Can AI-As-A-Service Be A Viable Model For Indian Service Providers?

For a country that built its reputation on outsourcing, and now data analytics outsourcing, can India emerge as a service provider in the AI segment? According to Allied Market Research, Asia Pacific region, led by India and China, is the top provider of data analytics outsourcing. Some of the contributing factors are highly-skilled workforce, low labour costs and efficient technology infrastructure. Leading analytics vendors from India include Fractal Analytics, Mu Sigma, TCS, Wipro among others. However, can India make a play in the AI sector dominated by Google, Microsoft, Amazon and Facebook?  

AI technologies got a major boost in the last three to four years when Google open-sourced TensorFlow ML platform for developers and now Google’s AutoML, helps developer build a custom AI model. Close on the heels of Google, Microsoft open-sourced the Cognitive Toolkit in 2016. Meanwhile, Amazon offers MX Net, their open sourced deep learning software and last year Facebook open-sourced popular deep learning framework Caffe2. One of the major upsides of open source tools is that it allows SMBs to increase their development bandwidth with these services.


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AI/ML Solutions From Big Tech Firms Improve The Workflow

As digital natives like Google, Microsoft, Amazon, Uber and Facebook rush to make AI tools available to the developer community, we are seeing a high level of engagement from non-software companies that are deploying AI/ML technology in-house. Another point is that of the growing impact of cloud computing in driving open source AI tools forward. AI capabilities delivered in the cloud are driving the cost down for AI-aware organizations and SMBs.

Again, the AI software space is turning out to be a three-horse race with AWS, Google and Microsoft dominating the open source arena with their proprietary tools. From a cost point of view, AI/ML software is changing the enterprise workflow, reducing labour costs (organizations don’t have to invest in data science talent) and improving accuracy and efficiency.  

Can Indian Enterprises Toe The Line Of Big Tech Giants?

Leading cloud providers like AWS, Google and Microsoft Azure offer managed versions of open source projects – this in turn leads to lock-in opportunities for cloud providers. Hence, leading cloud providers are able to profit from open source technologies since they promise the advantage of carrying out AI workloads and cloud workloads. While Google offers a solid suite of AI products, AWS and Azure are giving a tough fight with releases that can match Google’s prowess.  

So, can Indian enterprises rival Amazon, Google or Microsoft in AI wars? Well, Indian IT bellwethers have pivoted from traditional business models to digital and companies have acknowledged that new growth areas lie in cloud, AI and automation. Over the last three years, Indian IT companies have changed their business model to increase in the popularity of cloud-based solutions, leading to production environments migrating to the cloud.

  • Given that AI wars are being fought in the cloud, Indian companies are not pure-play cloud companies, offering best in class managed services.
  • Peter Bendor-Samuel, CEO, Everest Group, reportedly shared that Indian players lag behind MNCs in digital services which in turn reduces their competitiveness. While Indian IT bellwethers have changed their business model, it isn’t clear whether they can emerge as winners in emergent technologies.
  • Indian IT bellwethers Wipro, TCS and Infosys are cashing on their automation platforms to win a market share. But that is just one part of the AI puzzle, as these automation platforms will only reduce repetitive tasks, thereby improving efficiency and reducing legacy spending.
  • Traditional IT companies lack a deep bench of AI researchers and talent.
  • Legacy Indian enterprises have not traditionally been product driven like SAP, Microsoft, Cisco or Oracle. For global product companies, the next evolution was entering into cloud computing to stay competitive and add another major revenue stream
  • Meanwhile, Indian IT companies largely offer cloud based, on-premise applications and are only now reinventing themselves as platform-oriented companies.
  • Infosys’s Nia and Wipro’s Holmes are positioned as AI platforms that act as business enablers and can create more value and drive efficiency in business processes
  • Competing in the AI service area alongside digital natives like Google, Amazon would be a tall order

Can Indian Startups Take On Larger Incumbents?

There is a phenomenal growth in vertical AI Indian startups providing that have identified industry specific pain points and have commoditised ML and AI capabilities. India is at a cusp where it can emerge as a leader in big data, analytics and provider of AI-based applications.

  • But for startups to succeed and close the gap with leading enterprises, their AI solution would have to focus on vertical, industry specific problems
  • Besides, they can only close the sales gap if the AI software increases productivity and also simplifies the overall workflow.
  • According to Texas based early stage VC firm, Mercury Fund, the best algorithm does not guarantee a winner in this space, but it is the best full stack solution that counts.

So far, Indian startups are winning the race in NLP capabilities given the demand for chatbots, especially in the BFSI sector. Some of the top players in NLP space are, and Senseforth which have developed solutions for leading banks.  However, it is hard to quantify the kind of business value generated by AI/ML startups in India.


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Richa Bhatia
Richa Bhatia is a seasoned journalist with six-years experience in reportage and news coverage and has had stints at Times of India and The Indian Express. She is an avid reader, mum to a feisty two-year-old and loves writing about the next-gen technology that is shaping our world.

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