Tuesday, December 6, 2011

India Outsourcing Industry - Cloud based Platform offerings by Top Vendors

Indian IT-BPO vendors had realized that there would be demand for cloud services and had started building their own capabilities in order to survive the shift in demand and create innovative new models. Indian vendors moved a step ahead and started building platform based offerings that will be delivered by cloud. This means that cloud computing is standardizing the IT-BPO offerings by the Indian vendors and they have realized the cost and productivity benefits of standardizing processes. Clients too are interested in the standardized offerings and since such offerings are more outcome-based offerings that influence their business values. These cloud based platform BPO offerings are delivered through either public or private clouds or through the data centers.

Traditionally Indian vendors get nearly all of their revenues from the installation, customization and maintenance of software that is branded and created by mostly foreign software companies. There is huge cost and technology expertise involved in development of packaged software hence Indian vendors were more involved in migrating and maintenance. The cloud presents a different scenario for the Indian vendors where they can build their own platform and products and evolve from just migrating and maintenance to running the services for the customers. In cloud computing there is very little scope for continued services in a Cloud market. Cloud based BPO platform offerings present an opportunity for the Indian vendors to develop their own offerings and also helps in increasing the non linear and outcome based revenues that have more margins.

TCS focuses on owning the platform and the services, instead of simply being ‘helpers’ for other cloud brands and wanted to own the brand, the solution and the customer. TCS started wanted its cloud computing offerings generate nearly 10% of its new business together with product revenues over the next few years and planned  to offer standardized solutions across the areas of insurance and banking to multiple customers using same resources. TCS started its platform BPO unit in April 2008 and since then “had seen good traction in human resource outsourcing platform, and had created new platforms in select areas of finance and accounting procurement and analytics. TCS platform offerings have been successful and have seen good traction since last two years and it has seen good success in UK market. With over 30 customers, TCS currently has seven platform-based offering in its BPO unit and 25% of revenues come from platform offerings.

TCS iON - a cloud-based integrated IT solution for Small and Medium Business (SMB) and has already gained over 240 SMB customers who have benefited from increased efficiencies. TCS has already realized the traction for its 'bank-in-a-box' solution among smaller cooperative and rural banks. The solution, which helps these banks automate and integrate their processes of deposits and loans for a fixed monthly rental fee for each branch, already serves nearly 2,000 bank branches. Cooperative banks, including Andhra Grameen Vikas Bank, Uttaranchal Grameen Bank and Purvanchal Grameen Bank, are using TCS' 'bank-in-a-box' solution. Already, smaller organisations, such as Kaya Skincare, Oxford Book Store and Ryan International School, are paying TCS on per transaction basis as they seek to lower their costs of operation further. Non SMB cloud revenues are still at very low levels.

Infosys is banking on innovative cloud-based platform to facilitate client's customized needs and its BPO arm is aiming for $1 billion revenue by 2014. At Infosys Connect, the company introduced 15 Business Platforms under a newly created brand Infosys Edge, a family of platforms that enable customers to buy software on a pay-as-you-go model and offerings range from helping clients with e-commerce businesses to managing human resources and procurement processes. In second quarter of 2011 Infosys Edge signed ten strategic deals. Of these, four were from EMEA, four were from Americas and two were from the APAC region.  Some of the edge platforms are Infosys SocialEdge, Infosys CommerceEdge, Flypp (mobile application marketplace), TalentEdge, etc.

Infosys has about 2000 engineers dedicated to the Cloud products and platforms. Infosys is also building its own data centers in Australia and US and it is exploring the establishment of another in Europe to host new Business Platforms. The company is expecting about 50%-60% of workloads to shift on cloud in next five years, which may yield significant revenues for it. Infosys continues to see strong momentum with its Cloud practice having delivered over 125 engagements till date and The company is building concepts on edge platforms like for mobile banking, medical tourism, etc. It is offering also managing through the cloud the Aircel's Pocket Internet Store. Infosys tied up with Microsoft to provide cloud-based services to clients and will offer Microsoft Private Cloud solutions such as Windows Server Hyper-V and Microsoft System Center, and solutions on Windows Azure to clients.

