Cloud, automation, sustainability and tools are trends driving IT – Economic Times

In a chat with ET Now, Anand Deshpande, MD & CEO, Persistent Systems, Kavi Arya, Pl, e-Yantra Project, IIT Bombay and Pari Natarajan, Co-founder &CEO, Zinnov, discuss the big picture in the IT Sector and how echnology trends are creating a disruption in the business model and the talent also have to keep up with it.

Edited excerpts

When someone says AI, I only have robots in my head. It is like a motion picture. What is AI all about? Deconstruct it for us because this is all jargon?

Traditionally when you looked at artificial intelligence, the idea was let us go figure out what the human being does and sees and if we can get a machine to replicate that. So there have been various techniques that people have used in the past to figure out how they would go about taking human intelligence and making it into a machine. People thought maybe we should create rules, we should figure out how people think and there was a lot of research going on.

In the last five to seven yearsm few things have changed; one change that happened was that technology became more freely available. The second thing is people are using data a lot more. It is not important for the machine to figure out exactly how the human thinks but it should enough answers. Let us say if you looked at cats and dogs and you wanted to separate the dogs from the cats, one can go about saying that here are the rules about dogs and here are the rules about cats and that is pretty hard to do.

You need dimensions?

Anand Deshpande: Dimensions, maybe colour, furs, whatever else, and how do you identify a dog from a cat? It is very hard to do. But what the new techniques allows is you just train the machine to see hundreds of cats and hundreds of dogs. These are the neural network algorithms that are available now. They are able to say if these are cats, then the next time when you ask it, is this is a cat, it can tell you with 90% probability that this is a cat.

You know its freaky. When you upload a picture on Facebook, Facebook knows who that friend is and asks you whether you want to tag this one? It is kind of freaky.

Anand Deshpande: Yes, absolutely. What has happened in the last few years has changed this thing. There are two-three things. One, we are leveraging a lot of this artificial intelligence on the basis of past data. You are giving it sample results and saying okay, can you compare this with what you already have and that makes it very compelling and much more efficient.

Second, the compute power, cloud all these things have made it very possible.

And the third thing which is I think equally important is that all the major players have released their products in the market. Google is freely available and then there is Microsoft and IBMs Watson products. It is all accessible and that is changing the way we are looking at things right now. So, people are deploying artificial intelligence and machine learning into every single problem that you can get your hands on.

So data and algos -- a combination of both?

Anand Deshpande : Yes.

What do you think impacts normal life and business the most? There are four or five key technology trends that are emerging. What is the top most to your mind?

Anand Deshpande: Clearly machine learning and machine intelligence is going to have an impact because it is changing how we can do automation. It can change a whole bunch of things in terms of how we respond to things. Definitely it is the key to getting this going in some sense but a lot of other technologies where large amounts of data are getting collected, Internet of Things is useful for trying to respond to activities and people are looking for actionable insights. So personal robots have started to emerge, personal information systems are starting to happen. A lot of different kinds of things like this are merging into each other.

There is so much of talk about 3-D printing, cloud, artificial intelligence, Block Chain. Technology is becoming a part of our daily life and if I look at the numbers, not only for Indian IT companies but for global IT companies also, they are struggling. A handful of Silicon Valley software companies are doing well. The start-up is where all the excitement is. The money also seems to be drying up because everyone is worried about profitability. So, technology will change our lives but are these new technology innovations really making money for investors and shareholders?

Anand Deshpande: They are playing a role in every industry right now. If you look at what is happening in the auto industry or the self-driven cars and Uber and all of the systems that you talk about, that would not have been possible without technology and without AI and some of the other techniques that we talk about. The whole view of IT industry as we look at it as Nasscoms top 10 companies needs to change, IT is sort of becoming prolific in every single industry and everything is IT now. Everyone wants to become a software driven business.

Is IT making money for companies?

Anand Deshpande: Absolutely. Those who are not becoming software driven businesses are going out of business. So essentially you have no choice. Software is driving business today and if you are going to make money it is going to be because you have the software.

