Cutting through the hype

Ramesh Lakshminarayanan - Executive Vice President, Kotak Mahindra Group talked to Subhankar Kundu about the group's IT infrastructure, plans for the future and his atypical views on cloud computing

Ramesh Lakshminarayanan

With a firm belief in the six pillars namely technology policies and practices for standardization, consolidation, centralized purchasing, disaster recovery, business continuity and information security, Lakshminarayanan has been with the Kotak group for the last three years and he has been the driving force behind the company's technology infrastructure upgradation and consolidation drive. His key achievements include building a group-wide state-of-the-art data center, a first-of-its-kind virtualized 10G network and a unified IP call center at the company's new premises in Goregaon.

He is responsible for all of the strategic technology infrastructure initiatives of the Kotak group, leads its efforts cutting across entities and helps build up a unified and best-in-class technology framework.

He was earlier with Citibank N.A. where he was SVP and Technology Infrastructure Head for Citigroup and its affiliates in India. In this role, he was responsible for managing the distributed infrastructure and data center services for various Citigroup entities in India.

Holding a Bachelors degree in science and an MBA, his personal interests include a passion for Bollywood movies and a fondness for quiz programs. Besides this, he is also a keen follower of cricket.

Data center infrastructure

Lakshminarayanan said, “We haven’t invested on technologies looking at only the individual blocks. It has to be a part of a larger strategy and the architecture has to be built around this strategy. We undertook this exercise about three years ago looking at where we stood and where we wanted to go from there. The IT architecture had to be built in sync with the business goals and organization’s larger agenda.”

One major area that this CIO looked at was the consolidation of the data center. He also focused on the consolidation of the company's premises because it was earlier operating out of multiple premises in Mumbai as there are multiple businesses across the group. The challenge was to bring together all of the resources into one place and carry out a robust integration of different businesses into a single point of data center operability.

“In Kotak, we have one approach towards meeting our IT needs. We have also looked at various aspects of our contact center in order to improve customer service levels. Our primary focus has been to leverage technologies for creating a common platform to cater to various mission-critical business needs,” he added.

Another technology that has been a area of focus for Lakshminarayanan is that of information security where he put together a comprehensive information security program to ensure that customer data was protected. One more area has been that of procurement where he ensured that the right technologies were sourced.

Under his direction, Kotak has collapsed seven data centers and replaced them with a large data center of 25,000 sq. ft., a green one that covers all the group companies including Kotak Securities, Kotak Life Insurance, Kotak Asset Management Company, Kotak Bank and Kotak Capital.

“We ensured that all of these group companies moved their data center operations into a centralized location and consolidated their IT infrastructure. We leveraged advanced, best-in-class technologies to implement this consolidation,” he stated.

Kotak believes in green IT. To this end, it invested in the integration of the building management system with innovations including converting analog to IP signals. Today it can track temperatures to the rack level; lighting and other electrical equipment can be centrally operated and tracked and considerable integration has been carried out including paneling the room in a centralized way.

Lakshminarayanan also looked at advanced chilling and cooling technologies where he built a conventional gas-built chiller to increase the efficiency level of cooling where it moved to an air-cooled chiller. A high level of power redundancy has been addressed through innovative data center technologies including active cooling which uniformly and consistently distributes cooling to each rack.

IBM put together the system although Kotak chose to manage the infrastructure by itself.

Lakshminarayanan said, “The managed model doesn’t suit our approach which is highly flexible. Earlier, prior to the consolidation, it was both outsourced and in sourced. Kotak Bank had outsourced to BSNL, Kotak Securities and Mutual Fund were running their own data centers. It was a challenging project as we had to migrate the operations in their entirety into the consolidated model at Goregaon over a short span of about nine months.”

Beyond the data center

Building a data center wasn’t the end of it. Kotak also looked at Remote Infrastructure Management. The physical running of machines inside the data center has been moving towards the outsourced model with automation tools and self monitoring tools built-in. Presently, the IT team is working with HCL in terms of parceling the server management function including system administration, DBA, capacity management processors etc. into a single, outsourced model.

He continued, “We moved from simple servers to rack mountable standalone servers; even to POWER servers to align with our core strategy of improving the overall infrastructure. We also moved into the footprint of blade servers, P7 IBM machines.”

