Archive for the ‘Cloud Computing’ Category

Is Cloud Computing a Boondoggle for China?

Tuesday, November 30th, 2010

Source: http://bit.ly/bSylew

In October, Beijing announced that it would spend 50 billion yuan ($7.5 billion) to become “the largest cloud computing center in China and even the world,” reports Caixin online. U.S. vendors like Microsoft are lining up to answer that call, because at present the only way China can accomplish such an ambitious goal is with mountains of equipment sold by western companies.

Many in China are not sold on the idea that cloud computing is an appropriate investment for the Chinese government. For one thing, the country hardly has the telecommunications infrastructure to realize the cost savings associated with cloud computing. In a November 9 speech to the U.S.-China Internet Industry Forum in Beijing, Dr. He Baohong cited a 2009 report by content delivery firm Akamai, which showed that the average data transfer rate in China is only 857 kbps, an order of magnitude slower than average rates in developed countries.

Cloud computing depends on the idea that buying computing power on demand leads to a cost savings – but the economics only make sense when connecting to the cloud is quick and easy.

It’s a chicken and egg problem with no easy solution – cloud computing doesn’t make sense in China until its telecommunications infrastructure improves, and broadband service won’t improve until there is pressure (from cloud services, among others) to expand bandwidth.

According to China.org.cn,

Internet Data Centers (IDC) are the basic platforms for cloud computing. But China’s IDCs are mostly small-scale, energy-thirsty facilities that provide poor service. China’s IDC market amounted to 6.39 billion yuan in 2009, just 5 percent of the Asian market. More than 90 percent of China’s IDCs occupy less than 400 square meters.

The U.S. broke this logjam – and paved the way for the cheap cloud services that we now take for granted – through large-scale Federal action, namely the Telecommunications Act of 1996, which allowed for more competition between the carriers of various services. The subsequent Internet bubble meant plenty of dark fiber for companies like Google to light up once demand was sufficient.

Critics point out that, for a country with neither adequate data centers or internet connectivity, the cost of connectivity dwarfs the cost of building out the data centers. Caixin reports:

But some also question the cost benefits of cloud computing. “Why are China Mobile and China Telecom so enthusiastic? On the costs of cloud computing, communications costs are actually the highest, but coincidentally they’ve been removed from the costs,” said Xi Zili, director of the Shanghai Supercomputer Center.

Whatever the wisdom of China’s push for moving virtualizing IT infrastructure in the data center, the government appears to be committed, and recently declared Beijing, Shanghai, Shenzhen, Hangzhou and Wuxi to be innovation sites for cloud computing.

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Cloud computing is ‘outsourcing on steroids’

Monday, November 29th, 2010

 

by Jamie Yap, zdnetasia.com

Cloud computing is the highest form of outsourcing, according to the CEO of Chinese outsourcing firm HiSoft. He added that while China is still catching up with India’s level of sophistication and dominance in the offshore market, the mainland has unique advantages that will enable it to eventually emerge as the outsourcing hub of the world.

Loh Tiak Koon, HiSoft’s chief executive, explained to ZDNet Asia that there is an overlap between cloud computing and outsourcing, rather than a clash.

When a company goes cloud and buys an Internet-based service, it is not running its own data center or buying its own software or hardware, he said. But the move to cloud also means a company has "practically outsourced its data center, software development, everything", pointed out Loh, who described cloud computing as the "highest form of outsourcing".

In other words, cloud computing is "an outsourcing model on steroids," the CEO summed up.

That said, Loh noted that the current adoption rate of cloud is not at a level where an outsourcing company can entirely bank its services. He added that the cloud has just arrived at a point where it can really start to take off because there are enough people who understand it and the price point has become very attractive.

The publicly-listed HiSoft, which on Friday unveiled its new, integrated regional headquarters in Singapore, offers both traditional outsourcing and cloud services and applications. Loh noted that though cloud computing is an important portfolio of its business, depending on what service model the customer is comfortable with, he emphasized that the company ultimately takes the lead from its clients.

Outsourcing giants: China vs. India

Loh acknowledged that China’s current stake in the global outsourcing industry is where India was 10 years ago. However, in terms of rate of growth, Chinese is definitely growing faster despite its late entry.

