Note: This is a literal audio transcription of the podcast. This transcription has to be read in context by ignoring grammatical and sentence formation issues. The podcast is located here
Krishnan Subramanian: Welcome to India Cloud at Podcast Series. This is the second podcast in these series and today I will be talking to Suresh Sambandam, CEO of OrangeScape. Hi Suresh can you introduce yourself and also talk about your company a little bit?
Suresh Sambandam: Sure. Thanks Krish. It was a great opportunity to speak with the audience. This is Suresh and I am the CEO and Founder of OrangeScape. OrangeScape is one of the global ten platform-as-a-service companies. We are based out of India, but we are going into the global market especially the US, UK and Western Europe.
Krishnan Subramanian: Okay. So how did you first get involved in cloud computing? Can you give a brief background on how you became interested in cloud computing? How did you make OrangeScape into a cloud player?
Suresh Sambandam: Okay. That’s a long story but I will try and do it pretty quickly. If you really look at OrangeScape’s purpose, we’re in the business of helping companies develop business applications and simplify the development of business application. We founded the company in 2003, late 2003, early 2004 and at that time there was no cloud. There was not even a word called cloud. Nobody knew anything like that. So we went on that purpose building a platform to help enterprises and developers who were basically power users who can build business applications without having to go through the standard programming model. So we built an abstraction, an abstract layer which is a metadata driven visual modeling approach for solving the problem. And then we were selling in India and we found out that to build a business application, it’s like a three legged stool or three parts of the puzzle. One is somebody needs a domain knowledge and you need a platform which is a technology platform. It abstracts the underlying complexity of the programming model. And then you need the third piece which is essentially the infrastructure on top of which this software can run. Now we solved the software problem and then we were selling. By the time we solved the software problem, it was like two, three years, and then we started selling. And then we started hitting this bottleneck with infrastructure because platform is pretty big. The platform that we built was pretty big. And then to host it you again need to go to IT and ask for servers and investments. You set up there and configure it. While the application development portion was simplified, the provisioning and the deployment, and the way we make it operational seemed to be very complex. It took quite a lot of time. And also if you look at the people, we have to discuss and interact to make this work within a large enterprise. It’s a pretty complex process. Do you understand what I am saying? Around that time, cloud just started happening, and then in the early stage, Amazon was there. Amazon started to be released. And then we were just watching. When the Google App engine was released, we realized that going on the cloud path is a way to actually solve all these problems much more elegantly because OrangeScape is not an infrastructure or a network management company. We are a software company and we did not have the capability to build datacenters and put all these things in the datacenter and manage that infrastructure. We need to build a whole new organization if you have to become a hosting provider. So that’s one of the reasons we even went to the app engine instead of the pure infrastructure plane because we just wanted to be a platform and a software company. We want to leave the challenges of building, managing infrastructure, and hosting to somebody who is already capable of doing that. That’s essentially how we went into the cloud space.
Krishnan Subramanian: Okay. So like I could say OrangeScape is like Visual Basic for PaaS.
Suresh Sambandam: Yes. It’s a Visual Basic for the cloud. ‘VB on cloud’ is the colloquial way to explain OrangeScape.
Krishnan Subramanian: Okay. Before we start talking about the Indian market, I have one question which I think it’s better to get the insight from you because you have made the transition. You have transitioned from being a sort of traditional middleware vendor to a PaaS player. So what are the things you learned here that you can share with others so that other organizations work looking towards PaaS as a move away from traditional middleware can learn? Is there any piece of advice you want to give with respect to using PaaS? Because I for ones strongly believe PaaS is the future of cloud services and PaaS will be the face of IT in the future unlike the apps people who are controlling IT in today’s traditional environment. So do you have any piece of advice which you can give to an organization looking to move towards PaaS instead of middleware?
