RajGopal AS, MD, Nxtgen Data Center and Cloud Technologies, in conversation with the DQ Channels, elaborates on the tie-ups with Emerson and Microsoft, expansion plans and its future strategies
How has the company addressed this market? What are the new developments in the pipeline?
You have seen out OPDC. So if you are my customer I will come and ask you if you want to co-locate, you give me your server, I will put it in your database. Lets say you want to put it in your own premise. So what I can do for you is virtualize your own hardware and make a cloud on your premise or use my cloud. But in the long run whether it is your hardware or my hardware, both will connect together and then we will provide you unlimited resources. This is what we call infinite datacenter. So whether you are a customer who needs cloud on premise or off premise, you have full choice. You don't need to be confined with one way of functioning.
Most importantly in terms of income, however, today on OPDC, we compete about 60% of the IBM, on cloud we compete 100% with Amazon. We have had great response to our enterprise cloud services. Today, our priority is to take our High Density Data Center (HDDC) live in Bangalore. We expect it to be operational by April 2014.This datacenter that is coming up is by far the largest in India. But it is not the largeness that we are happy with, this will host new generation hardware, it will take 15 kilowatts per rack on every rack on an average. What happens is if you have 5 racks on a facility, you can host that in one rack in our facility. So your customer sees a lot of value.
We are also going to get a K3 certification for this set up.
When it comes to lot of big vendors in India they form an alliance to sort out solutions through their partners. Do you see any opportunity over there or do you see any growth or business coming in from the area?
No, we will go through the partners because India is such a country that only partners can reach. I feel a single vendors cannot alone reach out in length and breadth in India. Our strength is making solutions and services. And our channel should take it to the industry. Our team is there only to support the channel partners. We want to focus more on developing betters solutions that our partners can continuously roll out.
But you have a tie up with Emerson. Are you looking for more such tie-ups?
No, Emerson is unique and precisely exclusive because we have co-designed that product with Emerson. Today, we don't see the need for having any other partner. But on the other cases, yes, we are working on our partners. We are on a program with Intel. We are also a part of a Microsoft program called Ignite. Ignite is basically a special program for datacenters from Microsoft. This is not a publicized program but we are a part of it. There are only 12 datacenters who are doing it. So Microsoft is working closely with us on certain aspects of it.
What is the leverage of being a part of this Microsoft program?
We have one more reference in Microsoft and it propagates whatever we are doing for them to their clients. It is beyond just technological benefit.
Whenever interacted, it usually is the cost saving which has an emphasis when it comes to utilizing a solution that comes from Nxtgen. So is it a challenging aspect to convince partners, and to make them understand the solutions?
The thing that happens when the partner sells the product, he has a big chunk. So it is large value. But when he sells a service it's a small value. But what the partner needs to understand is that in the long run these small ones add up to a very large amount on a month on month basis. He doesn't have to do anything to earn that. It is pure bottom line. Unlike in a product, while there is margin which is visible, a lot of times you lose margin because when you are delivering a product to the client, there are so many hidden costs. And most are them are not borne by the OEM, they are borne by the partner. Such things don't exist in our services module because its either customer who is installing it or we are installing it. Partner is only selling. The advantage is that whatever the real cost, the value that he gets, he gets to keep it. And the value over a period of time becomes so big, that it will run his company forever. Till the customer is alive he gets that recurring money. This should be understood and it will take time. They have to experience this fact. Once they start getting 1-2 lakhs coming every month, they will start getting interested so we have to handhold till they get to that level. The moment we start delivering a lakh rupees to partner every month, then there is no looking back. He knows where the money will come from. So we will handhold till he crosses that threshold.
Could you highlight some pain points, when it comes to pushing such specialized solutions?
The end game is not that everything will be virtualized because all of us have bought so much of hardware and finally you can't say that you will throw it. It will not happen. The real state of cloud is, what people call hybrid, usually people think it is public and private, it is not just that, hybrid is physical and virtual also. So what happens is for example, a customer who uses for his applications and front-end, uses virtual machine, and for his database, he had already bought one server, he doesn't want to run it on cloud, so what he did was, he brought his server physically and connected to cloud in our office. So we hosted his physical hardware and hosted his applications on cloud, so this is also a hybrid model. So it is co-location, managed services, and cloud.
For the next 5 years, hybrid in the physical and virtual sense is going to prevail. What we must learn to do is to roll out cloud along with customer's own hardware. Not tell him that all that he bought till last year is of no use and start using something new. It is not a story to sell like this. One should figure out, how to get value out of what he has today, and this is very important.
Are SMBs more on adopting newer technologies as compared to enterprises?
I would say, SMBs. What happens in a large organization is that for example they have 100 servers, and if they have 1 server virtualized then they will say we have done virtualization. But the percentage of adoption of ‘a' technology will be miniscule. It is not really running their business, their business still running on traditional platforms. But when it comes to a SMB, when he moves, he moves his entire business to new technology. They have taken a far bigger step than a larger company has taken. These guys have taken a bigger risk as compared to their larger counterparts. The bigger guys will do small things but make big noise.
For NxtGen, are mini metros and B&C class cities bigger market than metros?
Actually, it is everywhere. How many people have actually implemented cloud solutions? In reality, we think the adoption is less than 5% so we can't say that metro is not a market for us. Cloud has to be everywhere but still it has very low adoption rate, primarily because it is so complex to set up and run. So if you can help that part for customers in terms of making it easy for him to get to cloud, then it will be everywhere.
With big players going all out to capture market share in the country, how does this place you in the competitive scenario?
There is market for everyone but we don't want companies like Amazon to gain market share in this market. If you compare Amazon's VM and our VM, our VM will outperform by at least 2 times. If you are on 4 cores in Amazon you should just take 2 cores from us because run far superior. In terms of costs, we will be at least 40% lower than Amazon. Second thing, we are hosted in India so the response rate is much lower. What I strongly believe is we can deliver a service far superior than that definitely superior performance at a lower cost. And this is also our goal, we want to go out and compete with Amazon in India. We have partners like Intel who have backed us with strong funding.
What is your roadmap ahead for the coming fiscal?
We will adding a lot of new features to our existing solutions and upgrade it. Next year, we will be working on three projects, one in India and two at international locations. As the facilities in the international locations go live and we are looking at middle east countries, we will take our cloud services into those markets as well. Following this, we will have a set up in South East Asian countries, we have identified two countries but location is yet to be finalized. Wherever, we will go will take our HDDC, OPDC and other gamut of offerings and services as we believe in the offering of ‘Infinite Datacenter' to our customers.