He considered China to be today’s outsourcing hotspot, thanks to a huge domestic IT market, the tremendous size of its labor force, increasing proficiency in English–now introduced as a second language in high school–and most crucially, a supportive government.

For an outsourcing industry to flourish, Loh identified that there must be a very high bandwidth infrastructure and Internet connectivity. Part of the Chinese government’s efforts to promote outsourcing involve building infrastructures that prioritize these necessities, which lead to what Loh sees as stronger infrastructural capabilities than India.

The CEO also highlighted another unique differentiator that China has in outsourcing: it is leading in the global telecommunications and Internet industries.

He commented that the country is one of the fastest-growing mobile Web markets and has the world’s biggest online population. In addition, it has successful local equivalents of Internet giants from the West, such as search engine Baidu, online video site Youku, and e-retail site Taobao.

To manage such a huge volume of consumers and data, Loh reasoned that China’s domestic tech companies possess an advanced level of IT expertise, skills and support architecture. This, he said, puts China in a good position to export such services to foreign companies operating in similar industries.

Furthermore, several global firms want to enter China because it is a "very important end-market that [they] cannot miss out on".

Therefore, despite the competition from India as well as the Philippines and Malaysia, "China will definitely emerge the outsourcing hub" as the industry continues to grow, Loh said.

Outsourcing will only get bigger

In contrast to the sustained rise of outsourcing, Loh elaborated that the hardware industry is not growing as rapidly and is heading toward a device-centric market because more consumers are turning to mobile phones instead of laptops and PCs. Similarly in the software sector, people are not buying as much software and are instead switching to cloud services, such as Salesforce.com.

It is the services sector of the global technology industry that is getting bigger and bigger, of which outsourcing makes up approximately one-third of the whole, he reiterated.

To better leverage this increase, Loh said HiSoft takes an international and global perspective in the way it approaches outsourcing. He elaborated that rather than focus on building capabilities solely in China, where the company was founded, it also extends its strategies and business operations to the West (the United States and Europe), Japan and South Asia, of which Singapore is its regional headquarters.

The city-state was a logical choice for HiSoft because of its bustling economy and government openness to talent migration, Loh explained, adding that Singapore is a strategic gateway to the South Asian market and taps neighboring countries such as Malaysia.

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Google’s New Cloud Connect Targets Microsoft Office

Friday, November 26th, 2010

By David Needle

Google is ready to show off what its plans are for DocVerse, the startup it bought back in March. DocVerse had built a cloud-based add-on for Microsoft Office designed to let users easily share and edit Office documents online.

Starting Monday, Google (NASDAQ: GOOG) plans to offer the revamped DocVerse (renamed Google Cloud Connect for Microsoft Office) to testers. The company had no details about when Cloud Connect would be more widely available, but did confirm the service will be free.

DocVerse was started by two former Microsoft (NASDAQ: MSFT) product managers. Basically, the service is designed to help users of Office Word, Powerpoint and Excel move to Google Docs by giving them the same Office interface with the added collaborative features that Docs offers.

Google said Office 2003, 2007 and 2010 users can use Cloud Connect to sync their Office documents to the Google cloud, without ever leaving Office.

"Once synced, documents are backed-up, given a unique URL, and can be accessed from anywhere (including mobile devices) at any time through Google Docs. And because the files are stored in the cloud, people always have access to the current version," DocVerse co-founder and current Google group product manager, Shan Sinha, said in a blog post.

The documents in Google’s cloud can be shared and edited simultaneously by multiple people from within Office. Sinha said the service also keeps a full revision history as the files are edited, and users can revert to earlier versions in one click — a standard feature of Google Docs.

For everyone else, "don’t worry," said Sinha. At launch, Google Cloud Connect will be available free to everyone, including consumers."

The release of Cloud Connect comes at a time when Google has been moving aggressively to try and win a bigger slice of the enterprise productivity applications market long dominated by Microsoft.

Recently, Google relented on a long-standing request by many users to offer, as an option, a more traditional, chronological view of email messages in Gmail. Google’s standard "conversation view" collapses email "threads" or exchanges into one message.

