Raju Vegesna: Being the catalyst of change, Sify version 3.0

Date:   Wednesday , August 01, 2012

When Raju Vegesna took over as the Chairman of the Board of NASDAQ-listed Sify Technologies in 2005, it was the beginning of a new era for the company. Founded in the late 1990s, Sify had been among India’s earliest Internet players and the nation’s first private ISP. It had built a powerful brand with a strong consumer franchise, but was struggling to find its way in an increasingly competitive Indian market. But in a short span of six years, Sify Technologies has emerged as an enterprise-focused company with a diverse portfolio of network services, IT services, and software services.

As Raju fondly recalls, it has been a hectic journey for Sify as it upgraded from "version 1.0" to "version 2.0", but this hasn't deterred him from recently launching what he refers to as "Sify 3.0". This next era will have Sify focusing on managed services, taking advantage of the convergence of telecom and IT services, and leveraging Sify's strong technical and operational capabilities that it built in the 2.0 era. The plan for the next five years is to emerge as an end-to-end solutions provider for both large enterprises and the growing SME market, earning the confidence of the CIOs by better understanding their business needs and designing its offers around those needs.

Given his past track record of churning out three successful startups, with one of them sold for more than a billion dollars, his team knows that when Raju sets his mind to something, he is sure to deliver on his promise.

From version 1.0 to 2.0: The Revamp

Since its founding years, Sify had operated with a single minded focus on being India's pioneering Internet Service Provider (ISP). The company had caught the imagination of the public in the late 90's by breaking into the unexplored Internet field and becoming a trend-setting leader in this nascent market. By 2005, this was no longer a compelling USP. Despite being one of the first players in the ISP market, late entrants provided stiff competition in the consumer market. Many of these players were mobile operators, with a natural advantage of scale and the ability to leverage huge investments. When Raju took charge, he knew that the company had to explore new areas of business if they were to remain relevant.

With his background in running successful IT businesses in the US, Raju immediately recognized that enterprise customers in India were under-served. They could not enjoy the same quality, consistency, and breadth of services that he was able to avail of when he was building 3 companies from scratch. He identified Network services, IT Services, and Software services to propel Sify's future growth. For Raju, the end goal was to make Sify one of the best ICT players in India, and then begin to build up a global footprint. But to make this happen, the company had to make its presence felt in the enterprise segment.

"Sify 1.0 was all about consumer business. Sify 2.0 was about taking our high-tech, low-cost orientation into the enterprise sector," Raju recalls. The company started building a more robust network and designing services that specifically catered to enterprises. With his background in providing microchips to the world’s largest IT companies, Raju also intuitively understood the importance of quality, so he invested significantly in building the network in a way that enables Sify to provide SLAs for every customer circuit, even those in Tier 3 and Tier 4 cities. Today, Sify's network service is available in more than 800 cities, and the plan is to grow this to 1,000 within the next quarter. Part of the plan was also to set up state-of-the-art Data Centers and invest in a fully-owned software subsidiary, Sify Software Ltd. As Raju continued to invest and saw the successful rollout of many new enterprise products, Sify's revenue mix began to change. Within 5 years, Sify was earning more than 90% of its revenue from enterprise customers.

"We are the pioneers of the Tier III Data Centers in the country. In the year 2000, we launched our first Tier III data center in Vashi. In Sify 2.0, we built data centers in Mumbai, Chennai and Bangalore. And Sify's Data Centers have averaged over 99.99% uptime since inception – nobody in India can boast such continuously high performance levels over such an extended period of time," claims Raju, very proudly. Since then, Sify has built two new Data Centers in Noida and Mumbai.

But this was just the beginning.

In a bid to realize its vision as an ICT player, the company decided to invest in a submarine cable landing station. The Cable Landing Station set up in Versova, Mumbai, earlier this year has taken shape in less than one year. Talking about it, Raju explains how this fits into the company's overall strategy. "You may compare a cable landing station to a shipyard. With the opening of this landing station, we have already attracted two new sub-sea cable systems, GBI and MENA, to land in India. And we can accommodate up to four cable systems," he explains. With a capacity of up to 10 terabits per second, these cable systems are designed to accommodate the rapid growth in voice and rich media traffic between India and the Middle East, Africa, and European markets.

The other initiative that is close to Raju's heart is the cloud computing business. Talking about the company's cloud model, Raju says, "Our prediction is, in the next five years, cloud services will take over more than 50 percent of the total IT spend globally. With our ICT vision, and our broad portfolio of services, we hope to play a big role in the lives of growing businesses in India. We are not just talking of cloud services for large enterprises, but also for small and medium enterprises, who will use our cloud services to level the playing field with their larger competitors."

With the increasing penetration within the enterprise segment, the company made a conscious decision to integrate its consumer businesses like cyber cafes, broadband, and the Sify.com portal, and changed its focus in this segment to give enterprise-class support for startups, SMEs and the SOHOs (Small Office and Home Office), which Raju believes will contribute to the next economic miracle in India's growth story. You can see the passion in his eyes when Raju asserts, "Indian SMEs can compete on the global stage, but they need to leverage IT to E-enable their business models. India's future is not about labor arbitrage, it is about unlocking the entrepreneurial energy of India's many successful SMEs, unleashing it through world-class IT tools. This is a very personal mission for me, and it is one that Sify is helping the country to realize."

Mission 3.0: A 3600 Enterprise Offering

Sify has focused so far on services to the Enterprise sector, but Raju wants to move the company up the value chain by devising solutions for its customers rather than being just another IT infrastructure player. He also wants to take it global. The company already has offices in the U.S., the UK, Dubai and a recent one in Singapore.