On the storage front, the organization moved from entry-level storage boxes from NetApp to high-end enterprise storage boxes from IBM and EMC.

Lakshminarayanan said he had increased the horsepower by over three times in terms of server footprint.

On the virtualization front, he has gone into tie-ups on unlimited license agreements with VMware where he has been able to virtualize 450-500 servers in the data center.

Nevertheless, he felt that virtualization hadn't matured to the level where Kotak could afford to put its core banking operations on a virtual environment. However, a significant amount of peripheral systems around core-banking including Web servers, e-systems etc. had been put on virtual systems. Kotak has been running FLEXCUBE from iFlex solutions for the past seven-eight years (now known as Oracle Financial Solutions) but it’s planning to migrate to another solution soon.

Lakshminarayanan said, “As a mid-sized bank, we are looking for a platform that can aptly align with our strategy to upgrade our core-banking operations and I believe that Finacle is closer to our requirements. Having said that, FLEXCUBE continues to be our solution for some of our other operations such as the private management banking system.”

The organization has also invested a huge amount on network virtualization by deploying Cisco 7000 series switches where one virtualized switch can be carved into four different companies to converge their networks virtually.

“We have created a private cloud within the organization but I cannot brand it as a futuristic technology to the extent that it has been hyped.”

For example, the company hosts its credit card platform with a third-party service provider; it hosts its applications on the third party’s servers and pays on a per card basis through a shared services model. This was feasible as credit cards were a new business.

Emerging technologies

Talking about technologies for the days ahead, Lakshminarayanan said, “It’s important to understand in which area we, as businesses, should go in for a concept such as cloud computing and how we can justify the consideration that goes behind the cloud when it’s positioned as a dominant technology of the future. There is so much of hype around it and, naturally, it comes up when we talk about the future. However, we have to understand the fact that any emerging technology cannot be isolated from a futuristic perspective, rather it should fall in line with existing technologies.”

Lakshminarayanan said that there was no denying the fact that the BFSI segment was a little skeptical and wary of the cloud as a technology that can provide sufficient security assurance for today’s voluminous information and mission-critical applications.

Despite this, there were areas where he could see cloud computing being a valid option. One such area would be sales force automation where he saw a huge scope of benefits as these applications, when and if integrated with the core-banking platform, were not visible to the sales force.

CRM or mobile applications on the cloud could derive greater visibility for the sales force in terms of critical applications including verification or collection processes as 60% of the processes in banks are sales driven.

Also, higher consolidation of data center operations and a green take on that could be considered as the way forward. Virtualization is one of the most important aspects of a green strategy.

“I am looking at cloud computing in some areas. Not in core-banking, because of core dependencies, but for operations such as e-mail management or disaster recovery, we can probably go into the cloud as these are built-up projects. Building something from scratch would work on the cloud but migrating completely to the cloud from existing systems is not the way to go,” Lakshminarayanan said.

He added that cloud computing would emerge but CIOs had to have a cloud strategy map on how and why their businesses should align to the cloud computing model.

On the storage front, he thought that data deduplication would definitely catch up rapidly as, for a BFSI player, data lying in twenty odd places does not make sense as it leads to complete wastage of resources.

With BWA and 3G spectrum finally being auctioned, Lakshminarayanan feels that enterprises could end up investing on this in a big way provided that the players address the price-point issues and ensure enhanced connectivity, which looks a little disarrayed with the existing Internet infrastructure.

The Cloud is reasonably secure

CIOs of non-IT companies are often skeptical about cloud computing due to the security concerns that hover over the cloud.

Lakshminarayanan had a different take on these security concerns. Having accepted the fact that security concerns prevail, he didn't mince his words saying that vendors and service providers have a stake when they pitch this concept to CIOs.

He said, “We have to understand that vendors like Microsoft and IBM who are providing cloud computing platforms would definitely not offer something that has security flaws. They must have addressed the issues involved. I don’t buy the fact that these providers’ cloud offerings will put customers’ systems at risk. The stake is theirs and they won't allow their reputation as big players to go for a toss. So, security concerns would not be as big as has been hyped.”

subhankar.kundu@expressindia.com