Japan and China impress VMware, but India still a mixed box

SAN FRANCISO, USA: Vmware has gone full steam virtualizing network and storage by making a slew annoucements regading technology enhancements at VMworld 2013.

On sideline of the event, Andrew Dutton, senior VP and GM, VMware Asia Pacific & Japan and T. Srinivasan, MD, India and SAARC, spoke to CIOL on virtualization adoption in the region. Excerpts:

CIOL: How do you seen server virtualization taking shape in APJ region and especially in India?

Andrew Dutton: We got IDC involved to do a study and just in server virtualization in APAC. We have saved our customers $25 billion in the last five years. The savings garnered have been pooled back to the company and that is why customers across the region are more inclined towards adopting server virtualization. The adoption has been rapidly expanding and companies are set to save $70-$74 billion by the end of this decade (2020). Adding it all up, that's a prime saving of $97-$98 billion by just server virtualization.

If we can save close to a $100 billion dollars for these companies by just server virtualization, you can imagine the possibilities as to how fast these firms will pick up the networking and storage components of virtualization. These firms have already figured that out and know how to make it work going forward. If you turn that headline around that said "these initiatives are going to further create a $100 billion worth of profit for businesses in the next 10 years" - that is what VMware helps companies do!

T. Srinivasan: India numbers for the server virtualization savings is $3.94 billion (approximately $4 billion by 2020). India is gradually picking up on the adoption of server virtualization.

CIOL: How eager are companies in adopting server virtualization?

TS: If you look at what Andrew said as to what has been happening in the past three to four years, we have been heavily investing in India. The adoption of server virtualizing has been increasing. Basically, like in most economies, people have benefited and saved money by not buying hardware. The other savings come from reduction in real estate, electricity/air-conditioning, as well as in carbon footprint. The number that I gave you of the savings is a sum of all these savings the customers have experienced by using server virtualization.

We also have individual reference-able case-studies, both large and small companies, where each CIO have gone out and said that they have saved so much of "X" amount of CAPEX and OPEX costs by using our technologies.

AD: The compression ratio we are seeing now is 15:1 - so if you've had 15 servers, with VMware technologies, we take it down to about 1. So for example, each of the servers cost the company around $300 in electricity alone a year to run them. If you start to add up the savings just in that particular aspect coupled with the benefits of virtualization aspect like simplicity, resiliency, security and reduction of infrastructure costs, you have a winner that actually benefits the business! That's where we are finding huge amounts of uptake. Example - BFSI, healthcare, defense sectors, etc.

CIOL: Is the 15:1 compression ratio relevant to India too?

TS: It is a universal number and again these numbers are customer-dependent. In some cases, the customer may compress it to a 5:1 ratio, some go with 10:1. So, depending on the kind of application, the compression ratios vary. But again, there is no difference in these aspects between India and the rest of the countries.

AD: We are witnessing a dramatic increase in End-user-computing (EUC) product uptake across APAC. The surprising part is we are still figuring out if it is the businesses telling this is a good thing to do to secure the data and company assets or it's the fact that every person in APAC loves smartphones and devices. Everyone seems to have a dozen of them. I think there is a huge amount of demand from individuals saying allow me to work anywhere - anytime, but we need some flexibility in getting access to data. What we have now created are virtual desktops and little app stores.

The app stores are designed for "you". These apps give you access to the data and the information needed for one to do their job anytime - anywhere and it is controlled. Governments love it, the defense sector love it and it is a must need in the healthcare sector as well because it is private information.

For example - it allows doctors to use their iPad anywhere they are without having to go right next to the patient. One can send scans, doctor info etc. all very securely maintained in a central point as a result of which no one can take the data away. And that is a good idea! These are the general trends that I am seeing with regards to EUC.

CIOL: Who are the front-runners when it comes to virtializtion in APAC?

AD: We don't break it down into region-wise figures. While it is an interesting region, if you look at the north, the fastest growing countries we have are Japan (increasingly ramping up post the natural disasters), China (whose infrastructure is superb and growing at a rapid rate), ASEAN is doing well (Indonesia, Malaysia and Singapore especially have triple digit growth) and lastly, India continues to grow well.

CIOL: How do you see the India market evolving in the next two to three years down the line?

AD: The opportunity in India continues to be exactly the same. It is highly skilled and we got to stop saying it is a low-cost market. It is a high innovation market. It is driven largely by the initiatives taken by the government 20 years ago to increase the spending in technical education. That changed everything.

On the supply side, we are seeing huge uptake in education and training to match the demand for virtualization. And India is way ahead of the APAC region in this area.

The downsides are public infrastructure. Some of the networks aren't as strong between the capital cities. We hope to see a change in the coming years. But presently, this is causing companies problems and this constraint needs to be resolved.

We are still seeing a growth rate of 5-6 percent for India inspite of the downgrade but it is still double or triple most other countries. That is a huge opportunity. If we continue to virtualize and take the savings in those industries, that allows them to re-invest those money into their businesses and become more competitive. The faster the companies do that, the faster they become more internationally competitive and faster the economy will grow. The commercial groups will drive the economy going forward and this is a good thing.

TS: As Andrew said, there is opportunity clearly and from VMware's stand-point as well. There are challenges, but we have continued to hold our own despite the adverse circumstances.

AD: The addition of network and storage suits India to the ground because if we look at the very large customers in India, they are all internationally based. Ex: Look at Infosys - they run networks 24x7 to every corner of the globe and a lot of them are complex. Our technologies will save them enormously. Tata Manufacturing is also a good example.

CIOL: How long would it take for companies in India to implement the new technology announcements made at VMworld 2013?

AD: Some Indian companies are the most advanced in the uptake of newer technologies on the planet. They are the ones that are grabbing us by the ear and helping us innovate new products and services. The thing that will slow us down is getting the customers and enough resources trained. We need to get the education and enablement courses to our partners and customers rapidly.

The upside to all this is India's ease with the language of English - all the code that is written comes in English, Education is imparted in the same language and so India has an advantage in them. The downsides are that many of the government customers need to test and make informed decision when it comes to uptake of newer technologies.

CIOL: How important are the government projects for VMware in India?

AD: Our largest customers around the world are government agencies because of the potential for huge savings and in a way, leading and showing other companies to reduce their carbon footprint, decrease costs and utilize the technology in a productive way. Government is a very important sector for us. We are starting to see this in India as well.

Once there is parity between the state and central governments in India on the ongoing talks about datacenter location and the likes, then we will see an even more pick-up in our technologies. We have also seen good wins in both central and state govt. sectors and we are also working closely with partners like NIC in this sector.

If you look at the public sector on the other hand, all the major companies have virtualized their infrastructures. Examples are oil, manufacturing sectors, etc.