Infosys cloud computing services grow five times

September 16, 2011 Off By David
Object Storage
Grazed from Financial Express.  Author: Goutam Das.

Riding on a global surge in cloud computing demand, India’s second largest IT exporter Infosys has grown its cloud engagements five times over the past one year, jumping from about 20 last year to over 100 engagements currently…

Cloud services form just about 2% of the firm’s $6 billion top line but executives said it holds great promise for the future with both existing and new customers wanting to move applications onto the cloud – delivered over the Internet, cloud computing is an on-demand paradigm that can disrupt the way IT services are delivered today. Cloud uses virtualisation technologies and can potentially make an enterprise shed all of its IT assets one day; their servers, storage, and applications can be rented as per need from cloud service providers. For large tier enterprises, cloud variablises IT costs by converting expensive capex investments into opex.

According to Forrester Research, the global cloud market is set to grow from $40.7 billion in 2011 to $241 billion by 2020. All Indian IT service providers have jumped onto the cloud bandwagon and have started proving a mix of consulting, system integration and application management work.

As part of the firm’s restructuring earlier this year, Infosys had carved out a separate cloud services horizontal business unit that now has a profit and loss account. “We believe that in 5-7 years from now, about 60% of client workloads will be on the cloud, in a combination of public and private. We have done over 100 engagements so far,” Vishnu Bhat, VP and global head of Infosys Cloud, said.

The executive said that Infosys is helping global Fortune 2,000 customers identify cloud possibilities, migrate to the cloud and manage the cloud ecosystem. The firm has an asset-lite policy and has decided to stay away from the data centre market unlike its other Indian rivals such as Wipro.

“We are not building data centres ourselves. We debated whether we should be in the market and we took a conscious decision that we do not want to be in data centres. We have partnerships with Amazon, Microsoft, telcos like Verizon. These are our infrastructure partners,” Bhat said. Infosys is also working with platform companies as well as technology and integration partners who build tools and technology that help integrate the whole ecosystem of cloud.

All IT workloads will not move to the cloud because some parts of IT are just too complex. “About 40% would continue to be in a traditional environment because a lot of these applications are very archaic – they have to be heavily re-engineered for a cloud set up. The trajectory we are seeing in most mature markets is that the initial push is towards maximising on asset investments already made,” Bhat said.

Infosys Cloud currently has 2000 people and the unit’s revenues are not totally de-linked from people growth. “It is both people-based and transaction-based pricing. Once you get into the management of cloud applications, there is a huge opportunity for us to transform the engagements into a transaction-based pricing model. It is partly people-based because most of our consulting services on a people-based arrangement,” the executive said.

FE had earlier reported that Infosys has started offering Indian cooperative banks a cloud version of its core banking product Finacle, tapping into a R2,000 crore market.