India among top five growth markets, centre of global strategy for Red Hat

India has emerged as one of the top five growth markets globally for open-source solutions provider Red Hat and its parent company IBM, driven by the country's deep-rooted embrace of open-source architecture and a burgeoning talent pool, a top company executive said.

India is currently at the centre of the company's global strategy, both as a critical market and a hub for engineering excellence, Navtej Singh Bal, Vice President and General Manager, India and South Asia, Red Hat, noted.

"India, what started as a business from scratch, has actually scaled up nicely to be one of our fastest-growing businesses globally, and this is primarily because India has actually embraced open-source software at its core.


"I would say India would be, both for Red Hat and IBM, one of the top five growth markets globally," Bal said.

Addressing concerns regarding AI-induced job losses in the IT sector, Bal stated that while the technology will unlock efficiency gains of 2-5 per cent year-on-year, India's high economic growth rate is likely to offset potential employment risks.

"Given a high-growth rate market like ours, where our nominal growth rate might be north of 10 per cent, we should be able to consume the productivity benefits inside and yet be able to grow our employment base as well," he said.

He expects a shift in job roles, with data-crunching and managerial tasks being compressed in favour of expertise-oriented and decision-making roles that marry human intelligence with machine intelligence.

Red Hat, the enterprise open-source solutions company that IBM bought in 2019 for about USD 35 billion, has offices in Delhi, Mumbai, Pune, and Bengaluru.

Highlighting the role of open source in India's public technology stack, Bal pointed out that the central and state governments are heavily invested in open architectural principles to avoid being caught in proprietary technology stacks.

He noted that major digital public goods, including UPI, Aadhaar, and the passport system, are set to undergo modernisation as AI technology evolves.

"The focus of the government will be more in terms of infusing AI technology inside some of these applications and also making it more vernacular and user-friendly," he said, adding that "Made in India" sovereign AI stacks are also expected to emerge in the defence and paramilitary sectors.

Bal compared India's present technological environment to the global industry, emphasising the influence of capital expenditure prioritisation on infrastructure and the drive for autonomous architectures.

Indian IT services companies, which are involved in some of the large digital transformations globally, will also have to take that learning and redo their own processes and systems so that they can harness the power of these technologies better than anybody else in the world, he said, adding that global corporations will also look at India as a playground for new processes and plays, making it a global innovation hub.

Bal, however, also identified several bottlenecks currently hindering the transition of AI projects from the pilot stage to full-scale production.

He revealed that currently, only 30-40 per cent of total AI pilots reach the production stage.

"The moment you start thinking about production systems, you need the application to run with full reliability and full control. Not everybody has thought through their entire DevSecOps development pipeline," Bal explained.

He also cited the high cost of AI inferencing, talent scarcity, and organisational change management as significant hurdles.

He predicted that over the next year, enterprises will increasingly grapple with whether to budget for AI as operational expenditure or capital expenditure as they scale.