Business India 2014: A Bright Future?


Published on

IDG Connect has conducted in-depth interviews with a cross section of thought leaders on the ground in India, including the CIO of Cisco, the President of NetApp and Executive of Deep Computing at IBM. The aim of this report is to discover how professionals feel about the future of business in India 2014.

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Business India 2014: A Bright Future?

  1. 1. BUSINESS INDIA 2014: A Bright FutUre? IDG Connect has conducted in-depth interviews with a cross section of thought leaders on the ground in India, including the CIO of Cisco, the President of NetApp and Executive of Deep Computing at IBM. The aim of this report is to discover how professionals feel about the future of business in India 2014. Image courtesy of Prayudi Hartono
  2. 2. BUSINESS INDIA 2014: A BRIGHT FUTURE IDG CONNECT Read the full interviews here: INTRODUCTION: Anil Valluri: President of India & SAARC Operations, NetApp Brinda S. Naraya: Author, Bangalore Calling Hareesh Tibrewala: CEO of Social Wavelength Kalaivani Chittaranjan: MD and CEO of eMudhra Consumer Services Neeraj Varma: Director of Sales for Xilinx India Subram Natarajan: Executive - Deep Computing, IBM India South Asia Suchit Bachalli: Executive Vice President, Unilog Content Solutions SomPal Choudhury: MD, Analog Devices (ADI) V C Gopalratnam: CIO, Cisco India Venkat Viswanathan: CEO and co-Founder of LatentView Bangalore panorama Image courtesy of Ted Drake via Flickr “A lot of people work night shifts in Bangalore; IT people, BPO people or call centre people returning home at 2am or 3am,” Brinda S Narayan, author of Bangalore Calling, a novel about an Indian call centre, told IDG Connect in Autumn 2013. This will come as little surprise to anyone who is familiar with the waves of Indian outsourcing which have gone on over the last decade. But what did surprise Narayan, who grew up in Bangalore herself, was the sheer volume of parents who felt they had to wait up for their grown up kids to come home. “A large number of mothers and fathers [I spoke to whilst I was researching my book] said, ‘Oh I have to get up at 3am and I have to open the door for [my son or daughter], heat up dinner, keep them company and chat with them.’ So I said, ‘why don’t you just give them a key?’ And they were really appalled that I was asking them that question.” “These parents are completely disrupting their own sleep cycles because they don’t want to miss out on the contact [with their children],” explained Narayan “[But] what I realised is that these families are really buffering the effect of these different time zones [many young Indians are working in]. This helps international companies. It is not easy to keep people working at very odd times, because they can lose social contact with their community.” In some ways this story highlights the current business situation on the ground in modern India. Because beyond the tales of a falling rupee, conversely buoyant stock market, and an up-andcoming election, the supreme rule of the family underpins business. There is a vast youth population, which is consistently up-skilling itself, driven on by ambitious parents. This constant attempt at upward mobility means in turn there is a massively escalating middle class, whilst budget services - like call centres - which India has become known for are being gradually undercut by ever-cheaper markets. India is clearly at a cross roads, yet despite negativity from outside the country, there is remarkable positivity on the ground. Over the last few months IDG Connect has been speaking to thought leaders from a variety of companies in order to build a picture of the business landscape. In the course of these conversations a remarkably consistent view has emerged of an India, which whilst not without problems, appears to have a lot of hope for the future.
