CIO & LEADER-Issue-01-April 2018 (1)

Column 

Cambridge Analytica Case: Look 

Beyond The Scam Pg 10 

Face Off 

Is ROI Becoming Outdated For 

Technology Investments? Pg 20 

Volume 07 

Issue 01 

April 2018 

150 

Track technology Build business Shape self 

When an 

Enterprise 

and a 

Start-up Walk 

into a room 

Lessons from the community on how to 

create a thriving partnership and grow 

your business Pg 12 

A 9.9 Group Publication

EDITORIAL 

Shyamanuja Das 

shyamanuja.das@9dot9.in 

What 

makes 

them 

tango? 

T 

“A real big 

factor—and 

arguably what 

has changed 

the game—is 

the hyperscale 

cloud providers 

like Amazon, 

Microsoft and 

IBM bringing in 

their partners." 

The cover story this time focuses on how the 

Indian corporates are working with start-ups 

to derive business value, resulting in a winwin 

for both. 

But before you go to the hows, it is not a bad 

idea to start with the whys—the imperatives of 

what has made this change—being talked 

about for long; but finally happening on the 

ground only now. 

So, why are large Indian companies putting 

that extra effort to work with the start-ups now? 

It is fashionable. Well, do not get shocked I 

put it first. While it may not be the No 1 reason 

while taking the final decision on a start-up collaborative 

journey, it is often the No 1 reason to 

get interested. Being part of the community, you 

know quite well that this community is quite 

hype driven. And start-ups are the current 

hype. My apologies if this sounds 

really mean. Let us go to some more 

‘logical’ reasons. 

Only start-ups can offer some of 

the emerging technologies. Like it or 

not, many of the new technologies such 

as AI, machine learning, advanced 

analytics, IoT and their applications 

to specific verticals are available only 

with the start-ups. 

Start-ups are willing to walk that 

extra mile. For a large enterprise user, 

start-ups are keen to do the tweaking to 

their solutions based on the actual need. 

Both from business and reference point of view, it 

makes tremendous business sense. 

The cloud platforms are felicitating it. Another 

real big factor—and arguably what has changed the 

game—is the hyperscale cloud providers like Amazon, 

Micosoft and IBM bringing in their partners. 

Cloud has impacted the game in more ways than 

one. It has ensured that a start-up focuses on its core 

innovation and quickly plugs in horizontal APIs like 

UX, security, analytics, even AI-based bots, already 

available on the same cloud. So, go-to-market for the 

solution is quicker and easier. 

Cloud has minimized the needs of integration. 

Earlier, a stand-alone solution required a lot of integration 

services around itself, which was often not 

available easily. 

Finally, a cloud-based solution comes with the backing 

of a big name. That gives a feeling of assurance. 

Yet, the collaboration that is happening is still in 

an experimental stage. If Indian enterprises accelerate 

their transformation journey, they will continue 

to need the start-ups. If that slows down for some 

reason, the partnerships may be impacted too 

April 2018 | CIO&LEADER 

1

Column 

Cambridge Analytica Case: Look 

Beyond The Scam Pg 10 

TRACK TECHNOLOGY BUILD BUSINESS SHAPE SELF 

A 9.9 Group Publication 

Face Off Volume 07 

Issue 01 

Is ROI Becoming Outdated For 

April 2018 

Technology Investments? Pg 20 

150 

Lessons from the community on how to 

create a thriving partnership and grow 

your business Pg 12 

CONTENT 

APRIL 2018 

cover story 

12-19 | When A Startup 

And An Enterprise 

Walk Into A Room 

When an 

Enterprise 

and a 

Start-up Walk 

into a room 

Cover Design by: 

Charu Dwivedi 

Please Recycle 

This Magazine 

And Remove 

Inserts Before 

Recycling 

Copyright, All rights reserved: Reproduction in whole or in part without written permission from Nine Dot Nine Mediaworx Pvt Ltd. is 

prohibited. Printed and published by Vikas Gupta for Nine Dot Nine Mediaworx Pvt Ltd, 121, Patparganj, Mayur Vihar, Phase - I, Near Mandir 

Masjid, Delhi-110091. Printed at Tara Art Printers Pvt ltd. A-46-47, Sector-5, NOIDA (U.P.) 2013011 

2 CIO&LEADER | April 2018

AROUND THE TECH 

04-07 

Why Do So Few CIOs Drive 

Digital Transformation? 

www.cioandleader.com 

COLUMN 

08-09 

Is Hashgraph Better 

Than Blockchain? 

By Mohua Sengupta 

10-11 

Cambridge Analytica: 

Look Beyond The Scam 

By Shyamanuja Das 

INSIGHT 

26-27 

Blockchain’s Red Hot 

Indian Use Case: Invoice 

Discounting 

29 

The Rise of 

Cyptojacking in 

2018 

30-31 

Blockchain’s Red 

Hot Indian Use Case: 

Invoice Discounting 

Security 

34-35 

Is Security Secular 

Across Industries? 

MANAGEMENT 

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Printer & Publisher: Vikas Gupta 

EDITORIAL 

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for Enterprise Technology Business: 

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Brand Head: Vandana Chauhan (+91 99589 84581) 

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Editor: Vikas Gupta 


3

around 

thetech 

WhAT 

CIOs are 

tired of 

hearing... 

“The CIO 

office is a 

cost center” 

Leadership 

Why so few CIOs drive 

digital transformation? 

A recent research that we 

conducted on digital transformation 

in some of the core sector 

companies in three of India’s top 

business groups—Tatas, Mahindra 

& Mahindra and Vedanta/Sterlite— 

threw some interesting trends. 

One of the few points on which 

there seem to be a near-complete 

consensus among digital leaders, 

other CXOs and consultants is that 

only a senior, dedicated executive 

can drive digital transformation. 

‘Dedicated’ is the keyword here. 

The current thinking is that driving 

digital transformation is a full-time 

job. It cannot be just another KRA 

for some executive! 

It is not too difficult to explain why. 

A typical transformation journey, 

especially in a traditional business, 

could involve a lot of time and focus 

to prepare the organization before it 

could leverage technology. 

“60-70% of the transformation 

journey is actually about bringing 

a culture shift,’ says Nischal Gupta, 

Chief Transformation Officer 

at Sterlite Tech. Almost 

all executives we spoke to 

identified culture shift as 

the toughest part of the 

transformation journey that 

requires undivided attention. 

That can be manifested 

in a lot of discussion with 

other C level executives, 

creating communication 

programs for all employees, 

branded programs and a lot 

of similar stuff. Tata Steel, 

for example, started with a 

reverse mentoring program 

where 16 senior executives 

agreed to be reverse mentored 

by the youngsters. There was 

another program called Digital 

Enthusiastic Exploration 

Program (DEEP) that involved 

60 people immersing in 

technology. There was another 

called Digital Darshan. All 

these programs do require 

considerable time and focus. 


Around The Tech 

By the Book 

Based on an in-depth analysis of over 

2,600 leaders drawn from a database 

of more than 17,000 CEOs and C-suite 

executives, as well 13,000 hours of 

interviews, and two decades of experience 

advising CEOs and executive 

boards, Elena L. Botelho and Kim R. 

Powell overturn the myths about what 

it takes to get to the top and succeed. 

Their groundbreaking research was 

the featured cover story in the May- 

June 2017 issue of Harvard Business 

Review. It reveals the common attributes 

and counterintuitive choices that 

set apart successful CEOs—lessons 

that we can apply to our own careers. 

Much of what we hear about who 

gets to the top, and how, is wrong. 

Myth: Those who become chief executives 

set their sights on the C-suite at 

an early age. Reality: In fact, over 70% 

of the CEOs didn’t have designs on the 

corner office until later in their careers. 

Myth: You must graduate from an 

elite college. Reality: In fact, only 7% 

of CEOs in the dataset are Ivy League 

graduates--and 8% didn't graduate 

from college at all. To become a CEO 

you need a flawless résumé. 

makingheadlines 

The #DeleteFacebook hashtag has been doing the rounds on Twitter. As if to 

add insult to the injury, users are now deleting their Facebook accounts. Tesla's 

CEO, Elon Musk is the latest to join the bandwagon. He deleted his verified Facebook 

pages for SpaceX and Tesla after being challenged by a user on Twitter. 

However, the #deleteFacebook issue is a bit of a deja vu moment for the company, 

which has been embroiled in a series of controversies for the last decade. 

Almost eight years ago, an online event christened 'Quit Facebook Day' was 

started by a group of dissatisfied Facebook users. Their site, QuitFacebookDay. 

com, asked users to "commit to quit" Facebook on May 31 in 2010 by signing their 

name or Twitter handle to the list of pledges. The reason was identical - most 

users were concerned about the privacy of their data. However, the boycott was 

a major flop after just over 30,000 of the site's 500 million users deleted their 

Facebook accounts. 

The gender gap in pay has narrowed since 1980, 

but it has remained relatively stable over the past 15 

years or so. In 2017, women earned 82% of what men 

earned, according to a Pew Research Center analysis 

of median hourly earnings of both full- and part-time 

workers in the United States. Based on this estimate, 

it would take an extra 47 days of work for women to 

earn what men did in 2017. 

Why does a gender pay gap still persist? 

Much of the gap has been explained by measurable 

factors such as educational attainment, occupational 

segregation and work experience. The narrowing of 

the gap is attributable in large part to gains women 

have made in each of these dimensions. 

But other factors that are difficult to measure, 

including gender discrimination, may contribute to the 

ongoing wage discrepancy. 

gender 

bender 


5


Flip the Cart 

matter of 

twitter 

Walmart Inc. is close to finalizing a deal to buy a majority stake in 

India’s leading e-commerce company for at least $12 billion and 

may complete the agreement in the next two weeks, according to 

people familiar with the matter. 

All the major investors in Flipkart Online Services Pvt are now 

on board with the Walmart purchase, after an earlier debate over 

whether to sell to Amazon.com Inc., said the people, asking not to 

be named because the matter is private. Tiger Global Management 

will sell nearly all its 20% stake in Flipkart, while SoftBank Group 

Corp. will sell a substantial part of its 20 percent-plus holding, the 

people said. Walmart will likely end up with 60 percent to 80% of 

Flipkart, which will be valued at about $20 billion, they said. 