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China to build cloud computing base in Harbin

Monday, November 22nd, 2010

 

by Liang Jun, english.peopledaily.com.cn

China will build a complete industrial chain of cloud computing technology and create the "China Cloud Valley" in Harbin, capital of northeastern China’s Heilongjing Province over the next three years.

In the coming three years, the new industry will have a scale of 3 billion yuan, People’s Daily reported on Monday. Cloud computing refers the shared use of resources from several computers facilitated by networks.

The world’s largest cloud computing data centers are mostly located between 40 degrees north latitude and 50 degrees and Harbin’s location is similar to that. In addition, Harbin has abundant electric power and water resources, which help to reduce the operating costs, thus Harbin has unique regional advantages in developing the cloud computing industry, said Sun Rao, vice governor of Heilongjiang Province, at the launching ceremony of the cloud computing base on Nov. 18.

The "China Cloud Valley" will include a cloud computing center base; an application, innovation and research and development base; and a business incubator base. It will mainly develop industries involved in could computing, such as the Internet of things; software and service outsourcing; film, TV and new media production; and animation production.

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Cloud computing spawns mobile enterprise applications

Tuesday, November 2nd, 2010

As cloud computing gains popularity, many companies have already discovered the cost effectiveness and flexibility the emerging technology gives their overall IT infrastructure. Those same principles may now apply to business efforts to control corporate wireless spend.

Cloud services have spawned a mobile applications market that is expected to grow immensely over the coming years. Juniper Research expects the total market for cloud-based mobile apps to grow 88 percent between 2009 and 2014. Enterprise users will account for about 75 percent of the cloud-based apps market, Juniper says.

Cloud computing is an internet-based platform where resources, services, software and information are provided to computers and other devices on an on-demand basis. The move to embrace the platform is causing a paradigm shift away from on-premise mainframe computing that took hold in the 1980s.

Until now, many enterprise applications focused on email and horizontal solutions. But mixing cloud computing with smartphones that are pushing the limits of innovation could open the door for all sorts of new enterprise mobility uses for apps.

"This trend is in its infancy today, but ABI Research believes that eventually it will become the prevailing model for mobile applications," ABI Research analyst Mark Beccue wrote in a company report from 2009.

By minimizing the amount of code needed for each of the smartphone mobile operating systems, cloud services ease the burden of the developers that produce the apps. According to ABI Research’s report, this new cloud-based architecture will drastically change the way mobile apps are developed, acquired and used.

Deployment of cloud-based apps may also be easier than traditional models because companies will no longer have to manage in-house servers that support the mobile app. That will all be taken care of virtually.

"One advantage of these cloud platforms is you can synch from the mobile device to the cloud without intermediate servers or a VPN," John Barnes, chief technology officer of Model Metrics, told IDG.

Not surprisingly, cloud computing and mobile applications both appeared at the top of Gartner’s list of top technology trends to watch in 2011. Cloud computing occupied the top spot, while the combination of media tablets and mobile applications was No. 2. According to Gartner, the high quality of applications is causing smartphone users to interact with companies through them. This, in turn, is forcing application developers to release improved offerings to fuel the rapid market growth.

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Increased Cloud Computing Not Far Off for Mac and Apple Product Fans

Wednesday, October 27th, 2010

By J.A. McLynne

Techno geeks have been chatting up cloud computing all over the Internet over the past few years. It has reached deep into the lives of Internet surfers in more ways that were only dreamed of just a few years ago. The development of cheap storage devices has allowed establishment of huge data centers that reach across the globe and into your home. These servers stand ready to accept any data that you want to feed them. In some cases they may even take data without you even being aware of the theft.

These data centers contain thousands of servers and disk drives whose primary task is to collect and save data from the Internet. All that these computers do all day and night is slurp up as much data as they can from the Internet. For example, a recent CNN article reported that a cloud computing center run by IBM outside of San Jose stored more than a petabyte of data. This is enough storage to hold billions of photographs and books.

