Business India, July 4-17, 1994
Leaders in Technology
By and large the Indian corporate sector showed little ability to cope with technology development during the Licence Raj. However, less than a dozen companies have achieved technological excellence that is being globally recognized. The investment in technology development by these ‘techies’ is now paying off.
Shivanand Kanavi
Corporate success worldwide has long been fuelled by technology. But since the 1970s, it has become even more crucial as several technology –strong newcomers hit pay dirt and became mega players in the global marketplace. These companies, called ‘techies’ by Wall Street analysts, are being regularly tracked.
However, the important questions for us are: Does India have its own ‘techies’? If yes, who are they? What has lent them the drive to succeed and who are the people who head them?
Some people feel that these questions are irrelevant at present. They argue that the overwhelming atmosphere for four decades after independence has been that of licensed production in a protected market. Indian businessmen have shown an inability to cope with technology development and have largely used their R&D divisions for tax benefits. So, under the circumstances, how can a technology-driven company emerge, they ask.
Does that mean we have to wait another couple of decades to see technological excellence in some Indian companies? Well, yes and no. Though we don't have a Bill Gates or a Seymour Cray in India as yet, there area a handful of examples of technological excellence in the middle level who are being globally recognised.
This handful of Indian techies that we short listed are clear winners within restricted parameters. They shown farsightedness in either developing their own manufacturing technologies (as in the case of agrochemical and bulk drug companies) or in buying it, mastering it and developing it further, thereby acquiring the know-why (as in engineering). As a result, now when the Indian economy is being thrown open to competition, these companies are more ready than others to take on new challenges.
A feature common to all these leaders in technology was that they are led by men who are themselves technologists or those with tech vision- like Dr. Gharda, Dr Parvinder Singh, Dr. Hamied, Dr. Anji Reddy, Desh Bandhu Gupta, Ravindra Reddy, etc. Surprisingly, the large companies in the corporate sector- Reliance, ITC, ACC, Grasim and Hindustan Lever- have done hardly any technology development compared to their resources and scale of operations. One of the many reasons they do not feature on the shortlist. Their success, according to Business India, is largely due to good financial management, economies of scale, marketing, and technology scouting for initial buying.
The only exceptions to this large-company rule are Telco, BHEL and L&T. Even here, though they are no doubt technology –driven companies, one has to tread with caution. For, most of them are multi-product and multi-plant companies, where technology leadership, it does exist, is uneven; and the impact of a particular innovation on the overall company or industry becomes difficult to evaluate. Thus, L&T may be doing brilliant work in terms of heavy fabrication for the nuclear and space programmes, or petrochemicals but the other sections, like cement, are far from technologically superior. By and large, however, the need to be proactive, ready to experiment and take risks, which are essential for technology leadership, are sorely lacking in the large companies.
Surprisingly the techies do not consist of idiosyncratic geniuses but rather dynamic engineers, technologists and R&D personnel who exhibit good market savvy and are incredibly self-assured. Most of the personnel in these companies enjoy the challenges of the job, love the atmosphere of relative autonomy, the elbowroom to experiment and the opportunity to learn from mistakes. And, finally, they live to see their ideas or innovations actually move from lab into production and get a charge out of competing with like-minded individuals in the marketplace. Obviously, in the world of the technology-driven, the intellectual challenge is everything.
So, which are these centres of technological excellence among our midst? What makes them tick? This is what Business India found out..
Agrochemicals
This is a sector that has seen a number of Indian companies coming out with innovative processes and successfully competing with multinationals, both in the domestic and international markets. Gharda Chemicals, Excel Industries, United Phosphorus, Lupin, have all done very well by becoming major players in technical grade agrochemicals, that is, pure agrochemical concentrate that is later diluted using various solvents and sold in the retail market. But even among this pack, one company stands out as a real techy: Gharda Chemicals:
Gharda Chemicals
Perhaps, the incident that , best sums up Dr Keki Gharda, the leader of Gharda Chemicals, is illustrated by a story that has become part of Indian chemical industry folklore. In the early 1980s, Dr Gharda was invited to an MRTP commission hearing which revolved around a multinational's application for a licence to produce isoproturon. Some Indian companies objected to the application for fear that they would not be able to compete. But Dr Gharda, alone, was of the opinion that there was nothing superior about the multinational's technology. To prove his point, he declared that his company would introduce a new, more efficient process within 18 months and compete with the multinational.
Most of the people who comprised the stunned audience that day would not have imagined that Gharda would be able to pull it off. But he did. True to his words, Gharda realised the danger of using the highly toxic isocyanate route in making pesticides, and came out with a process to produce isoproturon, using urea. Today, he is the second largest producer of isoproturon in the world with large exports to Europe, US and the Far East. The superiority of Gharda's process, which is today internationally known as the ‘Indian process', made even Rhone Poulenc, the European giant which had a monopoly in isoproturon earlier, sweat.
Since then, Gharda Chemicals has become the leading Indian company in technical grade agrochemicals. Cypermethrin - a popular insecticide; cypermethric acid chloride - an intermediate for cypermethrin; anilophos - a herbicide used, for rice, originally discovered by Hoechst though it now uses Gharda's process; chlorpyrifos- a new generation insecticide; and napropamide -- another herbicide, have all made Gharda a power to reckon with in the global agrochemical scene. In the last three years, a number of international agrochemical magazines have written about Gharda and even put him on their cover.
Gharda Chemcals started as a three –men-in- a-garage operation in the late 1960s, in Santacruz, a suburb of Bombay. Dr. Keki Gharda who had returned from the US after PhD in Chemical Engineering from the University of Michigan, Ann Arbor, joined the faculty of University Department of Chemical Technology (UDCT), Bombay. However, he could not get a permanent teaching position and he turned instead to industry.
His first success, in the field o dyestuffs, came fast. He synthesized pthalogen blue, a dye that was very popular in the textile industry but had to be imported from Germany. Later azo-dyes provided the bread and butter. However, with the tremendous proliferation of process technology in the small-scale sector, dyestuff manufacturing was no longer as attractive, so Gharda changed course midstream into agro-chemicals.
This time it was not as easy. The early 1980s, the years of transition, were difficult. As a plant engineer in Gharda’s Lote factory remarked, “In those days we were literally living hand to mouth. But unlike other industrialists, Dr. Gharda did not retrench any of the R&D staff. The later years vindicated his visionary faith in in-house R&D”.
That vision has helped him to move with the times. When quality and purity export markets of Europe, Gharda changed tack too. Today, his analytical lab is not only top class but has made a number of original contributions: half a dozen of them (in Fourier Transform Infra Red spectroscopy and in High Pressure Liquid Chromatography) have become part of international standards.
Today, Gharda is going through another round of diversification into bulk: drugs and engineering plastics. But why get into bulk drugs when there are so many players already? "While the Indian' bulk drug industry is strong in organic synthesis, they are not so strong in chemical engineering," answers Gharda. “With our strength in both, we will be ore efficient.” Typically, they are building plants for products that are yet to come out of their R&D.
But this confidence has got him his fair share of detractors. “He is and eccentric,” says an indignant major player in bulk drug manufacture. “He wants to spoil the bulk drug market by driving down the prices.” His anger is partly fuelled by the not-so-polite letter he received from Dr. Gharda, which categorically stated that since Gharda Chemicals is going to enter the bulk drugs market in fluroquinolones at a lower price, the existing competitors might as well quit!
Therein lies the essence of the man. Variously described in the industry as a missionary, a Gandhian, an eccentric, and a spoilsport, he has nevertheless always approached the market in his own unique manner. His strategy is to come out with new products at prices that are at least 20-30 per cent lower than the prevailing ones and hold them at that level for years. Aside from driving the competition out of the market, it even makes giant multinationals wary of him. Perhaps one of the reasons why, today, some of them are queuing up to tie up with him.
And he lives by his own rules. For examples, though he has received many awards for novel processes, he has not patented any. He believes that the superiority of technology should be decided in the marketplace rather than in court rooms. He also shies away from breaking up the manufacturing process into a number of stages and carrying these out in different plants to guard hi trade secrets, as most of his competitors do. “This will lead to the right hand not knowing what the left is doing. And you would lose the team spirit where you troubleshoot together and learn from each other” he says. “The name of the game is to come up with newer and better processes and products through R&D and always stay a step ahead of the competition.”