Suresh Sambandam: Right, right. My view is the end user companies like the enterprises. I am not talking about ISVs whose bread and butter is actually building software. But I am talking about enterprises whose bread and butter is not actually building software but for them software is an enabler to their business. If you are a biscuit manufacturer or if you are a car maker, you are not building software to sell. You are building software to help your car be better produced and cost effective. And for them, the whole model is about time to market and productivity and not about control. If you really look at the middleware market, you know the way it happened clear to cloud is about controlling all pieces that goes into the platform. Actually I will take a step back and then say something. In the pre-cloud era, all enterprises, large enterprises they actually constructed a platform we spoke every time within their organization. What do I mean by that? Platform is when you have to put an operating system together. You need to define what is your database for your enterprise. Some companies standardize between DB2 or SQL Server or Oracle, and then you need an App server. So they piece all these pieces together and they want to control what goes into that complete style. Right? And then create what they call as an enterprise architecture for large enterprises. You know there are a lot of enterprise architecture groups and they essentially spend a lot of energy creating a sort of a platform of their own in the past. Right? And that is non-value added, no time to market process, and that doesn’t make sense if you are an end user organization producing cars or baking biscuits.
Krishnan Subramanian: Yeah, it actually takes precious amount of resources away from your core business. I think it makes no sense to me.
Suresh Sambandam: Exactly. Absolutely it makes no sense to me. But if you are a software, if you are an ISV, then at least it makes some sense to you because your business is about making software and you want to control certain parts so that you get better efficiencies and stuff like that. You want to have a performance system and all that stuff. But if your business is about making cars then you rather work on how do I get faster time to market, how do I focus on productivity rather than control. I think that’s a big learning. Personally I have working, so you are in the pre-cloud space. We are not really like a middleware company that we still used to run.
Krishnan Subramanian: Yeah. An abstraction of middleware actually.
Suresh Sambandam: Right. We run on top of the middleware but that has been our philosophy right from those days moving into the cloud. Cloud essentially brought in a lot of clarity to our positioning and a lot of simplicity towards our deployment and provisioning process. But the philosophy of OrangeScape continued to remain sort of intact from the founding days. While we have sort of shepherded ourselves into the right path and strayed away a little bit, we came back and all that stuff that happened. But essentially the original intent and mission continued to be the same actually because essentially, we are in the business of simplifying business application development.
Krishnan Subramanian: Yeah. So basically it just changed your delivery model than anything else?
Suresh Sambandam: Yes, yes, yes.
Krishnan Subramanian: Okay.
Suresh Sambandam: But then we are a lot more than delivery model but we’re primarily a delivery model.
Krishnan Subramanian: Yeah. To put it simply, like to make people sort of understand it in a simpler terms.
Suresh Sambandam: Exactly.
Krishnan Subramanian: So you are an ISV who have taken advantage of PaaS. But some ISVs might require control of the middleware part but most of them can still get away with using PaaS and sort of saving a lot of money as well as the resources. So do you think ISVs in India can really take advantage of PaaS? Will ISVs let them reach a global market?
Suresh Sambandam: Absolutely. I think I feel that people have to be very careful when they choose it unless you are an ISV who was a system level software maker where you want to control and have a much more fine grain control on the parts that go into your platform. You should really go to PaaS. If you are making a CRM software for example, or if you are making an order management software or you are making a dealer management system for the Maruti’s of the world in India or Ford or something like that then I don’t see any reason why you need to. From a technology perspective, it is a lot easier to adapt a PaaS and build a SaaS. And then you want to make your own commercial choices which are based on economics of which PaaS is commercially viable and also supported. And that’s a traditional trade off which you have to make but that’s a category of choice. You should move the category to a PaaS based choice. Among the PaaS category you need to pick vendors rather than move one level down and going to maybe an infrastructure choice.
Krishnan Subramanian: Yeah, I think that most of the SaaS windows building business applications in India should go with the PaaS unless there are some regulatory requirements requiring them to sort of keep it within certain boundaries. That’s my thinking at least.