  3. 3. BUSINESS INDIA 2014: A BRIGHT FUTURE IDG CONNECT Bangalore KFC & cows Image courtesy of Christopher Neugebauer via Flickr manufacturing sector. Now with all the young people joining our workforce, we have to expand beyond our typical white collar services sector and move into manufacturing.” THE MANY DIVISIONS OF INDIA “Dirty, straggling houses, with now and then an unexpected court composed of buildings as illproportioned and deformed as the half-naked children that wallow in the kennels.” It sounds like a scene from modern India, but is in fact Charles Dickens’ description of Seven Dials in London. The parallels with 19th century industrialising Britain are plain to see: from the slums that exist cheek-byjowl with a rapidly expanding middle class to the print newspaper trade, which is growing so rapidly that even second hand papers have a market. Yet this marks a conflict of its very own: “Look at how a typical developing nation grows,” Som Pal Choudhury, MD of Analog Devices explained. “It goes from agriculture to manufacturing, then as the country grows, it moves into services.” India missed a step. “It went from agro economy straight to a services economy without transitioning through the Over the last decade or so, India has carved a niche as an outsourcing destination for foreign businesses. “If you visit Bangalore and you go into these IT complexes they’re very different from the city outside the complex,” said Narayan. “It is almost like you’re entering a very different world. You might be going into Singapore, yet you come out and there are all these pot holes across the street [and people living in slums]. It is not equal between those inside the concrete complex who are very well paid and public roads are almost falling apart. There is a very stark divide in the city today.” On top of which, all the furious activity has left “Bangalore bursting at its seams,” Suchit Bachalli Executive Vice President and Co-founder of Unilog Content Solutions told us. “It is half as liveable today as it was 10 years ago.” The housing is extremely expensive and “for those who can afford it; it is hard to ignore the fact you don’t have drinking water out of your tap, you don’t have 24/7 power and you step out of your house into a traffic jam – it takes an hour and a half to do 10 – 14 KM.” This situation is unsustainable in a huge number of different ways, not least because India is gradually being undercut by ever cheaper markets. “It’s a relentless trend,” wrote Mike Magee for IDG Connect, “and it means companies are looking outside India to countries where prices and the standard of living are much lower. The fear is that at some point the drive to keep costs low will hit a brick wall, and in 10 years there will be nowhere left where labour is cheap, leaving eight billion people on the planet looking for work.”
  4. 4. BUSINESS INDIA 2014: A BRIGHT FUTURE IDG CONNECT THE NEED FOR FEWER SERVICES & MORE INNOVATION This can stifle entrepreneurial innovation. ‘The World Startup Report’ published in Spring 2013, for example, included a quote from an individual who said: “If you want to get married don’t do a startup”, whilst the presentation itself added, “It’s a bad point on the matchmaking checklist, like being a struggling artist (without the glamour)”. This social point was picked up in a comment on TechCrunch, “Getting married and prospective in-laws are a major issue in Indian Entrepreneurship circuit.” Talvinder Singh, Founder of supplemented this point with a first-hand account: “[The] World expects you to be some millionaire by now. Three years is like the litmus test of survival for any startup. And that’s when you are expected to marry. Well, a broke founder (ok, not really broke. Yet.) of a crazy idea isn’t a hot selling product, after all.” However, as Indian outsourcing begins to wane in favour of ever cheaper markets there is a desperate need for creative thinking and innovation. Suchit Bachalli, Executive Vice President and Co-founder of Unilog Content Solutions told us the real opportunity for Indian companies will be to become innovative. “There are companies that are doing software development, but they are told what the solution is. Very few companies, in my opinion, are at the problem [solving] end of it and are actually designing solutions and implementing them worldwide. Yet many Indian companies are sitting on a goldmine of data.” “I would like to see India considered as an innovator,” continued Bachalli. “The lack of innovation bothers [me]. Everyone seems to be very content with a desk job. In the West it’s the opposite fear. There the worry is that someone in India or China will take your job. But [I think Indians are] taking the wrong kinds of jobs.” “Everything is used,” he explained. “[Local CIOs] figure out all kinds of things to make it happen. Indian enterprises are [also] willing to take a lot of risk. I have seen a lot of multinational companies which are very risk averse. [Indian CIOs are] more savvy from a technology standpoint than elsewhere the world; they get [technical] to a point beyond reason. They understand technology very well and are usually focused on it, sometimes to a point of being very detrimental to their own interests.” Mix of styles Image courtesy of myhsu via Flickr The change will necessarily be slow and based around professionals’ mind set, but Bachalli is hopeful. “I was at a conclave for Big Data in Bangalore [in the Autumn and] it was most heartening because [whilst] the average Indian’s reaction to any new technology is to [talk about] setting up a training institute… or [talk about] outsourcing services to the west. I did not hear any of that. The thought process was: this is a great technology, what are the applications we can build on it?” Despite a traditionalist mentality there has always been a certain spirit of innovation within IT departments themselves. Anil Valluri, President of India & SAARC Operations at NetApp talked to IDG Connect about the catchall Hindi-Urdu term “Jugaad” which, literally, means an improvised work-around due to lack of resources, but has come to typify a way of thinking. “This is [the spirit of] ‘make it happen,’” Valluri told us. He believes this mentality has defined Indian IT to date. “There is a ‘make it happen’ tendency [in Indian IT]. You can conjure up absolutely impossible things out of nothing in Indian data centres and IT infrastructure.” “ There is a ‘make it happen’ tendency [in Indian IT]. You can conjure up absolutely impossible things out of nothing in Indian data centres and IT infrastructure. Anil Valluri, President of India & SAARC Operations at NetApp “ Outside tangible divisions of wealth and poverty, there are a number of stark fault lines that run through India and impact the business landscape. The most notable of these is that India is very traditional and very traditionalist. Families put their children under a lot of pressure to do well, which can come at a marked fear of risk; we all know the cliché about Indian parents desperately wanting their sons to be doctors.