Which he has done. Gharda’s turnover in 1993-94 is Rs 170 crore; exports: Rs30 crore, but with the smooth functioning of the new cypermethric acid chloride and alphamethrin plants at Lote, the 1994-95 results are expected to show at least a 30 per cent growth. Already the profit before depreciation and tax is a hefty Rs45 crore, i.e. 26.5 per cent. Despite the fact that Gharda is not into formulation and retail marketing in a big way, we believe that it will become a diversified Rs 1000-crore-plus company by 2000AD
Pharmaceuticals
Off all the sectors that have seen growth, the pharmaceuticals sector is probably the most dramatic. In 1947, the total size of the Indian pharmaceutical market was about Rs10 crore. Today, pharmaceutical production in India exceeds Rs7,000 crore and exports exceed Rs2,000 crore. Moreover, although it was controlled by the multinationals till the end of the 1960s, today Indian manufacturers of bulk drugs and formulations dominate the market. And companies like Ranbaxy, Lupin, Dr.Reddy’s Laboratories and CIPLA are dreaming of becoming billion dollar companies by the year 2000 AD.
There is a common misconception that this fantastic growth has been due to stealing patented technology from the West, for the Indian Patent Act of 1970 recognises only process, not product patents. But the fact is that hardly 5per cent of the Rs2,000 crore exports are covered by product patents. The rest are off-patent drugs and, hence, we are competing in the open market with original discoverers, thereby proving the more efficient nature of our processes and manufacturing costs.
Today there are nearly 800 bulk drug manufacturers in India. Some of them are being wooed by multinationals for tie-ups involving manufacture, marketing and even joint research. Market research has shown that a large number of high selling antibiotics and cardiovascular drugs are going off-patent in the next two years. There is also a growing shift towards generic drugs in the North American market. All of which are contributing to tremendous bullishness in the industry.
Initially, most of the Indian drug manufacturers were opposed to India accepting the Paris convention on patents. But finally, recognising its acceptance as inevitable if India wants to globalise, they quickly readjusted their strategies and started exploring opportunities to grow in the global market. Ranbaxy and Dr Reddy's Laboratories have already started a nascent programme of original research into new drug molecules and Lupin plans to follow. The idea is to manipulate the molecular structure of known drugs and come out with 'me too' drugs. Later, hopefully,' path-breaking ones can follow. This is much the same route that the Japanese drug industry took in the last two decades, and the chances of success seem bright.
Ranbaxy Laboratories Ltd.
Overstressed executives might remember Ranbaxy through the popular stress reliever Calmpose. But Ranbaxy, itself, hit big time with Cefaclor. Cefaclor is today one of the largest-selling antibiotics with over a billion dollars worth of sales and one of the top ten drugs in the global market. This advanced cephalosporin, however, is a challenge to any organic chemist trying to synthesize it. According to Desh Bandhu Gupta of Lupin, the problems are compounded by the fact that the discoverer, American giant Eli Lily, made life difficult for potential competitors by patenting various intermediates as 'time bombs' that go off when you reach that stage through synthesis.
Which is why, when Ranbaxy developed their own process technology for Cefaclor and patented it in the us, they not only won a lucrative market and a number of awards in India but made a name for themselves in the pharmaceutical world. A by-product of this success is the tie-up between Eli Lily (1991-92 turnover more than $4 billion) and Ranbaxy, for a joint venture and for joint research and development.
Today, Ranbaxy is buzzing with activity. In its swank R&D centre in Gurgaon, Dr Himadri Sen, who has two decades of experience in the international pharmaceutical industry, and his group are working on novel drug delivery systems and have already come out with some controlled release products and effervescent products. Sen firmly believes that there is still a lot of juice left in the already-discovered drugs, the key is to find effective and more user-friendly ways of administering them.
The bio-technology group, led by Dr K. Kannan, a leading protein chemist, is working on developing diagnostics for hepatitis, blood grouping, pregnancy and AIDS. They are also working on vaccines. The most exciting work, however, is in stem cell-based therapy that could prove a god-send for leukemia, bone marrow transplants and may even be advantageous to the treatment of AIDS. Kannan has done pioneering fundamental work in stem cell haematology, which he is trying to develop into tangible applications.
Dr Sood, who heads the pharmaceutical research, is expecting early results in new molecular research as well. To start with, they have taken the clever route of buying five biological lead molecules and are busy testing them. Information technology is playing a major role in new molecular research by allowing instant patent search hooking into global databases; that way the team can be sure that it is not working on a molecule that was patented only last week.
Ranbaxy has already spent over Rs30 crore on its R&D centre and plans to spend more in the coming years. Dr J.M. Khanna, executive director, who heads R&D, is scouting Europe and North America for further recruits. Everyone you meet in Ranbaxy seems to parrot the goal Dr Parvinder Singh, CMD, has set for the company 'to become a research-driven global pharmaceutical company'. And they seem to be well on their way to achieving it. With a 1993-94 turnover of Rs593 crore and exports of Rs226 crore, Ranbaxy already has joint ventures for manufacture in Canada, China, Malaysia and Nigeria, and is negotiating marketing tie-ups in North America. If all goes as planned, in another two years it may well cross the Rs1000 crore turnover mark.
Lupin
Any other company faced with the same challenge might have refused to pick up the gauntlet. But Lupin decided to take up the manufacture of Vitamin B-6, one of the first technology successes for which it won awards.
Vitamin B-6 has a complex 12-stage process where some of the intermediates are unstable. Dr. A.V. Ramarao, when he was at NCL, took up the challenge amidst much scepticism from peers and came out with the process. The next major question immediately arose: Was there anyone ready to invest crores in this process, which was as yet unproven on a plant scale? Lupin took the risk and mastered this complex technology. Now, they are doubling their Vitamin B-6 capacity.
Lupin Laboratories (1993-94 turnover Rs510 crore, exports Rs100 crore) definitely seems to have arrived. It is now aiming to reach a billion dollar turnover in the highly competitive international pharmaceutical market in four years! Sounds ambitious. However, if we look carefully at the achievements and strategy of this company started by Desh Bandhu Gupta, a chemistry professor, with an initial investment of Rs5,000 in 1968, it does not seem far-fetched. While DBji as he is fondly called in Lupin is obviously a smart businessman he is also a man with tech-vision. Right now, he is firming up his plans for a world class R&D centre with an investment of Rs 100 crore and 250 to 300 personnel in the next few years.
Today, Lupin is known for its successes in basically three fields. The anti- TB drug ethambutol, of which they are the world leaders producing 60 per cent of the global production, the antibiotic rifampicin and the cephalosporins. Their ethambutol process is so efficient that even the original discoverer, Lederle, is buying the bulk drug from Lupin. The company has also gone into cardiovascular drugs that are going off patent.
In addition, the recent breakthrough made in stabilising their Rs80-crore plant devoted to fermentation products will put them ahead of the rest.
Herbal medicine for export markets is another of Lupin's ventures. Its latest venture is making herbal dressings that heal cuts without needing sutures and without leaving a scar, developed by an Indian, Dr Harbada.
Now, the several strands in Desh Bandhu Gupta's net seem to be meshing with greater cohesiveness. Lupin already has a bulk drug joint venture in Thailand and is planning more in North America, Europe and the Central Asian Republics of CIS. With drugs that sell more than $20 billion going off-patent by 2000 AD, Gupta is confident of achieving his ambition of becoming a billion dollar company by that time.
Dr Reddy's Laboratories
Dr Anji Reddy thanks Ethyl Corp, USA, a petrochemical giant, for making him famous. In 1990, Ethyl Corp accused one of Dr Reddy's companies, Cheminor, of dumping the popular analgesic, ibuprofen, in the US market. In the drama that unfolded in the hearings before the US Department of Commerce and the International trade Council, Dr Reddy proved that his prices were lower because his technology was better. As a result, the antidumping moves were dropped.
Reddy a product of UDCT and NCL, learnt the basics of bulk drug manufacturing in the public sector IDPL. From a modest turnover of Rsl.5 crore, in 1985, his group has crossed Rs300 crore in 1993-94. Now, DRL is setting up joint ventures in Russia and the Middle East.
Investing over Rs10 crore, Reddy has set up Dr Reddy's Research Foundation, (DRF) as an independent unit to develop his R&D muscle. Today, DRL can develop organic synthesis and even commercialise a process faster than anyone else in the world. There have been cases where DRL'S office in New Jersey, has faxed an order for samples of a particular molecule, along with its molecular structure and purity specifications, and the group has delivered it in three weeks. Fast work by any standards!
DRL'S current plans are ambitious: it is now developing a programme for new drug molecules, of which they hope to patent a few within a year. Their programme consists of computer-aided molecular modelling, drug designing and research in plant products.
According to Prof V.M. Kulkarni at UDCT, computer-aided, drug designing considerably reduces the time factor in obtaining the lead molecules, avoiding trial and error.
As proof of Dr Reddy's ambitious plans globalisation, today Izvestia carries as many ads of DRL as any Indian newspaper. This company, too, will hit Rs1000-crore-plus by 2000 AD.