Suresh Sambandam: That’s correct. Actually you touched on something much more important because regulatory issues especially when you are dealing with Government. OrangeScape also has experience in dealing with Government customers in India. Except for dealing with Government customers, I think there are no other constraints that prevent you from using a non-India based platform. If you are only dealing with Defense and Government projects then it might mandate you.
Krishnan Subramanian: Yeah. I think that is the case with most of the countries in the world. Government projects mandate you to use the datacenters within the country.
Suresh Sambandam: Right. Except there are some companies like financial services who are trading and then dealing with some parts of their data that I think cannot go, or something like that is there.
Krishnan Subramanian: Yeah. I think there will be some regulatory requirements. Also with the financial services, there might be some performance issues which will require them to have the datacenters close to where the trading happens. For example in Wall Street, all the datacenters are across the river on the New Jersey side so there could be some verticals that might require datacenters to be closer to them. Otherwise, I don’t see any reason why start ups in India especially the hi-tech startups in India cannot take advantage of platform as a service.
Suresh Sambandam: That’s correct, that’s correct. Actually the latency is a big concern. I think you have brought up the problem of latency especially when you are going across the continent. Right? There is a four hundred millisecond delay for every network call across the continent. Right? So that means however optimized code you write it’s still going to be four hundred milliseconds delay.
Krishnan Subramanian: I agree, I agree. I hope that as the cloud, platform as a service market matures, these platform providers will have datacenters in many different parts of the world so that they can serve based on where the request is coming from. I hope we get there eventually. I am sure that we will get there eventually. The rate outage we are going to get there is still not sure. It’s still clouded.
Suresh Sambandam: Right, right. I think there are only two or three players who are doing this. Definitely Google has app engine and Microsoft has Azure. Right? But most of their datacenters, pretty much both the companies are in North America. So I think there are no plans, at least published plans to have data. So for India at least it needs to be in Singapore at the minimum.
Krishnan Subramanian: Yeah I agree.
Suresh Sambandam: So Singapore is like -.
Krishnan Subramanian: I am sort of like- I don’t know whether you saw my post. I am sort of expecting that Amazon will have a PaaS play in the next utilization of PaaS. If it does, probably the Singapore datacenters that Amazon has might help Indian users, Indian developers.
Suresh Sambandam: Yeah, yes, yes.
Krishnan Subramanian: Lets sort of a shift gear and go to the end user adoption in India. From your point of view, what do you think about cloud adoption in India? Do you see more adoption on infrastructure side or a platform side or on the application side? And also if you segment the market as an enterprise and SMB, where do you see most adoption? Is it on the SMB side or is it on the enterprise side? Also if you can tell me why is it the case, that it will be good for my understanding as well as other listeners.
Suresh Sambandam: Absolutely. I think India is very complex based and also it’s an evolving economy. Right? It’s not a developed economy and it’s on nuances. If you ask me from the market standpoint, it’s a split answer. The largest adoption has happened on the infrastructure side for enterprises. If you understand what I am saying right? Because it’s easy for them to go from a datacenter server to another datacenter provider like Netmagic, who happens to be OrangeScape’s partner. And there are other players like Control S and there are other infrastructure players who are also starting to offer cloud based solutions like infrastructure as a service solutions. So it’s a very natural transition for them. It also does not require a lot of change in their IT setup because instead of local servers in your datacenter you are moving into virtual servers on the cloud provider. You can put the same software, set it up everything, and then make it run. There is some work to be done but the benefit of cost and all this justifies that work. So the adoption for infrastructure as a service in enterprises is much higher. On the other hand for SMB’s, it’s obviously the software as a service stuff. You know like you would have talked to Kishore, Impel CRM, I think in, they are doing phenomenally well.
Krishnan Subramanian: Yeah. I was pretty impressed with the way their approaching their app development itself to meet the needs of Indian audience where SMS and stuff like that are more important than using a smart phone to get things out from a centralized location.