Among the issues that still need to be resolved are what happens 

to Flipkart’s founders and who will lead Flipkart after the purchase, 

they said. The amount each existing investor sells and the 

size of Walmart’s final stake still need to be finalized, they said. It’s 

also possible that terms will change or the talks will fall apart. 

If completed, the deal would give Walmart a substantial foothold 

in an emerging market. 

Vital 

Statistics 

Is the GDPR 

applicable 

to you? 

*Note –the responses to these questions should be 

evaluated based on the facts and circumstances in 

your organization and discussed with legal counsel. 

Three key questions to assessment applicability 

1 

Are you or your service providers 

a processor or controller located 

in the EU (e.g., do I have an 

affiliate organization in the EU)?* 

Yes 

Yes 

GDPR applies 

Yes 

No 

2 Are you or your service providers a 

processor or controller that offers 

goods or services in the EU (e.g., do I 

offer payment services in England)?* 

No 

Are you or your service providers 

a processor or controller that 

monitors behavior in the EU (e.g., 

am I a third party that monitors 

credit card balances in France)?* 

GDPR may apply 

No, I do nothave any entities, subsidiaries or affiliate organizations residing within the EU. 

No 

No, I do nothave any business activities in the EU, including those of third parties. 

No, I do notmonitor behavior or process data of anyone residing within the EU. 

Questions to consider include (but are notlimited to): 

• Do I have any plans or aspirations to do business in the EU in the future? 

• Do I process data of EU citizens who reside in the US? 

Source: E&Y’s GDPR: demanding new privacy rights and obligations 



Four lessons to learn from 

Facebook Analytica fiasco 

The world's biggest social network is at 

the center of an international scandal 

involving voter data, the 2016 US presidential 

election and Brexit. 

Damaging consumer trust 

The latest data ‘breach’ comes amid 

growing discontent around how consumer 

behavioural data is being used 

to deliver controversial, harmful or 

extremist content to consumers not 

only across the Facebook platform, 

but also sites on such as YouTube. 

Data access versus targeting 

As brands look to increasingly 

hypertarget consumers through 

behavioural data, there are also growing 

community concerns about the 

significant influence they could have 

on consumers. Certainly in the political 

sphere, this can be seen from the 

alleged claims of Russian interference 

in the 2016 US Presidential Election, 

as well as Cambridge Analytica’s 

impact on Brexit. 

This data was shared with Cambridge 

Analytica in breach of Facebook’s platform 

policies. Facebook admitted in its 

statement that it became aware of this 

unauthorized use in 2015, and subsequently 

asked Cambridge Analytica to 

delete the data. Facebook did not see fit 

to alert users about this use of their data 

and took very limited steps to secure 

the data, by seeking certifications that 

the information had been destroyed. 

Issues for data protection law 

This entire affair raises two important 

questions about data-protection laws 

globally, and particularly for countries 

like India that are in the process 

of framing their laws on privacy 

regarding data protection. 

First, the delayed and limited actions 

taken by Facebook, upon becoming 

aware of the unauthorized sharing of 

data, raise questions about how such 

breaches may be regulated. The claim 

by Facebook that this was not a data 

breach is premised on the other claim 

that data was harvested in a legitimate 

manner after obtaining consent from 

the users. This is reminiscent of several 

data-security incidents in India, where 

public collectors of data have claimed 

that by securing only one key point in 

a data ecosystem and ignoring others, 

they have adequately discharged their 

data-security obligations 

Rethinking privacy principles 

Data-protection laws emerged in a 

world that saw a preponderance of 

volunteered data. However, as the 

bulk of the data collected and traded 

is either observed or inferred, it raises 

serious questions about whether 

these traditional frameworks remain 

meaningful. The idea of privacy as 

control is what finds articulation 

in data-protection policies across 

jurisdictions beginning from the 

Fair Information Practice Principles 

(FIPP) in the United States. 


7

COLUMN 

By Mohua Sengupta 

Is Hashgraph 

the Technology 

of the Future? 

It definitely addresses critical 

challenges that Blockchain has 

been grappling with 

T 

The author is EVP & Global Head of 

Services, 3i Infotech Ltd. 

The most popular questions in the 

technology world today is most 

definitely the one on whether 

Hashgraph is better than Blockchain. 

The life and credibility of the 

Blockchain is being questioned and 

Hashgraph is being predicted as the 

technology of the future. 

While it is difficult to predict whether 

Blockchain is a thing of the past 

and whether Hashgraph is the final 

answer, one thing is sure, Hashgraph 

definitely addresses a lot of the critical 

challenges that Blockchain has been 

grappling with, the challenge of speed 

of processing, the challenge of fairness, 

and the huge challenge of requiring 

multiple industry regulators to 

come together. 

Hashgraph can process 250000+ 

transactions per second as opposed 

to Blockchain’s 7 transactions per second. 

Hashgraph is fast because it uses 

Gossip protocol to spread messages to 

the network and also performs some 

optimization of the gossiped messages 

to reduce the communication 

overhead. One other reason behind 

this speed of Hashgraph is because 

Hashgraph today uses private, permissioned 

networks. 

Coming to fairness, the main challenge 

of Blockchain is its dependence 

on miners. There could be forking 

and delay because of the actions of the 

miners, who can manipulate the process. 

Since Hashgraph is based on consensus 

and time stamping, it’s faster 

and more accurate. The Virtual Voting 

Consensus Algorithm of Hashgraph, 

which was invented by Dr. Leemon 

Baird, makes it straightforward to 

know how a node would vote and this 

data can be used as an input to the voting 

algorithm and to find whichever 

transactions have reached consensus 

quickly, thus making it more fair. 

I feel that one of the biggest challenges 

for Blockchain to be a commonly 

used technology, is the need 

for multiple industry regulators to 

come together and set regulations 

which will cut across industries. As I 

have said before, a Blockchain, or for 


Column 

As Distributed Ledger Technologies move beyond the POC stage to 

actual implementation stage, we will see even faster evolution 

that matter any DLT is beneficial only 

when the chains are big or integrated 

to each other. While it’s not really a 

technical challenge, given the water 

tight compartments of today, it’s an 

enormous roadblock to overcome 

for a DLT. Hashgraph is planning to 

overcome or partially address that 

challenge by way of their 39-member 

council. If run properly it will take 

care of enabling cross-industry discussions 

and regulations. 

Added to this, Hashgraph’s security 

is also claimed to be better than that of 

Blockchain. Hashgraph has been proven 

to be fully asynchronous Byzantine. 

This means that it doesn’t make any 

assumption about how fast messages 

are passed over the internet and 

this makes it resilient against DDoS 

attacks, botnets, and firewalls. While 

the security in Blockchain was never a 

challenge, the Byzantine Consensus of 

Hashgraph makes it stronger. 

While Hashgraph does seem to 

have quite a few advantages over 

Blockchain, we cannot say that 

Blockchain is a thing of the past and 

Hashgraph is the new technology 

of the future. I can only predict that 

Distributed Ledger Technology (DLT) 

is the way to go, but whether it will be 

Blockchain or Hashgraph or Tangle 

or any other DLT, only time can tell. 

They are all evolving and evolving 

very fast. As Distributed Ledger 

Technologies move beyond the POC 

stage to actual implementation stage, 

we will see even faster evolution. So 

it’s very hard to predict which DLT is 

here to stay because tomorrow is truly 

another day! 


9

COLUMN 


Cambridge 

Analytica Case: 

Look Beyond 

The Scam 

While the scam may be the immediate 

news, the episode should also serve as a 

wake-up call for businesses 

T 

The author is Managing Editor 

at CIO&Leader 

The Indian media, like its counterpart in 

the West, has focused on the supposed 

‘scam’ involving Cambridge Analytica 

(CA), the UK-based big data firm that 

helped in Donald Trump’s victory 

through big data analytics. 

The controversy started with a remark 

by its now-ousted CEO Alexander Nix, 

made to undercover Channel 4 News 

reporters about how elections can be 

influenced through what is very clearly 

unfair means, even while taking a 

public posture that the company does 

not cross the line of ethics. This came 

after New York Times and The Observer 

published how a UK-based company 

Global Science Research (GSR), hired 

by Cambridge Analytica, created an 

app and collected data from millions 

of Facebook users, in what Facebook 

claims to be ‘in violation’ of its policies. 

Rest assured, we have a lot to see in the 

days to come. With GDPR kick-off date 

just about two months away, a lot of that 

debate may focus on data privacy with 

Facebook too as a target. Facebook CEO, 

Mark Zuckerberg, has been warned 

by authorities in the U.S and Europe 

for a possible testimony. Indian IT and 

communications minister, Ravi Shankar 

Prasad has also warned Facebook of 

stringent actions if any wrongdoing 

is discovered. 

Role in Indian Elections 

Prasad’s warning comes after it emerged 

that Cambridge Analytica had been 

active in India too. 

“CA was contracted to undertake an 

in-depth electorate analysis for the Bihar 

Assembly Election in 2010. The core 

challenge was to identify the floating/ 

swing voters for each of the parties and 

to measure their levels electoral apathy, 


Column 

a result of the poor and unchanging 

condition of the state after 15 years 

of incumbent rule. In addition to the 

research phase, CA were tasked to 

organise the party base at the village 

level by creating a communication 

hierarchy to increase supporter 

motivation. Our client achieved a 

landslide victory, with over 90% of 

total seats targeted by CA being won,” 

the company’s website says. 

The 2010 elections in Bihar was won 

by Nitish Kumar’s Janata Dal (United) 

against Lalu Prasad Yadav’s RJD, bettering 

their tally in the previous elections. 

Interestingly, CA was established 

by its parent company, Strategic 

Communications Lab (SCL) in 2013. 

However, according to a report by the 

website thewire.in, SCL worked with 

a Ghaziabad-based company, Ovelene 

Business Intelligence (OBI), run by 

Amrish Tyagi, the son of senior JD(U) 

leader KC Tyagi. 

“OBI is Cambridge Analytica’s go-to 

company on the ground in the Indian 

subcontinent,” says thewire.in report. It 

quotes Tyagi junior who explains that 

being partners, they can use each other’s 

experience while making a pitch. 

This suggests that the work in 2010 

Bihar elections was carried out by OBI. 

