Outsourcing: Tata Communications Interview (Part 5)

By guest author Tony Scott

“Always On” around the Globe

Tony: So you are talking about creating your own IP – how has that impacted the kind of services you provide? Is this also part of the drive toward what some have said is pushing even more of the services off the CIO’s plate?

David: I think that the real change has happened in the technology environment itself versus being a true philosophical change. My philosophy is that I am not sure why any CIO would keep infrastructure on his plate as one of the things he wants to worry about. The reason I say this is because the way we look at infrastructure is becoming a lot like the way we look at utilities such as our phone or electricity. Your expectation is that they are always on, and that’s the only expectation that you have; you never praise them for any other quality. You never call Pacific Gas & Electric and thank them because the electricity is on your home every time you need it.

Tony: How about the concept of being “always on,” with data and applications being always available regardless of where you may be?

David: That’s also part of what is driving the industry. There are two main models now: public-class models and private-class models. The private-class models are heavily driven by security requirements vs. changing the way you provision. The public-class environments that are out there that everyone is developing all have have a story around them, and that story is based first and foremost on service. People who use those models are not necessarily as sensitive about the control of their data. But as a CIO, I would say we need to look at alternative platforms to see where we can get a cost advantage with either a private or public model.

Tony: I would assume that from your perspective this evolution of the industry is good because it allows you to move up the value chain and provide a higher level of service. Five years ago there were many parts of a company’s IT infrastructure, data management, and applications that would not have been outsourced because companies felt they could not be moved outside the purview of the enterprise.

David: Exactly, and having the assets we have as a company, we believe we were able to differentiate ourselves from many other players because we were able to leverage investments we made from a network perspective around an infrastructure investment. So from a customer perspective, our offerings should provide them with a cost and service advantage that you couldn’t get from someone else who didn’t have those same significant network investments. Our goal is to be provide “always on” infrastructure and access to our customer’s data and applications around the world, regardless of whether the people accessing the network and information are in the United States, Europe, India, or Singapore, to take some examples.

Tony: Obviously when you make those investments in infrastructure – assuming that you are when you making the right investments, which is always a challenge – at a certain point that is substantial barrier to entry to anyone else.

David: Agreed, and one of things we are trying to do is leverage what we think is a differentiation, particularly in emerging markets. So from an overall strategy perspective what we are heavily focused on is emerging markets around the world. Our investment to acquire a 56% stake in Neotel in South Africa as an example of that. We are also trying to expand our footprint in the Middle East, and we’ve built a relationship with CEC Telecom in China. From a strategy perspective, all of this is to broaden our footprint in the emerging markets.

This segment is part 5 in the series : Outsourcing: Tata Communications Interview
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