CIPLA
The stock market heard of CIPLA when its share hit an astronomical Rs35,000 this year. What most people don't know, however, is that, CIPLA has long been a leader in anti-cancer and anti-asthma drugs and has very popular brands in fluoroquinolones and antibiotics. But what distinguishes it is its penchant for producing high value, low volume products. Some of its specialised products cost about $1,000 a gram!
One of its major triumphs was the commercialisation of the extraction of vinblastine from vinca rosea leaves, which was then converted to vincristine - a popular anticancer drug throughout the world. Earlier, Indians used to export the dried leaves of vinca rosea and Eli Lily, US, used to make vincristine out of them. The capsules, containing one thousandth of a gram of vincristine sulphate, were sold in India for Rs80each.
CIPLA scaled up the known, but difficult process of extracting the alkaloid vinblastine from vinca rosea, and then converting it to vincristine and produced a capsule that was sold at Rs25 only and even exported it abroad. Similarly, when the drug AZT, that stops the AIDS virus from multiplying, was discovered, Dr A.V. Ramarao, director, Indian Institute of Chemical Technology (IICT) and his team synthesised it and transferred the difficult technology to CIPLA. Today, CIPLA is the only producer of AZT besides the original discoverer.
If there is one company that consistently and stubbornly fought the Dunkel Draft till India signed the GAIT treaties in 1994, it is CIPLA. Dr Yusuf Hamied, MD, CIPLA still feels passionately about it. "The issue is not my company or even the industry; the issue is affordable healthcare for millions of Indian people," he says. Dr Hamied's concern is commendable considering that many in the drug industry changed tack midway.
Hamied is sceptical of new molecules being introduced by Indian companies. He says "Our undoubted strengths are in organic chemistry but our infrastructure in biological research is hardly world class." He is getting a number of offers for joint ventures and research tie-ups from Europe and is going global like the rest of the pack.
ENGINEERING
Engineering is a field where considerable activity is customized. Here, incremental innovation, design and analytical skills, concurrent engineering, and a constantly learning manpower, that takes each new job as a challenge, help build up competitive advantage. Three companies stand out in this: MTAR, BHEL and L&T.
An interesting common denominator for all the three companies, is their participation in the nuclear and space programmes. Through this they learnt new technologies of high precision machining, zero defect welding and varied non-destructive testing techniques. They have also learnt careful documentation of each stage of manufacturing leading to traceability of failure. Since each job was a challenge, their engineers were kept constantly on their toes leading to a high level of motivation. Now, they have reached a stage where besides meeting the quality standards of aerospace and nuclear programmes, they can also meet highly competitive delivery cycles and cut manufacturing costs.
MTAR
If there is one thing that characterizes Machine Tools Aids and Reconditioning (MTAR) it is their ‘can do’ attitude. Set up by ex-HMT engineer, Ravindra Reddy, MTAR, Hyderabad, is probably the largest partnership company in the south (1993-94 turnover: over Rs20 crore). In less than a decade, Reddy built up an impressive stable of more than a hundred precision tools. Recognising Reddy's capabilities the Department of Space invited him to be on the board of Antrix Corp, India's only company to market space technology globally.
MTAR's achievements include the manufacture of critical components for Pressurised Heavy Water Reactors of Nuclear Power Corporation (NPC), nuclear fuelling machines, critical components for Fast Breeder Test Reactor at Indira Gandhi Centre for Atomic Research, and the prestigious liquid fuelled rocket engine Vikas for the Polar Satellite Launch Vehicle and the Geostationary Satellite Launch Vehicle.
Another first by MTAR is the capability to manufacture world-class ball screws, varying in length from half a metre to over five metres. These ball screws are essential for any high-speed motion and are thus the mechanical heart of aircraft controls, machine tools, CNC machines, and industrial robots.
Such is the confidence of Dr Ravindra Reddy in his team that he says: "If ISRO solves all the material science problems involved in operation at -250°c, a temperature at which most metals and alloys crumble, then we guarantee that we will provide the engineering back up and deliver the cryogenic engine,"
BHEL
BHEL is synonymous with power in India. "This public sector giant with manufacturing plants at Hardwar, Trichy,
Hyderabad, Bhopal, Jhansi and Bangalore has built hydro power stations, thermal power stations, gas turbine-based
power stations and has been the single nuclear manufacturer. With its turnkey capabilities, it has joined the elite dozen powerhouses in the world such as General Electric and Siemens.
It has developed the most comprehensive welding capabilities in Trichy making it one of the best manufacturers in the world of large capacity boilers for power production, and industrial processes, besides nuclear reactor vessels, and heat recovery systems. Though they bought the technology from an assortment of companies all over the world, BHEL's strength lies in assimilating it and developing the 'know why' leading to appropriate design changes and developments.
It is the same 'know why' that has led them to develop the technology suitable for high ash coal. India, poor as it is in fossil fuel resources, has one fuel in abundance that will last another 50 years: coal. However, Indian coal has its own peculiarities- it has very low sulphur, making it cleaner in terms of sulphur dioxide emissions, but on the negative side it has low calorific value and high ash content. BHEL thus produced fluidised bed boilers that can very efficiently bum high ash coal, lignite, rice husk, bagasse and other agricultural wastes, literally anything.
In addition, they have developed specialised R&D strengths and designed appropriate conventional boilers for Indian coal. One important development is the large tower type boilers (almost twenty storey high) for 210 MW power stations. The novel design is easier to erect and fabricate there by reducing delivery times.
Direct ignition of pulverised coal (DIPC) developed by BHEL's R&D leads to considerable saving of oil in thermal power stations. If all thermal power stations in India were to use this technology then Rs.1 ,000 crore could be saved annually.
BHEL has also put its thorough understanding of power systems to good use by making the appropriate changes to extend the life of old thermal plants. This requires complex computer simulation, stress, creep and fracture analysis of materials, on-line data analysis, and is a growing area of business for them. Soon this should contribute at least Rs.100crore annually to their revenue. Thus, an old plant running at say a 30 per cent plant load factor (PLF), can be run at a much higher PLF. The additional mega wattage is obtained at a cost of Rs 1 crore per megawatt only, a Godsend to energy and capital-starved power infrastructure.
BHEL's technology strength is reflected in the fact that the German giant, KWU which supplied it the gas turbine technology has itself placed orders for three gas turbines of 60 MW each; Reliance,- well-known for its technology scouting capabilities, has placed orders for two combined cycle gas turbine generators for its Hazira petrochemical project; and Malaysia has repeatedly placed orders for gas turbines and thermal power stations. All these have been won amidst stiff international competition.
That is why despite high overheads like its 74,000-strong work force, large townships, etc, BHEL truly has the potential to emerge as an international engineering giant.
L&T
This multi-product company that is into switch gears, cement, electronics, construction and heavy engineering is familiar to many for its board room intrigues in the last five years. But only a small number of people know the technology and engineering strengths in its heavy engineering division.
L&T became a hi-tech, heavy engineering company through its association with the nuclear programme. Prior to the 1970’s they were making some small cement plant and dairy equipment. Fabrications were of the order of about five tonnes. Now, in their Hazira plant, they can fabricate equipment weighing 450 tonnes or more. Thus, while orders have dried up from the nuclear programme, the expertise in engineering, design, analysis and simulation are being built upon to take on bigger challenges.
The thrust of L&T'S effort in heavy engineering is to be recognised as a turnkey Engineering Project Contractor - the coveted goal of any heavy engineering firm globally.
Metallurgy
Mukand
In ferrous metallurgy, basic process technology evolves slowly and gets accepted even more -slowly. Everyone, it seems, wants proven technology rather than taking risks with new ones. The large investments required naturally make one extremely cautious, if not downright conservative. However, Mukand's CMD, Viren Shah, took the plunge and made the bold decision of going for continuous casting technology. Today, the technology is common. But the fact remains that in the late 1960s only two plants in the world had opted for it, though technically it was clear that continuous casting would be more efficient. The third plant to adopt this technology in the world and the first in Asia, including Japan, was Mukand.
Mukand has been a pioneer in more ways than one. In steel refining technology, too, Rourkela Steel Plant and Mukand were pioneers, going for the new top and bottom oxygen-blowing process. Today, all over the world this technology has become the standard in refining.
Mukand's main product line is high quality wire rods. Their R&D team led by Dr R.H.G. Rao, vice-president, technical, has been improving the quality of wire rods while reducing the cost of production. Wire rods that are mainly used by the fastener industry for cold heading need to have special qualities which can only be achieved through advanced refining techniques.
With the upturn in the automobile industry, Mukand's sales have picked up considerably in 1994. It is also developing leaded steels required by the automobile industry. In ferrous metallurgy Mukand is definitely a company to watch.
Aerospace
Antrix Corp
While we have not much to show in aircrafts we have some thing to show in space. Our remote sensing satellite's and communication satellites are world class products. So the Department of Space of the Government of India set up Antrix Corporation to globally market India's space technology. The tie up between Antrix Corp and Eosat US, for distributing Indian remote sensing data in the highly competitive North American market has hit the headlines recently.