I am not debating that the world around us is changing and the world around us will change. That is the natural migration of technology. I remember when in my school we had that big fat dot matrix printer and we had a floppy where we would put DOS and now in my i-phone I carry 50 GB Cloud which is virtual. We use technology but barring 10-15 start-ups which are in Silicon Valley and coming up with all the innovations, inventions and all the upgrades in technology, I do not see too many profitable ventures. Why is that? Suddenly everybody is talking technology, everybody is investing in technology but numbers are not there. Profit is what I am looking at. I am not looking at top line growth because the cloud business will grow, your technology, artificial intelligence will grow, real experience will grow but if I am an investor, whether it is a PE or minority shareholder ultimately I want profits and dividends?

Anand Deshpande: You have to look at profits not just for IT companies. IT company profits will improve for sure but all manufacturing companies are going to survive and have profits because of technology right now. Technology has become a more fundamental. It is like breathing air right now and you cannot avoid it. So you cannot just say profits are not going to depend only on technology but technology is going to play a big role in the profits.

What is that big game changing technology right now and the impact that it is having on businesses by and large?

Kavi Arya: I would say sum it up with an acronym that everybody seems to enjoy. I call it CAST. C is for cloud; A for automation; S for sustainability and T is for tools.

Cloud: Increasingly what is happening is that people are moving their computing services from a dabba on their table to somewhere in the cloud because the communication infrastructure has become so good. Many big companies like Microsoft, Amazon, Google and so on are offering services where they are giving you this facility of storing your data and your enterprise data in the cloud but additionally they are also offering you data analytics and a service of actually being able to study your data to improve your competitiveness and I see more and more of this happening. In 2015, Alibabas revenue was almost one-fourth the GDP of India and now it sees itself not as an e-commerce company but as a company which is managing huge cloud, is doing data storage for you and is doing data analytics for you.

Automation: There will be more automation in whatever you do. All the low-end stuff is going to get done by automatic machines or robots, even software. A lot of the low end software work like testing and maintenance of large systems and things like that are going to get phased out and done by more and more intelligent software in the background.

Sustainability: It shows up in trends that you see nowadays like the Uberisation of the world where things that used to be a product in the past with a high maintenance and ownership cost, are being offered to you as a service. Cloud is also something that comes out of that. Instead of having a computer on your desk, you can hire as much space in cloud as you need. Instead of having a car parked in your garage, you can have as many taxies as you like. Sustainability is also smart. We are talking about smart cities, smart watches, smart consumables or what have you, everything is becoming smart. That is again a big consumer of a lot of IT infrastructure.

Tools: There are going to be more and more tools, high-end tools especially in software and so on which will make the lower end jobs more and more redundant and we will be having to move up skills ourselves in whatever we do. So that is if you like birds-eye view of what we see things as.

Everybody has heard about IoT. What is it doing to businesses?

Anand Deshpande: What is happening right now is that because of the technology abilities to put software into all kinds of devices and censors, today we can measure and activate censors all across the world. At the same time, you really can make significant business model changes because of that. One of the best examples is say for example Tesla. It has the ability to upgrade your car on the fly and as even after you bought the car you can upgrade it and you can get better features on your car.

If you look at washing machine that you buy once for the next 20 years. What would happen if you could upgrade your washing machine every so often because you have a better version of the product? We have been actually working on a lot of these areas and we find that the ability to bring data and respond in real time and change your business models to create the software driven business that you are looking at is really what IoT is making happen. This is real. Actually you will see impact of IoT in the next three years and it is going to be very significant and practically everything is going to have census and technology, data collecting, being collected in the cloud and response to it so definitely something to be watching out for all across.

The other one of course is blockchain and we hear that it is revolutionary?

Anand Deshpande: Blockchain started out to this concept around Bitcoins. The basic thing around blockchain is that it is a distributed transparent, tempered resistant auditable shared ledger that does not depend on a central agency. Let me explain what this means. What happens today is that if we had smart contracts, say a rental contract and we want to make sure that contract has not been tempered with by anybody. So we have a record. Let us say you have a contract that for your land or your parcel or whatever you have now and you want to make sure that contract that is in some central repository in the government. is not tempered with by anybody. You assume it has not been tempered with.

Like an e-locker.

Yes, but see all these lockers are all very central. When you have parties that do not trust each other, if I do not trust the government to be able to keep the data safe, then blockchain allows you to use the cloud in some sense, distributing copies of contracts all over the place to ensure that it cannot be tempered with. The copies are with everyone and so if you want a copy you can get a copy.

Like the Google doc?