Suresh Sambandam: Yeah. I think this is a very sophisticated subject. Actually I want to delve deeper on SaaS or SMB’s in India because I have some very deep views. We will talk about that. So that’s where I am seeing that SaaS for SMB’s is like a great adoption from an adoption standpoint. But there is a tremendous amount of room to grow meaning there are probably five more CRM’s who can come or ten more you know, what is this HR, I forgot this name in the US. SAP bought this company right?
Krishnan Subramanian: Success Factor.
Suresh Sambandam: Success Factor right. There are ten more Success Factors. There is scope for ten more Success Factors in India. It’s a huge market. But the problem is if you look at the SaaS model and since you talked to Kishore and he told you some few things, I feel there is again like it’s a three dimensional access. There are three dimensions. One dimension is the vertical, vertical as in the retail or manufacturing or those kind of things. Another access is the application which is order management or CRM or things like that. And then the third access is geography which is India or Middle East or US or Europe. So basically if you draw a three dimensional matrix of these verticals, the intersection point of all these three verticals is a scope for a SaaS application to be developed. So for example CRM for manufacturing for India is going to be very different from CRM for retail for India, or CRM for real estate for India. So there is a great opportunity. This is not true for India alone. It’s true for every geography. This is a philosophy that I have of how SaaS itself will explode in terms of creating a number of solutions.
Krishnan Subramanian: This is a very interesting idea. Like I will talk about it offline but this is a pretty interesting idea. Yeah go ahead.
Suresh Sambandam: Yeah. Actually I did a big this thing to- This is my original thought and then I actually gave interviews to Zinal and other people who have incorporated that India research. In fact I even have a slide which I can share it to you. So this is in my view the greatest opportunity for SaaS across globe. Right?
Krishnan Subramanian: Yeah. This is interesting because you are the third person from whom I am hearing this exact same thing. The first one is a friend of mine called Varadharajan whom I will be talking from a marketing perspective in cloud in one of the future podcast. He told me that the biggest problem in India is not cloud adoption, it’s about adopting the right set of tools for their business needs. And their problem is all the vendors who are targeting markets are not doing it right. So that’s his theory and Kishore highlighted the same thing. I think you are also hitting on the same point. I think this is something to be explored and we should sort of create an awareness around this idea and get people to really understand the nature of the market and probably offer solutions to meet the needs.
Suresh Sambandam: Sure.
Krishnan Subramanian: Yeah.
Suresh Sambandam: We can do a specific podcast on that separately. Hence, I am seeing that there is a great opportunity for companies to build SaaS solutions that are so unique to India. The market is there locally. You don’t have to go to US and sell. These are the barriers that used to exist in the previous paradigm, in the pre-cloud paradigm. Luckily, India is growing so rapidly and the market is there.
Krishnan Subramanian: Yeah it’s a huge market.
Suresh Sambandam: People are not seeing this actually and still they are continuing to go through the outsourcing models, sell bodies to outside of India, and stuff like that. I think there is much more money to be made and people are not able to see it. And unfortunately because of the currency difference between India and US and other mature economies, the talent pool is actually going towards the outside of -.
Krishnan Subramanian: Outsourcing model probably, yeah.
Suresh Sambandam: Yeah, exactly. The talent pool is getting attracted there and it’s making life more complex for even entrepreneurs who are thinking of creating products because the same guys are maybe sitting in General Motors in the US and actually doing a much more sophisticated dealer management system. And the domain knowledge already exist.
Krishnan Subramanian: Actually like six years back, I tried to do a startup in India on the open source front. I tried to manage from here but I tried to hire people in India and do some more open source related product development. I used to come to India and hire somebody and by the time I land back in US, Wipro or TCS or Infosys would have taken those guys away. So it was a big problem. I agree. The money is driving people towards the outsourcing market but I think there is a lot of opportunity in India where startups can really make lot of money if they do it right.
