Over the years, India's growing economy has created a critical need for enterprises to scale up and expand to meet customer demands. The arrival of COVID-19 accelerated its pace and forced corporates to actively seek out more flexible and reliable systems.
One of the companies well-placed to track such market development is VMware. Speaking to Digitimes Asia recently, Gaurav Agarwal, senior director of Enterprise and Government Sales for VMware India, pointed out that clients completely opposed to the cloud two years ago are now not so. They understand that cloud is a part of their overall story.
"For instance, customers in sectors like banking and telecom were not really cloud-friendly about 24 months back," Agarwal said. "But now they are putting workloads on the cloud, starting small, and eventually will figure out the cost economics. They're not shutting off their existing data centers. They're just deciding which app to go where, and then making cloud a part of their infrastructure as they move along, which was not the case earlier."
VMware's experience is in line with estimates from major research agencies. A report from IDC suggests that enterprises will commit to modernizing over half of their existing applications by 2025 to gain business agility through turnkey cloud-native development and deployment services.
"They understand that cloud is not necessarily cheaper, and the cost is not why they go to the cloud," Agarwal said. "They will go to the cloud because of agility, reliability, and scale."
Growing into SaaS and subscription
Data from agencies like IDC suggests that the sectors that VMware works in grow at the rate of about 8-11%. Agarwal explained that VMware is growing significantly faster than that.
"We intend to continue growing in high double digits," Agarwal continued. "But we are also doing a pivot as a company to a SaaS and sub [subscription] company from our initial position as perpetual license company. So, majority of our offerings now have a flavor of being consumed as SaaS and sub."
The company wants to increase its strength in the cloud-based solutions segment moving forward. This would place it in the right position to work closely with the increasing number of cloud-native companies in India.
"As a company, what we're doing is also building a cloud-native portfolio," Agarwal continued. "For cloud-native customers, offering a portfolio relevant to their workloads is our action to development as an organization. Over the next six to 12 months, we aim to be relevant to a cloud-native world. We are very relevant to a vSphere based one, but a new cloud-native client will find VMware very relevant soon."
Demand for digital transformation in India
Although COVID-19 wreaked havoc across all segments, VMware's industries weren't impacted much. In fact, the increased demand for digitalization made the CIO more critical because customers realized that they had to embrace digital transformation for their business to keep working.
"It actually opened up purse strings for a lot of our CIOs," Agarwal continued. "And a lot of them are now trying to build resilience in their data centers by having a hybrid strategy or a multi-cloud strategy, ensuring remote workspace capability, and enhancing security investments. So, when I look at banks, when I look at Telecom, when I look at IT & ITES, I don't see any slowdown in spending."
But this doesn't mean that there is no resistance to digitalization in its practical sense. Several traditional organizations and industries are wary of taking their operations digital and online. But the combined effect of COVID-19 and the need for smarter solutions that can scale up is increasing the demand. More interestingly, organizations have begun to understand what the cloud can offer to their business.
Agarwal gave the example of one of their customers, the IndusInd Bank. The lender wanted to deploy customer relationship management software on the cloud. They partnered with VMware for this new-age software to go on the cloud where it can scale horizontally, on-demand, and still be run with the tools and operations they were using on-prem. This app went live around 18 months back.
"But after that, they chose to modernize their lending app, merchant app, and several other apps through our platform," Agarwal said. "They modernized from a core, old-world system to a microservices-based architecture, which can scale and is a lot more agile for individual components to be updated based on business requirements versus the whole stack getting upgraded."
Ready for new technologies like 5G
India may see the rollout of 5G technologies in 2022 from major telecom players like Airtel and Reliance. Many industries are eager to take advantage of the increased speed and convenience that this new mobile technology is expected to offer. Agarwal said that VMware, too, is closely watching the developments and are keen to make use of it.
"We are working with telecom operators in India and worldwide in enabling them and getting them ready to offer 5G not only for their customers but also certain business cases," Agarwal said. "Most of these operators are figuring out how to expand data center capacity at the edge because when 5G comes, you will have to compute at the edge. Once you have computed at the edge, you need to manage them. That is where VMware portfolio becomes extremely relevant."
The market would watch such developments closely as enterprises continue the digital transformation and new technologies like IoT become more prominent. Companies like VMware would have a key role to play in India as new technologies become inevitable for every industry.
