Hitachi sees better IT spends in India from third quarter [DNA : Daily News & Analysis (India)]

(DNA : Daily News & Analysis (India) Via Acquire Media NewsEdge) Big Data and cloud computing are here to stay and there's a big potential here to tap in India, think Yu Yoshida, vice-president and chief technology officer, Hitachi Data Systems, and Vivekanand Venugopal, vice-president and general manger, India. In an interview with Beryl Menezes, they throw more light on this, other IT trends for FY13-14 and much more.

At a time when most IT firms are witnessing a slowdown, how has Hitachi Data Systems been faring Yu Yoshida: In the last quarter, we reported revenues of $1.16 billion compared to $1.08 billion a year ago. This was incidentally the highest second quarter revenue in the company history. Hitachi Data Systems (HDS) is also the only vendor to have grown in the last quarter, according to Gartner. We have also been profitable for the past 12 quarters. Overall, HDS has grown 20% in 2011-12 over 2010-11, with 24% of growth being reported from the Asia Pacific (APAC).

Do you see IT firms being impacted by the fiscal cliff in the US in Q3 Yoshida: If the tax incentive issues do not get resolved, IT firms will be impacted by the fiscal cliff. But we are seeing client spending pick up in Q3, as part of the new budget spend. This is because clients want to be prepared with new technology when the economy revives and be able to optimise new project opportunities. We believe clients also realised it was becoming increasingly difficult to run the business without making important technological investments.

Who are some of your main clients in India Vivekanand Venugopal : A majority of our clients are from the banking and capital markets space, followed by software firms, telecom and manufacturing companies. So, while 9 of the top 10 banks in India use HDS systems, it's 6 out of 10 for top IT firms and 7 out of 10 for top telcos run on HDS systems. That said, we are increasingly seeing more investments in the Banking, Financial Services and Insurance (BFSI) space in terms of new technology, more complaints and secure technology and customer-driven analytics. However, we are seeing more demand for improving search optimisation and extending storage capabilities in this market.

How do you view cloud pick-up in India Any case studies Venugopal: While 95% of our enterprise customers in India use cloud today, we see private cloud catching up, as companies look to convert capex to opex costs and increase efficiency. Most mid-tier and small companies today use virtual data centres which are much cheaper - and in a recent survey, 40% of our customers said they would migrate to the virtual data centre or cloud platform. Thus, clients have reported 20-40% savings in opex after using cloud, with data centre costs coming down 40% despite a 40-50% increase in utilisation. So, while Infosys' recovery time objective/recovery point objective (RTO/RPO) was 4 hours and 10 minutes, after using HDS virtualisation solutions, they were able to implement zero data loss and brought RTO down to 2-3 minutes.

How much scope and savings does 'Bring Your Own Device' (BYOD) entail for an enterprise Yoshida: Apart from reducing device costs by about $2 million, BYOD promotes employee flexibility and productivity, thus helping contribute towards a better topline and bottomline. BYOD is also expected to drive storage demand, which will help companies like HDS.

What is your hardware to software revenue distribution Yoshida: Since most IT cos have not been actively hiring employees to manage storage functions in the last 10 years, companies are seeking virtual solutions to deal with the data tsunami. Hence, more core hardware vendors like us are being asked to offer software-based remote managed and consultancy services. Thus, while 5-7 years ago, software and services made up 30% of our revenues, in 2010-11, they made up 50% of our revenues. Gartner also estimates that 25% of customers will transform to per unit IT services billing by 2013.

What is your experience as a Japanese conglomerate working with Indian technology cos Yoshida: We see companies like Infosys and TCS to be more open to working with new partners compared to system integrators in the rest of the world, and do not possess the locked 'one vendor loyalty' trait. Indian IT firms are more agile and efficient in completing projects in a timely manner, which will help them bag more contracts from closed economies and new geographies.

beryl.menezes@dnaindia.net Credit:Beryl Menezes (c) 2012 @ 2012 DILIGENT MEDIA CORPORATION LTD. ALL RIGHTS RESERVED

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