, patches, and data centre security—all resource-intensive-but-important workloads that an outside cloud vendor like Amazon Web Services or Microsoft Azure handles on behalf of their customers. If an agency can offload all that, it can focus on the specific features and capabilities it needs.”

That’s why India is also falling in love with cloud. Apart from the American software companies, Japan’s NTT recently increased its majority stake in Netmagic, a cloud data centre company headquartered in Mumbai.

Satya Nadella, CEO, Microsoft.
Satya Nadella, CEO, Microsoft.

Globally, Google has made its ambitions clear, earmarking $12 billion towards its cloud war chest, leading analysts to view it as the biggest threat to $10-billion AWS.

Both these Internet giants are building cloud businesses to diversify revenue. Google, which earns almost 90% of its $75 billion revenue from advertising, is yet to open a local cloud data centre here.

The NIC is allowed to contract private cloud providers “based on demand assessment and taking into account security-related considerations”, according
to the 2013 strategic direction paper for GI Cloud (Meghraj).

There is, however, a missing piece in the jigsaw: developers. The holy grail here is getting the best developers to build applications for government, while cloud providers and the NIC provide the infrastructure.

On this front, NIC’s Verma says there is scope for improvement. Developers from outside can offer innovative solutions to government problems, she says. “We have to evolve our engagement models.” Currently, the model uses tenders for government contracts, but this largely suits established companies with sound finances. “These modes of procurement are not suited to engaging with startups,” Verma admits.

Vanitha Narayanan, managing director of IBM India, agrees that the government needs to change tack. “The [lowest bidder in a state tender] approach does not give value to better use of technology… You have to have different models that have not been there historically in India in the government sector,” she says.

Hackathons are one way the government is seeking out developer talent. “While startups can ride with the bigger companies to form a consortium, I feel individual people can always be employed through hackathons, giving them incentives or awards,” says NIC’s Verma.

What the government is trying to do is to tap the brightest talents from the country’s top colleges, including the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc).

Inside government, young bureaucrats, such as Rohan Chand Thakur, deputy commissioner in Shimla, have championed software, including a system for arranging correspondence, as well as orders, directions, and instructions, between government offices in order of priority.

Hackathons have also helped generate ideas. “It is a win-win for both students and government. Students get an opportunity to work on real-life problems while the government gets a continuous flow of young talent and innovative solutions to problems. It provides out-of-box thinking,” says Verma.

For instance, the e-Gov App Store now features an information app for farmers that captures the location of farmers, and shows prices of the crops he is interested in. Before this app, a farmer had to go to the website, look for his state, taluka, and mandi, and many prices showed up. The NIC had asked the agriculture department officials for suggestions before bringing in developers to design it.

The problem with college internships though, is that the results aren’t always consistent. “There is a need to work out the framework for engagement with institutions across India to leverage the huge potential of young talent,” says Verma.

Ginni Rometty, CEO, IBM.
Ginni Rometty, CEO, IBM.

The developer community is a work in progress. Sharad Sharma, angel investor and co-founder of think tank iSPIRT, reckons India doesn’t need massive ranks of developers; what it does need is a change in mindset. “It is not a question of numbers. Empower them by giving them public goods [like Aadhaar and unified payments interface], and allow them to chase a dream, without too much of regulatory interference.”

Any new government project should be treated like a startup, Nandan Nilekani, the man behind the government’s Aadhaar programme, wrote in Rebooting India, co-authored with Viral Shah. “A team of 100 carefully selected individuals can fix all the major problems that ail India. How would such a system work? Let’s say the Prime Minister identifies 10 grand challenges India faces. Each idea can be the nucleus of a ‘government startup’,” he wrote. “Ten enterprising leaders in charge of each of these problems, in turn, form 10-member teams of the best brains within government and domain specialists from outside government to apply out-of-the-box thinking that can deliver innovative solutions.”

IBM’s Narayanan calls for more elastic policy. “When you look at complex technology programmes, you agree on a set of goals. When you go through with it, you discover certain new things about the systems—either changes have happened, or you have found a better way to do things. Things you requested for before are not as important as you thought at one time. It is a matter of flexibility but typically, the government gets very nervous about making those changes,” she says.

The framework for public-private partnership also needs to be defined. Says AWS’s Carlson: “[First, the government must] define the cloud standards. Then, you have to have a security and compliance regime, so that the government agency cannot use security as an excuse. You need a model and a standard.”

Neeta Verma, a computer technologies postgraduate from IIT, Roorkee, realises the importance of flexibility. “Now that private players have started setting up data centres, the need for us to do that has reduced,” she says.

The IT department is on the verge of concluding a process of accrediting cloud service providers, an exercise started last year. “It will give an option for government departments as well as public sector organisations to procure cloud services from [the private sector]. Our job is to ensure this is a state-of- the-art India Cloud, that everyone follows the essential security standards and the mechanism of procuring cloud.”

There is much to learn as she sets out to bring more developers onto cloud. “We are in the early stages of what cloud-computing is going to do,” AWS’s Jassy tells me. “We are really at the beginning of the enterprise and public sector adoption.”

Verma has made an encouraging start, but then again, her calender is probably going to stay crammed for a while to come. Meanwhile, perhaps it’s time for Vishwa Bandhu Gupta to upload a new video in which he talks of how the government cloud works—even when it rains.