A ‘Make in India’ Cloud Company ESDS is competing with big cloud providers and technology giants in India. This Nashik headquartered company offering Datacenter and Managed Services claims it has the technology to transform commodity based computing into utility model.
Piyush Somani, MD & CEO, ESDS Software spoke at length to ComputerWorld India on the state of cloud services in India and the competive landscape. “eNlight cloud (pay per consumption) is industry’s game changer with our auto-scaling of computing resource delivering 100% availability of customer applications,”he says.
ESDS claims to be India's First Cloud Patented Company. Can you please elaborate on this benchmark?
The real reason to launch a cloud platform was that we had acquired two small hosting companies in UK which started doing well from 2007 onwards. We had VPS hosting customers and the virtualization customers we had during those days often found their IT infra under pressure during Christmas, Good Friday, and Easter as VPS would go down and resources were not sufficient. A situation where business is good, but resources don't scale up is not desired by any company.
We hired freshers and toppers from engineering colleges to help change the compute power in real time. By 2011, we had the product platform ready with the reality of interchanging CPU and RAM in virtual machine in real time. It could be upscaled or downsized in an automatic manner. We immediately filed for a patent for this technology in US, UK and India. However it took four years as big cloud tech OEMs tried to create some issues. On 03 November 2015, ESDS became the only Indian company to receive a Cloud Computing patent from USPTO (United States Patent & Trademark Office). No one else in India has a patent on cloud.
How different is ESDS Cloud story than that of other tech OEMs and cloud providers?
Everyone in India only offers ‘virtualization as a service’ and they call it cloud. You don’t have Amazon, Microsoft or soft layer hosting out of India. The ones hosting out of India are simply offering virtualization from their datacenters. And that's not cloud. Cloud gives you flexibility, scalability and an independent environment from OEMs.
With virtualization, the infra gets splits into multiple virtual machines to run applications. The companies can move VMs from one infra to the other but those virtual machines cannot grow. We are the only company in the world which offers vertical scaling technology. The entire world and other OEMs work only on horizontal scaling.
Load balancing was converted into software defined load balancing which became software defined load blanking and then cloud. On other clouds, they will give thousand instances of same size but those instances cannot grow in real time. With our technology, the instances can grow in real time and only when it approaches threshold limit, the companies need to horizontally scale.
Five years back, it was estimated that the entire world will change architecture to make it similar to 3 tier architecture of ecommerce companies. They said all banks, telcos, and other big companies will change to three tier architecture, but that didn’t happen. No banks have their core banking on cloud and not even a single telco worldwide is on cloud. It shows that cloud was so well marketed and projected. The internet application which is a B2C application works very well with that model as you need thousands of VMs that can be load balanced. But when it comes to legacy enterprise applications and eneptirse databases, it does not work similar to B2C applications.
Every technology OEM like Microsoft, Amazon do have their own definition of Cloud. Comment.
Their cloud model is different as it is B2C focused cloud. Our cloud is more on B2B plus B2C. Their clouds don't not work with B2B. For example, B2B would be like a core banking solution used by banking staff, SAP HANA used by own staff, Oracle Siebel for telco. B2B does not work with them.
We offer the real time auto scaling of resources compared to other cloud services. The true element of cloud is also when the customers pay what they consume rather than pay for allocated resources. We have been able to achieve vertical and horizontal scaling that differentiates us form competition.
We have utility based models by other providers which is pay per use. But there should be a flexible factor built in for the exact time of consumption of a unit of a resource. The true nature of cloud is scalability, flexibility, agility and real time without shutdown. Cloud has to be like an electric bill.
People have not defined pay per use clearly as it has to be customized as per applications’ usage for end customer. ESDS has innovated in terms of infra as a service and this translates into benefits for customers' enterprise applications in a cost optimized model.
What’s been your company’s report card globally and in India in past one year?
We have strong presence in UK serving 35000 customers and more than 2 million websites are hosted by us. The focus in UK is with SMBs like web masters, individuals with shopping or ecommerce, smaller applications, smaller websites across various verticals. We do have a few government customers in UK including many councils and a few enterprise customers.
But India business is focused on B2B enterprises where they need a lot of compute power and managed services. They have been using pay per consume model as they do not know the nuances of sizing the infrastructure.
The worst thing with infra as a service in India is oversizing. The sizing is done by systems integrators or consultants. Nobody knows the secret formula but the fact remains that they always oversize the infra depending on the customer’s budget. For example, for x number of users packet size, they might need to buy 20 servers and 4 storage boxes. But the utilization in most cases even after three years would have only reached 5 to 10 percentile.
I believe the oversizing of hardware requirements from day one only weakens our country’s outward cash flows. Because more hardware deployed (than optimally needed) means more revenues for China (where each and every IT component is manufactured).
I believe the oversize of hardware requirements from day one only weakens our country’s outward cash flows. Because more hardware deployed (than optimally needed) means more revenues for China (where each and every IT component is manufactured) - Piyush Somani,MD & CEO,ESDS
Are CIOs wary of moving to cloud as their comfort zone is On premise?
