CIOs Should Validate the DNA of Their Outsourcer: CtrlS
Six-year-old CtrlS – a IT infrastructure and managed hosting provider -- delivers datacenter infrastructure, DR, storage, application hosting, backup, hardware, cloud computing, OS layers, network and security solutions to enterprises. P Sridhar Reddy, CMD, Ctrl S, speaks on why CIOs should outsource IT more than ever in today’s competitive environment.
Many datacenter infrastructure companies - both domestic and global are aggressive in Indian market . Is there enough business for everyone?
There is reasonable demand from the user community and majority of the companies in this space are growing at a healthy rate. We don’t get into fierce battles except for couple of deals. Everybody has carved their niche through specialization and outsourcing is a huge market. In some micro markets, there might be an 'over supply' situation but that is cyclic and for a limited period.
We haven’t even touched the tip yet in managed services, which has been a high growth area contributing over 65 percent of company revenues today. The size of deals are however small.
Have SLAs at the customer end become more demanding over the years?
Five years ago, service level agreementa (SLA) looked mainly at uptime, power cooling and some MNCs demanded SLAs based on humidity. Today the list stretches to over 20 pointers including SLAs on information/physical security, telecom links/ individual component uptime, and power consumption, to name a few. The list has elongated because vendors are introducing differentiated offerings and also most organizations are beyond the first phase of outsourcing. Some have learnt from costly mistakes and want to avoid such instances in future contracts.
There is a gradual shift in IT spends from pure Capex towards an Opex model. Why isn't the trend accelerating faster?
SMBs are already active on Opex. For mid to large enterprise it is a slow trend towards appreciating the ‘lease model’ offered from vendors like us. Their internal divisions could offer resistance as some fear that outsourcing reduces the shine of their department. Outsourcing often looks a bit expensive due to different indirect running costs. However, we project clear TCO with significant savings over the years.
Project cycles today have shortened to 20 percent of traditional ones. Many projects (with a one-year horizon) fail because by the time they are implemented a busines has either ceased to need it or the technology has changed. Outsourcing reduces that gap largely as we execute highly-complex projects within a maximum of four weeks.
Can you offer any ‘checks and balances’ before CIOs sign the outsourcing contract with vendors.
The outsourcing vendor has to be extremely passionate and committed to serve customer. This is a different business than a routine technology vendor. Check the DNA of that company and its stability. CIOs should look into survey reports prepared on the basis of daily feedback based on the tickets raised by customers. They can request infrastructure audit reports including tier 3 and tier 4 datacenter certification. High skill levels at the vendor end and after sales support are crucial.
Some prospective customers do a comprehensive due diligence including meeting long-standing customers . They sent experts to audit electrical / mechanical set ups and security infrastructure at our datacenter. They are justified to know our investment plan and business roadmap as they move IT to another premise (third party datacenter).
Lastly, what is the reality of the adoption of cloud by India Inc. ?
As an end-to-end IT provider, we are the best player to set up private clouds for organizations. We have built an automation suite of 16 different tools to ensure provisioning, service delivery, ticket management, to name a few. Almost 95 percent of private cloud deployments of enterprises reside at our datacenters. Most banks are cautious as they want private cloud at their premises. Surprisingly, the rest of BFSI community - insurance, payment gateways, brokers, investment bankers are aggressive outsourcers. Around one-third of the top lines are from BFSI.
For the public cloud we work with 20-plus regional service providers (broadband / cell phone providers) apart from mainstream ones. The highest end variant of public cloud is much more secure than any in house set up -- even a private cloud. The cloud platform – private or public -- by Ctrl S is a unique value proposition to the customer as it delivers world class, differentiated offerings at a decent cost.