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23 July 2019

The Russia cloud computing marketing is gradually scaling up

"Anton Zakharchenko, #CloudMTS provider strategy director, IT-Grad and 1cloud CEO (part of the MTS Group), tells more why clouds help large businesses to innovate, can cloud technologies increase productivity and how to learn artificial intelligence hundreds of times faster. More on the MTS cloud business perspectives. Since the beginning of this year the provider brings together three well-known players on the market.

Anton Zakharchenko, #CloudMTS provider strategy director, «IT-Grad» and 1cloud (part of the MTS Group), -tells more why clouds help large businesses to innovate, can cloud technologies increase productivity and how to learn artificial intelligence hundreds of times faster. More on the MTS cloud business perspectives. Since the beginning of this year the provider brings together three well-known players on the market.

«The ecosystem approach is relevant for large companies»

TADVISER: At the end of 2008, when IT Grad just entered the market, the cloud technologies were something new and incomprehensible. How is this segment of the Russian IT market developing now? Do we follow in the footsteps of the foreign scenario?

Anton Zakharchenko: The Russian market is gradually enlarging, like the foreign one. According to our forecasts, only a few large players will remain which will offer the business, in addition to cloud services, a range of digital services. Thus forming a digital ecosystem around the customer. MTS follows this path, which make it possible to provide companies with digital services related to the Internet of things, artificial intelligence, cybersecurity, big data processing and clouds. For example, we can help an industrial enterprise implement a comprehensive project for monitoring remote plarforms. Our experience is based on relevant competencies, own IoT platforms and the NB-IoT standard network, which has already been launched in more than 50 regions of the country. Data processing and storage both can be organized in our own cloud. Operator’s own communication channels are used for information transmission process. This ecosystem approach is especially relevant for large companies that need to implement digital technologies to accelerate business processes and increase flexibility. And, preferably, have it done quickly, efficiently and without additional strains on the budget.

TADVISER: A large business typically has a complex and diverse IT infrastructure. Will migration to cloud turn into a new one big headache and additional costs?

Anton Zakharchenko: Benefits for the business from using cloud-based model are invaluable compared to the temporary inconvenience associated with the migration process. Companies free themselves from long procurement procedures and the wait for expensive equipment for 3-4 months. An alternative way is to contract a cloud provider once and increase the consumed capacities when needed. And all this within the framework of one agreement with one supplier. In case of MTS, under the same agreement, you can use both cloud services and operator’s communication channels at a discount. Additionaly, large cloud providers offer not only the cloud itself but also provide service support at all stages: from system audits and migration plans to daily consultations. For example, with the help of IT Grad architects, in an extremely short time, the reservation and ticketing systems, test environments and IT development of S7 Airlines, Russia's largest private airline, were migrated to the cloud provider.

TADVISER: Based on your customer’s experience, what often becomes the starting point for moving to the cloud? Is it the desire to survive while reducing costs? Or is it the desire to introduce new technologies whilst becoming more competitive?

Anton Zakharchenko: Business perceives the clouds as a practical efficiency tool. Transferring any infrastructure to the cloud is also an opportunity to optimize current operating costs by 25-30% monthly. There is a significant acceleration of time-to-market period with the introduction of cloud technology. Experience has shown that clouds can increase by at least 50% the speed of development and launch of new products to the market. For example, clouds allow large companies and corporations to cope with long tender procedures, each time making a new procurement. Instead, you can contract a cloud provider and then simply increase the volume of services. As a result, business becomes more flexible and agile in implementing changes and introducing innovations. Let's go back to the example of S7 Airlines. The airline once confronted the fact that every major update of client applications IT infrastructure came with a delay of several weeks which is unacceptable for business in a competitive market. The time lag happened at the stage of capacity boosting and was due to the prolonged wait of the purchased hardware, its installation and configuration. The time expenditure to deploy new servers took 2-3 hours instead of several weeks after the company contracted a cloud partner represented by IT Grad. Avito, the largest online ad service in Russia, has accelerated its business processes by transferring enterprise portal to provider’s cloud. Interaction of hundreds of employees ensured, including access to files and workflow, as well as operation of vital office systems. Reduction of workload on office infrastructure allowed the online marketplace to increase the availability and speed of the portal up to seven times faster than the traditional approach. This directly affected the overall productivity of employees.

«IT-GRAD» were amongst the pioneers of the cloud market in the country»

TADVISER: About six months passed since the purchase of IT Grad. Did the deal pay off?

Anton Zakharchenko: Of course. Moreover, we see even more opportunities and potential for development ahead. This deal helps us to increase the efficiency of the cloud business. For example, through the consolidation of equipment at MTS own platforms, cost optimization will be ensured. Thus, allowing to allocate additional funds for further technological development and offer customers new demanded services. Besides, in addition to IT Grad, the deal included the small and medium business platform 1cloud. As a result, we expanded the boundaries of the cloud-based business line. We now have solutions for both large and very small businesses. We expect that the combination of all cloud assets will allow us to create a single cloud provider, one of the market leaders.

TADVISER: Competition in the Russian cloud market is only intensifying, new players are coming out, including foreign ones. What key aspects will comprise the leadership of this «single cloud provide»?

