The data of Indian citizens and businesses can be stored safely even outside the country, and impeding the two-way flow of data might impact the competitive positioning of the IT services industry, says Harriet Green, chairman and CEO of IBM Asia Pacific.

In an interview with Fortune India, Green and Karan Bajwa, managing director of IBM India–the regional arm of the $80-billion global technology giant, stated that even if it became mandatory for companies to store data from India consumers or companies within the country, it was equipped to do so at its data centre in Chennai.

They also reaffirmed that IBM–which completes 25 years in the country this year after re-entering the Indian market in 1992, will continue to invest in India. The company wants to deepen its market in the country where it sells technology services centred around cloud computing, blockchain, and artificial intelligence to enterprises. India is among the 14 countries that comprise the Asia Pacific region for IBM.

Edited excerpts:

There has been a lot of discussion and debate around the possibility and feasibility of it becoming mandatory for data to be stored locally in India to prevent misuse. What is IBM’s position on this?

Harriet Green: The first thing to consider here is the citizens’ responsibility with what they do around their personal data. It is important that each individual understands that there are entire industries out there that sell, manipulate and use their data.

Then there is the enterprises’ responsibility on how they handle clients’ data. IBM’s position on this has always been that our clients’ data is their data. We don’t manipulate, sell or distort it. If they want us to help them with insights garnered from this data, then it has to be requested for in a very specific and formal way.

India generates around $170 billion of revenues, a little under 10% of its GDP, from its vibrant technology industry, which is a hub for IT services, outsourcing and insourcing. What we told the government at the India Data Summit that we held in New Delhi yesterday (September 11, 2018) was that the question is does India want to continue to play that kind of a role in the global IT industry. We totally share the need for data security and are prepared to help with our cyber resiliency capabilities, but we believe it is possible for India to continue to have a pragmatic, light-touch view that you can secure data even when it is moving around and stored in different hubs.

But if it was made mandatory to store data generated from India locally, how would that affect your business model?

Green: I was working in Europe earlier and leading IBM’s Internet of Things division out of the Munich headquarters. In Germany, not only did we have to store data within the country, but within the federal state of Bavaria (of which Munich is a part). And we were completely able to do that. We have over 60 data centres around the world, including here in India and that won't be a problem for IBM at all.

Karan Bajwa: This is not a government versus the technology industry issue. Everyone is learning as the industry approaches this from a business point of view and the government looks at it from a citizens’ rights and security standpoint.

If the government needs us to localise the data, we have a data centre in Chennai where we have a lot of capacity and we will build more if needed. The larger point is the free flow of data happens both ways and if that weren’t the case, India wouldn’t have the business process outsourcing and IT services industry that it has today.

Image : Karan Bajwa, managing director of IBM India

During IBM’s earnings calls India gets called out as a bright spot for the company, where business is growing. What are IBM’s future plans for India in that context?

Green: We have spent close to $37 billion over the last five years across major research and development of new capabilities including cloud, Watson (IBM’s artificial intelligence platform), and blockchain. These new capabilities now account for 50% of our global revenues after Q2 (April-June 2018) and the benefits of these investments extend to India as well. Whether it is the State Bank of India that wants to digitally connect with the country’s unbanked population or the BSE, which uses our blockchain and security capabilities, there are many such examples in India where we help man and machine work together.

While the advantages of new technologies like artificial intelligence and blockchain have been discussed at length, do you see Indian companies adopting them adequately?

Bajwa: We are going through an adoption chasm for something like artificial intelligence. We are at the same stage as where we were with respect to PCs and mobile phones to decades ago. People resisted change thinking it will lead to jobs being taken away. But the jobs have only increased despite increased computing.

In many fields like healthcare, professionals like doctors don’t like to be told what to do. But we have successfully demonstrated, through our association with Manipal Hospitals and now with Apollo Hospitals, that augmented intelligence can help professionals with decision-making.

We are also working on a pilot basis with one of India’s largest oil companies to help them take more informed decisions on crude purchase, assisted by our artificial intelligence capabilities that can scan through millions of data points to chart historical patterns and predict future trends.

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