LATVIA: Lattelecom launches cloud computing service

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The Latvian telecom operator Lattelecom, having teamed up with Microsoft, has launched a new service: cloud computing product emakonis.lv.

Aimed at businesses, Lattelecom's lineup currently offers two products: cloud e-mail ePasts and cloud office suite eBirojs – a cloud-computing version of Microsoft Office. The users do not have to maintain a server, install software or even maintain an IT department – all the documents and software are stored on the central server. They need only a web browser and Internet connection to do all their computing.

Outsourcing IT

"The main idea of cloud computing is rent instead of buy," says Gusts Muzikants, head of business clients department at Lattelecom, to news2biz. "We have seen it work well with things like cars, and we believe that it is time to use it in the IT as well."

"The product is also very flexible: just like with, say, water, you only pay for what you use. If workers, say, go on vacation, you do not have to pay for their licences while they are gone," he adds.

The idea is becoming increasingly popular: according to a study conducted by US IT research and advisory firm Gartner, 43% of all companies in the world will use cloud storage by 2013. As for now, just 6% of Latvian companies use cloud computing, mostly using free services such as Google Drive or Microsoft Sky Drive. Lattelecom's own surveys show that 59% of the respondents did not even know about cloud computing.

Lattelecom's offer is among the first business-oriented cloud computting solutions available in Latvia. Unlike the free service, it promises better reliability and fast troubleshooting.

Cloud computing offers to work with all your documents
online, allowing for safe storage and universal access.
Picture: emakonis.lv

"The free services offer a 99% uptime, which translates in four lost days a year," Juris Gulbis, board chairman of Lattelecom, noted in the product's presentation. "We offer 99.99%, the industry standard."

Even though the idea is new to Latvia, Lattelecom believes that there is certainly a market for it.

"One of our main clients could be young companies who have not yet purchased any licences, servers or hired IT staff: this would save them huge initial investments," says Muzikants. "Another customer we aim at is companies who had purchased their servers and software some time ago and are now considering upgrades. The third target group is companies with high seasonality: the number of workers varies a lot throughout the year, so the company only has to pay for those who use it."

"We carried out our own research about Latvia," says Andrejs Juscenko, the Baltic head of Microsoft's Office Bussiness Group, to news2biz. "First, 99% of all Latvian companies are small and medium enterprises. Second, they often note that they do not have enough money to upgrade their software."

This is a problem even for large companies. "Companies use some 70% of their IT budget for maintaining the existing systems. This means that there is little funding available for upgrading and improving," adds Juscenko. Yet updates are indeed needed: "If a company invests in a system, it ends up using the same system for the next three-four years; considering how fast the technology changes, the software soon becomes outdated, leaving the companies less competitive. With cloud computing, the users can use the latest tools."

Finally, cloud computing allows companies to get rid of their IT departments altogether. According to Microsoft, 20% of non-IT companies worldwide have done just that. The company is quick to point out that this frees up money which then can be invested in the company's main business.

Increased mobility

In addition to saving costs, cloud computing also offers increased mobility. The products can be used anywhere in the world on any device that has a suitable web browser, including tablet PCs and smartphones.

"One worldwide trend is IT consumerisation," says Andrejs Juscenko. "This means that, increasingly often, employees use their own electronic devices for work purposes. Another trend is that more employees use social media for business purposes. The employers should encourage and support these tendencies."

"Yet another trend is the increased number of mobile workers who often need to work outside their office: according to Accenture [a global management consulting, technology services and outsourcing company – ed.], their number will soon reach 1bn worldwide. It means that this is a pressing issue; the companies must ensure their workers have an access to their IT systems wherever they are and whatever systems they use. Moreover, more and more workers do not work from office."
Lattelecom hopes that the service will reach several thousand users by the end of the year, pointing out that Latvia already has the necessary infrastructure, such as high-speed Internet connections.