What it means is that full five years 

before Prashant Kishor’s ‘famed’ 

election strategy and execution for 

JD(U)-RJD’s landslide in 2015 Bihar 

assembly elections, the Big Data game 

was very much there in India. 

With India’s—and specifically 

Bihar’s—demographic reality, 

Facebook could have helped a little. 

So, it is primarily data analytics that 

can be credited for this successful show. 

I think that is something that is a 

takeaway from the entire episode. That 

Indian political parties were already 

doing this by 2010, full six years 

before Trump won using ‘Big Data’ 

in the US. 

It is now well-known that prime 

minister Modi too relied on data 

analytics (interestingly, same 

Prashant Kishor) in his 2014 Lok 

Sabha elections. Maybe, he did that 

earlier in Gujarat elections too. 

In 2009, a strongman in a regional 

political party in Eastern India 

(who later fell out with his leader) 

used scientific data collection and 

juxtaposing that, with publicly 

available data, such as Census data 

and data from National Sample 

Survey Organization, to create 

successful election strategies for his 

party. The party severed its ties with 

one of the national parties and came to 

power on its own in the elections. 

So, even in the muddy, free-for-all 

politics in India, political parties have 

started relying on data analytics, 

using both scientific data collection as 

well as making good use of publicly 

available data. 

According to report by 

Moneycontrol.com, Cambridge 

Analytica itself had started focusing 

on the 2019 General Elections by 

being “in talks with a large opposition 

party in India” and had even made a 

presentation to the party in August. 

The report says it had “etched a datadriven 

strategy to target voters on 

social media, analyzing online user 

behaviour and connecting the dots 

across different citizen databases.” 

Where businesses lag 

All this raises an obvious question. 

Does this mean political parties are 

ahead in the Big Data game? 

In terms of usage of analytics tools, 

probably not. But one of the areas 

where political parties seem to have a 

clear lead is in using open data—or any 

publicly available data, for that matter. 

There could be four major sources of 

data for a business: 

1. Internally available data 

2. New data collected through custom 

research 

3. External data available publicly free 

or for a price and now 

4. Social media data, which is updated 

in real time. 

Out of the four, businesses have been 

focused mostly on the first two while 

Many 

businesses 

think unless 

they throw some 

big money and 

hire a big name 

to spend some 

time with, they 

cannot get any 

value out of 

their data 

the fourth has been the Holy Grail. But 

most of them have ignored the third 

one—publicly available data, that can 

add immense value to the businesses 

if analyzed in conjunction with their 

internal or research data. 

The social sector has been doing a lot 

of work using that data. 

“Many businesses think unless they 

throw some big money and hire a big 

name to spend some time with, they 

cannot get any value,” says a digital 

marketing executive and an open data 

enthusiast, rather bitterly. 

The whole thing provides the 

businesses with an opportunity to open 

their eyes to the possibilities that the 

political parties have already sensed. 

You do not have to steal data for 

that. You just have to think outsidein. 

Interestingly, the ability to do that 

has come as a strong pre-requisite 

for the digital leaders, in a research 

we have just completed on digital 

transformation in Indian companies. 

You may make or get amused by 

a smart, sarcasm-laden Twitter 

comment and move ahead, but it is 

also not such a bad idea to pause a bit 

and focus on the possibilities 


11

Cover Story 


Cover Story 

How to create a thriving partnership and derive 

business value, resulting in a win-win for both. 

By Shubhra Rishi 

This month, Bhavish Aggarwal made it to Time's 100 list: a list of 100 

most influential people in the world. There are very few people in IT 

circles who don't know Aggarwal. He is the co-founder and CEO of 

Ola Cabs, who gave India its first app-based taxi service. The startup 

idea may not have been unique because it was almost a year after 

Uber (formerly UberCab) had already launched (March 2009) in California, 

United States but it still gave urban Indians the convenience and comfort of 

ordering a cab service on a mobile app. Since then, the Indian tech industry has 

never been the same. The last decade may have seen the rebirth of the start-up 

ecosystem in the country with a more sustainable business model in the form 

of venture capital. 

According to a Nasscom Start-up Report published last year, over 1,000 new 

starts-ups joined the start-up ecosystem in 2017, taking the total number of technology 

start-ups to nearly 5,200. The B2C focused start-ups like Ola Cabs, have 

always found favor in the form of funding and have continued to garner 1.5x more 

average funding value vis-a-vis B2B start-ups, which increased from 27% in 2016 

to 31% in 2017, according to the report. 

However, the year 2017 is illustrative of a trend that has been in the making for 

the last few years. A trend that has observed an exponential growth of start-ups 

with B2B focus - with more than 47% of start-ups out of the 1,000 selling technology 

to enterprises. According to the report, this share of B2B start-ups was higher 

than B2B share in the overall start-up base of 40 percent. Clearly, the enterprise 

product emerges as the top vertical for B2B start-ups, followed by fintech, health 

tech and e-commerce. 

Not every 

start-up idea 

must result in 

a big business 

opportunity; 

some can be 

just strategic 

initiatives 


13

Cover Story 

According to Gartner's 2014 agenda, 

The IT core — infrastructure, applications, 

information and sourcing — was 

built for the IT past. CIOs report much 

of their new technology spending going 

towards improving core systems and 

capabilities and needed renovations to 

ensure fit for purpose and being “digital 

ready” include moving to a more 

loosely coupled “postmodern-ERP” 

paradigm, deploying public and private 

clouds, creating the information 

architecture and capabilities to exploit 

big data, and augmenting conventional 

sourcing with more innovation, including 

sourcing from, and partnering 

with, smaller and less mature enterprises. 

By "partnering with, smaller 

and less mature enterprises", Gartner 

was referring to SMB/start-up engagement 

and agile development as a solution 

to addressing the dual need to 

simultaneously renovate the core of IT 

systems and services, and exploit new 

technology options. 

A few years ago when we spoke to 

enterprise CIOs in India they didn't 

seem kicked about the benefits of working 

with technology start-ups. One of 

For a startup, 

working on a 

technology problem 

is one thing, but 

creating a business 

case is another. 

Kamal Karnatak 

Group CIO, RJ Corp. 

the main reasons for this reluctance to 

give B2B focused start-ups a chance was 

the lack of trust in the start-ups' ability 

to sustain themselves. A success or sustainability 

of a start-up or a unicorn was 

but a candle in a wind for an enterprise 

CIO. Even if the start-up could prove the 

viability of its product, the enterprise 

CIO was unable to prove it to business. 

A lot of enterprises conducted 

pilots with start-ups (and still do) but 

wouldn't talk about it. Some of these 

CIOs belonged to innovation-centric 

organizations where they believe 

that they can learn a great deal from 

start-ups, and inculcate or maintain a 

culture of openness and change within. 

These enterprises and their CIOs 

were the early adopters of this trend, 

and the ones who built a framework 

early on that allowed them to work 

with start-ups in the best possible way. 

However, these organizations kept 

this 'relationship' a low key affair until 

it became fashionable to talk about 

the 'association'- and until the digital 

transformation wave hit them hard. 

The folks at Bajaj Auto were way 

ahead of the curve. 

#When an enterprise 

can work with a start-up 

and not worry about its 

sustainability or financials 

Organization: Bajaj Auto 

Start-ups: Universal Robots, 

GladMinds, Altisource 

Outcome: Achieve 

automation, and efficiency 

improvement 

A start-up may not be 

able to create a legible 

business case. That's 

where enterprises can 

play a huge role 

A 72-year old flagship brand of Indian 

conglomerate Bajaj Group, Baja Auto 

is one of largest two-wheeler and 

three-wheeler manufacturer in the 

world. Despite being one of the oldest 

family run businesses in India, 

innovation has always been part of 

the company's DNA. The company's 

engagement with start-ups began in 

2010 when they realized the need to 

automate and digitize their assembly 

lines. The company deployed cobots or 

collaborative robots, a patented technology 

offered by Universal Robots, 

a Danish manufacturer that has just 

launched UR5, a six-jointed articulated 

arm robot and was expanding 

its base in Europe, and didn't launch 

business in India until 2016. 

According to Pradeep David, CTO 

at Universal Robots, Bajaj Auto saw a 

gradual rise in the productivity and 

efficiency in their production. It also 

increased the productivity of their 

employees along with their product 

quality. As a result, employees could 

easily program and set up these low 

cost robotic arms with 3D visualization. 

The actions of the robot are controlled 

and programed by a touch pad 

or by simply moving the robot arm to 

show the desired path of movement. 

The three-wheeler manufacturer 

has deployed over 150 cobots since 

2010 and is now among the largest 

motorcycle manufacturer in the 

world. They are of the view that the 

added benefits of the cobots are easy 

use, very low annual maintenance and 

higher energy efficiency. 

Vikas Sawhney, General Manager 

Engineering (Robotics and Automa- 


Cover Story 

Sometimes 

you don't see the 

problem till an 

outsider comes and 

shows you a better 

way of doing it. 

Rajeev Jorapur 

VP-MIS, Bajaj Auto 

tion) at Bajaj Auto, who oversaw the 

deployment, said of the implementation 

that they chose Universal Robots 

primarily due to the collaborative 

nature of the robots. "The key benefits 

of Universal Robots’ products such 

as their compactness, low pay back 

period, flexibility, light weight, costeffectiveness, 

accuracy and their safety, 

is what ultimately convinced Bajaj 

Auto about the suitability of Universal 

Robots for its standardized offerings," 

said Sawhney. 

Universal Robots wasn't the only 

start-up that Bajaj Auto worked with. 

According to Rajeev Jorapur, VP- 

MIS at Bajaj Auto, start-ups offer an 

exciting model of partnership that is 

very difficult to get from most other 

partners. Their focus is on the task 

and to make it happen. They are 

driven by passion and are more entrepreneurial 

in nature. 

"Most start-ups are sharply focused 

and they don't have width that you 

expect with more established companies. 

Thus, you must carefully choose 

them with the purpose you have in 

mind. We won't be worried about their 

sustainability or how strong they are 

financially. We believe we would be 

able to handle that part," said Jorapur. 

The automaker was looking to simply 

the manual process of sending the 

service coupons to Bajaj Auto every 

time the customer visited the dealer 

for vehicle servicing. 

