Tata Communications' cloud will cover more countries
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- Published on Monday, 27 June 2011 14:59
Tata Communications has its sights firmly set on the cloud. After launching cloud computing-based services in India and Singapore, with the latter covering other countries in Southeast Asia, the firm will now expand into the Americas, Europe and South Africa in the next 18 months.
Although it remains reluctant to divulge on the investment required for this expansion, it is likely to be a “significant” spend as it looks to create “similar platforms and capabilities in Europe and the Americas,” said Amit Sinha Roy, vice-president strategy and marketing, Tata Communications.
In Singapore, which is also the company’s international headquarters, it spent $180 million to set up a state-of-the-art data centre that supports the cloud computing functions amongst others. Additionally, it will invest close to $88 million annually over the next four years in the city-state as it continues to develop its presence in the region.
However, a “defining strategy” in its present international plans will be expanding its cloud-based offerings across multiple regions, which Sinha Roy claims “is one of the most important priorities” for the company going ahead. It plans to generate revenues of up to $250 million in the next three years from these services.
And if recent numbers are considered, Tata Communications’ strategy has credence.
Not only is overall spending on cloud computing expected to reach up to $72.9 billion in the next five year, according to a recent study, public cloud services are likely to account for about 46 per cent of new net growth in information technology expenditure by 2015.
A public cloud consists of a service provider making resources such as application and storage available to users over the internet, which may be offered free or on a pay-per-use model.
Small is beautiful
Unlike some of its global competitors, Tata Communications will focus on small and medium enterprises (SMEs), a shift from its usual clientele consisting of large multinationals seeking international communication solutions.
Its IaaS (Infrastructure as a Service) model, which enables provisioning of processing, storage, networks, and other computing resources over the internet, comes with multiple billing options in multiple currencies.
With a combined advantage of low start-up costs, easy scalability of capacity and a pay-per-use model, SMEs are seen as more likely to adopt these cloud-based services aggressively.
“Small and medium companies do not need to invest in infrastructure, so that start-up cost is very low. There is no capex (capital expenditure). It’s only opex (operational expenditure). Not only is it pure opex, it’s not fixed opex either. It’s pay-per-use. It’s like a utility, like an electricity connection. That is a very innovative thing for a SME,” explained Sinha Roy.
Without having to pay for things such as power usage, cooling, server, license, storage, and network, SMEs will see a reduction of at least 38 per cent in running costs alone. Moreover, the expenditure for hiring and maintaining a team of in-house IT specialists to run these systems and operations is also negated.
Since launching their cloud offerings — InstaCompute and InstaOffice — in India in October last year, Tata Communications has seen about 1,000 business sign up, with over 200 billing customers. Going ahead, Sinha Roy predicts “significant double-digit growth”.
“The second thing is about driving innovation. Say App developers, they need to have a development platform but they don’t know how much capacity they will require. This is about ability to scale up and down, the elasticity without having a fixed commitment. Sometimes you may have a huge burst requirement,” he said.
As it looks to take the InstaCompute platform global, the firm is also “aggressively looking at bringing in software as a service,” Sinha Roy said, where customers will be able to access a suite of software on a pay-per-use system.
“We have a set of software solutions that companies can adopt and use. For the international markets, we are exploring this. The difference will be in the licensing because these don’t belong to us. The discussions are on,” he said.
In the immediate, though, the cashing in on the public cloud remains its primary focus.
(Business Standard)