Wipro is launched cloud computing services through its arm Wipro Infotech and it has around 25 customers. Wipro Infotech is selling two cloud offerings to SMBs – software as a service (SaaS) and infrastructure as a Service (IaaS). Customers are charged per user monthly price model and it has been selling the service directly so far and may start selling through channel partners from next year. Wipro Infotech has applications such as ERP, mail and messaging, human resources management system, dealer management system, hospital information system, vendor portal and learning systems on the public cloud offering and is targeting verticals such as manufacturing, automobiles, healthcare, the microfinance industry, textiles, and education. Wipro has gone in for a mix of self-developed and third party software. The dealer management system and vendor portal, for instance, is Wipro's IP.

Wipro has also offerings in other layers of Cloud including Business Process as a Service (e.g. loan origination as a service), Software as a Service (e.g. bank in a box with leading software vendors, implementation partner to leading SaaS vendors) and Platform as a Service (PaaS). Wipro leverages its Global Command Center (GCC) to provide a unified monitoring and management platform for private, public and hybrid Cloud environments. Wipro Technologies has built a private Cloud for OnStream Utility Metering Services Limited. Wipro is also partnering with other players like Microsoft, Oracle, Amazon, Citrix, etc and offering various platform based services to their clients on the partner’s platforms since 2009.

HCL Technologies announced in 2010 end that new technologies such as cloud computing will become nearly $300 million business over next five years, as part of the company's new initiative to incubate next big opportunities. It had formed a unit called 'ecosystem and business incubation organization', which had already identified five new ideas. HCL Infosystems launched  cloud computing based services branded ‘HCL O’Zone’ with an aim to offer end-to-end cloud based computing solution services to
its customers.
HCL’s IaaS services are concentrated on the European and North American markets, with data centers in Sweden and New Jersey. The target market is HCL’s existing enterprise customer base, including a small number of industry-sector clients. Its offering includes standardized platforms for management, integration within a hybrid cloud environment, and a self-service portal and dashboard.  

HCL offers competency based services such as Cloud assessment, migration, implementation and maintenance. HCL has strategic partnerships & collaborations with leading players in the cloud ecosystem. HP has recognized HCL Technologies as the “AllianceONE Partner of the Year” in the category of HP Cloud Computing – Service Provider. Some of these include: Technology/OEM's Partnerships with Cisco, EMC, Vmware, Sun, Microsoft; IaaS: Amazon Web Services; PaaS: Salesforce.com, Microsoft Azure, Tibco; Cloud Management: BMC, CA.

Indian Vendors have realized cloud computing is essential for future growth and are investing in developing the various cloud offerings for the clients. Interesting fact is that instead of restricting themselves to the role of migration and maintenance they are more focused on developing their own brand of offerings and for this they are investing in data centers and technologies. They might be using the platforms, technologies and software of major vendors but they are developing service offerings use them but selling to the clients on their own brand name. Cloud product and services can be developed at a very low cost compared to packaged software and since cloud computing industry is at an evolutionary phase will definitely provide an opportunity for Indian vendors. All the vendors have created separate business units equipped with financial and thousands of human resources focused on creating products and platforms based on cloud. All of the vendors have developed their own IP product and platforms based on cloud and are aggressively marketing them to the clients.

Standardized offerings through cloud are also what clients are looking for as this comes with significant cost savings and no upfront technology investments. But clients have to be careful as there are some issues like data security, outages, contract complications and technology understanding. Cloud computing is expected to be a key offering for the Indian Outsourcing vendors for the non linear and outcome based revenues that have high margins and help these vendors move up the value chain. Platform BPO offerings is another segment where the vendors had been investing in development of platforms since past five years and they have been seeing success in terms of signing of platform deals since last two years. Vendors are also aggressively marketing the platform offerings to their clients and they are aiming for thirty percent of revenues from cloud and platform based offerings in next three to five years.

1 comment:

Nissim Roberson said...

Outsourcing refers to hiring an outside, independent firm to perform a business function that internal employees might otherwise perform.