It will not take long for this data storage facility to fill to capacity and more storage devices will need to be added to the facility. One company that is looking forward into the cloud computing era is Apple. Yes, Apple is jumping into the cloud computing market. The Chief Financial Officer for Apple, Peter Oppenheimer stated in the 2010 Third Quarter Earnings Call that Apple was building a billion dollar data storage center in Malden, NC. Oppenheimer said that the facility construction was on schedule.

Apple has stated in a recent press release that the data server center will support the iTunes and iPhone Apps store. However there is some speculation among Apple bloggers, like Paul Acciavatti at modmyi.com, that this center contains a huge amount of data storage capacity, much greater than being stated by Apple. The new center may be used to allow anyone with iTunes to store their music and videos on line ie, "in the cloud," so that the files and information can be accessed anywhere they may travel. Apple may also include a MobileMe capacity as well. A well connected applications database may virtually eliminate the need for an operating system on your computer.

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Cloud computing: 5 tips as GSA goes on-demand

Wednesday, October 27th, 2010

by Bernard Golden (CIO (US))

The most interesting cloud computing I saw this week was the announcement that the General Services Administration (GSA) has awarded 11 companies the opportunity to participate in the apps.gov portal, offering IaaS services.

The list of companies is an interesting mix, including cloud pioneer Amazon, large companies like Verizon, defense contractors like General Dynamics, and relatively small players. Almost all of the awarded contracts are offered via a joint venture arrangement between two or more players, typically one with technology and one with government knowledge and experience.

This award has been a long time coming. Apps.gov has been up for over a year, offering SaaS services. If you’re not familiar with apps.gov, it’s a portal, sponsored by the GSA, that allows government agencies (including state and local entities) to obtain cloud computing services on-demand with the contracts and due diligence already performed and in place. The IaaS portion of the award process was put out for bid and then withdrawn, to be released for bid once more. So the IaaS portion of the portal is finally, at long last, underway (the awardees still have to complete a FISMA (Federal security regulation) Certification and Accreditation process before finally being ready to do business via the portal).

Apps.gov reduces the burden for agencies that want to use cloud computing but don’t want to take the time (or don’t have the ability) to perform assessments and contract negotiations on their own. And, presumably, the GSA obtained very favorable pricing by combining all of those entities’ demand. This allows individual government agencies to save even more by taking advantage of cloud computing via the apps.gov portal.

So, the awards mean that, subject to the FISMA process, government agencies will have immediate, on-demand access to IaaS services. What will that mean? Here are five things that Federal (and state and local) agencies should expect:

1. More adoption than they foresee

I wrote about the way on-demand IaaS has been driven by developers. The government employs lots of developers and contracts to companies with tons of developers. Now that developers will have an approved method of using on-demand IaaS, look for a onslaught. A year ago I spoke with several members of the Federal Cloud Computing Steering Committee and shared that they should expect a ton of use once IaaS went up on apps.gov. Just as commercial software engineers have embraced AWS as a low-friction way to develop systems, once an approved government IaaS offering is available, the same phenomenon will occur.

2. An enormous acceleration to application development

People used to everything taking forever react to on-demand IaaS with a dumbfounded look, amazed that resources can be so easily obtained. Once you clear out all the endless, time-consuming back-and-forth necessary in most environments to obtain resources, it’s astonishing how much more productive people become.

3. Lots of confusion

To its credit, the Federal government is being extremely aggressive about cloud computing. The Department of Defense has its RACE cloud. The Department of Interior is building a cloud, with the vision of sharing it with other agencies. There are undoubtedly many more cloud construction initiatives underway as well. Inevitably, some of the "private vs. public" cloud controversy will adhere to the decision process regarding which cloud offering to use. Moreover, just the plethora of choices tends to induce paralysis by analysis.

4. An ongoing challenge to developers

Creating elastic, scalable apps doesn’t just happen. New design patterns need to be applied to allow applications to gracefully grow and shrink without operations personnel getting involved in software installation and configuration. There’s a learning curve to getting the hang of creating cloud apps, and that curve affects every group in application development. From this perspective, having an easy onramp to IaaS resources like apps.gov can make it easier to experiment with these new design patterns and provide an ideal learning environment.

