Mumbai-headquartered Patni Computer Systems is set to host all its information technology (IT) infrastructure needs on the cloud (a metaphor for the internet).
It has put nearly 80 per cent of all its infrastructure needs on a private cloud (only the voice operations such as call centres have data centres, since they are governed by other licenses), and been able to reduce its capital expenditure (capex spend) by nearly 30 per cent, besides saving another 30 per cent by way of lower power consumption.
Patni’s annual spending on its internal IT needs is around Rs 190 crore. These include servers for storage, desktops, networks and bandwidth. The company had around 200 servers at its data centres in Bangalore, Noida and Chennai, according to Satish Joshi, its global technology head.
With ‘virtualisation’ — which reduces the need for more servers by distributing the number of applications on these servers efficiently — from VMWare, Patni has managed to reduce the number of servers to just around 20.
“We may not need to buy servers for at least another year due to virtualisation. This is further lowering costs,” adds Joshi.
The company’s data now reside on a large business-to-consumer (B2C) player’s data centre, referred to as a ‘private cloud’. A private (also known as internal) cloud describes offerings that emulate cloud computing on private networks. It can be defined as a way to access services within an infrastructure that is closed by design — without connection to the internet (as opposed to a public cloud which stores data online — eg. Google’s hosted services, Gmail, Salesforce.com or Amazon’s cloud services).
Jeya Kumar, CEO of Patni, had earlier told this paper that leveraging the cloud would also help his company cope with inorganic growth. “Whenever we acquire a new company, we will not need two data centres, even if the headcount doubles. The complete new portfolio from the acquisition will be hosted on the web,” he had said.
Extension to clients
Patni is extending its cloud services to its clients, too, since it also is a Systems Integrator (SI). It takes the products from cloud vendors and sells them to customers to run their applications in the cloud. This is helping the company give value-added services to its clients.
For instance, if it provided application, development and maintenance (ADM) services to a banking client, the bank would have to create a separate cell to deal with this portion of the work, which meant added capex. “The work that this cell would do is now being accessed remotely through the cloud,” says Joshi.
“The IT Infrastructure piece of enterprise is the most amenable of the IT stack to shift to private cloud — the value creation to efforts ratio is significantly high, and some of the successful enterprises have achieved payback in less than six months. On the other hand, given the inexorable nature of shift to private clouds for enterprises world over, and the fact that Patni is consuming its own dog food, gives Patni the credentials to enable private cloud and make it work for their customers,” explains Alok Shende, founder of IT and telecom research firm Ascentius Consulting.
Cloud computing received a major shot in the arm, with internet search giant Google announcing its Chrome-based operating system (OS) last year. Major global cloud computing service providers like Vmware, Sun Microsystems, IBM, Amazon, Google, Salesforce, Microsoft and Yahoo already have a presence in India. IBM has a cloud computing centre in Bangalore. Other major Indian players like Wipro, HCL Technologies, Tata Consultancy Services, Infosys and even Bharti Airtel (with its network PC), offer cloud computing solutions as software as a service or SaaS or on-demand computing.
Big, growing markets
Cloud services offer a very big addressable market. A recent report from IDC forecasts server revenue from private cloud implementations to grow from $7.3 billion in 2009 to $11.8 billion in 2014. This projection is much larger than the public cloud category, which IDC expects to reach $714 million in 2014.
Research firm Gartner, too, believes that despite the economies of scale offered by public cloud providers, private cloud services will prevail for the foreseeable future, while public cloud offerings mature. Through 2012, IT organisations will spend more money on private cloud computing investments, it states, than on offerings from public cloud providers. A Zinnov study, meanwhile, estimates the global cloud computing market to be over $70 billion by 2015.
The Indian market, according to Springboard Research, would register compounded annual growth of 76 per cent between 2007 and 2011 and reach $260 million (around Rs 1,300 crore) in by 2011. India, with its ecosystem of over 1,300 independent software vendors (ISVs), 1.4 million developers and more than 11,000 system integrators (SIs and custom software development organisations), can cash in on the opportunity. An additional 3,00,000 jobs related to cloud services are estimated to be created in India over the next five years.