Suresh Sambandam: Exactly, exactly. And then the third question you asked, where does PaaS – I mean I answered it. IAS is going towards enterprise and SaaS is going towards SMB’s. And PaaS is obviously the most difficult thing because I think India will go one way or the other towards SMB and enterprise. But I think because the IT infrastructure in India where people say like there are no landline infrastructure for telephones in India, as much they are having mobile phones, we have like -.
Krishnan Subramanian: I think we will skip a generation. We skipped the generation with telephone, and we are going to skip a generation here. You know, actually I told Kishore the same thing like it is going to happen.
Suresh Sambandam: It’s going to happen. So the IT infrastructure is not that very well adopted so the opportunity to skip a layer and directly go into fully using cloud based solutions pretty much mostly SaaS based solutions in India has the biggest possibility in my view. But in mature economies like Europe as well as North America, the need for platform as a service is much more well-articulated in the minds of their own buyers. So that’s one of the reasons why OrangeScape is in the US as much as everything else.
Krishnan Subramanian: Okay. So from the end user side in India, what are the concerns or factors that are effecting total adoption? Do you see anything that effects large scale adoption of cloud?
Suresh Sambandam: I think there is only one problem and that is bandwidth availability and that’s it. There is nothing else actually. Everything else is the vendor’s problem of how they put together a value proposition and take it to the customers and make them buy. The only problem at the industry level and the Government level that we saw is make sure the last mile connectivity to the internet is available to the cloud. So if you go to anybody in India and then talk about cloud, the people will say, “So internet what do we do?” The costs are coming down definitely but the connectivity and the reliability of the connectivity is a problem, and obviously it’s also linked with power to some extent. But I wouldn’t have to worry about power because if your PC has to run, you need power anyway. So that problem is linked to a much more fundamental level. So I think my number one problem would be how as an industry we can influence Government to provide that last mail connectivity through mobile and 3G and those technologies. And if you can solve that problem, I think Kishore will be a much happier guy.
Krishnan Subramanian: Yeah I agree, I agree definitely. Yeah. So for the next part of the podcast, we are going to talk about Government adoption of cloud. But before we go there, I want to get you a perspective on how outsourcing vendors like TCS, Infosys and Wipro are feeling the heat of cloud computing. Cloud computing is completely changing the landscape and in my opinion, it might even cut down the influence of outsourcing vendors in the enterprise market over a period of time. So from your perspective do you think outsourcing vendors are facing the heat? And if so, are they taking any steps to be relevant in the coming years?
Suresh Sambandam: Right. I think the current reality is it is definitely not putting a heat on them.
Krishnan Subramanian: Okay.
Suresh Sambandam: Right? In fact I think they are. We have to wait and see how this transforms. The next three to five years is going to be a transitionary period where enterprises would have to continue to run what they are running as well as plans for transforming themselves into the cloud. So a system integrator like Wipro or a software systems integrator, I am not taking the infrastructure guys, those guys integrate the software systems and they are going to get more work because there are two things that enterprises have to juggle during the transitionary time. Right now they may not actually, at least I am not seeing, they are getting more involved because –.
Krishnan Subramanian: Yeah. Because they are more complex. I used to tell people that enterprise adoption of cloud computing will increase the complexity first before it makes it simpler.
Suresh Sambandam: Exactly. There are two things we will have to see. One is this transitionary period where there will be two systems that have to run in parallel, and eventually increase more demand than supply, hence they will be in a good position. The second one is when you simplify something. People start using it for beyond what the original intent is and they embrace it in such a way that they adopt more and more things. Think about Java. You know when Java came in, it just made sure that so many more developers came into the programming environment. It built so many million applications and things like that. Right?
Krishnan Subramanian: Actually it levels the playing field and opens up opportunity for further innovation.