5. An ongoing challenge to process

Applications developed on the apps.gov IaaS with the belief that "it’s just for the dev and test part of the project" will naturally end up becoming production applications–especially once the realization sinks in that the application that has been developed now has to go back through the tedious and lengthy ‘official’ release to production process. The temptation to just get started, perhaps with the rationalization that "we’re just testing it as a prototype" will be impossible to resist. I’ve written about this challenge several times, and if you haven’t seen our video on the "cloud boomerang," discussing the unforeseen return of applications to unprepared operations groups, you might find it helpful.

The Federal Government really deserves a hat tip for its aggressive pursuit of cloud computing (and not a moment too soon: it just announced that it has found another 1000 data centers that heretofore were unaccounted for!). The apps.gov offering is an outstanding initiative and should be acknowledged as a signal achievement. I’m looking forward to when the first offering gets through FISMA.

Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualization to date.

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More outsourcing buyers opting to restructure contracts

Wednesday, October 27th, 2010

from Consultant-News.com

3Q10 TPI Index shows delay in overall outsourcing market’s gradual recovery due to continued weakness, uncertainty in global economy.

More outsourcing buyers opting to restructure contracts

TPI, the sourcing data and advisory firm, released data showing a sharp increase in outsourcing contract restructurings but a delay in the overall outsourcing market’s gradual recovery due to continued weakness and uncertainty in the global economy.

The 3Q10 Global TPI Index, which measures commercial outsourcing contracts valued at $25 million or more, recorded total contract value (TCV) of about $14 billion, down more than 20 percent from both the previous quarter and the same period last year. While market activity typically slows in the third quarter, this year saw the lowest third-quarter TCV in five years.

Restructuring activity, which includes renegotiations, renewals and extensions of existing outsourcing contracts, totaled $6.8 billion during the third quarter, or 48 percent of the global market. Year to date, restructurings have accounted for 34 percent of overall TCV, compared with typically about 20 percent over the past three years, and have increased 56 percent over 2009, influencing results throughout the outsourcing market.

The uptick in restructuring activity can be attributed to three factors in the market:

• Economic conditions have caused many companies to be tentative about new outsourcing adoption.
• Existing outsourcers are increasingly attracted to the quicker returns and lower risk promised by restructurings.
• Longer-term contracts – the 7- to 10-year agreements awarded in the early 2000s as well as the 3- to 5-year contracts typically awarded more recently – are now coming up for renewal at the same time.

“As we predicted earlier this year, 2010 is shaping up to be a year driven by restructuring of contracts as organizations look to identify opportunities for cost reduction and greater efficiency,” said John Keppel, Partner and Managing Director, TPI Research, Analytics and Intelligence. “We expect to see restructurings continue to be a significant organic force in the outsourcing market in the future.”

Third-quarter outsourcing market performance varied substantially by scope, region and industry sector, the TPI Index found.

By scope, contract awards in both IT outsourcing (ITO) and business process outsourcing (BPO) declined in the third quarter. ITO values have dropped off since a strong first quarter, resulting in flat TCV year-to-date. BPO contracts also fell from the previous quarter, and year-to-date TCV awarded in that scope is down 15 percent. About one-third of the BPO TCV awarded so far in 2010 has been restructuring-related, an indication that this younger segment of the market is now maturing.

By region, differing outsourcing market maturity and economic climates are playing a major role in whether companies decide to enter into new contracts or choose instead to restructure existing agreements. Contract values declined in both the Americas and Europe, the Middle East and Africa (EMEA) during the third quarter, though the data indicate some stabilization in EMEA.

Among the industry sectors that historically have driven overall outsourcing market performance, Financial Services saw substantial contract award activity in the third quarter, largely due to the restructuring of some EMEA-based contracts with TCV of more than $1 billion. However, Manufacturing and Telecom & Media continue to recover at a slower pace.

“After some growth in the early part of the year, global outsourcing market activity in the third quarter slowed considerably,” said Keppel. “However, we do anticipate a significant improvement in performance in the fourth quarter even with the sluggish economy.”

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There is no real definition for Cloud computing

Monday, October 25th, 2010

by Scott Stewart (CIO)

The same question continues to be asked about Cloud computing: what is Cloud computing?