  5. 5. Indian Family BUSINESS INDIA 2014: A BRIGHT FUTURE IDG CONNECT Image courtesy of Wen-Yan King via Flickr THE FAST RETURNING DIASPORA “Talk to any Indian on the planet; they will all say they came back [to India from abroad] for family reasons,” V C Gopalratnam CIO of Cisco India told IDG Connect. “[This was certainly] true in my case. [But] more than that, it was the opportunity to be part of something different.” Like many successful Indian IT professionals, Gopalratnam returned to India after 17 years in the US because things were improving rapidly at home. “The standard of work in India is going up [continuously],” Neeraj Varma, Director of Sales for Xilinx India told us. “Cost arbitrage is no longer as attractive as it used to be. [And we’re] increasingly [getting work] because [of our] talent, quality and technology. Back office processing and call centres will continue to move to cheaper markets. [But] the value-based work will continue [to move to India].” India has a young population (median age 26.5) of 1.2 billion and the third largest education system in the world. This comprises of more than 500 universities and around 30,000 colleges, many of which are focused on tech. This represents a huge amount of IT talent and potential. Due to this, the government has been placing a real emphasis on Indian Institutes of Technology (IITs) in recent years. As part of India’s new science policy, it aims to see the country placed in the top five global scientific powers by 2020. “All education institutions are mandated with conducting research,” Mr. Subram Natarajan, Executive - Deep Computing, IBM India South Asia told IDG Connect. “There is a very conscious effort to improve the skills by government agencies.” Skills are of continued importance in this type of market place. The problem, clarified Varma, is finding good middle management “project leads” people who , have seven or eight years’ experience of the full project life cycle. Graduates are not so much of a problem. This is where the returning diaspora provides the missing part of the jigsaw. “India is really good at services,” explained Varma “We’ve mastered the art of services. [But] an engineer who works for a company [in India] may not get close to a product lifecycle, he’ll just be doing a small piece [and] doesn’t get the exposure on a managerial level to complete the full life cycle.” Yet the returning diaspora “have worked in cutting edge technology. [And] they make excellent middle management,” he continues. “We have seen them both as our customers and at Xilinx itself. [In fact] over half of [the people we deal with] have worked in US and returned. This is a very healthy trend to help local companies to really come up with the value.” “ “ The big change for India over the last few years is that Indians, who previously moved abroad and never returned, have started to come back home. This is having a noticeable impact on business on the ground because professionals are now bringing different working practices back with them. The standard of work in India is going up. Neeraj Varma, Director of Sales for Xilinx India McKinsey estimates that the US (alone) will experience a shortage of almost 1.5 million big data professionals by 2018. “Those types of jobs can only be filled by economies like India,” said Venkat Viswanathan, CEO and co-Founder of LatentView. “[This is a country which] continue[s] to produce large numbers of educated people who can potentially be groomed into these particular talent gaps.” World business tends to operate from a very western point of view, but the unique Indian mind set actually brings some very distinct advantages. “We like to go out and meet a lot of people and make a lot of friends. [This means] Facebook pages from India have a larger number of friends than say the US, which I think is very cultural,” Hareesh Tibrewala, CEO of Social Wavelength told us, and this approach to communication also has a noticeable impact on the workplace. “The way the US has developed [means] there tends to be more of a sense of independence. People tend to be more self-starters. People tend to work [well] on their own. As a result the culture in the organisation has evolved along those lines,” explained Gopalratnam. “Whereas if you look at India - because of the way our society is structured - it is a very collaborative environment. People tend to work better in teams,” he continued “and the younger generation coming in makes this [even more pronounced] because everything they do is collaborative. That impacts how work gets done in a US environment vs. an Indian environment. There is a stronger sense of community in India than you would see in a western context. [I think] that is the single biggest difference [between the US and India].”