Jorapur said that it was crucial for 

the manufacturer to carefully record 

the timeframe within which the vehicle 

was brought in for servicing. In the auto 

world, customers must get their new 

vehicles serviced within a month of purchase 

in order to ensure that the product 

has a long run. There was no way of 

knowing whether the customer or the 

dealer followed the process completely. 

With this resolve in mind, Bajaj Auto 

went through careful assessment and 

selected GladMinds Technologies, a 

cloud based start-up providing CRM 

services. After the deployment of the 

solution, the paper-based coupon 

system was replaced by a unique digital 

token system and was given to the 

customer every time he/she brought 

his/her new vehicle for servicing at the 

dealer's shop. 

Jorapur said that sometimes you 

don't see the problem till an outsider 

comes and shows you a better way 

of doing it. 

In 2015, the automaker partnered 

with an IoT start-up. 

At the time, a lot of manufacturing 

processes at Bajaj Auto were 

performed by external vendors at the 

company’s assembly plants. A vendor 

would communicate the production 

details at a pre-decided frequency but 

if machines could tell how they were 

performing without human interaction, 

not only would the manual effort 

at collecting information would go 

away and info would come directly 

from machines and would be more 

timely and reliable than somebody 

communicating it. 

“With this hypothesis, we 

approached the start-up, who helped 

us eliminate the manual channels and 

helped us plan our maintenance in a 

more robust manner,” said Jorapur. 

In the last four years, the company 

has evaluated over 50 start-ups, performed 

POC on 10 start-ups and are 

closely working with five start-ups on 

fully operational projects. 

“Most of our time is consumed in 

conducting background checks, financial 

analysis and performing due diligence 

– that is where most of our effort 

and energy is spent,” said Jorapur. 

#When an enterprise and 

a start-up can work together 

on resolving specific 

business problems 

Organization: ONGC 

Start-ups: Undisclosed 

Outcome: Inculcate 

innovation in business and 

eliminate critical business 

problems 

Some start-ups are only interested in increasing their 

own evaluation. You must gauge the motive of such 

organizations early on 


15

Cover Story 

The Rise of the B2B start-ups 

B2B v/s B2C focus on start-ups 

B2B v/s B2C focus across verticals 

Source: Nasscom-Zinnov Start-up report 2017 


Total base: 

5000-5200 


77% 


New start-up 

additions: 1000 

B2c 

B2B 

73% 

40% 

13% start-ups both B2B & B2C 

14% start-ups both B2B & B2C 

59% 47% 

6% start-ups 

both B2B & B2C 

37% 

B2B share from 

34%in 2016 

Verticals 

Aggregators/eCommerce 

Enterprise Product 

Health-Tech 

Fintech 

Food Tech 

B2c 

92% 19% 

1% 

100% 

87% 

26% 

70% 

49% 

98% 

8% 

B2B 

In 2016, ONGC launched an INR 100 

crore Start-up fund to foster, nurture 

and incubate new ideas related to oil 

and gas sector. The aim of the ONGC 

Start-up initiative is to provide the 

entire support chain for start-ups 

including seed capital, hand-holding, 

mentoring, market linkage and followups. 

It is also to increase the contribution 

of fresh implementable ideas in 

the oil and gas sector. ONGC had also 

set-up a dedicated portal to take this 

initiative forward. 

The company invited technology 

start-ups to submit their proposals 

for business cases (purely business 

related or with IT intervention) on the 

portal. “There were 70-80 business 

cases and they were left to select one or 

more based on their area of expertise,” 

said Alok Khanna, Executive Director 

– IS, ONGC. 

After a tedious selection process 

of evaluating the proposal comprising 

a three tier interview process where 

start-ups showcased their technical 

and financial viability, the company 

selected around 11-12 start-ups to 

work on specific business problems. 

“One major advantage of working 

with start-ups is that they work dedicatedly 

on your business case 

and if the project succeeds, then the 

company will sponsor the project 

for a full blown implementation. 

What enterprise lack in domain 

knowledge, start-ups have in abundance,” 

said Khanna. 

“Budgeting and funding a start-up 

is not an issue— once you have committed 

to working with the start-up, 

even if IT doesn't have the implementation 

budget, business does, and will 

fund the project,” he added. 

End result: even if 20% start-up 

projects are successful, it means that 

we have been able to cut down our 

business problems. 

“We won’t be able to share specifics 

of start-ups as all these projects are at 

different stages of implementation,” 

said Khanna. 


and a start-up can work 

together to improve the 

speed of execution of IT 

Organization: RJ Corp 

Start-ups: Undisclosed 

Outcome: Improve 

productivity and efficiency 

The Gurgaon-based drinks and foods 

group RJ Corp is a USD1.1 billion conglomerate. 

Its flagship brand, Varun 

Beverages is Pepsico’s second-biggest 

bottler and its fast-food outfit Devyani 

International has 500 retail outlets for 

Even if 20% start-up 

projects are successful, it 

means that we were able 

to cut down our business 

problems significantly. 

Alok Khanna, Executive Director – IS, 

Oil and Gas Corporation (ONGC) 


Cover Story 

brands such as KFC, Pizza Hut, Costa 

Coffee and TWG Tea. 

With multiple brands at disposal, 

there is no dearth of opportunity for 

the company to improve the productivity 

and efficiency of its vast-spread 

businesses. There is also a huge scope 

of innovation at the heart of RJ Corp 

and the company believes in quick 

decision- making when it comes to IT. 

According to its Group CIO, Kamal 

Karnatak, it has been collaborating 

with start-ups in the areas of data analytics, 

video analytics, machine learning 

and artificial intelligence, for the 

last three years. 

“It doesn’t matter if there was 

an IT project or not or if we had the 

budget for it but if you can create a 

business case, you can implement the 

idea.” Karnatak , who is a pursuing 

a research doctorate from IIT, Delhi, 

has a long history of association with 

start-ups, and mentors them from 

time to time. 

“An advanced start-up is always 

looking for a means to enter the enterprise 

market. They are ready to experiment, 

learn and understand your 

business, as well as gain exposure of 

their own solution,” said Karnatak. 

When it comes to working with 

start-ups, the conglomerate’s only 

motive is solving business problems 

quickly - within a short span of six 

months to one year. 

“Unlike traditional partners who 

spend a lot of planning and excuting a 

project, a start-up takes less than half 

of that time. Some start-ups are only 

interested in increasing their own 

evaluation. You can gauge the motive 

of such organizations,” said Karnatak. 

Take for instance, the conglomerate 

was using an old analytics platform to 

generate reports. However, their Area 

Sales Manager (ASM) didn’t have 

access to the platform due to huge 

licensing costs. To solve this problem, 

they worked with a data analytics 

start-up who provided a platform that 

not only granted access levels to ASMs 

but enabled an analytics interface to 

generate these reports. 

Similarly, the company also worked 

with a machine learning/ AI start-up 

to help them predict the sale of next 14 

days with an 85-90% o accuracy rate. 

With the Nike brand, the company is 

trying to measure the sales per store 

using the same start-up. This is evident 

of the fact that the same start-up 

was able to find multiple use cases 

within the same organization. 

In their work with a video analytics 

start-up, the primary purpose was to 

track footfalls in a single store. However, 

Karnatak asked the start-up to 

help them gather more data on their 

customers – the time they spend in the 

store, the ratio of male to females who 

We regularly reach out 

to new and innovative startups 

via referrals, technology 

forums, incubators and 

innovation summits. 

Nitin Chugh 

head-digital banking, HDFC Bank 

Start-ups should not 

compromise on their 

business ethos and cultures 

went for trials, etc – and integrate it 

with the sales system. 

“We are internal sellers for startups, 

and we need to make sure that 

we are able to mould the start-ups 

and help them create a typical business 

case that will generate business 

value,” said Karnatak. 

In short, “If I can show the value of 

5 crore, I can get a budget allocation of 

1 crore,” he added. 


and a start-up can work 

together and grow together 

Organization: HDFC Bank 

Start-up(s): Niki.ai 

Outcome: Create new 

channel for doing business 

and improve customer 

experience 

HDFC Bank launched a new Facebook 

Messenger chatbot, OnChat. It was 

created in partnership with Niki.ai, a 

2015 AI start-up. The chatbot can help 

customers pay utility services like 

bill payments and mobile recharges, 

make cab, bus and movie bookings. 

So far, the largest private sector bank 

has observed 160% month-on-month 

growth in transactions since its launch 

in December 2016, and has over 2.4 

million messages. 

The number of repeat users, which 

is close to 34%, further bolsters the confidence 

in conversational banking. The 

Messenger chatbot also opened up yet 

another channel for customer acquisition, 

with nearly 25% of OnChat users 

being non-HDFC Bank customers. 


17

Cover Story 

Collaborating with a start-up, if the business can 

show the value of INR 5 crore, it can get a budget 

allocation of INR 1 crore 

Niki.ai is not the bank’s first 

engagement with a start-up. The 

bank started recruiting start-ups 

three years ago and has a clear 

selection framework in place that 

makes it easier to weed out solutions 

that don’t fit the bill. 

“We regularly reach out to new 

and innovative start-ups via referrals, 

technology forums, incubators and 

summits. Every year, we invite over 50 

start-ups to a technology theme-based 

Innovation Summit. Niki.ai along 

with 10 other start-ups, was chosen 

through a multi-layered selection 

process,” said Nitin Chugh, headdigital 

banking at HDFC Bank. 

“We have implemented another 

chatbot for employees, on our website, 

and these chabots have offered us 

great customer insights and learning 

experiences. With OnChat, we thought 

if customers are spending more time 

on Facebook messenger, can the bank 

be there?” added Chugh. 

The chatbot implementation with 

Niki.ai isn’t a one-time engagement. 

The start-up will continue to relevant 

insurance, banking, and stock broker 

use cases to strengthen its natural 

language processing capabilities 

that will help in cross-selling and 

up-selling to their customers. 

Last year, Niki.ai released a 

Software Development Kit (SDK) for 

businesses to enable conversational 

commerce on their mobile and web 

apps. Since then, the start-up has 

garnered a lot of interest from 

multiple enterprises. 