The IT industry seems more confused than ever before as it struggles to define and pigeon hole this disruptive change and there seems little agreement or consensus on what Cloud computing actually is.

In the US, the National Institute of Standards and Technology (NIST) attempted to alliviate the situation by putting out a definition – but this is now in version 15, has more than 760 words, includes five characteristics, three service models and four deployment models. It also comes with a disclaimer that, in essence, says their definition is likely to change. So they don’t really know how to define what Cloud computing is because it is a changing paradigm.

Presenters at Cloud conferences cannot resist putting up their own new definitions, when Web search engines are queried on ‘what is Cloud computing’ they return an increasing number of new results each day and the tweets continue to scroll down with many different viewpoints as the pro and ante Cloud camps continue to posit their own new theories and definitions.

On top of all this, many vendors are simply taking their existing services and products such as hosting, outsourcing and co-location and rebranding them as a ‘Cloud’ product which means that their definition of Cloud is translated into ‘our product’.

But while the IT industry grapples with the definition and argues amongst itself about whether this is something new or just a fad or hype, many in the industry are also just sitting back to see what happens. Sadly they may be missing the real point that this Cloud computing disruption is not about a technology, it is not about a product, it is not about a service offering, it is not something that we have always done, it is not even about a deployment model, rather it is a transformation, a paradigm shift and a change in attitude and behavior that is occurring under their very noses.

Customer’s attitudes and behaviors towards how they want to buy IT are changing forever and this is the real transformation that is occurring. Sadly, many vendors may not be prepared for it.

Despite the criticism here of the various attempts to define Cloud computing, some much-needed thought leadership comes from Simon Wardley of CSC’s Leading Edge Forum in the UK, who bravely adds his definition of Cloud computing to the confused mix:

“Cloud Computing is a generic term used to describe the disruptive transformation in I.T. towards a service based economy driven by a set of economic, cultural and technological conditions”.

Cloud computing is a fundamental shift of the IT industry from a product based industry to a services based industry driven by factors other than just technology and products. This lifts the current thinking of Cloud computing out of the technology product space and into the realms of economics and culture, attitude and behaviour.

Looking deeper into Simon’s definition and his thinking on this, we find that he also presents the best comparative analogy of Cloud computing …the industrial revolution.

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IT Outsourcing Company Posts Unprecedented Revenue Growth

Monday, October 25th, 2010

By Ashok Bindra TMCnet Contributor

Last week, India’s IT outsourcing giants Tata Consultancy Services (News – Alert) (TCS), Infosys Technologies and Wipro were predicting impressive gains this year. As a result, all three were hiring professionals in large numbers to meet this growing demand. Infosys (News – Alert) Technologies was the first to post a strong revenue growth for the July-September quarter.

This week TCS raises that bar to $2 billion, are up 12 percent from the previous quarter and 30 percent year-to-year growth. Net income for this quarter was $455 million, up 13 percent from the earlier quarter. At this rate, the outsourcing giant is expecting to end the fiscal year with $8 billion in revenues.

In a company statement, TCS CEO and managing director, N Chandrasekaran, said, "It has been a quarter of superior performance across the board, driven by volume growth of over 11 percent. In uncertain economic conditions, our results are a milestone on the path to strong demand recovery. Our teams have displayed agility to respond to these opportunities across markets and more importantly, execute flawlessly.”  Chandrasekaran continued, “Given the growth we have achieved across all industry units, we are very positive about the global demand recovery going forward while being watchful in view of the macro environment."

According to TCS, all major outsourcing markets showed double digit growth, Europe leading the pack. The IT outsourcing firm’s North American revenues crossed one billion dollars. Impressive gains were also seen in all emerging markets with India and Asia-Pacific leading the group. 

Some key wins for the company include, Canada’s large financial institutions, a Fortune Top 50 Healthcare company, a U.S.-based large banking and financial services institution, the Phoenix Group, a leading publishing and education services provider, a leading grocery retailer, and a leading North American general merchandise retailer. In addition, a state government in India selected TCS to transform its food and civil supplies system.

During this quarter, the company was granted two patents. It has applied for 380 patents, out of which 64 patents have been granted, said TCS.

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