Suresh Sambandam: Right, right. So whatever people said, “oh it doesn’t have ROI to do it anymore.” Right? When you simplify, the cost comes down. Whatever was excluded as non-ROI items will suddenly become possible. Right? And then it will buy more work. I think it’s going to be an expansion, exclusive growth for the IT industry. That’s how I see it.
Krishnan Subramanian: So possibly, from being system integrators in the traditional environment there will be more system integrators for the cloud?
Suresh Sambandam: Yes, but I think they need to reinvent themselves. I think they need to understand that.
Krishnan Subramanian: Yeah. They have to definitely. Yeah. They have to reinvent themselves. While talking to some of the players, I get a feeling that they are still pushing the enterprises to stay with the traditional setup because it will eventually hurt their big share of profits. But I think sooner than later unless they disrupt themselves and reinvent themselves, they are going to get into trouble. But I think they are smart enough to understand that and they’ll probably prepare for the onslaught of cloud.
Suresh Sambandam: Okay. Exactly, yeah. I think you sort of answered it. Yeah. So I think there are some people at the operational level who have revenues and targets linked to some recurring revenues, who will try to put some artificial barriers for certain systems to move. But this will happen in pockets and then there are more number of things that happen, that cannot happen. This will be happening at the individual level but beyond that, it’s an unstoppable force.
Krishnan Subramanian: Yeah. The same way cloud is getting adapted in enterprises. Here in the US, it’s a bottoms-up adoption like individual teams start using Amazon web services and suddenly IT realizes that, “hey man, these guys are completely bypassing us and now they are sort of embracing the cloud.” I think that kind of a realization will come for these system integrators and they will change the game plan as soon as they realize that.
Suresh Sambandam: Oh this is news to me. Do you think that departments are buying Amazon web services?
Krishnan Subramanian: Yeah. I know many teams. Let’s say they want to do some experimental project. What they do is they use their credit card to get resources from Amazon web services and then they expense it. Since the amount or expense is very low, it doesn’t even get noticed by IT. Then they really get their project going and then they go to IT and say “hey I have done this on Amazon web service. Now I want you to provision the services from Amazon so that I can make it a production system.” So that’s like many IT’s, at least not everybody, but many of them are realizing it that way. That happened with Open Source, that happened with social networking tools and that’s happening with cloud computing tools too.
Suresh Sambandam: I was surely thinking SaaS will be like that in US but I –.
Krishnan Subramanian: No. See, the beauty of an Amazon web service kind of solution is like it completely removes the barrier to adoption. So if I have a credit card, I will be able to log in and I can easily expense and write the whole thing when I do my expenses. And it’s a small amount so that nobody will bother it. So that’s how like many teams are – see like earlier they used to have mail servers under their desk. Now they don’t do it anymore. They just swipe their credit card, get services from Amazon, and once they are done, they shut it off like that [indiscernible] [00:31:48]. It has become very easy for these teams to sort of adopt cloud services on the infrastructure side.
Suresh Sambandam: Okay, okay that’s -.
Krishnan Subramanian: Yeah. Let’s now shift gears and talk about cloud adoption in the Government. At least in the US, the current Obama administration is pushing hard for a cloud first initiative. They want Government agencies to adopt cloud first and if it doesn’t suit them, look for other options. So basically the idea is that it cuts cost in this year for large deficits, and they also want to make Government agencies more nimble and efficient. So is there a trend like that happening among the Indian Government? If so, can you give me some insights?