According to Sachin Jaiswal, 

Co-founder and CEO, Niki.ai, “HDFC 

is a progressive organization. Any 

kind of validation that a client gives 

to its service provider is a big deal 

because it builds credibility and 

builds our business." 

Especially, if the service provider is 

a start-up. 

It is true that enterprises aren’t 

comfortable with sharing names of 

the start-ups that they work with 

– until after the implementation. 

Understandably, most organizations 

would rather share a success story 

Working with 

large enterprises 

requires start-ups to 

have a better cash 

flow and ensure that 

their product quality 

is great, especially 

when you are trying 

to scale 

Sachin Jaiswal 

Co-founder and CEO, Niki.ai 

rather than a failed implementation. 

In 2017, the start-up mortality rate was 

20% to 25%., with a majority of them 

closing down within 1.6 to 1.9 years 

of inception. 

The last three years have taught 

Jaiswal a few lessons too. 

He said, "before you interact with 

the client, a start-up must ensure: 

Whether you understand the market 

Whether there is a need for the 

product 

Timeline, effort, cost estimate, mark 

up client is willing to pay." 

“Most start-up players go with an 

open mind. However, it helps to be 

confident about the maturity of their 

product before you approach a large 

scale organization. There will be 

companies willing to experiment with 

a less than mature start-up, but the 

probability will be lesser,” he added. 

“Working with large enterprises 

requires start-ups to have a better 

cash flow management process and 

ensure that their product quality is 

impeccable if, as a start-up, you are 

trying to scale. That fundamental 

hasn't changed. You have to realize 

that what is the market that you are 

after and you have to cater to that 

market,” said Jaiswal. 

Additionally, Jaiswal said that 

start-ups you must have a clear cut 

understanding of what their business 

model is. “If you are a client servicing 

business, you will latch on to every 

opportunity that will add to your 

top-line but if you are a technology 

provider, then you must know when to 

exit the conversation.” 

The truth is, it is the people 


Cover Story 

working in the start-ups that make 

them attractive to large enterprises. 

CIOs are always looking for a fresh 

wave of talent among their midst, 

which helps them to innovate, to 

inspire internal employees, and to 

implement a technology product in a 

short span of time. 

Despite the pressure of digital 

transformation and the compelling 

need to work with start-ups, large 

enterprise CIOs need to be certain of 

a start-up's intention. Organizations 

should be able to gauge that early on 

if it is just a marriage by association. 

Many a times, a start-up may display 

lack of transparency based on past 

experiences of having been taken 

advantage of, which makes it difficult 

for them to accurately assess a startup’s 

product or service, and may 

ultimately, face rejection. 

It is the job of the start-up to 

understand the requirements of 

the business. Most start-ups are 

rejected because of their failure to 

present a viable business case for the 

organization. In situations like these, 

it is the CIO's or the business head's 

prerogative to advise and mentor the 

start-up in a direction that helps them 

to churn out a success story. 

All said, a leap 

of faith goes a 

long way in any 

partnership 

Like HDFC Bank, many large 

organizations host competitions, 

hackathons, and events for start-ups 

around a particular technology or a 

theme. These events provide the 

right kind of exposure and the 

opportunity to interact, meet faceto-face, 

and display maturity that 

opens doors to new relationships and 

business partnerships. 

In the last three years, digital 

transformation has been the driving 

force for many large organizations to 

seek greener pastures for talent, ideas 

and technology. As a result, CIOs and 

their organizations are opening their 

doors to innovation and new forms of 

collaboration with start-ups. 

Companies such as RJ Corp, 

Bajaj Auto, HDFC Bank, and ONGC, 

are only a few examples of large 

organizations that are committed to 

working with start-ups and in the 

last 3-4 years, have kept a consistent 

dialogue with the start-ups that they 

have worked with in the form of 

product upgrades, new business, and 

building relationships with them. 

Start-ups also should understand 

that they must preserve their business 

models and stay true their DNA. A 

lot of organizations employ the same 

tedious assessment process that they 

do for other technology partners. As a 

result, they expect start-ups to tow the 

line and adjust to implementing a little 

'extra' on the side. In such cases, startups 

must be clear about the business 

they are in, and how must they are 

willing to accommodate. However, a 

lot of start-ups also see this as a form 

of additional business opportunity 

that will help them mature their 

products and make them more 

attractive to big customers. 

Start-ups have to overcome their 

fear of being let down. Many complain 

that they are made to work with teams 

at large organizations that pose as 

innovation centres, and the technology 

solution never sees the light of day. 

Therefore, organizations and 

start-up must clearly define this 

We have a total 

of 70 clients in 

India; Bajaj being 

our number one 

client with having 

deployed 150 so 

far. They have been 

buying cobots since 

2010. Thanks to 

them, the top 5 twowheelers 

are using 

our technology. 

Pradeep David, 

CTO, Universal Robots 

partnership and set up deadlines 

for product planning and execution 

– even if it means shorter timelines 

for a 3-month long technology 

implementation. Large organizations 

must also appoint people who 

understand the start-up ecosystem 

and work towards building trust and 

creating continuous engagement. 

Partnerships demand a lot of time 

and investment. Therefore, once you 

take the plunge, start-ups and large 

enterprises must work together to 

sort out their differences at every step 

of the way, respect boundaries, and 

co-develop innovative new solutions 

that better serve their customers – just 

like a dream team playing to win 


19

FACE OFF 

// Is ROI becoming 

outdated for technology 

investments? 

For years, IT leaders have treated 

Return on Investment (ROI) as 

testament of a successful IT initiative. 

For most CIOs, realizing a hard ROI 

wasn’t always easy and it wasn’t 

necessary that every implementation 

had to result in a profit or a loss. In 

many cases, companies or CIOs can 

find that there isn’t any significant 

or tangible ROI associated with an 

implementation. These limitations can 

result in professional embarrassment 

for the IT leader. 

Over the years, businesses have 

gradually realized the importance 

of strategic investments without 

expecting any considerable tangible 

gains. In the digital era, however, the 

return on technology investment is 

calculated unlike the standard way of 

estimating ROI. 

Take for instance; value over 

investment (VoI) is more of a pay per 

Quick View 

Ajay Kumar Meher, says, in 

the age of digitalization, ROI is no 

longer calculated the same way it 

used to be earlier 

use model. So, organizations 

today are paying based on 

their usage of a technology, 

and replacing it with a 

superior option in case 

they get a better or cheaper 

technology at any moment 

Ajay Kumar 

Meher 

SVP & Head, IT 

& Post Production, 

Set India Pvt. Ltd. 

of time. With the easy exit 

option available, these investments 

are broadly driven by ‘value’ of the 

investment rather than ‘return’ 

on investment. 

The other type of ROI that digital 

organizations are investing in today 

is known as futuristic investments. 

These investments are made primarily 

to build the digital backbone of 

an organization, and to enable 

business. Business enablement-based 

investment in digital technologies 

such as machine learning, Robotics, 

big-data or IoT, can result in revenue 

growth opportunities. 

The purpose of ‘building the digital 

backbone’- type of investments, is 

primarily to strengthen the core of 

an organization. This is to say that 

organizations should look at this as a 

capability enhancement tactic rather 

than a ROI based investment. 

The truth is technology investments 

should be strategic, and not tactical 

"The ROI 

on tech is 

calculated 

unlike the 

standard way 

of estimating 

ROI" 


Face Off 

Ashok Jade 

CIO, Shalimar 

Paints 

"ROI is 

still a valid 

framework 

to gauge 

technology 

investments" 

Shalimar Paints has more than a 

century-old legacy and rich heritage. 

It was established in 1902, and is 

country’s first paint company in the 

field of paints and coatings. Being 

the oldest paint company, it was 

very essential for us to use technology 

to our advantage in order to 

compete in the market. The successful 

use of technology has always 

benefited us to remain in market 

despite tough competition. 

If we look back to the journey of IT 

transformation in Shalimar Paints 

for the past couple of years, we spent 

initial years strengthening our core 

systems like ERP and our core business 

processes. As ERP aged, we 

started investing in systems such 

as CRM, PLM and so on, and our 

journey further moved towards new 

technologies such as Mobility, Analytics, 

BPM, Cloud etc. Today, we 

have started evaluating how we can 

invest in IoT, VR and get business 

ahead of completion. 

Last financial year was the year 

of digitization for Shalimar Paints. 

Our IT investments have increased 

more on new technologies while 

balancing core systems such as ERP 

and CRM. 

Today, there isn’t much difference 

between innovation and enterprise 

IT projects. However, innovation 

projects demand more freedom 

to fail than business-as-usual infrastructure 

projects. I believe that ROI is 

important for both, and its relevance 

while making technology investment 

decisions helps a lot. Take for instance, 

investing in IoT may not give you 

Quick View 

Ashok Jade, CIO, Shalimar 

Paints, says, ROI on tech 

investments can be in the form 

of intangibles 

immediate result but once the entire 

ecosystem is integrated around IoT 

then we will certainly create more benefits 

and business value… 

I believe that ROI is still a valid framework 

to gauge technology investments. 

My experience is that many people do 

not define exact meaning of returns. 

The ROI could be in different forms 

such as profit or cash or even in other 

forms such as efficiency, productivity, 

customer delight and so on… CIOs 

should able to convert these in some 

measurable form or numbers. 

However, I do agree that ROI cycles 

have become shorter and technology is 

one of the reasons for this. Technology 

has changed market dynamics. As a 

result, every organization wants to be 

ahead of competition 


21

POINT OF VIEW: Ctrl-S 

“Over 200 innovations 

led to the creation 

of the most energy 

efficient data center” 

An interview with Sridhar Pinnapu Reddy, Founder & 

CEO, Ctrl-S, on the launch of Tier 4 DC in Bangalore 

C 

CtrlS Datacenters has launched a Tier-4 Data 

center in Bangalore, assessed as one of the largest 

Tier-4 data centers in South India. The facility is 

expected to provide India’s growing tech giants 

with reliable, robust data management and distribution 

networks, with near zero downtime, 100% 

redundancy and industry’s lowest PUE. 

The company has five data centers in the country 

(Four Tier-4 Datacenters and one Tier-3 Data 

center). The Tier-4 data centers are spread across 

Hyderabad, Mumbai, Noida and the Bangalore 

facility. Another Tier—3 datacenter is located in 

Chennai. It’s data center footprint across the country 

spans over half-a-million square feet and has a 

rack capacity exceeding 10,000. 

