Indian outsourcers cautiously reach for the clouds

April 28, 2010

The global economic slowdown has forced many firms to cut costs and take a series look at cloud computing options – including Indian tier one outsourcers. In fact, Kris Gopalakrishnan, the CEO of Infosys, noted last August in the Financial Times that even they need to adapt to the changes that are occurring so as not to be caught out in the cold. However, he also added that there is still a question as to how much the market will move into the cloud computing space given that previously heralded technological changes had failed to happen as quickly as predicted.

Indian outsourcers cautiously reach for the clouds
So how are Indian tier one outsourcers tackling cloud computing? A quick survey is revealing:

  • Infosys. At Infosys, Gopalakrishnan noted that they are still testing the waters of cloud computing. However, he also noted that Infosys focuses only on the world’s 1,000 leading companies who have annual revenues of approximately $5 billion or more. On the other hand, entering cloud computing would allow them to tap the mid-market. In other words, companies with US$1 billion plus in revenues. Then in January at Infosys’s annual strategy meeting of its top executives, the company announced that it would zero in on cloud computing along with seven other growth areas over the next five years (digital platforms, emerging economies, healthcare, sustainability and environment, modeling for higher predictability and new areas of commerce such as micro payments).
  • Wipro. At Wipro, the Financial Times noted last February that about 500 employees are part of a pilot program where they are hooked up to a central computing “cloud” or a collection of shared servers and software. The purpose of the program is to study the potential of the cloud computing trend and so far, the pilot program has found that it can only take about 36 minutes to set up a cloud network as opposed to 43 days for an employee of an outsourcing firm to set up a new project. Hence Girish Paranjpe, Wipro’s co-chief executive, noted that the potential for cloud computing is huge.
  • Tata. At Tata, cloud computing services are being piloted for both small and medium sized businesses. However K. Ananth Krishnan, their Vice President & Chief Technology Officer, noted earlier this year in Business Today that to be a real cloud computing player, a firm must be able to provide relevant domain applications and the necessary business services. Today, Tata provides cloud applications that cover common office and business applications, core vertical ERP applications, and niche analytics applications to SMEs in the education, healthcare, manufacturing and retail industries.

In other words, Indian tier one outsourcers at this point in time are still largely just experimenting with cloud computing. Nevertheless, cloud computing could allow Indian outsourcers a chance to capture a client’s entire IT budget plus a large portion of their business process work and thus, increasingly compete head-to-head with large Western groups such as Accenture, Cap Gemini, Dell, Hewlett-Packard and IBM. Hence, look for Indian outsourcers to increasingly make a concerted effort to reach for the clouds.


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