N. Sampath, executive director, Antrix Corp, says, "Liquid nitrogen costs in India are high and we need about a million litres of it to test a satellite in the space simulation chamber. Though component costs are much higher in India, still it works out cheaper to fabricate satellites here rather than in the US or Europe by 20-30 per cent. For I can get highly skilled MTechs and PhDs to do the job at less than 10 per cent of their cost in the US or Europe."
However, international competition in the satellite market has become cut-throat. More than 50 per cent of the satellite market used to be in the military sector which has been drastically reduced. So all the biggies like Hughes, Martin Marietta (GE), Loral Aerospace (Ford), and others are aiming at the civilian market. Though Antrix, on its own, stands little chance of getting any orders in the global market, Loral wants to tie up with it and this should stand the company in good stead.
This fledgling hi-tech company can really hit it big in the future. As a communication revolution sweeps over India in the next five to ten years, there will be a big demand for communication satellites for TV and telecom. At that time, no doubt, Antrix will come into its own.
Automobiles
Telco (Now Tata Motors)
Is there someone out there who can give Maruti a run for their money? We think Telco has the potential not only to do that but even to enter the global car market. One other plus point in favour of Telco: it has an R&D facility that does not even exist in Maruti.
The visionary behind this was undoubtedly its former chairman, the late Sumant Mulgaokar. The first all-new Telco product was the Tata 407, introduced in 1985. It was conceived, designed, developed and productionised in 18 months flat to take on the just-introduced Indo-Japanese light commercial vehicles (LCVS). Today, Telco has over a 50 per cent share of the LCV market.
Amongst all Indian automobile companies, Telco's ERC is, by far, the largest R&D set-up, employing over 800 highly qualified engineers and designers. Headed by R&D general manager, S.K. Shome, its employees and equipment rank amongst the best in the world. A full-fledged, 98-terminal IBM RS/6000 CAD system costing nearly Rs.80 crore helps Telco generate concept proposals through to wire-frame diagrams, designing the inner skins, analysing structural integrity, generating cross-sectional views and defining the templates required to make the, final mock-up.
All sophisticated equipment, however, is quite meaningless without the right people handling it. Telco's resident director, V.M. Rawal, points out: "Technology is of no use if you don't have good people. It's the dedication of the people that really matters. The sophisticated Rambaudi machine was being put to use in two weeks flat, with
no special, training programme. It was taken up as a challenge." At the same time, Telco is not trying to reinvent the wheel. After developing the engine and the body design, for fine tuning them they are using the state-of-the-art services of the likes of International Automotive Design, UK, and AVL, Austria.
In conclusion, our techies may not be at the cutting edge of technology but all of them have used the Indian strengths in knowledge engineering and that too in an atmosphere that did not call for it. Thus they stand out for their farsightedness.-
N. Vaghul, chairman, ICICI is optimistic of the future. "The real industrialisation has started only now. Every businessman I meet nowadays, small or big, talks of technology and is aware that without technology he will be sunk," he, says. If these words are really a prophecy of things to come, we'll be seeing a lot more of the Indian 'techies' from now on.
Monday, January 7, 2008
Friday, December 21, 2007
Nasscom remake
Business India, February 16-29, 2004
Coming of age
Nasscom, the apex body of Indian software and services companies, has overcome setbacks and reinvented itself to thrive in adversity.
Shivanand Kanavi
Kiran Karnik is the most unlikely face of the year. Thoughtful, self deprecating, cultured, always giving credit to others, no self promotion ... these are the many epithets that come to mind on meeting him.
When he took over the stewardship of Nasscom (National Association of Software and Services Companies) in September 2001, a comparison between him and his predecessor - Dewang Mehta, was inevitable. Mehta had died tragically in harness at 39, in a hotel in Australia. Dewang was a dynamo of manic energy that made him the premier IT evangelist of India and the face of the entire Indian IT industry. Many wondered if Karnik could fit into Mehta's big shoes. In short, if Mehta was the irrepressible Elvis Presley of Indian IT (including the side burns and hair do) then Kiran Karnik is the tambourine man - Bob Dylan.
"My answer to such posers was, 'look at it differently, I am standing on a very tall man's shoulders’”, says Karnik, in his typically modest style. Today as Karnik gets featured as the Face of the Year, 2003 by Forbes.com, one can objectively say that Karnik and Nasscom have finally moved out of Mehta's shadows in more ways than one.
Quietly Karnik and a host of IT stalwarts - Phiroz Vandrevala, Harish Mehta, Saurabh Srivastava, Arun Kumar and others - helped reengineer Nasscom. It is no longer centred around personalities and individuals but is becoming an institution. It is not just plain old lobbying based on contacts and charm, which Mehta excelled in, but research-based policy interventions; it is not any more a one man army of Mehta working 20 hour days, but a whole host of IT entrepreneurs and executives, giving their time willingly for India's most successful industry association.
Business India recognised Nasscom's contribution to the business landscape in India long ago in a cover story in February 2001, 'Power lobbying'. We said then, "Nasscom has functioned more than just a trade body. To be sure, it has advocated the cause of its members, but at the same time it has looked well beyond this and it has advocated changes in the national interest. In fact, Nasscom has morphed from a mere trade association to a catalyst for change on the national scale."
Three years later we can safely say that despite catastrophic events, like the loss of Mehta, a recession in the US and 11 September, Nasscom has come out trumps. Advanced countries with high cost economies are outsourcing services to countries like India. Today outsourcing has become a big buzzword. India is the first destination for many western companies and when they land up here the first address they visit is that of Nasscom. No wonder Forbes.com chose Karnik. "I am no celebrity, they took bits and pieces of what is happening the world over and what Nasscom is doing, and when they put it all together the face that appeared was mine," reacts Karnik.
Nasscom's annual conference showed clearly the coming of age of Nasscom and the Indian IT industry. Why do we say that? There are many small changes, some tangible and some intangible, which all add up to a new phase of Nasscom.
Earlier Nasscom brought in celebrities, Indian and foreign, to draw media and delegates. This year, celebrities in the opening session were the billion dollar club of IT companies, made in India. The panel consisted of S. Ramadorai, CEO, TCS; Nandan Nilekani, CEO, Infosys; Ramalinga Raju, chairman, Satyam; and Vivek Paul, CEO, Wipro Technologies (through a video conferencing link from California). They were not great orators, there was no grand standing, they were not a Steve Jobs, a Scott McNealy or a Larry Ellison, but there was tremendous self assurance. They impressed Suhas Patil, the grand old man of Silicon Valley. "We have come of age," he said, later.
In fact, more Indian tech gurus from the Silicon Valley, are rescinding their earlier views and admitting that Indian offshore development is a new model and it has worked. Earlier many of them used to look down upon the Indian IT sector as mere 'labour arbitrage' - a fancy word for middlemen between Fortune 500 clients, and poorly paid but highly qualified Indian programmers.
But Indian IT companies were quietly confident that they are their own models. "From the beginning that has been the case. We could not learn even from services companies like IBM or EDS. They had different cost structures and delivery models. We could not benchmark against them. So we had to go into a huddle, brainstorm, share our data and woes, pass tips to the next guy who is entering a new market, etc, and the forum that we created for that was Nasscom," says Saurabh Srivastava, chairman, Xansa, and one of the founders of Nasscom.
"It is a great place where CEOs and entrepreneurs do really share data, and their worries without any inhibitions," says Revathi Kasturi, president, Tarang Software Technologies, a Bangalore-based startup, the first woman to become an executive council member.
And that tells us something about the internal working of Nasscoml and what makes it different from other industry lobbies. While other industry associations get activated come budget time and are riven with factionalism and contrarian pulls, Nasscom has survived and thrived. Of course, some might say it is narrowly focused into software and hence the cohesion, but that is only a part of the story. After all, it consists of 800 members, only five of who contribute to 35 per cent of the industry turnover. It consists of MNCS, it consists of services companies and product companies, it consists of third party BPOs (Business Process Outsourcing companies) and captive BPOs of MNCs. SO there is enough scope for all kind of push and pull. But Nasscom continues to draw them together.
The biggies of software like TCS, Infosys, Wipro, HCL, Satyam, Cognizant and so on have long out grown their start up phases, have enough financial muscle to invest in marketing, research, overseas offices, etc, so commonsense says that they do not need the hand-holding of Nasscom. But out of 30-odd executive council members, at least 20 attend all meetings. As for the annual conference, everybody keeps it on the top of their agenda of them give a lot of their valuable time for the affairs of Nasscom. Why?