  6. 6. BUSINESS INDIA 2014: A BRIGHT FUTURE IDG CONNECT This in turn is having an impact on IT across the board, from BYOD to its corresponding security concerns… but above all in the explosion of data. “The [sudden] data explosion has hit India harder,” said Valluri. “Because we didn’t have internet access in the remote areas [until recently], it was only the cities. But with the smartphones taking over, the class B and class C towns are now all on the net.” To add to this the population is growing and the new generation born and raised with gadgets are increasingly looking for services online. The government is using this to facilitate better processes, such as Ms. Kalaivani Chittaranjan, MD and CEO of eMudhra official identity documents. Ms. Kalaivani Chittaranjan, MD and CEO of eMudhra told IDG Connect about how the government has established cyber kiosks which provide instant services for citizens: Mall Bangalore Image courtesy of Saad Faruque via Flickr “These people may not be literate, but they can walk in say what they want and the information can be printed out there and then. This means people with no access to the internet are now able to make use of online facilities.” Problems associated with poor infrastructure are so intense that a small number of cutting edge new startups are looking to offer creative solutions. Google Executive Chairman Eric Schmidt wrote in an opinion piece for the ‘The Times of India’ in the Spring: “The most striking Indian internet innovations won’t come from big institutions or companies moving online. They will come from Indians solving local problems.” He went on to cite the case of Redbus, which took the mess of multiple bus companies working across the country and provided an answer. Schmidt’s conclusion to this was, “You don’t have to aim for foreign markets to be successful. You just have to solve local problems in a way that’s globally applicable.” “ The most striking Indian internet innovations won’t come from big institutions or companies moving online. They will come from Indians solving local problems. Eric Schmidt, Executive Chairman, Google “ The technological changes which have gradually taken hold across the world now appear to be hitting India all in one go. In September, the Times of India reported that this year India has seen an 89% increase in smartphone users from 2012. “Mobility is putting a lot of pressure on system,” Anil Valluri President of India & SAARC Operations at NetApp India told IDG Connect. The Times of India article compared accelerated smartphone growth to that in Brazil, but with the important caveat that Indians are skipping a generation of multimedia phones. Prashant Singh, MD of Nielsen India told the paper: “Users will migrate straight from a feature phone to a smartphone.” People with no access to the internet are now able to make use of online facilities. “ THE IT MARKET REACHES MATURITY “
  7. 7. BUSINESS INDIA 2014: A BRIGHT FUTURE CONCLUSION The western media is full of stories about how India is failing, yet the picture from thought leaders on the ground is far more positive. Of course India has its problems. It is a country characterised by division, which is currently battling the transition from cheapest outsourcing destination to innovative strategic market. However, all the building blocks appear to be in place for future success. India has a massive population of young people who are consistently encouraged by their families to upskill themselves, while the government is actively pushing educational excellence. It has a large returning diaspora which is bringing best practices from abroad, back home. And it is has its own unique approaches to the workplace, which hinge on collaboration and a spirit of ‘make it happen’. “I think people need to understand,” concluded Gopalratnam, CIO of Cisco “that India is not just about talent or cost. It is actually a business opportunity.” This point was vigorously seconded by Rao Yanamandra on our website. He went on to add: “[It] can even be extended to other developing countries in Asia.” About IDG Connect IDG Connect, a division of International Data Group (IDG), the world’s largest technology media company, produces, publishes and distributes local IT and business information on behalf of a truly global client base. Established in 2005, we have a fully nurtured audience of 2.6 million professional decision-makers from 130 countries, and an extended reach of 38 million names. This lets us conduct research, create independent analysis and opinion articles, and drive long-term engagement between professionals and B2B marketers worldwide. For more information visit