BFSI – Cloud and Data Center Battle Card

Industry At 52%, India has the second-highest adoption rate of Fintech in APAC. By 2022, 15–20% of the Indian
Overview workforce in the BFSI sector would be deployed in new jobs that do not exist today

80% of Indian and APAC banks migrated to a hybrid cloud

Banking Mutual Fund Insurance architecture in 2018

INR INR 24 INR

7% TR 19.8 TR 12% The public cloud services market in India reached INR 127.8
167 TR
BN in 2017, up from INR 92.3 BN in 2016
Total Industry CAGR Assets Under Projected Market It is expected to reach INR 284 BN by 2020
Assets (Dec 18) FY 2013- 18 Management Size(2020)
(Apr 18– Nov 18)

FINTECH Cloud and AI are the top technological trends that the
Indian BFSI industry is adopting in order to become agile and
India’s fintech market is expected to grow from INR 85.2
BN in 2016 to INR 170.4 BN by 2020 enhance both branch banking and customer experience

Industry India’s BFSI cloud market is primarily driven by technological innovation, increasing adoption of digital
Drivers payment systems and favorable government policies

Growing RoI from Fintech Digital Payments and Increasingly Sophisticated and Diverse
Projects Mobile Banking Offerings
India represents opportunities worth INR
At 29%, India offers the highest Digital payment transactions in
142 TR for cloud computing services
expected RoI on Fintech India to grow from INR 3.5 TR
Banks are using services from multiple
projects compared with the in 2016 to INR 35.5 TR by 2020
cloud and DC providers to reduce cost,
global average of 20% (PwC Mobile banking services volume increase efficiency, and provide compelling
2017) grew by 92% in 2017–18 customer experiences

Protection Against Financial Data Protection Bill 2018 (draft) Integrate Customer Data
Crimes The new bill is designed to compel Industry players are using mobile
Scalable cloud solutions can companies to store copies of users’ apps for integrating customer data
enable banks to scan thousands critical personal data in India across banking platforms to create
of transactions per second, However, the bill has failed to state a single source of truth (SSOT)
improving their ability to combat explicitly define ‘critical data’. It will and enable near real-time insights
financial crimes likely be introduced in the Parliament
in June 2019

Key Technology Trends Key Pain Points in Adopting Cloud Services

Hybrid Hybrid cloud adoption in India to increase from FIs are under pressure to migrate all
46% applications to the cloud
cloud 13% in 2018 to 43% in 2020

74% experts believe that there is a strong Experts believe that cloud adoption will
AI &
need for AI in the BFSI industry to provide 49% prompt the restructuring of existing IT
robotics proactive and personal customer support organizational structures within companies.

IT spending on corporate-owned data FIs lack the right skill sets to

Data
centers will fall 80% by 2025 and will be 31% manage and derive the maximum
centers devoted to cloud services value from cloud investments

The analytics, data science and big data

Big data & Company experts believe cloud computing has
industry in India is expected to grow seven 91%
analytics increased the efficiency of their IT departments
times by 2025 (2018)

External India’s external storage market experienced FIs have concerns surrounding integration with
23.1% YoY growth during Q3 2018, driven by
29%
storage cloud vendors
banking and professional services sectors (IDC)
Survey: IDG Cloud Computing Survey - 2018; For 550 IT & Security decision makers

Sensitivity: Confidential All USD numbers are converted to INR with conversion ratio of $1 = INR 71 Sources: Publically reports & whitepapers, company websites, primary interviews
BFSI – Cloud and Data Center Battle Card
New Companies are investing in new technologies, such as digital marketing, BI & Analytics, Cloud, Security, and
Technology Data management, to drive digital transformation and grow market share
Investments
Top technologies for
Strategic Business Priorities Top new Technology Spending
Differentiated Offerings

Digital business/ Digital Digitalization/ Digital

26% 22% 26% BI/ Analytics
transformation marketing

Digitalization/ Digital
25% Growth / Market share 18% BI/ Analytics 21% marketing

Information security & Mobility/ Mobile

12% Profit improvement 13% 11% applications
cloud services

11% Customer focus 10% Data management 8% Cloud services/ solutions

Survey: 2018 CIO Agenda Survey - Gartner ;

3,160 CIO including 354 banking and investment services CIOs

Impact on BFSI In order to increase operational efficiency, financial service providers are digitizing their office operations
Value Chain through cloud-based software and technology platforms

