Suresh Vaswani, Executive Vice President & Global Head, Applications & BPO, Dell Services and Chairman, Dell India and Raman Sapra, Executive Director, Strategy & M&A, Applications & BPO, Dell Services, talked to Prashant L Rao about Dell’s application modernization strategy
What are the opportunities in mainframe modernization and does the availability of Linux and Java hosting on modern mainframes affect this opportunity?
Suresh Vaswani: We want to move customers to x86 and it is not going to happen if we don’t have an application modernization strategy. To this end, we acquired Clerity, which does rehosting from COBOL and mainframe environments to the x86 platform bringing down the cost of application maintenance. Our second acquisition, that of Make Technologies, had to do with application reengineering. With these acquisitions, we are now a comprehensive provider of application modernization services.
Raman Sapra: Make is an interesting tool for application portfolio assessment. Once you assess the application information, you are able to get the business logic from the legacy code and build a clear strategy on what you have to do with the applications portfolio. Some of it could be about sun-setting applications and the rest would be that we could take some applications and rehost them using Clerity Compiler. The third would be in terms of using a conversion tool to move that to Java or .NET and the fourth would be move it to SAP or Oracle. If you add testing capabilities, application development and application maintenance capabilities we can migrate customers to a future-oriented application architecture and manage it for them.
Is Application Modernization a particularly large market?
Vaswani: It’s a big business for us. Typically a lot of legacy systems are in the banking sector where they use huge mainframes and there is low risk orientation. Given the cost that runs into billions of dollars, they want to take that cost out and they know they cannot stay with their existing platforms. Open architectures have become fairly robust and people are looking at it seriously now.
Sapra: When you look at customers wanting to move to social media and mobility there are two parts to the transition; one is at the front-end wherein you enable social media and monitoring tools or some applications on mobile platforms. You also have to ensure that your back-end applications support these processes and that is why customers want to move to new platforms in order to support these initiatives.
What’s the addressable opportunity here?
Vaswani: Dell is a $62 billion company and we have a $8.3 billion play in services. The enterprise business and services part of our business works out to about $20 billion.
To us, it is a means to an end. Mobility is important for the customer experience and you cannot move to next generation technology on an old architecture. We are not just looking to get a share of the $12 billion market for applications modernization. Rather, it is an enabler for us. We want huge migration to the x86 architecture and the impact of this business is on the whole of Dell. Just as an example, an application modernization deal could be worth $200 million by itself but it may result in $500 million of business for us.
Dell typically has not been seen as a serious player in this sort of transformational business. Is this initiative an attempt to break into that market in a big way?
Vaswani: It’s a big market and application modernization has a big role to play in that market. There is also the larger mid-market and we have a role to play in that. We are not just about maintaining the past for customers; while we will do it for them, what we really want to do is to take the customers into the future. Eventually, the market addressed will be much wider because we have that mid-market engine. We acquired a company called Boomi last year. It is a software integration tool enabling multiple Cloud applications to work together seamlessly. We have started a software product division the objective of which is to look at IPs, which are more of horizontal IPs. We will have to address the mid-market for which we will need more partnerships and alliances. We own a few IPs but, ultimately, we want to ensure that we deliver IT solutions to customers.
Sapra: If you look at our Perot business, it provides us with strong IP for Applications & BPO. We own IP for life insurance. We are the second largest TP in the US. Once you own the IP, you can then wrap it with a business process and deliver it as a service to the mid-market.
Is there an Indian angle to this?
Vaswani: We are a global company and India is a growth market for us. 27% of our workforce is here. We will continue to leverage India in application modernization. In our Whitefield campus, you will see some unique business solutions and also some unique mobility solutions. From the applications modernization perspective, our important markets are mature ones such as the US and Europe and a large part of our services are global. We do a lot of data center and infrastructure management (IM) work. We have done some good projects in applications particularly in the healthcare provider space. India has a large mid-market and we will certainly innovate, form alliances and partnerships, perhaps add some solutions and address that market. Application modernization could be small in India as the country has little of legacy. We want to use it to change the world.
