Infosys says cloud marries outsourcing

As many fear about the repercussions of cloud software on India’s IT services industry, the country’s second-largest IT services firm is scripting a uniquely Infoscion way of converting the challenge to an opportunity.

Software-makers and dotcoms may be rehashing their products for new Cloudscape, but Infosys is going one step further — infusing its entire outsourcing model with the power of the cloud.

“Our strength is our consultant,” says Raghavan Subramanian who heads the ‘Centre for Excellence’ for cloud computing at the $5 billion firm, pointing to the underlying philosophy of its hybrid cloud-BPO model.

Cloud computing refers to the technology underlying Internet-based IT services, kicked off by pioneers like Hotmail. The Sabeer Bhatia-founded firm exemplified the ‘cloud era’ by making email software such as Outlook surperfluous to its users.

Instead, users could just log on to similar software running on Hotmail’s swarm of computers (cloud) using a plain old web-browser. The approach has since attacked nearly all forms of locally installed software, including bread and butter services like enterprise planning, word processing etc, reducing the traditional packaged software deployed by firms.

Some fear IT service companies like Infosys, which get most of their revenues from creating, installing and running locally deployed software, will be impacted by any large-scale move to cloud.   

While disputing any large disruption in the traditional IT services model, Subramanian said the firm is intent on using the new architecture to its advantage.While traditional cloud players urge companies to delete their local employee-management software and log on to the Internet, Infosys is taking cost-cutting a step further.

“Everyone says that you can replace the local software and save money. But our offering is at a higher level because we will not only replace the local human resources software, but we will run the entire human resources department for you, using cloud software,” says Subramanian. In other words, Infy will replace not only the software, but also  run the entire department for you.

Subramanian, of course, is aware of the negative implications of taking over entire departments, but believes that only well-trained people can bring the full cost-savings and benefits of cloud systems to the companies.

“We have seen people deploy cloud solutions, but not be able to fully achieve the intended cost benefits due to poor utilisation of the software. With trained manpower, we deliver much better cost savings than otherwise,” he says.

Besides human resources, the company can also manage other departments such as procurement and customer relations management, by combining its IT skills with its BPO and outsourcing experience.

For the purpose, the firm currently has a team of around 250 experts, handpicked and trained from its BPO arm Progeon.

Another 175 engineers from its IT services division are writing the code required for implementing the plan. “We have already gone to market with it and have good take up from the North American and Asia Pacific market,” Subramanian says.

Depending on the transaction specifics, Infosys is open to transferring the old employees to its rolls, instead of letting them go.

In addition, the company is also engaged in the traditional model of selling just the software on a Cloud. It has more than 200 people working on its software-as-a-service offering, including modules for customer support, e-commerce, social media management etc.

It is also studying the possibility of launching a cloud-based app-store, on the lines of the one it has implemented for the South Indian mobile operator Aircel.

In these segments, however, it faces tough competition from dotcoms-turned-cloud players like Google and Amazon.