Vineet Nayar, CEO at HCL Technologies, has firmly cemented himself as one of today's outspoken visionaries in the world of IT services. Never afraid to offer an opinion that may rub a few folks the wrong way, the self-styled CEO booked his ticket to notoriety at HCL's analyst conference in Boston this past week, where he described Cloud, well, as bullshit.
Unfortunately for Vineet, some of the HfS Research team had also made their way to the sessions, and we weren't going to let Vineet off lightly, without getting him to share some of his views with our readers. So Phil Fersht and Esteban Herrera were only too pleased to grab some time with him on Thursday after his flamboyant keynote to get him to elaborate a little further...
Vineet Nayar, Chief Executive Officer, HCL Technologies
HfS Research: Thank you for joining us today, Vineet. Can you elaborate on your statement this morning that “Cloud is Bullshit?”
Vineet Nayar: My view on Cloud is that I always look for disruptive technologies that redefine the way the business gets run. If there is a disruptive technology out there that redefines business I am for it. If there is no underlying technology there, and it is just repackaging of a commercial solution, then I do not call it a business trend. I call it hype.
So, whatever we have seen on the Cloud – whether it is virtualization, if it’s available to… now before I go there, and the reason I believe what I’m saying is right, is because you have now a new vocabulary which has come in Cloud, which is called Private Cloud. So now it is very difficult, so what everybody is saying is “yes, it is private Cloud and public Cloud” So, in my vocabulary Private Cloiud is typically data center and when I say Cloud it is about Public Cloud. So let’s be very clear about it.
All the technologies that have come in so far—whether it is VMware on virtualization, which is the driving force in cloud, or Azure or Spring—are available for the enterprise customers to implement in their data center and to create a robust infrastructure which is a shared platform for their applications to deliver to their consumer. So the question I ask is: “Why should they step out from their data center and go into somebody else’s data center which is shared?” Why would they do that?
They would do it because they believe that with shared infrastructure, assumption one, they will get a better return on investment. Now, that did not happen with grid computing with IBM and IBM On Demand has been a very big campaign.
Is there something I see out there that tells me it will happen now? Yes, it is happening where your usage requirement is time bound—that means you need it for three months for SAP testing, you need it for one month a year for tax consolidation. But, am I going to put my IP on the Cloud, am I going to put my financial accounts on the Cloud, and I going to put my HR applications on the cloud? I have not seen any technical reasons for that to happen.
Then the second reason you can do that is there is commercial benefit that somebody is offering you, which is flexibility of you being able to use the infrastructure at a higher or lower on a significant level—that means you can go up 50% or down 50%. When you look at the pricing available for those kinds of flexibilities, they are commercially unattractive. Which leads me to believe that whoever is selling services of variable infrastructure as Cloud is selling them as leasing connections, rather than selling them as true variable connections. I don’t have a problem with that because there is no underlying technology which makes sharing more productive rather than not sharing. So if there’s no underlying technology, obviously it has to be leasing connections.
And then we go to applications like leasing of Azure, which creates a bus so you have to create more efficient applications rather than inefficient applications. I believe Azure will be a standard tool for creating applications inside the organization so that people, whenever they use those features and services, will use them inside the organization.
So, do I need to I need to go out on the Cloud to use azure or Spring? The answer is no. the only reason I would go out on the Cloud is for shared services—for applications which are not available for me to buy. Salesforce.com now you can buy as an enterprise license. So the purity of the Cloud is also going away. And you will see a lot of Salesforce.com being inside the enterprise because they will reuse their existing infrastructure.
Now, public citizen services is an area which would lend itself to application sharing. And the same is true with communities coming together—export communities, auto component manufacturing communities—whose owners on a standalone basis are not big enough to buy an ERP system but can come together and buy a shared ERP system.
Now, you can force me to call it Cloud. Or you can force me to say that they will an entrepreneur out there who will see an opportunity to construct a data center, construct and ERP, charge everybody a fee and say that my business is to serve you—and you create a shared services platform.
So my view is that I have not seen anything from a technology point of view which is not available for the enterprise for usage for me to get very excited and saying, “Hey all of this is going to move to the Cloud.” And that’s the reason I’m not as bullish about the Cloud as somebody else is.
HfS Research: You mention about shared services and I think that’s interesting. Do you see the growth of these "shared services" happening more with the small to mid-market businesses? And it’s those companies, as they get bigger, where everything they’re getting, is being provisioned as a shared service in the Cloud. Whereas it’s the large enterprises—the global 2000—where there's a lot of legacy IT apps and infrastructure, and the business case for Cloud isn’t quite there yet.
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