Sridhar Reddy – A Self Disruptive Entrepreneur

Sridhar’s Empire: CtrlS, Cloud4C, Pioneer, Iconic || 1600 employees || Cloud4C Rs.250 crores revenues || 26 worldwide locations

Family: Two sons || Sriram 10th || Kris 5th

Sridhar Reddy is a pioneer in establishing the first ISP called ‘Pioneer Internet’ in Hyderabad. He is also a pioneer in building a data centre right in the middle of Hyderabad’s HITEC City during the recession of 2008. No wonder his first company was named Pioneer. The view of the road to Inorbit from his 7th floor suite at Pioneer towers is spectacular. As the road transformed from an open space to skyscrapers in the last decade, Sridhar transformed Pioneer from a single Indian entity to a global conglomerate of four companies in the space of Data centres, infrastructure and IT services.

When complacency hits a business, it gets disrupted. Sridhar knows this well. He never lets himself nor his team to settle for the laurels of success. He keeps disrupting himself to keep ahead of his competition. He’s made at least 200.innovations till date.

Earlier days
Sridhar hails from Bhuvangir. After studying in telugu medium till high school, he graduated as a civil engineer from CBIT. His dad had a small drilling business. As a teenager, Sridhar used to go around with his dad to the borewell sites. While his friends had fun during summer breaks, Sridhar got busy helping his dad.

“I have never worked as an employee. At the age of 19, I hired my first employee. I started building software applications when I was in the fourth year of my engineering. I didn’t know much of programming so I hired programmers.”, said Sridhar.

ISP to ERP for ISPs
In the early 2000s, Pioneer was hit hard with receivables and they almost went bankrupt. Despite hardships, Sridhar never let go off the staff. He moved 75% of the staff to IT consulting for the Indian biggies. Slowly he turned the business around. He did ERP for ISPs all in a box called Allauddin with minimal implementation time. Very soon he conquered 80% of the ERP market for ISPs.

Birth of CtrlS
Between 2002-2007, internet bandwidth prices started to crash. Pioneer pivoted from ISP services to hosting services. It could never compete with the rivals as they had deep pockets. Sridhar sensed an opportunity at the onset of rapid growth of industries catering to Fibre and high connectivity. He started CtrlS data centres as the next logical profression.

“When data centre businesses worldwide were in doldrums, I got excited and ventured into data centres. That is the beginning of CtrlS.”, said Sridhar. During 2003 to 2005, data centres were mostly used for website businesses. Sridhar could predict that big enterprises will eventually move up the chain to data centres as higher bandwidth became more accessible. CtrlS in action
Funding challenges
Setting up a data centre requires huge capital. It was the time when banks never gave loans to data centres. Luckily Sridhar had built a good credit history with banks over years. He also built a great relation with SBI, as they had been his banker. He approached SBI for a capital expenditure loan of Rs. 17 crores. SBI took eight months to approve, during which they hired IIT Chennai for doing the due diligence and audit on the project.

Getting the second power line
Right of way, two substation access, getting the second power line are all part of the many prerequisites for a tier 4 certification. Sridhar was ready to invest into this at any cost.

“I knew getting a special GO is important. We tried to convince the government. This was in 2008. I prepared a three-page document with only 30 hours of preparation for just an eight minutes meeting. Two minutes for describing a data centre and ‘tier 4’. Talked about the value add in having it in India. I figured it would help the distribution company. Two lines means no loss in revenues for them when a power line is down. The IAS officer agreed. Then we moved onto electrical engineers. They suspected I was doing a scam to steal power. It took me 18 months to convince and get special meters and get them tested. All of this is at my own cost.”, detailed Sridhar.

Customer acquisition
Convincing Indian customers was another challenge. Tata, Reliance and Airtel were CtrlS’s competitors. These top brands invested massively on their own Fibre. How could CtrlS get customers? No capital. No data centres. No customers. Sridhar striving on challenging and getting customers on board was no different.

“I came to know a big bell of the west was searching for a data centre provider to setup a global node in Hyderabad. I reached out to SKM, S Krishna Murthy of ESKAYEM who built Citi Bank’s data centre. He shared some of his best designs with me. The telecom giant looked up my record and they heard good things from my customers and bankers. The drawings we submitted were the best. All the big brands already in this space come with lot of inflexible terms. We are agile to do whatever customer wants. I wanted the prospect to be highly critical of our design and work. We picked the best practices from around the world for this telecom operator.”, explained Sridhar.

Today, 15 of the global fortune 100 are Sridhar’s clients. 30 of ET’s top 100 too. Top ones of any Indian industry vertical are their clients.

Secret Sauce
CtrlS provides tier 4 data centre services at the same cost of tier 3. Clients trust CtrlS because they are the only Tier 4 certified data centre in India. CtrlS is extremely energy efficient. They spend 20% less energy than their competition.

