Former SoftBank executive and the Chairman and CEO of Palo Alto Networks Nikesh Arora called on businesses to think digital and cloud-first. He also added that India should get serious about cloud adoption and become a ‘cloud first’ country.
He said if there was a magic wand and if he could wave it and ask for a wish, it would be for Indians to get serious about understanding cloud adoption in the country. He believes most of the future technologies will be built in the cloud, which would allow for low latency, high bandwidth, high data processing capability, which he said is is what would be needed to deploy AI in this country.
He said if India can leapfrog the technological revolution in a way, where it actually becomes a cloud-first country, then it would also require the regulators to be more progressive from a cloud-thinking perspective.
When asked what are the deterrent factors in cloud adoption Arora told CNBC-TV18, “Across, the world there is a degree of apprehension in letting all the data sit on the cloud. Because the cloud companies are primarily foreign businesses, which put the data in the cloud.”
He believes that the best companies are those that serve a local market and develop for the global market. “If you look at companies that have businesses in India or teams in India, the most successful companies from a technology perspective are ones who both serve a local market and deliver for the global market. I think there's a huge opportunity for securing the country's infrastructure securing the infrastructure for thousands of companies large and small, which allows us to have a large domestic market. We want best of bleeding edge product centres in India, we don't want this to be delivery market, we want innovation to happen here. We want that innovation delivered to the rest of the world and also local market,” he said.
'COVID-19 made us tech-reliant, but digital adoption brings cybersecurity risks'
Arora said the COVID-19 pandemic enabled a technology-reliant society across the globe. This however, also expands the risk of security hacks, he said.
“I think what the pandemic showed us was that every company, barring a few, is a technology company. Because everything else vanished, legacy business, traditional business vanished, you wanted to be in a zero-touch environment, and technology came to the rescue. So we became a very technology reliant society across the globe. When that happens, it expands the risk of security hacks, it expands the exposure that cybersecurity brings to your business,” Arora said.
He however doesn't think people are going to reprioritise technology adoption. "Governments around the world were pumping money into the economy because we believe we were dealing with a pandemic. That was the biggest shock to the system. We all thought the only way to write it out was to take the uncertainty of the pandemic away by making all the other uncertainty go away,” he said, adding that managing COVID created economic risks for the future.
'Many investments, not exits'
Talking about the Indian economy, Arora said that a lot of investments are coming into the country, but it is not seeing many exits. “I would contend that India hasn't seen the cycles yet and what I mean by that is, a cycle is when you enter and you exit. We see a lot of investment, we see a lot of markups, we haven't seen a lot of exits," he said, adding that all exits are either strategic buyers buying assets or a few IPOs.
Arora said there are still a lot more unicorns which have to go through that cycle. "So I think this is a bump in the road for a lot of the unicorns which have had re-rating. So hopefully, many of these are robust businesses, they can survive the downturn or survive the sort of the cold winter for the next few years, where they either have to go raise money at a lower valuation than they did the last time around, which I think has even more consequences in the Indian ecosystem than it has in the western ecosystem," he said.
On the Indian IPO window and the need to build robust businesses
Talking about Indian IPO window for businesses, Arora said that if one has built a robust business and has profitability show or has the path to property very clearly articulated in the market, there is always a window for an IPO. "I don't think the IPO window is contingent on lofty valuations market," he said.
Arora believes there is a difference between a venture being a venture capitalist and being an entrepreneur. "A venture capitalist has clearly defined entry and exit criteria, they will enter cheap, and they will leave when they make a multiple of your money. As an entrepreneur, you're stuck with the consequences. You build a business, you're with it for a long time, because you still own a substantial stake in the company, you have obligations to your employees, to your customer, so you don't get to run away. So an entrepreneur has to build a robust business, because it has to stand the test of time," he said.
“India as the largest democracy in the world, allowing a very stable political environment and more and more consistency in the way policies are implemented, the more and more consistent the way things are followed to so I think it has tremendous potential going forward," he added.
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