“We Expect $250 Million From The Cloud”


5 Aug 2011
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Prateek Pashine, President, SME, Tata Communications, talks to Sonal Desai about the SME opportunities in cloud computing, the needs of this segment and the company’s partnership model

How does Tata Communications define SME? What is the company’s addressable opportunity in India?
Indian SMEs are companies with less than 500 employees. We define all companies with more than 500 employees as large enterprises. According to our estimates, in India there are 5,000 to 7,000 large enterprises and 1.6 million SMEs with at least one PC in their organization. Of these, there are 1.4 million organizations with less than 100 employees across the country. About 80-85 percent of our target audience is in the top 30-35 cities.

According to analyst reports, the ICT spend of the Indian SMEs stands at `80,000 crore and has grown at 15-18 percent CAGR over the last two years. Major contributors toward this spend are PC and voice. Again, organizations with less than 100 employees spend one- tenth the amount on ICT vis-à-vis those with 100-500 employees.

What are the other trends that you observe in SME spends?
Organizations with up to 100 employees are more linear and depend on a (local) channel partner who influences their buying decisions. These organizations want to control their data, are concerned about the physical security of their networks, and depend on a one-stop-shop for most of their IT needs. They also rely on their peers to make IT-related decisions.

Of late we have been seeing a slight shift in this attitude. The Generation Y which is taking over the business is more tech-savvy and aware of the developments in IT. In addition, they have access to social media networks such as Facebook and Twitter that influence their decisions.

Tata Communications launched InstaOffice and InstaCompute in September 2010. What has been the progress so far?
We are targeting $250 million in revenue from cloud services globally over the next three years. India, Singapore and South Africa would be significant contributors.

Over the last one year we have been testing our offerings, talking to customers and listening to their pain-points. Now we are market-ready. We will leverage on our cloud offerings, InstaCompute and InstaOffice, both of which are on the pay-as-you-use model.

InstaOffice, powered by Google Apps, offers email and instant messaging. For customers who want to boost productivity output, it offers document and Website creation as well. InstaCompute is a pay-per-use IaaS solution deployed across our data centers and integrated into our tier-1 IP network. When customers need greater computing, we offer them the latest processors based on this elastic computing infrastructure.

We have signed on thousands of customers over the last one year for InstaOffice alone. We have also migrated many Microsoft customers to the InstaOffice platform. Similarly, we are running betas of InstaCompute with customers.

Our pricing is very economical: `250 per user per annum for business mail (without additional features), and $50 per user per annum for additional features such as collaboration, IM and chat. In addition we have other offerings such as Zoho CRM (online CRM), Zoho IVR (offerings for contact centers), Sugar CRM, and SaaS and IaaS applications for horizontal and vertical expansion.

With companies such as Amazon and Rackspace offering cloud services at competitive costs, why should a partner associate with Tata Communications?
These are early days for Amazon, Rackspace and others. People recognize the Tata brand, and that is our big advantage. Plus we have a direct presence in the country with a suite of products, relationships with customers, and the experience of managing lakhs of customers, including post-paid and pre-paid—these are pre-requisites to succeed in the cloud business. With us, partners can expect deal size as low as `600 to as high as `1 crore and above. It is up to them how they want to leverage the opportunities.

We have offerings for the real estate, stock broking, health care and BPO segments. However, we have released only the BPO offering so far, and are developing solutions around many more verticals. Plans are on to release solutions for at least 5-6 verticals by 2012-end.

What would be your service delivery model?
We are working with close to 400 telecom and IT channel partners. Some of these include MN World and Cadence in Bengaluru, and Nexus Communications and Aastha in Mumbai. We also have tier-1 partners such as TCS which sells white-label services.

Currently we are streamlining the partner process. We established the Business Partner Advisory Council in July 2011. Besides executives of Tata Communications, the council has 12 partners, five of whom are from IT. It is a part of the extended sales team that studies processes, market dynamics and strategies for a successful business model.

Besides, we have tiered our partners into three categories—Premium, Business and Registered. Registered partners will only generate leads. Business partners will have dedicated channel managers. Each channel manager will work with three Business partners, discuss business plans, and set targets for them. The Premium partners would be by invitation only.

Are there any synergies between Tata Communications and iON?
We explore opportunities where we can collaborate. But first we want to develop a story of our own, build referrals, and only then think about synergies with iON.

source : crn
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