Tier 4 certification mandates a minimum of two power lines. There are dozens of such other stringent requirements that one needs to comply. European and US authority, Uptime and TIA942 respectively, have set these standards and they have certified CtrlS.

Today, CtrlS has four Data centres. Bombay data centre is 150,000 sft in size. The one in Bangalore is 180,000 sft in size. Their second data centre in Hyderabad is coming up next month in Gachibowli. Sridhar is planning to launch a hyper scale data centre with the consumption of 100 MW and above in Mumbai soon.

Cloud4C, fastest Hyderabad Startup
Sridhar started Cloud4C in 2014 as a community-cloud that works as disaster recovery for ultra large enterprises. Within two years, Cloud4C has grown to Rs. 250 crore run rate with its presence in 13 countries.

Banks can’t outsource to public clouds. Critical sectors for very large work load don’t have a cloud as they are restricted by regulatory and governance policies. How about those companies that need 20TB kind of cloud? One of the top three telecom companies, when they need very large instance, where do they go?

Cloud4C is in 26 physical locations worldwide. Sridhar aims to be present in 30 countries soon.

Cloud4C versus CtrlS
CtrlS is for co-location and private cloud (managed service). Cloud4C is vertical specific.”Cloud for Banking sector needs twenty plus tools to maintain their security. File and data integrity, access integrity and integration of all. Then the need for RBI compliance. This is like Z category security for an enterprise.”, said Sridhar.

Partnership with SAP
ERP of large enterprises need big control. SAP4Hana and Cloud4C are good partners worldwide. Cloud4C is planning a big launch later this month at Bangalore.

Rapid fire with Sridhar
Bhat) Describe yourself in three words
Sridhar) Entrepreneur, ambitious and innovator

Bhat) What would be your lifelong dream?
Sridhar) Be on top of the world every day. I want the biggest net promoter customer (NPS) in the services industry. We are targeting to reach 50+for our next year from our 35+ current score. I have one permanent dedicated employee to work with customer satisfaction. This resource gets daily feedback from the customers.

Bhat) If you are stranded in an island, what two things would you want with you?
Sridhar) Water. I think of what I can do or add value even if I were alone in that island.

Bhat) What compliments do people give you most?
Sridhar) People say I am honest and they trust me.

Bhat) What have you done that you are most proud of?
Sridhar) My life is filled with them. I feel proud about myself every day with something that I achieve. I challenge everything conventional.

Bhat) Leader or follower?
Sridhar) Servant leader. Our organization chart is a reverse pyramid. I notice that this is not scalable. We have an aggregate 1600 workforce in all the four companies.

Bhat) Define happiness?
Sridhar) State of mind. You are genuinely on top of the world when you are happy. Customer delight is the biggest factor on my happiness. I am super truthful.

Bhat) When was the last time you laughed out loud?
Sridhar) All the time.

Bhat) Four things you would change about yourself?
Sridhar)
1) Spend more time in empathizing with people. Instead of running meeting after meetings.
2) Wish the people around instead of being on phone as I walk in the building.
3) improve the presence of mind a bit more. As my mind is continuously solving problems.
4) Spend more time on my passions like Scuba, Art of Living and Vedantha academy.

Bhat) What is the first thing you think of in the morning?
Sridhar) Just start working.

Bhat) What will you never do?
Sridhar) Let down a customer.

Bhat) What did instil this customer consciousness in you?
Sridhar) I read “Good to Great” by Jim Collins. Instead of working for money, I started working for greatness. My days are fun-filled now. I have become an addict of it. Customer delight is my newfound drug.

Bhat) The next big thing?
Sridhar) I want to establish one more company this time in impact space. The next big thing according to me is a symbiosis of many emerging technologies. If I have time, I will connect emerging technology dots and start dreaming to envision the future. Opportunities will show up in tons.

Bhat) What do you fear the most?
Sridhar) I have disrupted many and someone may disrupt me in future. Be on continues watch guard. I disrupted myself four times in last eight years. I changed ourselves constantly with the state of the art and future prediction. I could predict three disruptions in my industry before they could happen. I discouraged top three performing products and killed those products. If we didn’t do, we would have gone bankrupt. You never like to settle.

Bhat) What frustrates you?
Sridhar) Not getting customer delight. I worked two months in the knock room all by myself.

Bhat) What do you do off work?
Sridhar) My week starts on Sunday evening. I stay away from golf as I know I can get addicted to it. I do motor biking and I do cycling. I do biking in one of the Himalayan ranges or mountains every few months. I got two motor bikes.

Bhat) What is your lifetime goal?
Sridhar) I see it as a journey. Every other year I start a new division or a new company. I have four companies now.

Written by Bhat Dittakavi of Variance.AI on “Sridhar Reddy: A Self-Disruptive Entrepreneur” on 2nd Feb 2018 as part of TiE Today Series, a TiE Hyderabad initiative.