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Thought Leaders in Cloud Computing: Pradeep Rathinam, CEO of Aditi Technologies (Part 6)

Posted on Monday, May 7th 2012

SM: Let me get another piece of clarification here. So, Microsoft is playing this game both at an isolated platform-as-a-service level as well as an integrated platform-as-a-service plus infrastructure-as-a-service, is that correct?

PR: That’s correct.

SM: Whereas Amazon is just playing infrastructure-as-a-service, Rackspace is playing the infrastructure-as-a-service game, Microsoft Azure, I presume, can be lowered on top of any of those infrastructure-as-a-service platforms, yes?

PR: Yes, I do think they have the most operative vision. When it comes to execution, well, time will only tell, right?

SM: Right, right. OK. What other topics shall we touch on?

PR: I think one of the reasons I said we made a bet on this was to really amplify the point around how does this help us shape our own business model? If I think of Azure as a small business, think of it as a traditional services provider, which basically, came into being by a time and materials arbitrage, and we used a global development model to build that out just like any other services company, and we were largely Microsoft eco-system based. So, we were doing a lot of development on .Net and those platforms. We grew from $30 million to $100 million. We have 1,500 plus people. I don’t think the next $100 million is going to require that we build the next – add another 1,500 people. And that’s a fundamental shift of what the cloud will bring from a paradigm perspective for our business model.

In the past, everything we did was to a custom infrastructure. If we went and built something for Met-Life, or we built something for Jamba Juice or another customer, we had to use their infrastructure to build our task. What the cloud has done for us is given us a unique vision of thinking about reusable assets and using innovation and intellectual property as a way to differentiate ourselves and reuse these components and provide faster deployments. So, our business in the future will be software and software plus services and not just a pure services play.

It’s an important distinction because that’s the reason we recently hired a top-notch Chief Technology Officer. We have a dedicated intellectual property community. We look at all the assets of all the projects that we do and see how do we build, re-use, how do we build our own frameworks? Can we release some of these frameworks on a public cloud that can be downloaded and used? So, this is an important aspect of how I think about cloud not transforming what we do for our customers as well as what it has done where our operating margins will shift dramatically. We are a 10% to 12% net margin business today. But I do think that we will grow substantially once we learn how to leverage our IP, how to repurpose our IP for driving our operating margins better.

SM: Basically, building layers and extensions to the Azure platform, which is going to be able to be resold more effectively as you grow this business, and that’s going to give you the margin advantage.

PR: That is correct.

SM: Do you see yourself, as this business unfolds, do you see yourself also developing more products? Does that trend of adding framework elements, does that also extend all the way to actual products?

PR: Product is big word. As soon as we say product, it requires all the emphasis of figuring out an end-to-end customer problem and building, investing in marketing, product management, salesforce and what have you. I think we see ourselves as being able to run a process, a service to transact a process. In the new world, the definition of product will also change. We see ourselves doing building-block software on top of the Microsoft Azure platform and then we see ourselves taking, say, in the health care scenario, a process and saying here’s what it takes to finish a process from end to end. Once we do that for three customers to run that as a service for other customers in the health care space. Three is just to give you an example. So, if you want to call that a product, you can, but I call that a service. Our new services business will be a software plus services business. It will emanate out of running a service for our customers.

This segment is part 6 in the series : Thought Leaders in Cloud Computing: Pradeep Rathinam, CEO of Aditi Technologies
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