Tata Communications’ global cloud ambitions

March 9th, 2011 | by Chan Chi-Loong

The lucrative public compute cloud market is heating up, and a new challenger has entered the fray.

Tata Communications just launched Instacompute in Asia Pacific yesterday, a scalable, pay-as-you-use compute cloud that is closely similar to Amazon’s Elastic Compute Cloud (EC2) offering here in the region.

Except that Tata Communications claims that it offers a better, more robust service as they are building Instacompute on their global network infrastructure.

Said Vinod Kumar, managing director and CEO of Tata Communications at the press launch yesterday: “Other traditional cloud providers buy their networks, but we own the network on which the data is run.”

Being a global telecommunications player with good connectivity depth in Asia – especially in India – Tata Communications hopes that their network links as a telco will give them a leg up in the public cloud brawl, especially in terms of network reliability and reach.

“We’re betting Tata Communications on the cloud,” said Vinod. Tata Communications has aggressive targets for InstaCompute to hit US$250 million revenue in three years time.

The launch of their cloud datacenter in Singapore yesterday is but the first salvo of their global cloud ambitions, as they will follow this up with launches in Europe, US and South Africa by the end of the year. Singapore is the second cloud datacenter that they are adding to their existing Hyderabad one in India.

Other features that will help Tata Communications challenge market incumbent Amazon, which had a one-year lead in Singapore, include tweaks like support for multiple currencies and multiple payment models using prepaid, postpaid or contract invoicing.

A check with both the Tata Communications and Amazon offerings show that their pricing models are remarkably similar – for now.

Sales wise Tata Communications is going to sell in three ways: Through online credit card sales at their website, through direct sales for bigger customer prospects and lastly through channel partners.

According to Vinod, Tata Communications is looking to build a cloud ecosystem and are looking for channel partners who can add value in reselling instaCompute solutions.

And the cloud market goes crazy

The cloud market is getting increasingly hot as both IT vendors and telcos jockey for primacy.

For example, in Singapore alone there is Alatum, a HP and SingTel foray into grid services under the auspices of the Infocommm Development Authority of Singapore (IDA) that was launched in late 2009.

Alatum provides both the compute portion of the cloud (IaaS, or infrastructure as a service) and services portion (SaaS, or software as a service). However, their pricing model for IaaS is locked in at yearly contracts and thus does not really compare with hourly utility compute models that Amazon or Tata Communications runs.

Just two days ago IBM launched their US$38 million cloud lab datacentre in Singapore, and this is likely going to be used to spearhead their charge into private cloud offerings in the region.

We’re not even touching on the SaaS portion of things, which many major IT vendors, from Salesforce to VMware to Microsoft, have fingers in.

Demand is driven by a voracious conflux of technology factors, including virtualization, fast and stable global networks, and the commoditization of cheap storage and servers. More crucially, it brings down the price point of IT.

Aroon Tan, managing director of Magma Studios and a reference pilot customer of Tata Communications at the Singapore Instacompute launch, epitomizes the type of SMB customer that will benefit from the cloud.

A game developer based in Singapore, Magma Studios is developing World of Temasek, a free-to-play massively multiplayer online (MMO) game designed to teach students the history of Singapore. The game is expected to launch in the middle of the year.

According to Aroon, the move from a CAPEX to OPEX cloud model was a logical one as it lowers costs and allows them to scale when there is demand.

“The cloud means that I can adapt to the needs of the students,” he explained, as schools in Singapore will will likely enrol into the game in batches when it is launched.

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