Front Office Middle Office Back Office

Customer Mgmt. (On Trading Risk Transaction Book-keeping

Chain
Value

Marketing and Management Product

boarding & addressing Management & & Claims and Order
Sales Reporting Design
complaints) Investments Control Processing Validation

RPA Online Accounting

Key Technologies

Payment Feedback Cloud-based Virtualized API Platform

Apps/ Collection & EPM Networks & Book-keeping
In Focus

Wallet Consumer Storage

Behavioral Analytic Data Analytics
Predictive Analytics
Platforms Platforms
Platform

Cognitive Claims Processing &

Virtual WebRTCs Application Security Reporting
Computing Mgmt. Software
Branch /Robo Advisors Platforms Software/ Tools

For banking operations, firms

IMPACT

FI’s are digitizing customer Middle office operations also

Areas

utilize business platforms to deploy software (robotics/analytics)

interfaces to increase their
accelerate critical decision- for back-end automation and
virtual presence globally
making in real time process optimization

Adoption of Financial Service industry is implementing cloud-based technologies to facilitate online banking, Omni-
Cloud channel and contextual banking experience
Technologies

PAST Adoption of Cloud Across Financial Service Industry FUTURE

TRADITIONAL OMNI-CHANNEL / DIGITAL CONTEXTUAL

ONLINE BANKING
BANKING BANKING BANKING

• Access to • Card Transaction on Internet • Cloud-based • Pay-as-you-go • Virtual Branch

Branch Site, CRM (On-demand) Operations
Product • Online/ Internet Banking Public Cloud
Details, ATM Services • SaaS for • Cloud-based
Location etc. Core Finance • Private PaaS Blockchain
• Flexibility and Auto- Applications for Developer
• Internal Scalability Efficiency • Cognitive
Communicatio • Direct Automation
n on E-mails • Data Security and Reliability Banking on • IaaS for Web
SaaS Analytics • Cloud
Processing Collaboration

Sensitivity: Confidential All USD numbers are converted to INR with conversion ratio of $1 = INR 71 Sources: Publically reports & whitepapers, company websites, primary interviews
BFSI – Cloud and Data Center Battle Card
Fintech &
Fintech and Bigtech disruptions, combined with developments such as API and Micro-services, are creating
Bigtech
exciting opportunities for cloud and data center providers.
Disruptions

Employees & Customers

Customers Tele-calling booths Employees

Fintech
FinTech
Ecosystem
Front office Globalization management Third-party platforms
Security
platforms management
Smart/ Video ATMs
Open Banking Identity
management Service
orchestration
Technology Innovation API event Customer request management SaaS
Back office
economy (incl. self-service request)
platforms Robotic guide
Agile - DevOps

APIs & Micro-services

Domain and micro-services Automated kiosks
Data Center On-screen consultants
IaaS, PaaS, SaaS Retained platforms on IaaS & PaaS

Today and tomorrow – Transition of

Bank of the Future
Banking System

Conversational In the near future, Cloud-based application, AI, Analytics and Public Cloud storage will be the most sought
Triggers after technologies for the BFSI sector

Impact on Demand High Medium Low

Infrastructure Enabler

Technology / Conversational Triggers Data Cloud Transfor DC-

Trend Migration
Protection Services mation Colo

• Over the next 24 months, 30% of banks across

the world will allocate 50% of their expenditure on
cloud-based apps (2018)
Cloud • 22 of India’s leading insurance companies are
based Apps using Office 365 and Azure from the local data
centre (2016)

• Hosted on MS Azure, BankChain, a community of

30 banks from India and the Middle East, is working
to implement blockchain in banking (2017)
Blockchain • SBI estimates a reduction of 7% intermediaries due
to the use of blockchain (2017)

• 93% of Indian bankers are using AI to automate

and take critical data-driven decision – Accenture
(2018)
AI & Robotics • Private banks, such as HDFC Bank and ICICI Bank
already use chat bots for customers service

• India’s data centers market reached INR 319.5 BN

in 2018, driven by modernization of the BFSI
sector and supporting government policies
DC & external • Organizations’ demand for high-performance and
storage low-latency storage solutions led to a triple-digit
YoY growth of all-flash arrays in Q3 2018

• Indian analytics, data science, and big data industry

is growing at a CAGR of 33.5%, and the BFSI
sector has almost 100% adoption rate (2018)
Big Data • SBI plans to set up a big data lake to enhance
customer offerings (2017)