You recently launched the Bangalore 

Tier 4 DC. Tell us about your 

journey so far. 

Actually, very interesting. Eleven years ago, when 

I started thinking about Ctrl-S, everyone I spoke to, 

asked me only one question: Sridhar, what makes 

you think you can be successful in this business? 

The top five three brands are in the same 

business, but they are multibillion dollar 

conglomerates. To answer that question, puts my 

business plans behind by almost six months. Soon 

I realized that I have to be significantly better than 

them to be able to co-exist in this business. Add to 

that, significantly better quality, much lower prices 

plus a lot more flexibility which the larger players 

could not offer. In a way, this gives our customers a 

competitive advantage. 

This was a biggest challenge, at the same time I 

had to satisfy my investors and shareholders. So 

that’s the kind of a background with which we 

started. Obviously it was a huge challenge—you 

know whenever there is a challenge something 

significant has to come out. That’s what happened 

in Ctrl-S, and that’s how we started Tier 4 Data 

Center. Today we have enabled over 200 innovations 

which led to the creation of the most energy 

efficient data center. 

Today Ctrl-S is the world’s only LEED platinum 

certified data center company. It led to innovations 

such as, disaster recovery as a service, community 

clouds and as a result, not only were we able to 

survive the competition, but we became the market 

leaders in terms of growth rates, in terms of presence, 

in terms of occupancy levels; in all aspects, we 

became the market leader. 

Right now, we are present in almost all the 

important Indian cities . We have the presence 

and we are geared to capture the full potential 

Indian enterprises have to offer. Not only that, 

three years ago, we embarked on a bold and ambi- 


Sridhar Pinnapu Reddy, Ctrl-S 

Interview 

"We are able to 

provide services from 

thirty-six locations 

globally in about 

eighteen countries." 

in this industry has invested in people in establishing a digital 

defense center within our service delivery networks. We 

have put together a large team to focus only on cyber defense. 

tious plan to expand our presence to forty countries 

across the world. 

Today we are able to provide services from thirty-six 

locations globally in about eighteen countries. In all these 

countries, we are among the top twenty companies, and the 

top five brands are our customers. This is ranging from South 

East Asia to Japan to Australia, New Zealand and Middle 

East, U.S.A, Mexico, Netherlands, and Norway recently. 

How did you boost the confidence of 

your customers to ensure that they are 

in safe hands? 

It’s a continuous battle of securing the digital assets. You 

never know what’s going to happen next. So, there are twothree 

things which go into staying at the top position. Of 

course, there’s technology, which kind of protects the tools, 

which are required to establish different set of controls, both 

at perimeter level and internal security, external security, data 

security, as well as from various bots and malicious attacks. 

For each one of them there are differentiated tools. What 

we’ve done over a period of time is invest in most state-of-theart 

tools, which are from leading solutions providers. And in 

terms of people, we’ve gathered, I don’t think any other player 

How do you see the customers eventually 

benefiting from a Tier 4 data center partner 

like you? 

It’s very simple. Tier 4 is like having hundreds of differentiators 

over Tier 3. It is not just providing dual active power 

sources as many in the industry believe. It is about every 

aspect of the data center right from physical attributes to the 

plot location to that of the strength of the building to hundreds 

of parameters which go into the making of a data center. 

In all those parameters, Tier 4 is a step above. So if Tier 3 

is 900 kg per square meter loading this is 1500 kg per square 

meter, which is a significant difference. 

What is your roadmap for the year 2020? 

We are going to get aggressive in DC design bids worldwide. 

So that’s an area where we’re progressing. In the private 

cloud space, we’ve formed different divisions for banking and 

manufacturing ERP related workloads. 

And we’re focusing on verticals such as insurance, 

government, and healthcare. Additionally, five different 

community clouds are going to roll out in the next, out of 

which, two are fully mature and the third is going to be 

live next month. And we look at maturing all these five 

community clouds over next two-year period. What it 

means is that we’re going to have skilled professionals in 

different digital technologies just like the way we have ERP 

professionals and banking professionals. 

We’re going to bring in industry experts and make sure 

to give a different value proposition altogether on using 

cloud technologies to these customers in that space. And 

we look at being present in all the 40 countries in the next 

two years. We are also looking at tripling our members in 

the next two years 


23

insight 

Companies Are Going To 

Spend A Lot More On AI 

and Cognitive Systems 

Every industry is evaluating to see how it will impact their 

business processes and go-to-market efficiencies 

By CIO&Leader 

W 

Worldwide spending on cognitive and artificial 

intelligence (AI) systems will reach USD 

19.1 billion in 2018, an increase of 54.2% over 

the amount spent in 2017. With industries 

investing aggressively in projects that utilize 

cognitive/AI software capabilities, the International 

Data Corporation (IDC) Worldwide 

Semi-annual Cognitive Artificial Intelligence 

Systems Spending Guide forecasts cognitive 

and AI spending will grow to USD 52.2 billion 

in 2021 and achieve a compound annual 

growth rate (CAGR) of 46.2% over the 2016- 

2021 forecast period. 

“Interest and awareness of AI is at a fever 

pitch. Every industry and every organization 

should be evaluating AI to see how it will 

affect their business processes and go-tomarket 

efficiencies,” said David Schubmehl, 

research director, Cognitive/Artificial Intelligence 

Systems at IDC. “IDC has estimated 


Insight 

that by 2019, 40% of digital transformation initiatives will 

use AI services and by 2021, 75% of enterprise applications 

will use AI. From predictions, recommendations, and advice 

to automated customer service agents and intelligent process 

automation, AI is changing the face of how we interact with 

computer systems.” 

Retail will overtake banking in 2018 to become the industry 

leader in terms of cognitive/AI spending. Retail firms will 

invest USD 3.4 billion this year on a range of AI use cases, 

including automated customer service agents, expert shopping 

advisors and product recommendations, and merchandising 

for omni-channel operations. Much of the USD 3.3 billion 

spent by the banking industry will go toward automated 

threat intelligence and prevention systems, fraud analysis 

and investigation, and program advisors and recommendation 

systems. Discrete manufacturing will be the third 

largest industry for AI spending with USD 2.0 billion going 

toward a range of use cases including automated preventative 

maintenance and quality management investigation 

and recommendation systems. The fourth largest industry, 

healthcare providers, will allocate most of its USD 1.7 billion 

investment to diagnosis and treatment systems. 

“Enterprise digital transformation strategies are increasingly 

including multiple cognitive/artificial intelligence use 

cases,” said Marianne Daquila, research manager, Customer 

Insights & Analysis at IDC. “Business transformation is 

occurring across all industries as successful companies 

embrace the array and potential impact of these solutions. 

Automated customer service agents, increased public safety, 

preventative maintenance, reduction of fraud, and improved 

healthcare diagnosis are just the tip of the iceberg driving 

spend today. With double-digit year-over-year spending 

growth forecast, IDC expects to see an increase in general use 

cases, as well as a refinement of industry-specific use cases.” 

The cognitive/AI use cases that will see the largest 

spending totals in 2018 are: automated customer service 

agents (USD 2.4 billion) with significant investments from 

the retail and telecommunications industries; automated 

threat intelligence and prevention systems (USD 1.5 billion) 

with the banking, utilities, and telecommunications 

industries as the leading industries; and sales process 

recommendation and automation (USD 1.45 billion) 

spending led by the retail and media industries. Three other 

use cases will be close behind in terms of global spending 

in 2018: Automated preventive maintenance; diagnosis and 

treatment systems; and fraud analysis and investigation. The 

use cases that will see the fastest spending growth over the 

2016-2021 forecast period are: public safety and emergency 

response (75.4% CAGR), pharmaceutical research and 

discovery (70.5% CAGR), and expert shopping advisors and 

product recommendations (67.3% CAGR). 

Retail will overtake 

banking in 2018 to 

become the industry 

leader in terms of AI/ 

cognitive spending 

A little more than half of all cognitive/AI spending 

throughout the forecast will go toward cognitive software. 

The largest software category is cognitive applications, 

which includes cognitively-enabled process and industry 

applications that automatically learn, discover, and make 

recommendations or predictions. The other software 

category is cognitive platforms, which facilitate the 

development of intelligent, advisory, and cognitively enabled 

applications. Industries will also invest in IT services to help 

with the development and implementation of their cognitive/ 

AI systems and business services such as consulting and 

horizontal business process outsourcing related to these 

systems. The smallest category of technology spending 

will be the hardware (servers and storage) needed to 

support the systems. 

On a geographic basis, the United States will deliver more 

than three quarters of all spending on cognitive/AI systems 

in 2018, led by the retail and banking industries. Western 

Europe will be the second largest region in 2018, led by 

retail, discrete manufacturing and banking. The strongest 

spending growth over the five-year forecast will be in Japan 

(73.5% CAGR) and Asia/Pacific (excluding Japan and China) 

(72.9% CAGR). China will also experience strong spending 

growth throughout the forecast (68.2% CAGR). 

“The latest iteration of the Cognitive/AI Spending Guide 

is a roadmap for the journey of organizational DX through 

the use of AI, deep learning, and machine learning,” added 

Schubmehl. The Worldwide Semiannual Cognitive Artificial 

Intelligence Systems Spending Guide sizes spending 

for technologies that analyze, organize, access, and provide 

advisory services based on a range of unstructured information. 

The spending guide quantifies the cognitive computing 

opportunity by providing data for more than 20 use cases 

across 16 industries in eight regions. Data is also available 

for the related hardware, software, and services categories. 

Unlike any other research in the industry, the detailed segmentation 

and timely, global data is designed to help suppliers 

targeting the market to identify market opportunities 

and execute an effective strategy 


25

Insight 

Blockchain’s Red 

Hot Indian Use Case: 

Invoice Discounting 

Risks such as double financing can be completely 

avoided using blockchain. That is what is driving the 

usage blockchain for receivables financing 



Insight 

T 

The yet-unnamed blockchain, 

built on HyperLedger Fabric, 

will be used to secure 

recievables financing 

This month, three Indian factoring 

exchanges and the American 

blockchain technology firm MonetaGo 

announced launching of a fullfledged 

blockchain. The yet-unnamed 

blockchain, built on HyperLedger 

Fabric, will be used to secure 

receivables financing. 

