Outsourcing: Arul Murugan, Founder and CEO of Enrich IT (Part 5)

Sramana Mitra: I really like the way you have done your positioning. I think you’ve got on the front end of a trend that is developing.  I have talked to enough CIOs at this point to know that the trend is there. Where would you point entrepreneurs? You’ve obviously done a nice positioning of where you saw a gap. You see an opportunity to [create] a substantial business. Where would you point entrepreneurs who are coming into the outsourcing space or into the cloud computing space? Using this kind of a model of services and outsourcing and so forth, where do you see some interesting opportunities? If you were a young entrepreneur today and you didn’t have Enrich IT, where would you start?

Arul Murugan: I strongly believe in the cloud delivery model. Some may think that getting into a cloud-based business may involve a lot of investment to get into cloud, data center, and so on. That may not be true. Actually, with cloud computing, entrepreneurs can start with little money if they get creative. The first thing I would say that entrepreneurs need to find is a niche application area where they have  expertise, that they can provide on a cloud computing model. Just to clarify,  there are two parts of cloud computing. One is pure technology play like VMware, where you focus on infrastructure and platforms. The other one is on the application side. I am talking more about the application side of the cloud computing model.

SM: Right.

AM: My comments is going to be about the application side rather than the pure technology side. We are not talking about platform as a service (PaaS) or infrastructure as a service (IaaS). I am talking about the upper layer, which is the application layer, how I provide applications for my clients on a cloud computing model either in the B2B or B2C space. If they have identified a specific application area where they have expertise, entrepreneurs can be very successful.  In the cloud, you need to get into hyper-specialization. When you are talking about cloud or a SaaS application, you cannot be a generalist. You need to get into a specific area where you provide expertise and deliver it over the cloud. Entrepreneurs should realize that there are plenty of opportunities out there. If they have specific areas [of expertise], hyper-specialization, have a clear-cut thought process, then they should aim to deliver them to millions of consumers over the cloud. Everybody has to think big.

What I am doing on private cloud is in the B2B space. For new entrepreneurs, I would say they should think about the consumer space. Mobile is growing dramatically every day, and the iPhone and Android mobile devices are spreading  out. What I would say is, come out with a specialization. Think how you can reach out to millions of consumers and provide a solution for them on a cloud computing model. They may not need more than $100,000 to $200,000 in investment. For example, if I am going to start, I am going to invest not more than $100,000, and I am pretty confident that I can take that to a $10 million business in three to five years. With Enrich IT, I started with $25,000 and  I took it to $10 million in four years. Now, if I am starting brand new, my goal would be to see how I can reach $10 million in two to three years. Since it’s a cloud, it’s very scalable. It’s easy to take from $10 million to $50 million. Right now, I am in services. It’s very hard to scale.

Services is not something easy, whereas if you are in a true cloud model, it’s easy to scale and do it. I would say that for new entrepreneurs, there is plenty of opportunity out there from a cloud perspective. Cloud computing is not well understood by many people. Everybody will have a different definition of what they mean by cloud computing since it is still in the early stagse.

This segment is part 5 in the series : Outsourcing: Arul Murugan, Founder and CEO of Enrich IT
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