We don’t know if the founders of OpenAI, the 2015 start-up behind ChatGPT, asked the artificial intelligence chatbot: Where will we get the money and the technology to make our dream come true? ChatGPT would have remained silent: it had not yet built its database. In 2019, Microsoft answered by investing $1 billion in OpenAI and recently added $10 billion. OpenAI launched ChatGPT in November 2022. Microsoft agreed to build a supercomputer by linking thousands of Nvidia GPUs or graphics processing units on its Azure cloud computing platform, allowing OpenAI to train increasingly powerful models.
But not every start-up can secure the endorsement or collaboration of the world’s largest tech company. What’s the alternative? Opt for software as a service (SaaS), infrastructure as a service, or platform as a service. All these are now being introduced by large, established companies that have been around for decades.
Yotta Data Services, a realty major Hiranandani Group company, is building India’s largest—and possibly the world’s 10th largest—supercomputer. It has ordered over 16,000 H100 Tensor Core NVIDIA GPUs, the latest GPUs used by the likes of Microsoft and Oracle. “The US, China and many other countries are far ahead of us in AI. They are working feverishly on AI models, especially generative AI models,” says Sunil Gupta, Co-founder, MD & CEO of Yotta Data Services. Gupta says if you make any large-scale AI model for training, you need a huge amount of computing and network capacity, which, with the Yotta Supercomputer going, will be easily accessible to Indians.
Take boAt, one of India’s fastest-growing start-ups, which makes audio products and wearables. When boAt started to scale, it opted for a proven ERP system by SAP to eliminate manual compilation of reports and get real-time visibility of its business. It uses SAP S/4HANA Cloud through RISE, a web-based SaaS.
“When you are a start-up, you can manage most of the things, most of the controls and delegations of the authority because you are a small team. But when you grow into an organisation, you must standardise and put things in process. Or you cannot grow,” says Sameer Mehta, Co-founder, CEO & Co-founder of boAt.
Over 74 per cent of start-ups in India have reported direct benefits from implementing enterprise applications, according to a recent research paper titled ‘Driving the next phase of sustainable growth for Indian Start-ups in 2023 and Beyond’. The paper, by SAP and Zinnov Digital, studied 115 start-ups. The report said 24 per cent of start-ups believe they can attract investors only if they have a mature business model that is driven by technology and is scaleable. About 68 per cent reported strong growth in revenue after adopting enterprise technology solutions, leading to better valuations.
SAP, which has been working with large enterprises for 51 years to figure out technology solutions in their business operations, is offering a ‘Grow with SAP’ to start-ups to help them scale. “When we started working with the start-ups, we understood that the problem statements they (start-ups) are solving are similar. The scale and the cost structures are a little different. But the concerns enterprises have are not different than when it comes to start-ups,” says Sanket Deodhar, Vice President of Digital Natives & Start-ups at SAP India.
Today, over 50 unicorns in India use SAP solutions. Then, many soonicorns (“soon-to-be” unicorns) are adopting SAP’s solutions. The company allows start-ups to pick and choose the solutions they want to use, add solutions as they scale, drop or retire those that are no longer useful, and pay for what they use.
One such start-up is WayCool Foods, an end-to-end agritech firm based in Chennai that procures fruits, vegetables, staples and dairy from farmers and manages the supply chain to serve B2B customers. Four years into its operations, WayCool Foods had built proof of concept and was looking to expand beyond Chennai and Bengaluru, especially into small towns. The solutions it was looking for would have required 50-60 different applications. Instead, it opted for SAP’s S4/HANA end-to-end ERP solution as a foundation and on top of that, it built its layer of proprietary solutions using Censa, its tech arm.
“We had to reconcile between 40-50 data points from different places every month to generate the financial statements. As we were going to scale significantly, that would not be practical. So, we went live on SAP on April 1, 2021, and in two years after that, we have grown; we have grown 8x,” says Censa CEO Avinash Kasinathan.
Start-ups are also touchy about cost-effectiveness and don’t mind an initial investment that brings long-term gains in operational efficiency, fewer manual errors, and optimised use of resources.
PayNext, which offers end-to-end digital and automated payment solutions to banks such as RBL Bank, YES Bank, Federal Bank, and South Indian Bank, and payment acceptance solutions for businesses with PoS, QR-code, scan and pay, etc., had hosted its digital transaction business application on other hyperscalers. But when it diversified its digital services, the setup became too costly and complex to manage. By migrating the workload to Oracle Cloud Infrastructure, PayNext increased application performance, availability, and scaleability. “We were afraid of Oracle being a big brand name. We were not sure at what price they would come to us. But they understood the challenges of a fintech company and addressed the cost for us,” says MD Maulik Joshi.
Shabeer K Mohamed, senior sales director at Oracle, says, “Unlike other digital natives or start-ups, most of them are pressed for time because you have an idea—you want to get that into the market, you need to get that onto your customers, whether it’s B2B or B2C in the fastest possible time.” Oracle has a dedicated framework or offering designed to give these digital natives and startups the capability to scale their offerings quickly, he says.
For start-ups, IT is mission-critical, requiring robust protection against cybersecurity threats that continue to evolve and adapt. And as organisations embrace digital initiatives, the exposure of applications to potential threats increases. “The expanding security perimeter, driven by the growing volume of data, devices, users, and applications, intensifies the challenge. Simultaneously, the scarcity of required security, risk, and compliance skills adds to the complexity faced by IT teams, consuming valuable work hours,” says Bhawna Agarwal, Senior Director – Compute and Digital Sales, HPE India.
To address these challenges, startups are turning to managed services such as HPE Services, which allow them to offload the day-to-day burden of security management. boAt’s Mehta, who has grown a start-up into a unicorn, says, “Any company that wants to grow has no option but to have technology. Whether it be on product, marketing, or back end, otherwise, your manpower costs will grow, and systems will not work, so without technology, nothing will work.”
Should you, as a start-up looking to scale, build in-house solutions or go for experts offering solutions? Ask ChatGPT. Or just do what boAt did.
@nidhisingal