Micro Focus: Compliance burden on Indian organizations could be massive

Micro Focus is a management software and consultancy firm and into enterprise application and integration. Here CyberMedia Managing Editor Thomas George talks to Asia Pacific Japan President Stephen McNulty and India country director Saurabh Saxena about HPE’s Software Division acquisition, the R&D scene and compliance issues.

Q: What is the scene post-acquisition of Hewlett Packard Enterprise Software Division? How did the integration go? Where are we today?

Stephen McNulty: We are a US$4 billion company and we have invested a lot. From the Micro Focus side of the family, what we have done from the last year is we have started to integrate some of Micro Focus products to HPE software products. We have done a massive amount of investment and delivered over 500 new product releases, products or integrated products from either one side or both.

Q: Is it correct to say that Micro Focus has completed the integration and all its transformation assets in one workflow of cloud readiness?

Stephen McNulty: No. Micro Focus has grown a lot after the acquisition. We had different ERP Systems in Micro Focus and we had just embarked on our single unified ERP project when we announced the acquisition. So, we kept everything on hold. When we came together on Day 1, there were a few systems from Micro Focus and one system from HPE legacy.

One of the things that we decided to do was embark on a project to build everything into just one system which goes live on November 1. We are 9/10th of the way there. If you’re talking about the cloud readiness of the products that we actually sell, the answer is: Some products are designed to run on cloud, some aren’t. There are many companies into financial services, healthcare and airlines which are still running mainframes.

We have taken the mainframe code (running on AWS, Azure) so people can do DevOps on mainframes. DevOps is about the fastest speed. There’s nothing speedy about mainframe other than the batch processing. We lift and shift code of a mainframe, put on data, put to the DevOps and then put it back into the mainframe.

Q: How is the APJ market performing for you?

Stephen McNulty: The region (including maturing economies like India) is very profitable for us. APJ is somewhat similar to some parts of Europe, which are very matured economies. We have the breadth of all the established companies and economies. Then we have got the absolute explosion of new technologies.

For example, smart cities. If you try to take a city and make it smart; you are taking millions and millions of existing systems and trying to make them smart. Here, you have got cities and countries including Indonesia and China. We have a phenomenal opportunity here to leverage what we do best: Loading, deploying, exporting and securing applications; helping different cities and governments to become smart and safe.

Q: Which verticals do you see as having good traction within the country?

Saurabh Saxena: Government public sector is one of our fastest-growing verticals. We cut across banking, finance and telecom service providers. We have got a lot of play at IT/ITes. India is the 6th largest software service provider, but we also got Tier 2-3 service providers who are growing and becoming complex. We also work with retail and manufacturing sectors. Globally also, these are the verticals that we focus on.

Under the digital India initiative, we have talked about smart cities. We have a lot of refreshers happening: Like state data centres (SDC). So, there’s a lot of work happening there, and the scale is immense as we are looking at all the states with 100 smart cities.

Telecom is going through a phase of consolidation—it’s a highly volatile segment right now. If you look at it, there are a billion plus wireless phone subscribers and half a billion plus internet subscribers. If you look at the scaling complexity, that’s where we come against challenges. That’s where our solutions are perfectly positioned.

Q: What’s the R&D footprint in India.

Saurabh Saxena: Almost 18-20% of Micro Focus’ workforce is in India. One third of R&D product engineering is based out of the country. A lot of what we talked about in security in terms of Identity Access Management, Endpoint management is done end-to-end here. A lot of IT Operations Management—in terms of Hybrid Cloud Management, Network Operations Management, Data Centre Automation, etc. is all done out of here.

Additionally, data protection backup and Information Management is done out of here, end-to-end. We get engineers to interface with many of our customers. They get to the ground, to the field and try to understand the realities and complexities that the Indian customers face. Because it’s now as complex and scalable as what you see in the rest of the world, we leverage the huge presence in the country, and we are just growing. A lot of what we are doing in containers is happening out of India. We are leading the way there as well.

Q: Emerging regularities and compliance issues are increasing. There are so many geographies. How do you help companies comply?

Stephen McNulty: This is a massive opportunity for us. People talk about GDPR (General Data Protection Regulation), which has made a lot of news recently. Outside of Europe, what we are finding now is that most countries have already implemented their own data privacy laws.

So in India, there have been are data privacy laws in the past. However things are changing. You have got new laws that will be in effect soon. If they are similar to GDPR, the compliance burden on organizations will be massive. First of all, you have got to find the information and that’s difficult. Like a data centre, dropbox etc information is everywhere and in different formats. You have got to find it and then classify whether the information is structured or unstructured. You have got to keep policies in place around who can access it. Is it encrypted? Can it be stored?

In Singapore, in some cases, you can validate someone using the national ID. Citizens’ partial information being accessed is creating a major heart ache in in that country. Singapore has one number—the national ID no. —which is associated with everything—driving license, ticket bookings, etc. The citizens have the right to ask a company what data they have on them, they have to be given it.

Think of the burden. Data protection, data privacy... If something goes wrong, someone will lose their job. There are also the fines, loss of face, market capitalization drop, customer dissatisfaction etc. So for us, when we talk about information management and compliance in the context of security, we actually have our information and security practices in place. You have to secure everything, including infrastructure. Ultimately, it’s the information through the infrastructure that people want. We have got probably the most comprehensive and massive portfolio.

Q: Micro Focus has seen a decline in revenues in the last two years. So, are we seeing an upswing now?

Stephen McNulty: The first three to four months were quite difficult for us. We had some the complexities which we recognized and started working on. We have now fixed ourselves and are heading in the right direction. Our share prices have recovered.

Q: Going forward, do we see a good increase in SaaS revenue?

Stephen McNulty: SaaS is just a way of delivering cloud. People think SaaS is cheaper, public cloud is cheaper. Later they realize it’s not cheap as they thought. A large part of our solutions are able to be consumed primarily on cloud model. We have some solutions that we provide as SaaS, but what we would rather do is, provide cloud-friendly solutions to our partners. They can offer their customers SaaS or whichever method they want. We are agnostic in our approach.

Saurabh Saxena: We have a huge play on added security services offerings. We have got several partners and testing service providers. What we do is give flexibility in the way technology and our solutions can be delivered and consumed. If you are monitoring servers and the customer requires agent-base on premise and the agent has to be installed, it’s not the way out.

If a large ITes organization split across the globe wants to do deep discovery of the assets, the only way it’s possible is to put agents on all the machines that are there. This means there is no way SaaS can help. There has to be on premise agent to be deployed.

It depends upon what level, what depth of solution, and financial requirements of the organization: CapEx and OpEx. There are organizations that are heavy on CapEx for a year and then OpEx thereafter. So, for us, it’s all about flexibility and to be able to deliver solutions in a way one would want to consume it. In the end, it’s the Hybrid IT ecosystem which is complex, and hence, flexibility and agility are both key for us.