Anand Deshpande: Well Google doc is still in one central place, Google doc is not replicated and if you were to edit Google doc and we had shared thing we would not know that it has not been changed. So with smart contracts especially when agencies are not partnering with each othe,r this becomes very handy. Another example, if we are transacting money, my bank will keep a ledger of all the activities. Your bank will keep its own ledgers. These ledgers are copied all over the place. What if we did not have to keep those copies and it was all available in one place so that you can just go to the central repository and look for that data and look for whatever you are looking for.

So this kind of a distributed architecture where you are able to copy these data sets and contracts all over the place and where you do not have to depend on one version of truth as it is distributed in the network is really what blockchain allows you to do. This came in from Bitcoins clearly but people have found good use for this across smart contracts and distributed things and especially when you are looking at international things when agencies do not necessarily want to talk to each other this becomes a very handy way. I expect this to be a bigger technology starting 2018. In 2017 there are certain issues around security and other things that will get sorted out.

So now we have understood these technologies the impact on various facets is what we want to discuss may be you have a question for Professor Arya.

Anand Deshpande: So let us ask Kavi who is a Professor at IIT in Mumbai, you are teaching all these technologies I am sure to your students how do students who are looking for jobs and technology situations right now, should be thinking about this in the future?

Kavi Arya: This is an age where students should be prepared to change their career at least five times in their life. We are talking about technology which has a life span of about two, three, five years and things like that things keep on changing. So they should be willing to continue learning all their life.

Second is that they should try and get the maximum degree or the highest level skill as they can before they leave the university ideally. It is interesting that an ACM survey the Association of Computing Machinery survey almost 20 years ago valued a B-Tech in the US at about $1 to $3 million over the life time of a person, it valued an M-Tech at between $2 to $3 million and it valued a PhD at $3 to $5 million. This is important both for companies and individuals nowadays because of the immense change that is happening in the world.

As India becomes a more developed economy and technology begins to take much more hold of the economy we will find this need much much more. There is a project which I am running at IIT Mumbai which is a Robotics Outreach Project called e-yantra where we are trying to reach out to a large number of students across colleges to actually equip them with these kind of skills that they need. We have discovered that you can really teach students through the medium of a competition pretty effectively and it is amazing how much talent there is out there in the country. Only a very small fraction of it comes to IIT Mumbai as we all know or the IIT system. I think there is a lot of talent out there which is not being used or capitalised upon which is what our project is trying to actually do.

Pari, what according to you would be the future five years hence of technology companies which are operating out of India?

Pari Natarajan: I will give you a few key trends based on the customer interaction we had. One, the level of automation is going to dramatically increase especially in some of the lower-end worker or managed services, infrastructure management, test automation. Customers are looking for a 15% reduction in overall cost of delivering some of these services, so that is one big trend.

Second, cloud becomes a key for how people manage their infrastructure. The number of people required to manage cloud infrastructure is reducing from 10 to 1 but when there is a major issue which happens in the cloud infrastructure, the skill of the person to solve this issue is going to be much higher. So you need a lot higher skilled person but not a lot of people. This is another big trend.

Third, large global enterprises are now moving from using lot of customised solutions to solutions which they can potentially configure, like moving into SaaS based cloud solutions. So when you move into a cloud solutions, you do not need a lot of system integration help. But that is how a lot of the Indian large IT services companies have built their business in integrating and customising Oracle, FAP and so on. That business is going to dramatically reduce as companies move into SaaS based solutions. These are some of the key trends which is going to have a disruption the traditional IT services business which our industry has built over the last 20 years.

Another thing the industry does not talk about quite is the talent issue. If you look at the talent pool which the industry hires from the industry over the last 10 years, the compensation has not really gone up for the IT industry. If you go to a university, most of the CEOs of large IT companies talk about how they do not need a lot of people to solve these issues going forward in IT. Now it creates a doubt in the students mind is this the right industry for me to get into because the salary has not increased and the CEOs talk about not needing a lot of people. Your picking order in universities is changing where university students could potentially prefer large Indian conglomerates and large Indian government institutions to join compared to the IT companies whereas IT companies were the key, the primary job creators.

So we have the technology trends are creating a disruption in the business model and also there is an issue they face around the talent which is coming in joining these companies.

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Cloud, automation, sustainability and tools are trends driving IT - Economic Times