• Public cloud service revenue to grow from INR 51.8

BN in 2018 to INR 134.9 BN in 2019 - Gartner
• HDFC, ICICI, Kotak, and Axis Bank use
Public Cloud
Microsoft’s public cloud (2016)
Sensitivity: Confidential All USD numbers are converted to INR with conversion ratio of $1 = INR 71 Sources: Publically reports & whitepapers, company websites, primary interviews
BFSI – Cloud and Data Center Battle Card
Data center footprint expansion Colocation remains the highest contributor to service
providers’ overall Cloud and DC revenue
• Owing to increasing customer demand and government
regulations, players like Ctrls, Netmagic and ST • For CtrlS, colocation contributes to more than 60% of its
Telemedia opened new data center facilities in India cloud and DC revenue. In the case of Nxtra Data, it is 76%
• For Netmagic, colocation contributes ~45% to its
revenue; its strategic focus is more towards cloud services
Rise in multi-cloud services to meet growing IT demands
• Players like Netmagic and Airtel are strengthening their
cloud portfolio by following the inorganic growth BFSI industry continues to be the top
path. Netmagic acquired ActOnMagic and Airtel is consumer of data center services
partnering with cloud giants to offer multi-cloud services
to enterprises
Source: Secondary & Primary Research

Service Comparison : Sify Vs. Competitors

Data Center Infrastructure

Sify ST Telemedia RCom CtrlS Netmagic Airtel

Number of Data
9 16 9 6 11 10 (Nxtra data)
centers

Built-up Area ~200,000 sq. ft. ~1102,000 sq. ft. ~650,000 sq. ft. ~340,000 sq. ft. ~1550,000 sq. ft. ~1,98,000 sq. ft.

Uptime 99.982% 99.99% - 99.995% 99.99% 99.982%

Experience 17+ years 15 years 17 years ~10 years ~20 years

ISO9001, ISO 9001, ISO 20001, ISO 22301, ISO/IEC

ISO20000-1, ISO ISO27001, ISO9001,
Certifications ISO27001, ISO27001, TIA 942 ISO 27001, ISO 50001, 27001, ISO/IEC
27001, ISO 22301 ISO20000
ISO20000 ISO 18001 20000-1

• Designing • Remote hands • Incident

• Remote
• Construction • Audit Support management
management
Customer
• Operational • Shipping & - - • Security
• Troubleshooting
Support
Support receiving • Change
• Custom Installation
• Technical cleaning management
• Reporting

Sify, CTRLS and airtel have announced plans to build new data centers in india. Other players such as netmagic and reliance
also opened new facilities in 2018
• Netmagic opened two new data centers in
Sify CtrlS Airtel Mumbai and Bengaluru in late 2018

Mumbai • The new Bengaluru data center spans 250,000 sq. ft. of space and
the Mumbai site spans 300,000 sq. ft. The company plans to add
150 personnel to its current workforce of 1,270 as it looks to grow
Chennai further

• RCom opened a hyper-scale data center

Bengaluru in Mumbai during mid-2018

• The company also plans to expand connected data centers across key
Pune hubs in India, including Bengaluru, Hyderabad and Chennai

Delhi NCR • CtrlS is investing INR 2,000 Crore to set up

hyper-scale infrastructure

Hyderabad • The company is setting up Tier 4 facilities in Hyderabad,

Mumbai and Chennai, which will take its data center footprint to 5
million sq. ft. by 2020
Planned for 2020 & beyond Planned for 2019

Areas of Offense Areas of Defence

• ST Telemedia and Airtel have more number of data
• CtrlS has the least number of data centers present in
centers then Sify Technologies. Airtel is further planning
India compared to other service providers such as
to build 10 more data centers
Netmagic, Sify and Airtel (Nxtra Data)
• Players like CtrlS, Netmagic and Airtel claim to offer
• Netmagic’s Noida and Chennai data centers are on
uptime up to 99.995% for their data center services
leased premises, which can create security issues for
the customers • Netmagic leverages the capability of its parent
company NTT Communications, due to its improved
• RCom’s Bengaluru data center (Peenya) is facing
managed and professional services capabilities, to win
issues of accessibility and theft
more complex projects,
Sensitivity: Confidential Sources: Publically reports & whitepapers, company websites, primary interviews
BFSI – Cloud and Data Center Battle Card
Cloud Portfolio Comparison

