Cloud Platform Helped Hungama Digital Media Lower Its Cost By 50 Percent11th Feb 2011
Inflexible, expensive, and a barrier to growth. Hungama Digital Media's IT infrastructure wasn't aligned to business. Until its CTO moved to the cloud, lowering costs by 50 percent.
- How to use cloud platform to scale up
- How to leverage cloud for agility and flexibility
As grey clouds scudded across the monsoon sky, the newly appointed CTO of Hungama Digital Media Entertainment, Manan Chhatrapati gazed out of the window. The weather wasn't helping his pensive mood.
It wasn't hard to see why. He was heading the IT department of a company that was growing rapidly, adding new clients and services to its portfolio, and conquering new territories both in India and the world. (It serves customers in 42 countries and manages more than 2,000 digital and mobile campaigns for 300 global brands.)
While that was great news for business, it wasn't so good for the IT department. Simply because, the company's traditional IT infrastructure-which wasn't flexible or scalable-wasn't robust enough to respond to dynamic business needs. Also, maintaining such an infrastructure was expensive. The company desperately needed a makeover.
And the responsibility of providing that sat on Chhatrapati's shoulders.
With over 25 years of experience in the IT industry, Chhatrapati has lent his expertise to many organizations both in India and abroad. What's more, he had run his own company, Pie Computer & Investments, a software development firm, in the US.
There couldn't be a better person to fix Hungama's problems.
Case Study Highlights
- Post implementation, Hungama’s applications are much more systematic. Because its storage is now centralized, the company can organize its content in a structured manner.
- The company has saved close to 50 percent in maintenance costs. The biggest savings have been realized from turning capex to opex.
Founded in 1999, Hungama Digital Media Entertainment has expanded at a fast rate. Having started off as an online promotions agency it has now grown into a full-fledged digital entertainment, mobile services, and promo marketing entity. Apart from its in-house projects, the company also develops, manages, and hosts websites and portals for external clients. Its clientele includes some of the biggest names in the country: Videocon, Pepsi, Bajaj Auto, Tata Sky, Mitsubishi, ICICI Bank, ITC and LG.
Hungama also creates and manages search engines, social media and mobile marketing applications, video and gaming services.
However, in the midst of all this buoyant business growth, the company's IT infrastructure was beginning fall behind. To meet its growing business needs, Hungama had deployed more servers. It also installed servers in local datacenters, which was proving to be expensive, time-consuming, and resulted in operational inefficiencies.
"Our customers are always in a hurry to get their campaigns running. This puts a lot of pressure on the business teams. But because of the inherent inefficiencies of our systems we could not deliver quick turnarounds," says Chhatrapati. This resulted in delays in implementation and unnecessarily increased the company's time-to-market. Also, many of its customers created websites which lasted only for limited periods of time (especially for promo marketing campaigns), so flexibility was necessary. It made no sense to invest in servers and increase capex. "Our cost for storing content was spiraling. Due to dynamic business needs, servers became redundant after the project was completed," says Chhatrapati. At the same time, the company was constantly investing in buying new servers.
To add to his misery, Hungama was about to launch a new portal, Hungama.com, for which they would need to procure some more servers. The resulting capex was now beginning to give the organization sleepless nights. "We were talking about 100,000 audio tracks and well-stocked library of innumerable videos and games. This meant huge investments in storage. It was this capital investment in storage that was becoming a cause of concern," says Chhatrapati.
He realized that to manage such large volumes of content he needed storage flexibility. It was no longer feasible to keep on purchasing storage, as it added to time, space and cost pressures. He needed an infrastructure to roll out products and services quickly and to accelerate time to market.
Thinking about what it would take to get his company out of this problem, Chhatrapati looked out of the window a second time. The clouds had parted.
Up, Up and Away
The proposition of moving his storage to the cloud seemed like his best bet. "The flexibility and elasticity of the cloud would provide us the much needed scalability. And, we could do without investing in storage," he says.
But at a time when most organizations are wary of anything cloud, how did he convince himself to move to a public cloud? "We wanted to address the needs of different customer segments. And a private cloud wouldn't have served that purpose. And once you are convinced about tackling security issues, then the public cloud is not a bad option," he says.
Chhatrapati presented a business case before his management. They were enthused at the prospect of capex savings and gave him the go-ahead.
After one-and-a-half months of deliberation he zeroed in on AWS (Amazon Web Services). "With the elastic storage and bandwidth, we could pay for what we actually use. There is no up-front [cost] commitment. We can discard resources as we wish, free up engineering resources that are required to run our own infrastructure. We felt that a good merger of storage along with servers would give us the required flexibility," says Chhatrapati.
And that's what it did.
But, despite its many benefits, the cloud environment was alien to his team and they faced several issues.
While training and consulting with the AWS team helped them get acquainted with the cloud, bandwidth availability proved to be another hurdle.A content delivery/distribution network (CDN) was set up to solve bandwidth issues. This network is a system of computers that contain copies of data, placed at different points in a network. It maximizes bandwidth for accessing the data from clients throughout the network.
Bandwidth issues aside, no cloud computing initiative can take off without addressing security concerns. And Hungama is no different. That's why Chhatrapati ensured that the AWS cloud computing platform generated a key with encrypted username and password. So, from a physical perspective, it is not possible to know on which server the data resides. This provides Hungama with access to its servers while ensuring that security is not compromised.
On Cloud Nine
Today, Hungama has successfully implemented most of its in-house digital properties on the cloud. It uses the platform extensively for its storage needs and serves most of its content off the cloud. Some of its clients' websites are also hosted on the cloud.
The cloud platform has helped the company scale up its business to support customers around the world. "It became quite easy for Hungama to cater to its American customers because AWS cloud computing services are headquartered in the US and that has reduced latency issues," says Chhatrapati.
The platform has embedded a culture of cost efficiency in the IT infrastructure. Hungama now has to pay only for what it uses. It does not have to shell out on maintaining and managing servers. The company has saved close to 50 percent in maintenance costs. The biggest savings have been realized from turning capex to opex.
It has also streamlined processes considerably. Post implementation, Hungama's applications are much more systematic. Because its storage is now centralized, the company can organize its content in a structured manner. "We are now able to better understand what we have and we can put it in the right format. It also makes life easier for the consumer to pick up the content he wants," Chhatrapati says.
The elasticity of the cloud has reduced time to market, providing the company with the desired business agility to meet customer's expectations. This, in turn, has enabled Hungama to speed up its innovation process and accelerate rolling out its services. "The flexibility to scale both up and down has really enabled us to quickly adapt to business dynamics. Our business teams are able to meet these deliverables in a short span of time. This has given us a competitive advantage in the market," says Chhatrapati.
Hungama has now migrated about 80 percent of its infrastructure to the cloud and Chhatrapati expects to use the cloud platform to meet the company's disaster recovery requirements.
cWith server and storage management sitting on the cloud, Hungama is now able to focus on its core competence. It is able to spend time on projects that add value to its customer offerings or areas that differentiate its business. "This gives us a great competitive edge," says Chhatrapati.
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