Suresh Sambandam: Yeah. Actually we were very hopeful and bullish for the UID project, the equivalent of a social security number for the US. That’s a huge organization and under that, there was also a Government cloud initiative. To some extent, there was an RFP that was floated and you know for a system integrator to put all the pieces and provision this Government cloud. You know OrangeScape was also part of that RFP process. But for some reason, that initiative got stalled because there were lots of questions on the UID project itself that it came up in Parliament and stuff like that. But Nandhan had a great vision in how to bring cloud to Government and use citizens’ dollars in a proper way. In fact I see Government as the biggest beneficiary of cloud. The reason I am saying that is we sell into the Government as well. Every Government has tremendous amount of unutilized capacity. Everybody buy their own big, big servers; big, big software and they use ten percent utilization, and half of them is not used. Mostly it’s shelf ware. Right? If you are in the cloud, you are only going to use capacity whenever it is required and you don’t pay for it. It’s all money spent and gets locked into these machines. Government will be a huge segment where cloud will make tremendous sense for spending citizen tax money properly. But I think we need to make sure that we all support Nandhan in his UID project and make sure it passes through the Government hurdles and they are able to do beyond what they are suppose to do. I think that’s where it gets stuck.
Krishnan Subramanian: Okay. In the US NIST, National Institute for Standards and Technology, is a set of specifications which Government can use so that the cloud adoption is seamless and it doesn’t disrupt the functioning of ANC’s. So is there any such initiative going on in India for Indian Government purposes based on the regulatory requirements and also the security considerations and stuff like that? So is there a NIST equivalent in India giving out specifications on how Government agencies should adopt the cloud computing whenever they are ready to adopt?
Suresh Sambandam: I don’t think there exists one.
Krishnan Subramanian: Okay, okay.
Suresh Sambandam: At least I am not aware of. I started losing touch with the Government market in India especially. But at least to the best of my knowledge, I don’t think there is any standardization for buying. So I think Government doesn’t have a policy like what the Obama administration has done which is saying something like cloud first. Once you create a policy and the team like that, then other things starts pushing down.
Krishnan Subramanian: Yeah I agree, I agree, I definitely agree.
Suresh Sambandam: Yeah it is not, we haven’t done that.
Krishnan Subramanian: Since they haven’t even decided on that policy probably like other things are just waiting there. Okay. So like let’s move away from the Government’s use of cloud to the obstacles they can throw on the way of cloud adoption. Because some of the regulations are definitely needed because that’s the way the Government can protect themselves and also the people. But some might be really like hindering the innovation, hindering the progress. From your point of view, what is the impact of Indian Government regulations on cloud computing or cloud adoption?
Suresh Sambandam: Right. The biggest one I think and I don’t know whether you heard it from Kishore is we have a big problem with RBI’s control on how credit cards are getting billed. That actually proves a huge deterrent for SaaS providers and PaaS providers like OrangeScape. If you have to swipe your credit card and then say every month I will pay like fifty dollars. Right? And it does, there is no way to do it in a simple mechanism because RBI does not – Every time you will have to put in the card you need to enter a password before the transaction is processed.
Krishnan Subramanian: Okay.
Suresh Sambandam: So you can’t do like recurring billing automatically.
Krishnan Subramanian: Okay.
Suresh Sambandam: So people who have a recurring SaaS based subscription model, they have lots of trouble with this particular regulation. We also did a campaign to see how to kill it but you know we are still not able to [cross talking] [00:37:23].
Krishnan Subramanian: Is it for security reasons or is it for keeping control over the money flow reason?
Suresh Sambandam: Actually the original intent was a good noble intent. Before SaaS took over, this is actually a good initiative which is essentially to protect -.
Krishnan Subramanian: It sort of reminds me of the two factor authentication. But if it is for security reason to some extend I can agree, but if it is a way to control everything by the Government then probably it will be hindering.
Suresh Sambandam: It was definitely for the security reasons because they want to make sure that fraudulent transactions are prevented. They thought about it as a single transaction that happens on the internet. Right? But yeah when we searched that recurring payment that happens for SaaS based services. That used case there completely missed when they formed this policy. And at that time SaaS companies in India were also not too many. There are only e-commerce companies like Make My Trip and Flipkart, like those companies -.
Krishnan Subramanian: Yeah. They just use a onetime transaction so it -.