The three factoring exchanges 

involved are: 

RXIL or Receivables Exchange 

of India (RXIL), a joint venture 

between NSE Strategic Investment 

Corporation Ltd (NSICL) and Small 

Industries Development Bank of 

India (SIDBI) 

A.TReDS, a joint venture between 

Axis Bank and mjunction Services 

M1xchange, operated by Mynd 

Solutions 

RXIL, Axis Bank and Mynd 

Solutions were licensed by the 

Reserve Bank of India to operate 

Trade Receivables Discounting 

System (TReDS), as the service is 

known in regulatory parlance, in 

November 2015. 

MonetaGo, a New Yorkbased 

technology firm, is an old 

India hand. It was the primary 

technology supplier for a blockchain 

trial conducted by Institute of 

Development & Research in Banking 

Technology (IDRBT), RBI’s research 

arm, in January 2017. National 

Payment Corporation of India (NPCI) 

and multiple banks participated in 

the trial, which incidentally was also 

around trade finance and was also 

built on Hyperledger Fabric. 

Tech-leveraged Invoice 

Discounting 

The process of bundling and selling 

invoices at a discount, is a major 

source of working capital finance 

for small and medium (MSME) 

companies. Suppliers to any large 

company are paid typically in 30 to 

120 days. But since the MSME needs 

working capital, financial companies 

buy the invoices at a discount and 

provide finance to the MSMEs and 

later collect the money from the 

buyer. Because the invoices are 

bought at a discounted rate, the 

practice is popularly known as 

invoice discounting, 

While the practice itself is quite 

old, in the last few years technology 

platforms are being used to make 

the process faster and efficient. The 

platforms work like any auctioning 

platform. Typically, a seller uploads 

an invoice on the platform, which 

is approved by the buyer. Once 

approved by the buyer, the invoice 

becomes a factoring unit and is 

auctioned on the platform which the 

financiers try to buy by entering their 

discounting rate. After the final bid is 

accepted by the seller (or the buyer, in 

case the buyer is bearing the interest 

rate), the TReDS platform settles the 

trade. The financier is debited and the 

supplier is credited. 

The shift to new technology-based 

platforms is catalysed by RBI’s 

proactive stance to promote the usage 

along with rapid developments in 

financial technologies. This stems 

from the Government’s thrust on 

energizing the MSME segment to 

drive economic growth. 

RBI came up with a concept paper, 

Micro, Small & Medium Enterprise 

Factoring-Trade Receivables 


27

Insight 

Exchange in March 2014. Based 

on feedback from public and 

stakeholders, it published the final 

guidelines in December that year. 

The guidelines outlined the 

requirements and the basic tenets 

of operating the TReDS, including 

the system participants, their roles, 

transaction process flow, settlement 

process, etc., besides indicating the 

eligibility criteria for entities desirous 

of setting up and operating such 

a system. RBI also clarified, in the 

guidelines, that the TReDS will be 

an authorised payment system and 

will also be subject to the oversight 

of the Reserve Bank of India under 

the Payment and Settlement Systems 

(PSS) Act, 2007. 

RBI also specified that MSME 

sellers, corporate and other 

buyers, including the Government 

Departments and PSUs, and 

financiers (both banks and NBFC 

factors) would be direct participants 

Jesse Chenard, CEO, MonetaGo 

in the TReDS, which would 

provide the platform to bring these 

participants together for facilitating 

uploading, accepting, discounting, 

trading and settlement of the invoices 

/ bills of MSMEs. 

RBI’s guidelines were forwardlooking 

as the regulator explicitly 

mentioned that “the bankers of sellers 

and buyers may be provided access 

to the system, where necessary, for 

obtaining information on the portfolio 

of discounted invoices / bills of 

respective clients.” 

It also clarified that the TReDS may 

tie up with necessary technology 

providers, system integrators and 

entities providing dematerialisation 

services for providing its services. 

The three TreDS platform were 

licensed in November 2015. RXIL 

was the first to be operational in 

January 2017. 

KredX, another venture-funded 

start-up also into operating an invoice 

discounting platform, has also applied 

for a licence. KredX has already raised 

Series A funding of USD 6.25 million 

in October 2016. 

Blockchain: Another 

Layer of Trust 

As the platform providers started 

looking out for the latest technology, 

blockchain seemed to be tailor made 

for the application. Not only it makes 

each transaction far more efficient, it 

makes it far more trusted too. 

What we have seen with this 

week’s announcement is almost 

unprecedented. Initiated by three 

competing new players, without it 

being driven by a major financer, is 

itself a major step. 

“The exchanges realized that there 

is significant value in going for a common 

blockchain,” says Jesse Chenard, 

CEO of MonetaGo, the technology 

company that has initiated the platform. 

Most important is reducing 

fraud and eliminate risks such as 

double financing. That will not just 

make it far more trusted, but will also 

make the system more efficient in the 

long run, helping everyone. 

“This technology enables us to work 

together with the other exchanges to 

achieve shared goals without sharing 

specific data. I look forward to the day 

when other players in the financial 

services industry also appreciate 

the value add in terms of preventing 

frauds related to Bill Discounting and 

become a part of this system,” said 

Kalyan Basu, MD & CEO of A.TReDs. 

“This is a simple and low-cost 

technology innovation which helps 

us mitigate risks arising from 

multiple financing of the same bills 

across the platforms in addition 

to our existing risk management 

processes which provides a clear 

benefit. The real benefit will actually 

come when other financiers such 

as banks, NBFCs, and others 

join MonetaGo’s platform,” said 

Kashinath Katakdhond, MD & 

CEO, RXIL. 

Echoed Chenard, “The more the 

merrier,” he said referring to more 

players joining the blockchain. 

The understanding among the 

promoters—the three exchanges and 

MonetaGo—is that the technology 

will be continuously be updated by 

MonetaGo. 

“We are constantly evaluating new 

methodologies and technologies 

which we believe will fit into our 

long-term product road map” said 

Sundeep Mohindru Director and 

Founder of M1xhange. 

“Tech will change over time. We will 

keep supporting that,” said Chenard 

of MonetaGo. 

The blockchain has been production-active 

only for two weeks after 

months of testing. 

Though this is the first enterprisegrade 

live blockchain, there have been 

several proofs of concept/trials using 

blockchain technology in India. 

Most of them have been around two 

areas: cross border money remittance 

and receivables financing with 

invoice discounting 


Insight 

Cryptojacking 

Is On The Rise 

in 2018 

As per Symantec, India is among 

the most vulnerable countries 

By IANS 

W 

When 

it comes to increased cryptojacking 

activities, India is second in the Asia-Pacific 

and Japan (APJ) region and ninth globally as 

hackers create a highly-profitable, new revenue 

stream with crypto-mining, cyber security 

giant Symantec said in a recent statement. 

According to Symantec's "Internet Security 

Threat Report", detection of coinminers on 

endpoint computers increased by a whopping 

8,500% in 2017. 

"Cryptojacking is a rising threat to cyber 

and personal security," Tarun Kaura, Director, 

Enterprise Security Product Management, 

APJ at Symantec, said in a statement. 

"The massive profit incentive puts people, 

devices and organizations at risk of unauthorized 

coinminers siphoning resources from 

their systems, further motivating criminals to 

infiltrate everything from home PCs to giant 

datacenters," Kaura added. 

Cryptojacking is defined as the secret use of 

a computing device to mine cryptocurrency. 

With a low barrier of entry cyber criminals 

are harnessing stolen processing power and 

cloud CPU usage from consumers and enterprises 

to mine cryptocurrency. 

Coinminers can slow devices, overheat batteries 

and in some cases, render devices unusable. 

For enterprise organizations, coinminers 

can put corporate networks at risk of shutdown 

and inflate cloud CPU usage, adding 

to the cost. 

"Now you could be fighting for resources on 

your phone, computer or Internet of Things 

(IoT) device as attackers use them for profit. 

People need to expand their defenses or they 

will pay for the price for someone else using 

their device," Kaura added. 

Symantec found 600% increase in 

overall IoT attacks in 2017. India today ranks 

among the top five countries as a source for 

IoT attacks. 

The firm also identified a 200% increase in 

attackers injecting malware implants into the 

software supply chain in 2017. 

Threats in the mobile space continue to 

grow year-over-year, including the number 

of new mobile malware variants which 

increased by 54%. 

Mobile users also face privacy risks from 

grayware apps that are not completely malicious 

but can be troublesome. Symantec found 

that 63% of grayware apps leak the device's 

phone number. 

In 2017, the average ransom cost lowered 

to USD 522. 

"Several cyber criminals may have shifted 

their focus to coin mining as an alternative to 

cashing in while cryptocurrency values are 

high," the report noted 


29

Insight 

Bot Seriously! 

Virtual assistants are becoming the new 

sine qua non in consumer services 



Insight 

OOnline travel portal, Yatra.com and Kotak Mahindra Bank 

are the latest in a series of consumer services companies that 

are leveraging AI-powered chatbots to serve their customers 

better. While almost all leading banks, especially in the 

private sector, have already launched these bots, Yatra is one 

of the early ones in the online travel business. Online retailer 

Flipkart soft-launched a similar conversational search 

capability in early 2017. 

However, one segment that has led the use of AI-powered 

virtual assistants from the front is banking. All new private 

sector banks—HDFC Bank, ICICI Bank, Axis Bank, Yes 

Bank and now Kotak Mahindra Bank—have launched 

similar products while India’s largest bank, State Bank of 

India, a public sector bank, too has launched its own virtual 

customer service assistant. 

While organizations have been flirting with AI-powered 

chatbots for close to three years, most of the commercial 

launches have happened in the last 18 months. 

In November 2016, Axis Bank launched its intelligent 

chatbots, in partnership with Active.ai, a Singaporebased 

start-up. 

A month later, HDFC launched a Facebook Messenger 

chatbot created in partnership with Indian start-up Niki.ai, 

called OnChat. 

In February 2017, ICICI Bank launched its own chatbot 

iPal for handling customer queries. It has handled an 

estimated 10 million queries. 

Flipkart launched its conversational search during 

that time. 