Anton Zakharchenko: The combination of expertise, product portfolios and technology platforms will allow us to solve any type of business problem associated with the clouds. For example, a platform in Kazakhstan has now been added to the MTS platforms based in Russia, Armenia and the Republic of Belarus. From the point of view of geographical location and the choice of a provider of domestic origin – all these factors provide vast business opportunities, especially for large federal companies and transnational corporations. In the future, a common technology platform and a single team of experts will offer companies — both small and enterprise-level — a wide range of cloud services. And quite often — unique on the market. In our nearest plans — to shift focus from infrastructure services to expanding the portfolio of cloud services such as PaaS, SaaS and provision of managed services. For example, #CloudMTS team is currently working on container services that will accelerate the deployment of customer applications in the cloud. The use of such solutions significantly increases the efficiency of client’s IT department due to flexible scalability, increased fault tolerance and automatic management of application lifecycle.

TADVISER: Is it possible to say that at the core cloud business development lie mergers and acquisitions? How did #CloudMTS develop before the acquisition of IT Grad?

Anton Zakharchenko: Our global plans include to bring MTS to a fundamentally new level as a digital services provider. And the development of the cloud business helps us massively on that. Each and every effort we made is to ensure that #CloudMTS transforms from a startup into a large cloud provider as soon as possible. Currently several dozen cloud services are available to our customers. We have a developed enterprise-level platform and infrastructure throughout the country in the form of our own data centers and communication channels. For example, this year in March, we launched a unique service for the Russian market — anti-virus protection of IT resources and corporate data located in a public cloud. According to the results of Q1, we quadrupled our revenue compared to Q1 of last year. The volume of stored data increased 7.5 times. Such companies as ABBYY, Ericsson, Honeywell, British American Tobacco Russia, Hunkemoller Russia are our clients.

TADVISER: Key customers of IT Grad and #CloudMTS are large businesses. In fact, you have one target audience. Will brands compete with each other?

Anton Zakharchenko: Сompetition is out of the question. We are creating a single cloud provider. Active processes on integrating teams, service processes and product portfolios are underway. In the future, both providers customers will be able to add new services or switch from using one service to another with the same high quality and level of technical service. In addition, new options are available for customers in terms of their own business development. For example, IT-Grad customers will be able to use MTS digital services ecosystem and it will be very cost-effective. This means that it will be possible to order chat bot implementation, remote monitoring system, as well as tools for working with big data, and, of course, cloud services from one single services provider. IT-Grad customers will also be able to save by using both IT services, mobile communications and the operator’s Internet.

TADVISER: The IT Grad brand is widely recognized in the market. Are you afraid that the outflow of customers will begin?

Anton Zakharchenko: First of all, the workflow does not change for customers. Services are produced in full volume and in the traditional mode for the customer, all contractual obligations are preserved. Secondly, in the near future, IT Grad will continue to exist under the brand long known to its customers in the cloud. We are not in a hurry to change the provider’s brand. The brand will be gradually integrated under #CloudMTS. In the future, customers will be able experience new features, for example, related to innovative technologies in the field of the Internet of things, big data, artificial intelligence. Including PaaS solutions that will be focused on solving specific problems in these areas.

«Clouds become the center of Russian digital ecosystems»

TADVISER: How are clouds related to these technologies? Can one say, that cloud computing, along with big data or artificial intelligence, is one of the foundations of the digitalization of the economy?

Anton Zakharchenko: Clouds are the technological basis and an integral part of the general trend towards digitalization of the country. Seamlessly the clouds become the center of Russian digital ecosystems, representing the technological basis for implementing innovations. As an example, let’s refer to a developer company that decided to create a new solution that increases the efficiency of business operations with the help of artificial intelligence technologies. In order for artificial intelligence to be able to carry out the tasks assigned to it, for example, in business analytics, it needs to analyze huge amounts of data. Of which the trained model will deduce certain patterns subsequently thus forming the basis of the future IT solution. All these processes can be implemented using classic hardware equipment which, by the way, will be quite expensive for such purposes. TADVISER: Can one use cloud services to introduce and adopt new technologies?

Anton Zakharchenko: Yes, and they will significantly reduce the cost of IT solution development due to the fact that there is no need to purchase expensive equipment. This cumbersome stage is replaced with small monthly payments for a cloud service. A similar service was recently launched in #CloudMTS: the cloud supercomputer not only allows significant savings, but also speeds up the processes of deep learning of artificial intelligence. Up to hundreds of times faster compared to calculations on conventional processors. This is just one single example when cloud capabilities make innovation more accessible and accelerate its implementation. For example, at MTS, we are developing new digital directions mainly based on our cloud. I now refer to our telemedicine service SmartMed, distance learning platform Smart University and the media platform for gamers WASD.TV.

TADVISER: According to analysts, by 2020, the number of devices connected to Web around the world might reach 50 billion units. How do clouds contribute to IoT projects?

Anton Zakharchenko: Any Internet of Things project is a huge stream of data. Information obtained from sensors, robots and devices must be quickly collected and processed. As well as stored somewhere securely. Clouds are capable of providing reliable and fault-tolerant service, which can be quickly and almost unlimitedly scaled as digital data volumes grow. From the point of view of speed of deployment of systems and the financial aspect — these will be more effective solutions compared to conventional servers. In addition, smart city projects cannot do without cloud technologies as large volumes of wide variety of data is being generated. Starting with the intensity of traffic flows and up to resurgence of crime. According to studies, smart city solutions can increase the response to emergencies by 20-35% and reduce the average time of citizens on the way to work by 20%. In the future, the demand for cloud services will be proportional to the growth in the number of smart devices, the emergence of smart cities and industries.


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