"Nasscom has a voice that carries more weight than any of the individual companies so we make the best of it. Moreover, it is a forum where we grow out of our narrow companywide concerns and brainstorm about what is good for the whole country and the entire IT industry," says Phiroz Vandrevala, executive V.P, TCS, who became a full-time spokesman for Nasscom in the post-Dewang period, before Karnik took over.
But what the industry needed in terms of tax benefits for software exports, and lower telecom tariffs that are crucial to deliver software to clients all over the world was won long ago by the diligent work Dewang Mehta and others, so what kind of policy intervention are they talking about?
Well there are always issues which affect the IT industry, where the knee-jerk reaction is usually the wrong one. For example, when everyone wanted duty protection from imports, Nasscom asked the government for zero duty on imports. When IPR had scant value in India, Nasscom carried out campaigns against software piracy, despite the fact that it could only benefit MNCS like Microsoft and not Indian services companies. Recently, when the government made noises about taxing the foreign BPO companies, Nasscom as a body advised against it, even though Indian BPO companies would have 'benefited' from it.
Why? Well let us look at the big picture. The zero duty on imported software helped in reducing the cost of IT in the domestic sector. Even though the bulk of Nasscom members depend on exports for their bread and butter, it has been their firm belief that without a large domestic base no product companies can come up here. "Moreover as Indians, all of us would like to see an IT-enabled knowledge based economy grow in India and not just in the rest of the world. We may not use fancy words like 'nation building', but we are after all proud to be Indians and want it to shine," says Harish Mehta, chairman, Onward Novell group and another founding member.
Similarly, copyright and IPR issues taken up by Nasscom have helped in the growth of product companies in India and have endeared Nasscom to MNCs as well. This is already paying off. Product companies contribute over Rs.6,600 crore to software exports, and are growing at a rapid clip of no less than 30 per cent per annum, according to Rajiv Mody of Sasken Communications, who heads the Nasscom Product Forum. The product forum is also promoting the 'India Inside' campaign, showcasing MNCS which are doing high-end research and development in India.
As a result, Microsoft, SUN, BT, Intel, Siemens and Price Waterhouse Coopers are very active participants of Nasscom. "We are deeply interested in promoting IT in the domestic sector. The benefits of e-governance, as a tool of transparency and using IT as a productivity tool in manufacturing and financial services are going to take India forward as a major economy and they transcend our narrow company interests," says Rajiv Kaul, MD, Microsoft India, who heads Nasscom, domestic IT market forum.
But why did Nasscom advise the government against taxing foreign captive BPOs? They are doing value added work here but are not showing it as a profitable business. As a result, not only is the government losing taxes but if an Indian company like TCS does it in the US then the US government's Internal Revenue Service would promptly put them in jail!
"Many times reciprocity is not the right response. If the circular issued by CBDT had gone through, then we would have got low-end work, which is not taxable and high-end work could have gone to other destinations. Our estimations are that by 2006-7 this industry might grow to about $70 billion. We know that 40 per cent of that will go as salaries. That means the government will get about $10 billion as taxes, which it would not get otherwise. So why do you want to kill the golden goose for a few dollars today?" asks Srivastava.
Business India spoke to several Nasscom executive members and all of them echoed the same sentiment independently. This shows several things. Firstly, Nasscom members are thinking their policy positions through, which are widely debated internally and backed up by hard data, leading to a united stand. Secondly, lobbying is now based on hard statistical data and not personal charm. Thirdly, they are rising above their immediate interests and looking at what is good for the country in the long term.
"If we had stayed in the same mould as we have been, then Nasscom would soon become irrelevant. I divide the growth of Nasscom into three phases, in the first phase it needed evangelizing and Mehta did it brilliantly. The second phase was putting in place the right policies and regulations, and that was hard work: telecom liberalization, 10A/10B in the Income Tax Act, Software Technology Parks, a host of things which helped the industry. The third, which started just before Dewang passed away, was brand building,” says Karnik.
“So far we have done well, but to maintain a 28-30per cent growth we need to be innovative. It cannot be incremental growth. We are promoting start ups, innovation and incubation, and continuing to influence policy, based on solid research, on hard data. For example, about lowering duty on computers and its effect on the PC market, we looked at prices and demand in different countries. But since people say India is different we looked at price elasticity in mobile phones and the CTV market, and what employment multipliers they can be and what they can do to the rest of the Indian industry including the software industry."
"Today, against the backlash to outsourcing jobs to India too, we are going to policy makers in the UK and the US, with hard research data from the Department of Labour, US, etc. We talk of gains to their domestic industry through outsourcing, we look at the demographics and the aging population profile there and the resultant drop in GDP growth, problems with immigration, etc, and hence project outsourcing as the best way out. This is a more professional and sustainable approach," explains Karnik.
Besides e-governance, Karnik himself is very excited about IT in defence, which is not talked about much. Today IT is the primary weapon in defence. One can use IT in blocking, tracking, tracing and directing armament fire, etc. But it is all packaged with the hardware. If the hardware and software are disaggregated then the cost of the system will come down heavily in India's favour and Indian companies can be involved in doing the software. It will save money and make India more secure.
Nasscom, however, is also working behind the scenes on WTO negotiations. If India works out its strategy properly, then there is a great opportunity for the Indian services sector. "There are some genuine problems for CAS, etc, but let us look at the total picture. We put together a high powered task force and got people from four top companies to come and work full time on this, and put together a document on the services opportunity and how it can grow to 10 times our other exports in six to seven years, if we can get the foreign markets opened up," says Karnik.
"There are two reactions to globalisation. Either there are people who are ideologically for globalisation or old socialists like me, who are sceptics, who say for 10 years nothing has happened so it is bad per se. But today we can see that unlike other developing countries we have a great opportunity. We should open up earlier. Tactically you can have different stances.
You can hold back retailing, till they open up something else, etc, that is a different issue," says an excited Karnik.
Karnik has drawn on the collective wisdom of his members. Ganesh Natarajan, Rajendra Pawar, Rajiv Kaul, Rajiv Mody, Ramalinga Raju, Arun Seth, Bhaskar Pramanik have been drawn in to head specific activity.
What about the 80 per cent of small companies, who might not connect with the concerns of the biggies? "'Within Nasscom there are enough activities which help the SME or startup sector in terms of research, advice on marketing or IPR, etc. I have never felt any kind of discrimination of smaller companies. In fact, even if somebody makes a remark inadvertently, I don't let it get me down after all I represent 80 per cent of the membership," says Revathi Kasturi.
Nasscom is being studied by several countries since there is no other similar example in the world. "National Rifle Association in the US is probably the only other," laughs Harish Mehta. But jokes aside, the diligent Chinese are sending a delegation every month and closely monitoring Nasscom's activities to learn from it. "There is a saying that if you carry a big stick then you can talk softly and others will listen carefully. Dewang gave us a big stick so I can afford to talk softly," acknowledges Karnik.
Looking ahead there will be non-tariff barriers, not just due to job losses but because India has emerged as a major player. Other countries want to know whether they are too dependent on Indian software. "How do we sustain our competitive advantage, after all we have cleared the path for our competitors? China in the long run because of size and bandwidth will be our competitors. They will be offering everything from call centres to R&D. But ultimately our biggest differentiator will be diversity. We are used to working in multicultural teams, being ourselves a multicultural society. So it is easy for us to work in international teams."
"At a more basic level our culture is that of ambiguity. Recognising gray areas helps us think creatively. When things are given step by step as in manufacturing, the East Asians are great. When you look at us five to 10 years ahead, you will see us as great source of ideas and solutions," says Karnik.
Where do we go from here? In Karnik's words, "When I took over, a journalist asked me to summarise in one sentence what I want to do! I thought hard over it and said, 'I want to make India and IT synonymous'. When you think of wines you think of France or with watches you think of Switzerland. Of course, everybody makes wines, California, Australia, Chile and even India. Similarly everybody makes watches, but France and Switzerland stand out in our minds. In the US, associating India with IT, has already happened. That is what is seen in the backlash in a negative way. But my hope is that when this blows over, association of India with IT will remain. "We say Amen to that.
Coming of age
Nasscom, the apex body of Indian software and services companies, has overcome setbacks and reinvented itself to thrive in adversity.
Shivanand Kanavi
Kiran Karnik is the most unlikely face of the year. Thoughtful, self deprecating, cultured, always giving credit to others, no self promotion ... these are the many epithets that come to mind on meeting him.
When he took over the stewardship of Nasscom (National Association of Software and Services Companies) in September 2001, a comparison between him and his predecessor - Dewang Mehta, was inevitable. Mehta had died tragically in harness at 39, in a hotel in Australia. Dewang was a dynamo of manic energy that made him the premier IT evangelist of India and the face of the entire Indian IT industry. Many wondered if Karnik could fit into Mehta's big shoes. In short, if Mehta was the irrepressible Elvis Presley of Indian IT (including the side burns and hair do) then Kiran Karnik is the tambourine man - Bob Dylan.