In March last year, HDFC Bank launched a fullfledged 

customer service chatbot called EVA (Electronic 

Virtual Assistant). 

Around the same time, YES Bank, in partnership with a 

Silicon Valley start-up Payjo, launched its wallet services 

through a chat-based financial assistant. 

In September last year, State Bank of India, the largest 

bank in India, launched SBI Intelligent Assistant (SIA), 

which the bank says addresses queries the way a “bank 

representative does.” The SBI chatbot also uses Payjo. 

Most of the commercial 

AI-powered chatbot 

launches have happened 

in the last 18 months 

In November 2017, FirstCry, a leading bay and kids 

products retailer, launched its own AI-based virtual 

assistant Jenna. 

The New Kids 

In 2018 too, the story continues with more launches 

ofcustomer service chatbots. 

Yatra.com’s virtual assistant is called YUVA, short for 

Yatra Universal Virtual Assistant. YUVA, available on 

desktop, Android, IOS, Google Assistant and Facebook 

Messenger, supports various Indian accents. 

“The users can search and book flights, apply multiple 

filters, rearrange options with different sort orders and 

modify bookings. The user can provide the complete 

information in a single sentence or talk to YUVA 

and provide the relevant information in a form of a 

communication,’ said the company in a release. 

Its future versions will feature multi-lingual support 

starting with Hindi followed by other important regional 

languages and will be assisting the customers in hotel and 

holiday bookings as well. 

Kotak Mahindra Bank launched 'Keya', a voice bot 

integrated with the bank’s phone banking helpline 

and augments its existing IVR in Hindi and English. 

It is developed using the technology from Nuance. It 

uses automatic speech recognition, natural language 

understanding and text-to-speech technology. 

Startups such as Payjo, Niki.ai, Haptik are making news 

with their solutions to enable consumer companies better 

their customer service using AI-powered chatbots 


31

Insight 

And You Thought 

Security Is Secular 

(Across Industries)? 

The nature and motive of data breaches could vary 

significantly across industries. Any strategy formulated 

without the understanding of those peculiarities in an 

industry will never be very effective 



Insight 

Origin of breaches 

TThe conversation around enterprise 

security and threat management has 

always been horizontal. While there 

is a broader recognition today that the 

business impact of an incident could 

vary significantly across industries, 

there has been little effort to understand 

how the fundamental metrics of 

threat vary across businesses. 

That means a largely uniform, horizontal 

approach towards security. 

The recently released Verizon 

Data Breach Investigations Report 

(DBIR) 2018 — the 11th edition of the 

study — reveals why that could be 

awfully inadequate. 

Whether it is in terms of the origin 

(external vs internal) of breach/ 

incidents, the type of data breached 

or the nature of the attacks, the nine 

industries covered by DBIR 2018 show 

significant difference. Some of those 

metrics are key to the understanding 

of the nature of threats and hence 

important from the point of view of a 

solutions approach. 

For example, as much as 99% of the 

breaches occur in the accommodation 

(hospitality) industry involve external 

factors, while in healthcare, as much as 

56% are internal. In fact, in hospitality, 

Point of Sales (PoS) accounts for 90% 

of all breaches. 

“Often restaurants are smaller organizations 

without the luxury of trained 

security staff, but they are forced to 

rely almost exclusively on payment 

cards for their existence,” explains the 

report. These attacks are overwhelmingly 

motivated by financial gain and 

perpetrated by organized crime. 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Accommodation 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Accommodation 

Education 

Education 

Financial 

Financial 

Healthcare 

The differences are not just in the origin. 

The motives too are significantly 

different across industries. Though 

increasingly, financial motives are 

becoming predominant, in some 

areas—like manufacturing and public 

administration—espionage are almost 

equally strong motives. In healthcare, 

curiosity is a major factor. 

The kind of data that is targeted also 

vary across industries. In Accommodation, 

93% of compromised data is payment 

data; in education, 72% of data 

is personal. Credentials account for a 

huge 41% in the Information sector. 

A good counter-threat strategy 

requires that the breaches are 

Information 

Manufacturing 

External Internal Others 

Prof Services 

Motive behind breaches 

Healthcare 

Information 

Manufacturing 

Prof Services 

Public Administration 

Public Administration 

Financial Espionage Convenience Fun ideology others 

Retail 

Retail 

understood clearly. Each industry 

has a different mix of motives, origins 

and the kind of data that is targeted. 

Since the security budget and 

resources are limited, they need to be 

channelized properly to optimize the 

effectiveness of the security strategy. 

Depending on the nature of 

threat, the companies will not just 

be able to identify the investment 

priorities, it may also help an entire 

industry segment to come together 

to minimize certain threats. In 

areas like healthcare and public 

administration, a collaborative 

approach may be more effective than 

siloed approach 


33

Security 

1 In 4 Organizations 

Using Public Cloud Has 

Had Data Stolen 

As per the security report, poor visibility is found to be one of 

the greatest challenges to cloud adoption in organizations 


P 

Poor visibility is one of the greatest challenges to 

cloud adoption in an organization, according to 

McAfee’s Navigating a Cloudy Sky: Practical Guidance 

and the State of Cloud Security report. Across 

all industries, computing storage and asset protection 

are transitioning to the cloud, making it difficult 

for IT practitioners to see what is ahead. This 

uncertainty and lack of visibility to new environments 

are causing some executives to move slowly 

or stick to their known paths, while others move 

boldly ahead. 

“Despite the clear prevalence of security incidents 

occurring in the cloud, enterprise cloud adoption 

is pressing on,” said Rajiv Gupta, senior vice president 

of the cloud security business unit, McAfee. 

“By implementing security measures that allow 

organizations to regain visibility and the control of 

their data, businesses can take advantage of innovative 

services and accelerate their business with a 

more informed approach to security in the cloud.” 

Cloud Services Nearly Ubiquitous 

Almost all organizations are well into cloud adoption. 

According to the survey, 97% of worldwide IT 

professionals are using some type of cloud service 

and are concurrently working through issues 


Security 

related to visibility and control. 

The combination of public and private 

cloud is also the most popular 

architecture, with 59% of respondents 

now reporting they are using a hybrid 

model. While private-only usage is 

relatively similar across all organization 

sizes, hybrid usage grows steadily 

with organization size, from 54% in 

organizations up to 1,000 employees, 

to 65% in larger enterprises with more 

than 5,000 employees. 

Cloud-First is the Strategy 

of Most Organizations, but 

in Cautious Decline 

Cloud-First is an information technology 

strategy that states new projects 

should consider using cloud technology 

first as opposed to on-premises 

servers or software. According to the 

report, Cloud-First is the strategy for 

IT in many companies and remains a 

primary objective. Caution seems to 

have taken over for others, as the number 

of organizations with a Cloud-First 

strategy dropped from 82% to 65% 

this year. Despite the reported security 

incidents, respondents with a Cloud- 

First strategy still believe that public 

cloud is safer than private cloud. 

Sensitive Data Stored in 

the Cloud 

The majority of organizations store 

some or all of their sensitive data in 

the public cloud, with only 16% stating 

that they store no sensitive data in the 

cloud. The types of data stored run the 

full range of sensitive and confidential 

information. Personal customer 

information is by far the most common, 

reported by 61% of organizations. 

Around 40% of respondents also store 

one or more of internal documentation, 

payment card information, personal 

staff data or government identification 

data. Finally, about 30% keep intellectual 

property, healthcare records, 

competitive intelligence and network 

pass cards in the cloud. 

Managing the risk of storing sensitive 

data in the cloud means ensuring 

the organization has visibility to it. A 

focus on fundamental governance and 

technological steps, such as requiring 

departments and personnel to participate 

in asset identification, classification 

and accountability helps build 

visibility. Data Loss Prevention integration 

with cloud providers, including 

the use of Cloud Access Security 

Brokers, manual or automated data 

classification and other technology 

steps, will help reduce the risk of sensitive 

information flows to and through 

cloud services. 

Security Incidents Still 

Widespread 

Prominently, one in four organizations 

that uses IaaS or SaaS has had data 

stolen, and one in five has experienced 

an advanced attack against its public 

cloud infrastructure. As organizations 

prepare for the European Union’s 

General Data Protection Regulation 

(GDPR), slated for May 2018, they will 

be ramping up compliance efforts. 

Organizations that are more confident 

in the ability of their cloud providers 

are more likely to have plans to 

increase their overall cloud investments 

in the coming year, while those 

less confident plan to keep their investments 

at the current level. Fewer than 

10% surveyed, on average, anticipate 

decreasing their cloud investment 

because of GDPR. 

Malware continues to be a concern 

for all types of organizations and 56% 

of professionals surveyed said they 

had tracked a malware infection back 

to a cloud application, up from 52% in 

2016. When asked how the malware 

was delivered to the organization, just 

over 25% of the respondents said their 

cloud malware infections were caused 

by phishing, followed closely by 

emails from a known sender, driveby 

downloads and downloads by 

existing malware. 

Respondents 

with a cloudfirst 

strategy 

still believe that 

public cloud is 

safer than private 

cloud 

Skills Shortage Decreasing 

The shortage of cybersecurity skills 

and its impact on cloud adoption continues 

to decrease, as those reporting 

no skills shortage increased from 15% 

to 24% this year. Of those still reporting 

a skills shortage, only 40% have 

slowed their cloud adoption as a result, 

compared to 49% last year. 

Best Practices and 

Recommendations 

Based on findings from this year’s 

study, the report concludes with three 

best practices that all organizations 

should actively work towards: 

DevOps and DevSecOps have been 

demonstrated to improve code quality 

and reduce exploits and vulnerabilities. 

Integrating development, 

quality assurance and security 

processes within the business unit 

or application team is crucial to operating 

at the speed today’s business 

environment demands. 

Even the most experienced security 

professionals find it difficult to keep 

up with the volume and pace of cloud 

deployments on their own. Automation 

that augments human advantages 

with machine advantages, such 

as that found in tools such as Chef, 

Puppet or Ansible, is a fundamental 

component of modern IT operations. 

Multiple management tools make 

it too easy to for something to slip 

through. A unified management 

system across multiple clouds with 

an open integration fabric reduces 

complexity 


35

CIO &amp; LEADER-Issue-01-April 2018 (1)

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