By Sramana Mitra and guest author Shaloo Shalini
SM: Given the strategy you have followed thus far, what have you been able to accomplish from a cost reduction point of view?
JS: Let me answer the question this way. Say in terms of applications that have flexible or volatile demand, which includes several of the ones I have mentioned, the cost structure is very favorable. I will add to that mix those applications that have a limited time demand. What I mean by that is an application that you might want to set up temporarily, or say you are prototyping or piloting, and you are bringing up the application for n number of weeks or months as opposed to applications that may stay up for years. Those are all proving to be significantly cheaper for us to run in a cloud environment. I’m not going to provide you with dollars and cents, and it wouldn’t [be] applicable, because again you have to understand that our cost structure is highly efficient. We have virtualized a lot of our data centers and applications, and we have probably some the best pricing on enterprise licensing agreements with software vendors as anyone. So, we have set the bar, and the bar is pretty high for a company like ours. There are others, financial institutions and such, that run these kinds of big environments, too.
Then there are long-term applications with steady-state needs, where shared tenancy is required in terms of a non-customized environment. That class of applications for us, at the moment, is harder to prove in cloud. It proves in the short term, but we have a challenge in making it an excellent cost equation in the long term. This is again because of our internal cost structure. Again, facing inside and outside, we provide this feedback to our own internal organization in terms of whether they may need to modify their products. You have to look out.
I would say to entrepreneurs in this space, If you are trying to address the enterprise marketplace, you’ve got to look at the cost structure that they are going to take on in, not just in year one but over the long haul; take a long- haul, three- to five-year view. This is because we don’t bring our applications up and down that often, especially the big ones, and our cost structure is low on an ongoing basis.
SM: All right. Let me switch the direction of the conversation a bit. I got a picture of what your philosophy is and where you are in moving things to the cloud. Given that backdrop, let me explore with you some of the blue-sky areas or emerging trends in cloud computing and get your input on what you are thinking in that area. One area where I suppose there is not a lot of legacy infrastructure and where some of the IT infrastructure has gone to the cloud is the domain of the social Web, right? Social media, the social Web, social CRM – these are all new trends that took root [in the first half] of the past decade and matured in the second half. I presume that is not something that carries a lot of legacy IT infrastructure. What are you doing in that domain?
JS: Well, it is one of my favorite topics. Here is what we are doing in the social Web space: We are exploring the technologies – all open source technologies and off-the-shelf things. We started about two years ago, and we are doing it all in-house. But it is absolutely the perfect application that we would have no issue with moving to the cloud. That would be a terrific application for us. The bigger hurdle on social computing in an enterprise like ours is not technical but cultural. I chat with many of my peers in other companies, and it is a question of how do you get the corporation to adopt a very different way to have information travel and to communicate and collaborate around the company. I have been through a lot of these trends, and it is interesting to me. Again, in saying this, I would step out of the philosophy about this, but ten years ago we put in instant messaging, and that was like wildfire.
Now, there is still a certain percentage of the company that for whatever reason doesn’t use it, but nobody had to push the adoption of instant messaging. I can tell you from a few years of evangelizing myself that it is a lot of work inside a large enterprise such as ours to drive the adoption of these technologies. I am still trying to figure out what is the difference between these technologies and some of the others that have been adopted much more easily. But having said that, I certainly believe that the difference in efficiency and effectiveness of a company, where the culture has adopted such collaboration tools, is going to be orders of magnitude faster and better than companies that don’t. I am sure that I am preaching to the choir here!