Suresh Sambandam: If it’s a onetime transaction, they don’t have too much problems. But the recurring payment transaction oriented businesses like SaaS, it started happening only in the last two, three years, and they are feeling the heat and it’s forcing companies to do things like set up a US company and then create a merchant account in the US and do all the transactions here and then transfer money back to India, and lots of workarounds. Otherwise you have to fill out a form like Google does this. If you are doing an ad words right in India, Google says “To enable your account, you need to fill out this form and then sign it and send it which basically says that it is authorized.” The credit card owner authorizes Google to do recurring payments. And then they will actually send this to RBI. They have a huge army for people who are working on this who make sure -.
Krishnan Subramanian: Yeah. But the startups cannot do that. They cannot afford to do that.
Suresh Sambandam: Startups cannot do this. It doesn’t have the money power like Google to do this, and we are all stuck. So I think that’s one huge barrier.
Krishnan Subramanian: Okay. So before we windup the podcast, let me get your thoughts on what Government and industry can do more to further increase cloud adoption in India?
Suresh Sambandam: I think there are lots of SMB’s in India who still do not know that software can solve some of their problems much better than what they are doing currently manually. It’s something like saying there was a campaign that was run to say, “You know if you eat eggs, you get protein and you become healthy.” Right? There is a big awareness issue. Because the IT literacy and adoption is so poor in India, a lot of people don’t even know that some of these problems can be easily solved with software. So at that level of adoption awareness, have to be brought in like running a nationwide campaign for people to know that software can solve this problem. They can run their businesses much more efficiently. That is one. The second one is the internet. And the third one is we talked about the credit card recurring payments. I think these three things are the most important things in my mind.
Krishnan Subramanian: Okay. What about the industry? What can industry do increase the -.
Suresh Sambandam: You see I am part of Nasscom and I’m part of this group called products group. It focuses on helping product companies that have problems and challenges and resolve them. So we are trying to all these things, all these three things. There is an internet working group which is trying to take this RBI problem and then go to RBI and solve this problem. There is this other group, our group is a products group. We are trying to work with the UID and garner support for them and all that stuff, and then also on the creative awareness stuff. So I think industry I mean Nasscom is the biggest industry association for software companies in India. And you know there are some activities that Nasscom is doing but it can be done like ten times more.
Krishnan Subramanian: Okay. So one last thing. What can analyst like me and cloud pundits do to further increase cloud adoption in India?
Suresh Sambandam: Unfortunately my view is that analysts have a great influence with enterprises and it might have a relatively smaller influence within the consumers. And consumers typically go to mainstream media to get influenced. If they have to be influenced, you need to go to mainstream media. Right? In India, if you really look at it, the kind of people who read Twitter and those things are still not there. We are talking about a small company whom manufacturers, let’s say agarbathi. Right? And that guy wouldn’t be on Twitter or Facebook or even know anything. He would only read the local vernacular newspaper and then he will see vernacular television. Right? And that is how he will get influenced. Right? So I think analysts can do a great job in influencing enterprises like the Maruti’s of the world or the Kevin Cares of the world, those kind of companies. I am not still very clear how analysts can help the SMB segment because that’s a very tough segment.
Krishnan Subramanian: Probably talking to media people and pushing them to write more. Often I have been seeing some articles on the Hindu and few other Indian newspapers about cloud computing. But I think as you said there should be more. They should do more to sort of educate people about what technology can do for their business problems.
Suresh Sambandam: Exactly, exactly, exactly yeah.
Krishnan Subramanian: Okay. Thank you Suresh. Thank you for your time. And this is India Cloud at Podcast Series. We are doing this as a buildup to the forthcoming cloud tour in India in four cities. We are going to talk about cloud computing targeted towards architects and developers in Chennai, Bangalore, Pune and Delhi. And this also gives us an idea about where the Indian cloud market is so that we can help in whatever way we can. Thank you very much. Thanks Suresh for your time and I will see you, talk to you guys in the next cloud podcast.
Suresh Sambandam: Thanks Krish bye, bye.
Krishnan Subramanian: Bye, bye.