"My answer to such posers was, 'look at it differently, I am standing on a very tall man's shoulders’”, says Karnik, in his typically modest style. Today as Karnik gets featured as the Face of the Year, 2003 by Forbes.com, one can objectively say that Karnik and Nasscom have finally moved out of Mehta's shadows in more ways than one.
Quietly Karnik and a host of IT stalwarts - Phiroz Vandrevala, Harish Mehta, Saurabh Srivastava, Arun Kumar and others - helped reengineer Nasscom. It is no longer centred around personalities and individuals but is becoming an institution. It is not just plain old lobbying based on contacts and charm, which Mehta excelled in, but research-based policy interventions; it is not any more a one man army of Mehta working 20 hour days, but a whole host of IT entrepreneurs and executives, giving their time willingly for India's most successful industry association.
Business India recognised Nasscom's contribution to the business landscape in India long ago in a cover story in February 2001, 'Power lobbying'. We said then, "Nasscom has functioned more than just a trade body. To be sure, it has advocated the cause of its members, but at the same time it has looked well beyond this and it has advocated changes in the national interest. In fact, Nasscom has morphed from a mere trade association to a catalyst for change on the national scale."
Three years later we can safely say that despite catastrophic events, like the loss of Mehta, a recession in the US and 11 September, Nasscom has come out trumps. Advanced countries with high cost economies are outsourcing services to countries like India. Today outsourcing has become a big buzzword. India is the first destination for many western companies and when they land up here the first address they visit is that of Nasscom. No wonder Forbes.com chose Karnik. "I am no celebrity, they took bits and pieces of what is happening the world over and what Nasscom is doing, and when they put it all together the face that appeared was mine," reacts Karnik.
Nasscom's annual conference showed clearly the coming of age of Nasscom and the Indian IT industry. Why do we say that? There are many small changes, some tangible and some intangible, which all add up to a new phase of Nasscom.
Earlier Nasscom brought in celebrities, Indian and foreign, to draw media and delegates. This year, celebrities in the opening session were the billion dollar club of IT companies, made in India. The panel consisted of S. Ramadorai, CEO, TCS; Nandan Nilekani, CEO, Infosys; Ramalinga Raju, chairman, Satyam; and Vivek Paul, CEO, Wipro Technologies (through a video conferencing link from California). They were not great orators, there was no grand standing, they were not a Steve Jobs, a Scott McNealy or a Larry Ellison, but there was tremendous self assurance. They impressed Suhas Patil, the grand old man of Silicon Valley. "We have come of age," he said, later.
In fact, more Indian tech gurus from the Silicon Valley, are rescinding their earlier views and admitting that Indian offshore development is a new model and it has worked. Earlier many of them used to look down upon the Indian IT sector as mere 'labour arbitrage' - a fancy word for middlemen between Fortune 500 clients, and poorly paid but highly qualified Indian programmers.
But Indian IT companies were quietly confident that they are their own models. "From the beginning that has been the case. We could not learn even from services companies like IBM or EDS. They had different cost structures and delivery models. We could not benchmark against them. So we had to go into a huddle, brainstorm, share our data and woes, pass tips to the next guy who is entering a new market, etc, and the forum that we created for that was Nasscom," says Saurabh Srivastava, chairman, Xansa, and one of the founders of Nasscom.
"It is a great place where CEOs and entrepreneurs do really share data, and their worries without any inhibitions," says Revathi Kasturi, president, Tarang Software Technologies, a Bangalore-based startup, the first woman to become an executive council member.
And that tells us something about the internal working of Nasscoml and what makes it different from other industry lobbies. While other industry associations get activated come budget time and are riven with factionalism and contrarian pulls, Nasscom has survived and thrived. Of course, some might say it is narrowly focused into software and hence the cohesion, but that is only a part of the story. After all, it consists of 800 members, only five of who contribute to 35 per cent of the industry turnover. It consists of MNCS, it consists of services companies and product companies, it consists of third party BPOs (Business Process Outsourcing companies) and captive BPOs of MNCs. SO there is enough scope for all kind of push and pull. But Nasscom continues to draw them together.
The biggies of software like TCS, Infosys, Wipro, HCL, Satyam, Cognizant and so on have long out grown their start up phases, have enough financial muscle to invest in marketing, research, overseas offices, etc, so commonsense says that they do not need the hand-holding of Nasscom. But out of 30-odd executive council members, at least 20 attend all meetings. As for the annual conference, everybody keeps it on the top of their agenda of them give a lot of their valuable time for the affairs of Nasscom. Why?
"Nasscom has a voice that carries more weight than any of the individual companies so we make the best of it. Moreover, it is a forum where we grow out of our narrow companywide concerns and brainstorm about what is good for the whole country and the entire IT industry," says Phiroz Vandrevala, executive V.P, TCS, who became a full-time spokesman for Nasscom in the post-Dewang period, before Karnik took over.
But what the industry needed in terms of tax benefits for software exports, and lower telecom tariffs that are crucial to deliver software to clients all over the world was won long ago by the diligent work Dewang Mehta and others, so what kind of policy intervention are they talking about?
Well there are always issues which affect the IT industry, where the knee-jerk reaction is usually the wrong one. For example, when everyone wanted duty protection from imports, Nasscom asked the government for zero duty on imports. When IPR had scant value in India, Nasscom carried out campaigns against software piracy, despite the fact that it could only benefit MNCS like Microsoft and not Indian services companies. Recently, when the government made noises about taxing the foreign BPO companies, Nasscom as a body advised against it, even though Indian BPO companies would have 'benefited' from it.
Why? Well let us look at the big picture. The zero duty on imported software helped in reducing the cost of IT in the domestic sector. Even though the bulk of Nasscom members depend on exports for their bread and butter, it has been their firm belief that without a large domestic base no product companies can come up here. "Moreover as Indians, all of us would like to see an IT-enabled knowledge based economy grow in India and not just in the rest of the world. We may not use fancy words like 'nation building', but we are after all proud to be Indians and want it to shine," says Harish Mehta, chairman, Onward Novell group and another founding member.
Similarly, copyright and IPR issues taken up by Nasscom have helped in the growth of product companies in India and have endeared Nasscom to MNCs as well. This is already paying off. Product companies contribute over Rs.6,600 crore to software exports, and are growing at a rapid clip of no less than 30 per cent per annum, according to Rajiv Mody of Sasken Communications, who heads the Nasscom Product Forum. The product forum is also promoting the 'India Inside' campaign, showcasing MNCS which are doing high-end research and development in India.
As a result, Microsoft, SUN, BT, Intel, Siemens and Price Waterhouse Coopers are very active participants of Nasscom. "We are deeply interested in promoting IT in the domestic sector. The benefits of e-governance, as a tool of transparency and using IT as a productivity tool in manufacturing and financial services are going to take India forward as a major economy and they transcend our narrow company interests," says Rajiv Kaul, MD, Microsoft India, who heads Nasscom, domestic IT market forum.
But why did Nasscom advise the government against taxing foreign captive BPOs? They are doing value added work here but are not showing it as a profitable business. As a result, not only is the government losing taxes but if an Indian company like TCS does it in the US then the US government's Internal Revenue Service would promptly put them in jail!
"Many times reciprocity is not the right response. If the circular issued by CBDT had gone through, then we would have got low-end work, which is not taxable and high-end work could have gone to other destinations. Our estimations are that by 2006-7 this industry might grow to about $70 billion. We know that 40 per cent of that will go as salaries. That means the government will get about $10 billion as taxes, which it would not get otherwise. So why do you want to kill the golden goose for a few dollars today?" asks Srivastava.
Business India spoke to several Nasscom executive members and all of them echoed the same sentiment independently. This shows several things. Firstly, Nasscom members are thinking their policy positions through, which are widely debated internally and backed up by hard data, leading to a united stand. Secondly, lobbying is now based on hard statistical data and not personal charm. Thirdly, they are rising above their immediate interests and looking at what is good for the country in the long term.
"If we had stayed in the same mould as we have been, then Nasscom would soon become irrelevant. I divide the growth of Nasscom into three phases, in the first phase it needed evangelizing and Mehta did it brilliantly. The second phase was putting in place the right policies and regulations, and that was hard work: telecom liberalization, 10A/10B in the Income Tax Act, Software Technology Parks, a host of things which helped the industry. The third, which started just before Dewang passed away, was brand building,” says Karnik.
“So far we have done well, but to maintain a 28-30per cent growth we need to be innovative. It cannot be incremental growth. We are promoting start ups, innovation and incubation, and continuing to influence policy, based on solid research, on hard data. For example, about lowering duty on computers and its effect on the PC market, we looked at prices and demand in different countries. But since people say India is different we looked at price elasticity in mobile phones and the CTV market, and what employment multipliers they can be and what they can do to the rest of the Indian industry including the software industry."
