Hybrid cloud data services company NetApp has seen its flash storage become a promising success in its battle with market leader Dell. In the overall enterprise storage market, NetApp currently trails Dell and Hewlett Packard Enterprise. The company, which has annual revenues of $6 billion, employs more than 1,700 people in its various offices including the large research and development division in Bengaluru.
Anil Valluri, president of India and SAARC business, says that the innovations happening in India are helping the company sell in other emerging markets. Valluri, who is an advisory member of the artificial intelligence task force of policy think-tank NITI Aayog, says that the Indian market is increasingly becoming important for the company as legacy industries move to a hybrid model as against a complete cloud model. Edited excerpts:
How big is India for NetApp?
India is a large enough market to be counted as one of the top five in Asia-Pacific and is one of the fastest growing in double digits. We have 15-18% market share, according to IDC. India is less than 10% for digital companies and we are also in the same range. The scale and growth here are a big promise for us to overtake larger economies.
We are not small, but a mid-size market now. If we grow between 10% and 15% every year, we will double the size in every 3-4 years, and hence will overtake large economies which are witnessing low growth rates. You can win a market like Vietnam and move on, but here you will stay put for years.
Do NetApp’s R&D and sales-marketing teams function together in small markets like India?
The R&D team is headed by Deepak Visweswaraiah and together we run the India presence of the company. We work closely—they get insights on the business as to what customers are looking for and we get insights on where the industry is headed and on the new technologies and innovations. The India centre gets responses on how to plan the next generation of products based on increased local customer feedback. The India office has the scale and variety. Developing markets give you a different set of challenges.
Do you see hybrid-cloud going beyond the financial sector in India?
There are two types of cloud applications—born-in-the-cloud and go-straight-to-the-cloud. But manufacturing, pharmaceuticals and automobiles have a lot of legacy applications and data centres of their own. They are embracing hybrid because they have on-premise infrastructure using technologies whether it be SAP or Oracle. Companies like Tata Communications, Sify Technologies and NetMagic provide the convenience of the cloud for on-premise data centre infrastructure. They also have the ability to connect to the back-end of an AWS or Google and can thus use the elasticity of the cloud. That is the best of both worlds.
Most Indian enterprises cannot manage full cloud on their own. If such companies do not adopt hybrid cloud, they will not even have system integrators to sort out their daily IT troubleshooting. They need somebody to intermediate to take care of their problems. Large enterprises need that physical touch.
India is a hybrid country and we are leading the charge in cloud adoption. Here, you cannot sell a million dollar deal without meeting them in person, while in the US, it is possible. Contrary to perception, the best solution for small- and medium-sized enterprises is the hybrid cloud through these on-premise cloud service players like Sify and NetMagic, because there is always someone to assist you.
How is India still different as a market?
India presents a four-dimensional challenge to technology vendors. It is a price-performance market. You have to be adaptable to hostile environmental conditions. India's scale is different. For instance, banks in India do a lot more transactions of lower value with the load on the system being different for a $1 million or a Rs 100 transaction. Many people come to India to understand scale, similar to that of Aadhaar. The cost is secondary but you have to optimise accordingly. It is a different design approach. If you replicate the US model here, it will not work.
Can you elaborate more on this?
The scale is the first thing we keep in mind in India. Cost is the second factor as India is a market that is not willing to pay for the brand. The third dimension is about deploying in diverse conditions like dust, heat and non-sterile conditions. So, it is a test bed for several multinationals to create unique products. Once you learn to develop products for India, you can sell it in Mexico, Brazil, China and Indonesia among other countries with similar conditions.
Deepak and his team get a lot of such insights all the time. It is always two-way communication and it is not just we preaching to them about how the US market is doing. Innovations like unified payments interface, debit card equated monthly instalments, buy now pay later, etc are from India and other countries might want to implement them tomorrow.
The buying patterns or the shipping model also have to be different. For instance, we used to upgrade once in five years, while in the developed markets, they change technologies once in three years. It is about making do with things when they are sub-optimal.
Is that attitude changing as India grows richer?
Our products were designed to work at 60-70% utilisation and the remaining one third was meant for exigencies and contingencies and not for production. In my earlier days, customers were at 93% utilisation. In Western markets, once they reach 60% utilisation, they will augment it. If something breaks down, there is no headroom for anything. We take phenomenal amounts of risk. They had some backup plans in mind. It is changing because of newer technologies, which reduce power consumption. The size of the equipment has reduced dramatically, helping save real estate costs. This, in turn, has eased maintenance and increased usage.