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Investment & Strategy

Confluence 2017 – Technology Conference

We attended Confluence 2017, a technology conference held at Bangalore, India, which focused on disruptive technological innovations. The conference provided insights on how value created by industries over the last 100 years is being disrupted by companies created in the last decade. Only 57 companies that made up of the original Fortune 500 list have managed to survive, with the rest falling prey to inaction and consequent disruption.

Disruptive innovations are at the forefront of all new technological initiatives of the companies that presented, and would remain the key focus area for the next few years. The conference reaffirmed our belief in the long-term potential for growth in themes like Artificial Intelligence (AI), Internet of Things (IoT) and Cyber security. Discussions with the various start-ups, as well as multinational corporations that participated in the conference reiterate our view that the demand for next-gen security solutions is set to rise in the near term. We see scope for increased adoption of AI, Cloud and autonomous driving platforms by major automakers over the long term.

We met a wide range of corporations and start-ups based in India focusing on Artificial Intelligence (AI), Cognitive computing, Augmented/Virtual Reality, Natural Language Processing (NLP), Robotics, Internet of Things (IoT), Machine learning, Big Data, Cyber security and Autonomous driving. Below are the key findings/observations from the conference for the companies under our coverage.

AI innovations are not only focused on the consumer segment but also catching pace on the commercial side. While AI developments are still at the early stages, we believe this segment offers huge growth potential. Amongst the initiatives highlighted, we are particularly enthusiastic about the Skype Translator (a Microsoft product), which has the ability to convert live spoken text from one language to another (eg. French to English) and provides the output in verbal form on the go. The platform uses natural language processing (NLP) and has the ability to capture various accents/languages. We believe this tool could be used at various organisational levels and act as a key enabler in multi-lingual organisations.

As a part of IoT, automotive cloud platforms are picking up pace with more connected, personalised and adaptive technology. Infotainment system company Harman, a part of Samsung, talked about the future of automotive technology as they expect vehicle intelligence to transform the driving experience. Harman presented various new platforms that they are working on, which include 1) Maps as a service – provides alternative routes depending on the traffic and weather conditions and 2) Vehicle analytics – provides constant updates on the vehicle health, content personalisation and cloud based driver profile. As per Harman, automakers can experience the customisation of specific features of their value offerings within the next two to three years with the early adopters being the luxury car producers, primarily in the North American market. It highlighted that global companies such as Daimler have started adopting these technologies.

In the backdrop of complex cyber attacks witnessed recently, companies offering integrated security solutions across multiple platforms such as computer networks, web, mobile and cloud data storage solutions should benefit. A majority of the companies attending the conference expect to have cyber security as a top priority in their IT budgets. According to application and desktop virtualisation software provider Citrix, 74% of the global companies see the need for a new framework for securing their IT infrastructure. This need arises from a shift in corporate IT infrastructure away from on-premise to the cloud.

We present our selection of stocks that could be the major beneficiaries of these themes.

This document presents equity ideas exclusively provided for potential investments.This document cannot be considered as adapted to a person or based on the analysis of the situation of a person.