"Today, against the backlash to outsourcing jobs to India too, we are going to policy makers in the UK and the US, with hard research data from the Department of Labour, US, etc. We talk of gains to their domestic industry through outsourcing, we look at the demographics and the aging population profile there and the resultant drop in GDP growth, problems with immigration, etc, and hence project outsourcing as the best way out. This is a more professional and sustainable approach," explains Karnik.
Besides e-governance, Karnik himself is very excited about IT in defence, which is not talked about much. Today IT is the primary weapon in defence. One can use IT in blocking, tracking, tracing and directing armament fire, etc. But it is all packaged with the hardware. If the hardware and software are disaggregated then the cost of the system will come down heavily in India's favour and Indian companies can be involved in doing the software. It will save money and make India more secure.
Nasscom, however, is also working behind the scenes on WTO negotiations. If India works out its strategy properly, then there is a great opportunity for the Indian services sector. "There are some genuine problems for CAS, etc, but let us look at the total picture. We put together a high powered task force and got people from four top companies to come and work full time on this, and put together a document on the services opportunity and how it can grow to 10 times our other exports in six to seven years, if we can get the foreign markets opened up," says Karnik.
"There are two reactions to globalisation. Either there are people who are ideologically for globalisation or old socialists like me, who are sceptics, who say for 10 years nothing has happened so it is bad per se. But today we can see that unlike other developing countries we have a great opportunity. We should open up earlier. Tactically you can have different stances.
You can hold back retailing, till they open up something else, etc, that is a different issue," says an excited Karnik.
Karnik has drawn on the collective wisdom of his members. Ganesh Natarajan, Rajendra Pawar, Rajiv Kaul, Rajiv Mody, Ramalinga Raju, Arun Seth, Bhaskar Pramanik have been drawn in to head specific activity.
What about the 80 per cent of small companies, who might not connect with the concerns of the biggies? "'Within Nasscom there are enough activities which help the SME or startup sector in terms of research, advice on marketing or IPR, etc. I have never felt any kind of discrimination of smaller companies. In fact, even if somebody makes a remark inadvertently, I don't let it get me down after all I represent 80 per cent of the membership," says Revathi Kasturi.
Nasscom is being studied by several countries since there is no other similar example in the world. "National Rifle Association in the US is probably the only other," laughs Harish Mehta. But jokes aside, the diligent Chinese are sending a delegation every month and closely monitoring Nasscom's activities to learn from it. "There is a saying that if you carry a big stick then you can talk softly and others will listen carefully. Dewang gave us a big stick so I can afford to talk softly," acknowledges Karnik.
Looking ahead there will be non-tariff barriers, not just due to job losses but because India has emerged as a major player. Other countries want to know whether they are too dependent on Indian software. "How do we sustain our competitive advantage, after all we have cleared the path for our competitors? China in the long run because of size and bandwidth will be our competitors. They will be offering everything from call centres to R&D. But ultimately our biggest differentiator will be diversity. We are used to working in multicultural teams, being ourselves a multicultural society. So it is easy for us to work in international teams."
"At a more basic level our culture is that of ambiguity. Recognising gray areas helps us think creatively. When things are given step by step as in manufacturing, the East Asians are great. When you look at us five to 10 years ahead, you will see us as great source of ideas and solutions," says Karnik.
Where do we go from here? In Karnik's words, "When I took over, a journalist asked me to summarise in one sentence what I want to do! I thought hard over it and said, 'I want to make India and IT synonymous'. When you think of wines you think of France or with watches you think of Switzerland. Of course, everybody makes wines, California, Australia, Chile and even India. Similarly everybody makes watches, but France and Switzerland stand out in our minds. In the US, associating India with IT, has already happened. That is what is seen in the backlash in a negative way. But my hope is that when this blows over, association of India with IT will remain. "We say Amen to that.
Profile: Pradeep Sindhu
Business India, January 22-February 4, 2001
Sparc
Shivanand Kanavi
Pradeep Sindhu is a difficult man to interview. "If you are talking money, networth, etc, then I am walking out of this. If you have anything to discuss about Juniper, I will be glad to talk. Anything about myself and family is a no, no," he burst out.
Apparently, he has had a bad experience with Indian media and its crass obsession with dollars made. We, of course, placated him quickly, "Networth, what networth? Perish the thought! We want to ask you about routers, about Internet Protocol (IP), about how you are giving sleepless nights to John Chambers & Co at Cisco."
The effect was instantaneous. He changed into a professor, an ardent researcher, an engineer's engineer who talks English. It was so dramatic, that for a moment one thought the guy was either one-dimensional or unreal. But Pradeep is simply passionate about his work.
That is how Pradeep Sindhu and his colleagues at Juniper Networks have carved out nearly 30 per cent of the high-end router market. Earlier, Cisco was the uncrowned king of Internet infrastructure. It still is, when it comes to enterprise level networks, but for the core of the network, more and more telcos are buying Juniper's equipment.
Pradeep narrates the story of Juniper: "In 1996, when I asked myself how an exponential phenomenon like the Internet could be facilitated, I saw that the only protocol that could do it is IP, since it is a connectionless protocol, it is reliable and easily scalable. The elements that were missing in IP were routers. When I looked at IP routers built by others, I was really surprised at their primitive nature. That is when I realised that there was a great opportunity to build IP routers from the ground up, using all the software and hardware techniques I had learnt at Xerox PARC (Palo Alto Research Centre). I thought every second wasted would lead to some- body else discovering the same. I called Vinod since I had done some work with Sun and he had investments in networking. He gave me an hour. I spoke to him about the macro scene and told him that if we design from first principles we could do 50 times better than what is available. He asked some questions and said he would think about it. He called back two weeks later and said let us do something together."
"When Pradeep came to me, he had no business experience. My view was: 'I like the person and I like the way he thinks'. I asked him to sit next to somebody who was trying to build an Internet network for three weeks and asked him to understand what the problems are. He is such a good guy that he was able to learn quickly what the problems are. Helping a brilliant thinker like Pradeep and guiding him gives me great satisfaction. This is one guy who has really changed what the Internet is. The difference he has made is fabulous," says Vinod Khosla. That is tall praise coming from Vinod, who is no mean thinker himself.
With apologies to Sun Microsystems, who produce chips named Sparc (in fact, Sindhu played a significant role in it), we are using the same for the title, since Pradeep Sindhu is really a spark that came out of PARC.
Sparc
Shivanand Kanavi
Pradeep Sindhu is a difficult man to interview. "If you are talking money, networth, etc, then I am walking out of this. If you have anything to discuss about Juniper, I will be glad to talk. Anything about myself and family is a no, no," he burst out.
Apparently, he has had a bad experience with Indian media and its crass obsession with dollars made. We, of course, placated him quickly, "Networth, what networth? Perish the thought! We want to ask you about routers, about Internet Protocol (IP), about how you are giving sleepless nights to John Chambers & Co at Cisco."
The effect was instantaneous. He changed into a professor, an ardent researcher, an engineer's engineer who talks English. It was so dramatic, that for a moment one thought the guy was either one-dimensional or unreal. But Pradeep is simply passionate about his work.
That is how Pradeep Sindhu and his colleagues at Juniper Networks have carved out nearly 30 per cent of the high-end router market. Earlier, Cisco was the uncrowned king of Internet infrastructure. It still is, when it comes to enterprise level networks, but for the core of the network, more and more telcos are buying Juniper's equipment.
Pradeep narrates the story of Juniper: "In 1996, when I asked myself how an exponential phenomenon like the Internet could be facilitated, I saw that the only protocol that could do it is IP, since it is a connectionless protocol, it is reliable and easily scalable. The elements that were missing in IP were routers. When I looked at IP routers built by others, I was really surprised at their primitive nature. That is when I realised that there was a great opportunity to build IP routers from the ground up, using all the software and hardware techniques I had learnt at Xerox PARC (Palo Alto Research Centre). I thought every second wasted would lead to some- body else discovering the same. I called Vinod since I had done some work with Sun and he had investments in networking. He gave me an hour. I spoke to him about the macro scene and told him that if we design from first principles we could do 50 times better than what is available. He asked some questions and said he would think about it. He called back two weeks later and said let us do something together."
"When Pradeep came to me, he had no business experience. My view was: 'I like the person and I like the way he thinks'. I asked him to sit next to somebody who was trying to build an Internet network for three weeks and asked him to understand what the problems are. He is such a good guy that he was able to learn quickly what the problems are. Helping a brilliant thinker like Pradeep and guiding him gives me great satisfaction. This is one guy who has really changed what the Internet is. The difference he has made is fabulous," says Vinod Khosla. That is tall praise coming from Vinod, who is no mean thinker himself.
