Tata Communications has repositioned its cloud services and products under a unified offering called ‘Tata Communications Vayu’ as part of its digital fabric strategy.
Vayu, which the digital enterprise solutions firm calls its cloud fabric, integrates services like infrastructure as a service (IaaS), platform as a service (PaaS), AI platform, security, cloud connectivity, and professional services into a single ecosystem.
“Unification helps the customer in really simplifying and avoiding the complexity and uncomplicates things for them. The whole mantra with our digital fabric is to uncomplicate and innovate,” Amur Lakshminarayanan, MD and CEO at Tata communications said.
The firm currently offers cloud solutions under different names and will continue to offer them. Through this new positioning, the entire suite of cloud related services and products has been brought under one umbrella and will be available in a modular format.
The new unified positioning also helps eliminate complexity in managing cloud services, and reduce operational costs, the company said.
Tata Communications claims that the integrated cloud offering can deliver up to 30% cost savings while optimising workload performance, and compared to large cloud service providers, it can offer a 15%-20% cost advantage.
“We have a margin aspiration in the company. And we will meet those margin aspirations. So, we’re not sacrificing 30% profitability or anything to do this. This is not done by cutting cost. It is done because of the value that we deliver to the customer,” Lakshminarayanan.
The company has maintained that it targets to reach 23%-25% Ebitda margins. Its margins have been under pressure in recent quarters, with Q2FY25 Ebitda margin dipping to below 20% in the March 2024 quarter. There has been some recovery in Q3FY25 with Ebitda margin at 20.4%.
The idea, Lakshminarayanan explained, is to offer a plug and play model for customers to pick and choose what services they want. “The point that we are trying to make is we can also offer the full stack of solutions,” he said. Vayu also provides cloud security and compliance solutions customised according to the industry. For example, its banking services cloud solutions is compliant with RBI regulations in addition to adhering to the Digital Personal Data Protection (DPDP) mandates.
The firm has been investing $50 million a year on its cloud services over the past three years. Its overall capex has been in the $200 million to $300 million per year for the same period.
Lakshminarayanan said that going forward too, the company’s annual capex will be along similar lines.
Vayu also leverages Tata Communications’ partnership with chipmaker NVIDIA and will provide GPUs to enterprises as part of its GPU as a service offering. This will help enterprises reduce infrastructure cost and in training AI models.
Lakshminarayanan said that the integrated cloud offering will make the company future ready, as enterprises start developing AI models on their data, as against the current practice of training models on public data.
“Eventually, enterprises will be differentiated basis their data – their secret sauce – because knowledge will be a commodity,” Lakshminarayanan said in relation to the emergence of models trained on enterprise data.
He added that when this happens, services like the sovereign cloud will become pivotal in deciding digital transformation partners for enterprises.