"We have the longest track record of providing IP-based data services over a Tier I telecom backbone infrastructure in India. Our core competence comes from our technologies and accumulated skills," explains Raju. "We are still going to be India-centric and by that, it means knowing the Indian market inside out. It also means servicing all of India, not just the top cities. Reach is a very important advantage for us". Then he quickly adds, "That doesn't mean that our global initiatives are of lesser importance, but I happen to believe that if you can overcome the challenges of a cost-sensitive market with inconsistent infrastructure like India, you can succeed anywhere!"

With service offerings in Network, IT Services and Software, Sify is now present in almost all the spheres of the ICT eco system. Sify is also India's first enterprise managed services provider to launch a dedicated Security Operations Center to deliver managed security services. In readying itself for Sify 3.0, Sify has taken on a radically different approach. "In the Sify 3.0 era," Raju says, "the mindset has to be about being relevant to the customer and their IT infrastructure." This change in Sify’s outlook compliments the demands of decision-makers in enterprises, most importantly the CIO.

"The CIO is not anymore just an IT manager; the future CIO is a business enabler. We are tailoring our company to complement his new responsibilities," explains Raju. In the early days, perhaps the only worry for a CIO was 'how is he going to provide connectivity', but today, things have taken a drastic turn. Organizations are expecting the CIOs to provide real time data on how the businesses are doing, and helping companies make sense of the massive amount of information available in the era of 'Big Data'. "This is where we want to step in. We want to be the best support structure for the CIOs, and aid him by providing the tools for him to be successful," says Raju. This is what is driving Sify towards Data Analytics and Business Intelligence.

"My whole team understands this vision and is focused on it. It's just that we have to get better and better. But the most important thing is we enjoy accepting challenges. Our customers' job is getting harder every day – we need to figure out ways to make it easier," he says.

So what keeps Raju ticking? "Discipline and Quality with Commitment," he says, a lesson he learnt very young from his grandfather. His grandfather instilled in him that it is the commitment to deliver which is most important. "As long as you fulfill your commitments, I believe you will be successful. Whether it is the people with whom you are associated in the company, or in your life, I think they will respect you for your commitment," Raju says. "That is the way you brand yourself and my brand is 'If Raju commits, it will be delivered!"

The Road Ahead

Raju believes that if one has a clear vision and a disciplined execution plan, success will follow. "But that's not enough." Raju reminds us, "A good team is essential. Promises made are kept by people, so it is people that matter."

Raju spends much of his time talent-hunting. He is looking to take onboard people who are aligned, understand and want to be a part of this new era. "It's not just the technology, but the way people look at using those products that is going to be different. That is the beauty of IT. Every five or six years you need to relook at the company with a new vision and execution. That is the way I see the growth, a process of continuous renewal," adds Raju.

Raju Vegesna: The Formative years

Raju Vegesna, may have shot to prominence in the Indian business scenario only in the last few years, but back in the Valley, he is one of the most prominent Indian entrepreneurs. Having lived in the U.S. since he was a student, when the opportunity to lead Sify beckoned, he grabbed the chance to be back in India to renew his ties with his homeland.

He grew up in coastal Andhra Pradesh where his grandfather was both a powerful personality in the village and a pivotal figure in Raju’s life. “He was a farmer who knew hunger but worked hard and did so much for his family and the village,” he says. “He enjoyed the respect of the entire village. He was an intellectual. I used to watch the way he talked to people and how he got things done. He won the best farmer award in the district sometime in the 1970s. It was he who taught me that to succeed; you have to put your heart into things.”

Raju says that the environment people operate in is very important in moulding their outlook. His childhood environment was supportive and guided by his grandfather. Moving to the U.S. after his graduation from Bangalore University catapulted him into an environment that was all about excelling. While earning his Master’s degree in Computer Engineering at Wayne State University, Raju took a course on the Motorola 68000. Inspired, he decided to create a software simulation of the 68000 for his thesis and called a senior Motorola engineering manager for help.

Impressed with what he saw, the Motorola manager offered him a position with the company. He accepted and went on to write the microcode for the 68030 and the specifications for the 68040. Raju’s mentor at Motorola, Roger Ross, who was known for his ability to spot talent, invited him to be chief architect for Ross Technology, Inc., a start-up that developed 32-bit Sparc processors. At Ross Technology, Raju was integral to the development of the first-generation HyperSparc, which Sun Microsystems, Inc. chose as the CPU heart of its first multiprocessing computer.

Around this period, Raju realized it was time for him to take the next step, to create not just technology, but to build a technology business. He left Ross Technology in 1994 to start up a leading-edge technology company, ServerWorks Corporation.

In 2001, seven years after its formation, ServerWorks was acquired by Broadcom Corporation. Two years later, in 2003, Raju founded ServerEngines LLC that in less than a decade went on to become an industry leader in network and storage convergence products that grew rapidly with significant operations in California, Texas and India. ServerEngines was acquired in August, 2010, by Emulex.

As someone who has built three successful start-ups, he says that he realized very early on in his career that one person cannot do everything – you need to build a good team. “People are the most important asset of any organization and the best way to motivate them into doing good work is to communicate transparently with them.”

“I always tell my kids that people are not computers, you need a different approach for each human being. You can’t duplicate things. Since we all have faults and good points, you can either look at people and focus on their negative qualities as the starting point or you can focus on the positive, and that is what I always do, start with the positives,” he says.

Having seen lots of managers and lots of different management styles, Raju says that in the end, it all boils down to building the people in an organization, besides leadership and vision.