Sify TATA Com. RCom CtrlS Netmagic Airtel

• Cloudinfinit AWS+ • • Private Cloud • Simplicloud (Public

IZO Private Cloud
(Public Cloud) • Cloud) •
• IZO Managed Virtual Private Public Cloud
IaaS • Cloudinfinit Private Cloud • Dedicated Private • Private Cloud
Cloud (Managed
(Private Cloud) • Ctrl4C (Public Cloud • Hybrid Cloud
services for AWS
• Cloudinfinit VPE cloud) • Virtual Private
and Azure)
Cloud

• Cloudinfinit • IZO Cloud

Enterprise (PaaS Containers • Enterprise Cloud • Offers DBaaS (MS
Partners PaaS model enabling • IZO Cloud (services are – SQL) within its
‘Bring your own Analytics divided into IaaS Public cloud • PaaS and SaaS
license for (managed services and PaaS model) offering through a hybrid
software) for Big Data) cloud
environment
No cloud Portfolio leveraging third-
• Oracle (only offers cloud • Delivers Sugar
SaaS CRM, Open EMM party cloud
Applications as No SaaS Portfolio connectivity via its - services
SaaS cloud X platform) and more in virtual
subscriptions appliance format

• Private Cloud :
Service Level 99.8% uptime for 99.95% to 99.995% • From 99.95% to • Up to 99.99%
- • Public Cloud
Agreement cloudinfinit services 99.99% uptime
(Ctrl4C) : 99.99%

Partners • AWS, Azure,

Microsoft Azure and Microsoft Azure and Doesn’t specifically Microsoft Azure and
Google and
Managed AWS AWS mention about AWS
Alibaba
Services managed and
connectivity for 3rd
AWS, Microsoft Azure AWS, Azure, Google, party cloud providers • Microsoft Azure
For Oracle, Alibaba, IBM, Only AWS
and Google and AWS
Connectivity Salesforce

Strategic Focus Areas of the Competitors

Digitization and government initiatives are compelling data center service providers to invest heavily in building new data
centers

Special focus on Cloud services Rise of Reliance Jio Airtel betting big on datacenters

Owing to the increasing demand for cloud

Post disrupting the consumer telecom Bharti Airtel is preparing for a bigger
services in India*, players like Netmagic
space, Reliance Jio is planning to step enterprise play through its new cloud and
and CtrlS have amplified their focus on
into the enterprise service segment data center strategy
cloud services
specially in cloud, IoT and network • As part of this strategy, Airtel’s wholly-
• Netmagic is planning to target services owned data center unit, Nxtra Data Ltd,
customers who are looking to adopt a
• Reliance Jio started testing public is planning to set up 10 new data
multi-cloud environment. It plans to
and private cloud within Reliance centers with four being planned
offer a one-stop solution for data
group companies immediately in Pune, Chennai, Mumbai
migration to private cloud, public cloud
• It plans to develop a state-of-the-art and Kolkata
and to third-party cloud such as AWS,
Google and Microsoft green field data center in Kolkata’s • The company is planning to tap the
upcoming 100-acre IT hub that will be opportunity that has arisen due to
• CtrlS is also heavily investing in
the biggest in the state the regulation on data localization
infrastructure to tap the growing Indian
cloud market
*Indian market to reach $4.1 Billion by 2020 – Forbes

Areas of Offense Areas of Defence

• CtrlS has limited experience supporting third-party
services such as AWS and Microsoft Azure
• ST Telemedia and CtrlS don’t have their own network
backbone. They largely depend upon their partners for
connectivity services, whereas Sify has a strong network
presence in India
• Tata Communications has discontinued its public cloud
service (Instacompute) as the company was not able
to compete with hyper scale cloud providers.
• Post the integration of Netmagic with NTT Communications,
it provides a comprehensive range of managed services
and connectivity to major cloud service providers
• Players like CtrlS, Netmagic and Airtel claim to offer
uptime of 99.99% for their cloud services
• Airtel is one of the empaneled partners of the state and
central governments’ cloud-based projects, which poses
serious competition to Sify in government deals
• Reliance Jio is likely to adopt an aggressive pricing
approach for its enterprise IT / cloud services similar to the
one for its consumer services (Source : Primary Interview)

Sensitivity: Confidential Sources: Publically reports & whitepapers, company websites, primary interviews