It’s the lack of knowledge in most cases. The customers are afraid as they do not know that the infra can be sized optimally and scale as they grow. And the fact that they use ‘pay per consume’ model and allocate more resources, they will buy technology once in five years as they do traditionally.
Then there is compatibility issue if you bought IBM P6 series and then add P7 then that option was not available. But with x86 and open source it is now easy to integrate different solutions. However the oversizing trend continues as CIOs and IT managers are still largely influenced by SIs and consultants.
Besides infra oversizing, what are other pain points you witness with Indian CIOs?
The biggest competitors to us are channel partners of OEMs. Channels will have the same infra (mainly hardware with upgrades) of major tech OEMs. The customers are often forced to buy hardware that their partner is recommending. Or maybe the channel has worked with the same CIO across his roles across different companies. That fear is always there in CIOs and they have been buying more hardware.
Some CIOs we see have complicated their infra with AV from one, storage from other, switches from another vendor. And they have IT infra pieces from half a dozen plus different OEMs.When something goes wrong in the network, CIOs call for all OEMs but no single one takes the responsibility. We have been telling them to move out of such scenarios and outsource their IT to cloud and data services players like us.
Another change we see in the last few years is the fact that CIOs in age group of 30 to 3 5 years are replacing CIOs. aged above 50. Also new companies are having younger CIOs and CTOs than before. And these CIOs are keener to consider cloud as they have higher company goals on mind rather than their individual goals.
CIOs are big influencers though not the final decision makers. We see more than 80% of CIOs and CTOs engage in safe decisions than the right ones with their IT infrastructure through traditional budget and vendor evaluation process. They engage with the biggest brands (at competive prices) and tomorrow if some IT piece fails they are still safe from sharp criticism from board due to big OEMs’ hardware. That’s a challenge.
How would cloud adoption impact the market for IT appliances like storage, servers’ etcetera in India?
The hardware business will continue to grow at double digit in India. And cloud will also grow.
Most of the Fortune 500 companies have majorly B2B workloads on cloud like KYC, documents, customer information etc. This is only 10% of their total workloads. This is because most top verticals like banks, telcos are not on cloud. Hence we foresee a huge opportunity with cloud in B2B space.
How easy or difficult has been the path for ESDS as a new data services player to convince India Inc. about cloud?
Initially it was very difficult for enterprises to host their workloads and applications in our datacenter. DR hosting was our ‘foot in the door’ business opportunity. Today almost 35% of India revenues come from DR. With our DR hosting, the customers save around 70% through our pay per consumption cloud model. Also they saw DR drills, support level, managed services from our end that helped build trust amongst Indian enterprises. They can now focus on innovation and launch new products and focus on business growth leaving the cloud part to us.
Our strategy to target enterprise accounts with smaller products and services has worked. And then the companies start utilizing more product offerings from our end over a period of time.
We have named accounts across most verticals including large conglomerates, oil and gas, FMCG packaging, automotive etcetera wherein we started cloud on one or two virtual machines as initial orders. But later they kept on adding hundreds and thousands of VMs.
Acquiring customers for cloud is a challenge. But later the upsell and cross sell of other products becomes easy as CIOs get comfortable with the cloud paradigm.
Acquiring customers on cloud is a challenge. But later the upsell and cross sell of other products becomes easy as CIOs get comfortable with cloud paradigm.
What about companies’ demand for cloud providers to have local datacenter in India?
Yes. Almost every customer wants to host their data or applications in a local datacenter. In India, Mumbai and Bangalore top the list of preferred cities. They are more comfortable and it’s a mindset issue that the data is safer at a closer location. However we have seen breaches or downtimes happen even when the data is on premise or in their private datacenter.
Till we had the existing datacenter at Nashik, many CIOs and company executives refused to visit the same. Because in India, one has to physically see the technology work to invest in the same. But after we launched the datacenter in Mumbai, the volume of orders have spiraled to the tune of more than 70 crores.
Highlight few priorities of ESDS in 2016 and beyond.
We are launching on premise product eNlight 360°which would be available for banks, telcos etcetera. This will enhance customer’s hybrid cloud journey including monitoring services, catering to five popular hypervisors, burst out to public cloud and managed services. The thought process of large organizations for hybrid IT is to keep critical business on premise and go on cloud for B2C applications. We do not want to lose on that big opportunity.
We as a data services company first developed the patent technology for vertical scaling on public cloud and now we can offer the same platform for on premise.We want to be an aggregator (like Uber) for compute across thousands of nodes, across big organizations and make that available for public cloud in the future. This market will mature over the next three to four years. As of now we can offer new products and services on premise to our customers.
What is your channel strategy to reach out to larger market in much quicker time for widespread India market?
We have a good alliance partners like KPIT and KPMG in both Tier -1 and Tier-2 space. We also have 20 to 25 smaller partners. The third segment is channel partners aligned with us who act as our hand and feet in India market. We also have an exclusive channel partner network in tier 2 cities for cloud projects. We explored tier-2 channel route about four months back as we were identifying competent partners to come under our fold.