With apologies to Sun Microsystems, who produce chips named Sparc (in fact, Sindhu played a significant role in it), we are using the same for the title, since Pradeep Sindhu is really a spark that came out of PARC.
Monday, December 10, 2007
Profile: Rajvir Singh
Business India, January 22-February 4, 2001
A VC with a soul
Shivanand Kanavi
“Rajvir Singh is an usual Valley VC. He still has some soul left,” an entrepreneur told us. “You must meet him before you go. I will give you his cell number and you can talk to him,” said part-time entrepreneur and full-time academic Prof Paul Raj. “Raj, as he is popularly known in the Valley, is one of the biggest. He did Cerent and sold it to Cisco for $7 billion, and Sierra and sold it to Redback for $4.3 billion,” said yet another entrepreneur. We were leaving the Valley the same day and we dialed the number given to us. “Oh, you must be looking for Raj Singh, I am Raj Parekh," said the voice on the other side. Our curiosity had been sufficiently aroused and when we found that both the Raj’s work for the same firm, Redwood Venture Partners, we decided to pray for good traffic conditions so that we didn't miss the flight, and meet them anyway before we left for San Francisco.
Needless to say, we were handsomely rewarded. Though we did not have much time together, we struck a cord instantaneously. "I am from Idrishpur village, near Meerut, and was born in an ordinary farming family," began Raj Singh. We continued in this vein for a short time and then continued the rest electronically. Raj Singh is a true wanderer. Not only in the physical sense of trekking, which he does regularly with his family ("we went to the Andes this summer," he informed us). Like a seeker of something ethereal, he keeps wandering from job to job, startup to startup, idea to idea. On the way, he also creates knowledge and wealth.
After his BE in Roorkee Engineering College in EE, Raj joined the Navy. After a couple of years working on the aircraft carrier Vikrant, Raj found the regime too rigid and so, he resigned. He then joined IIT Delhi and worked in TIFR'S mathematics department, studying computer science. To this day, he says he found the atmosphere at TIFR the most stimulating. In 1974, he joined a startup in Delhi, Alpha Electro, to make minicomputers. He was then given an assignment in Libya. Working for the Libyan Electricity Corporation, he developed a computer programme for grid planning and load dispatch. After a couple of years there, he joined the University of Minnesota at Minneapolis for an MS in computer science. From 1981 to 1995 Raj changed jobs - from CDC to National Semiconductors, to Trilogy Systems, to Cirrus Logic to Nexgen to Inter HDL.
Then he ventured onto his first startup Advancel Logic, which later split into Fiberlane and Stratum One. Fiberlane again split into Cerent and Siara and Cyras.
In 1999, Raj teamed up with old friend Raj Parekh to float a venture fund, Redwood Ventures.
Today, Raj is part of Comstellar Technologies, a combination of an incubator and a vc firm and a specialised technology holding company in a particular sector. Anil Gupta of Stanford University has called Comstellar Technologies a Metacompany and has predicted a brighter future for this model. Raj has invested in 40-50 startups. A large number of them are in the optical component space - which is why Raj is described as a fountain of optical startups. The way he has started his companies and then split them as and when required, show an extremely flexible and functional strategy, a key characteristic of the startup culture.
When Raj was facing a burnout, he found time to write a book, Digital Design and Synthesis with Verilog HDL, which has gone on to sell over 10,000 copies.
"I have learnt a lot from various industry stalwarts, I was lucky to directly work for people like Suhas Patil, Thampy Thomas, Atiq Raza, and Vinod Khosla. I also happened to work with Kamran Elahian in helping him start Momenta, and with Prakash Bhalerao, who was director on the board of Advancel. I worked with Prabhu Goel while I was writing my book on Verilog HDL. What I did was apply all that at Cerent, Startumone and Redwood Ventures. Now I am learning from my general partners Raj Parekh and Deven Verma," he says.
Raj Singh's reputation as an optical startup machine has spread far and wide. Recently, the Chinese government invited him for a visit. "They have invited me to become an advisor to their minister of information technology and also visit them again and give seminars to young graduates on how to start a company, how to develop a business plan. In return for their hospitality, I gave them free rights to translate Digital Design and Synthesis with Verilog HDL into Chinese," recalls Raj.
Raj Singh's soulfulness is evident from an anecdote regarding Tachion Networks, now being eyed for an acquisition by Alcatel for a billion dollars. One day the president of Tachion Networks called Raj and said he had run out of money and could not meet his payroll any more. Raj decided to wire him $100,000. "He called me on Thursday, and Friday was his payroll date. I called Raj Parekh to do the same and he also wired him another $100,000. None of us had met this guy before, and it was a blind date. Investing is not just making money, it is also making the entrepreneur's dream come true," says Raj. Amen.
As for equity in his startups, Raj says: "The more you give it away, more you get out of those who get it. I found it very satisfying when John Chambers of Cisco, who bought Cerent, made a statement to his staff that he was very happy to see that stocks distribution in Cerent was very even. That enables the company to hire more talent who help build a large company."
"I would like to use my new-found wealth to benefit the society that I got it from. I have a dream of creating a venture fund out of my personal capital, the returns of which would not come to me, but would rather go to benefit charity organisations, Indian social entities, and to improve education in India. My village in India still does not have a high school. And the Hindu temple in Sunnyvale still does not have a clean carpet and a clean restroom. This fund will have part of the returns invested back into the fund, will be known as a green fund, and should hopefully continue to generate sufficient money to at least become a continuous source of money supply to some extent," he adds.
This simple man from Meerut seems to be a total misfit in the Valley, but paradoxically, that is where he is thriving.
A VC with a soul
Shivanand Kanavi
“Rajvir Singh is an usual Valley VC. He still has some soul left,” an entrepreneur told us. “You must meet him before you go. I will give you his cell number and you can talk to him,” said part-time entrepreneur and full-time academic Prof Paul Raj. “Raj, as he is popularly known in the Valley, is one of the biggest. He did Cerent and sold it to Cisco for $7 billion, and Sierra and sold it to Redback for $4.3 billion,” said yet another entrepreneur. We were leaving the Valley the same day and we dialed the number given to us. “Oh, you must be looking for Raj Singh, I am Raj Parekh," said the voice on the other side. Our curiosity had been sufficiently aroused and when we found that both the Raj’s work for the same firm, Redwood Venture Partners, we decided to pray for good traffic conditions so that we didn't miss the flight, and meet them anyway before we left for San Francisco.
Needless to say, we were handsomely rewarded. Though we did not have much time together, we struck a cord instantaneously. "I am from Idrishpur village, near Meerut, and was born in an ordinary farming family," began Raj Singh. We continued in this vein for a short time and then continued the rest electronically. Raj Singh is a true wanderer. Not only in the physical sense of trekking, which he does regularly with his family ("we went to the Andes this summer," he informed us). Like a seeker of something ethereal, he keeps wandering from job to job, startup to startup, idea to idea. On the way, he also creates knowledge and wealth.
After his BE in Roorkee Engineering College in EE, Raj joined the Navy. After a couple of years working on the aircraft carrier Vikrant, Raj found the regime too rigid and so, he resigned. He then joined IIT Delhi and worked in TIFR'S mathematics department, studying computer science. To this day, he says he found the atmosphere at TIFR the most stimulating. In 1974, he joined a startup in Delhi, Alpha Electro, to make minicomputers. He was then given an assignment in Libya. Working for the Libyan Electricity Corporation, he developed a computer programme for grid planning and load dispatch. After a couple of years there, he joined the University of Minnesota at Minneapolis for an MS in computer science. From 1981 to 1995 Raj changed jobs - from CDC to National Semiconductors, to Trilogy Systems, to Cirrus Logic to Nexgen to Inter HDL.
Then he ventured onto his first startup Advancel Logic, which later split into Fiberlane and Stratum One. Fiberlane again split into Cerent and Siara and Cyras.
In 1999, Raj teamed up with old friend Raj Parekh to float a venture fund, Redwood Ventures.
Today, Raj is part of Comstellar Technologies, a combination of an incubator and a vc firm and a specialised technology holding company in a particular sector. Anil Gupta of Stanford University has called Comstellar Technologies a Metacompany and has predicted a brighter future for this model. Raj has invested in 40-50 startups. A large number of them are in the optical component space - which is why Raj is described as a fountain of optical startups. The way he has started his companies and then split them as and when required, show an extremely flexible and functional strategy, a key characteristic of the startup culture.
When Raj was facing a burnout, he found time to write a book, Digital Design and Synthesis with Verilog HDL, which has gone on to sell over 10,000 copies.
"I have learnt a lot from various industry stalwarts, I was lucky to directly work for people like Suhas Patil, Thampy Thomas, Atiq Raza, and Vinod Khosla. I also happened to work with Kamran Elahian in helping him start Momenta, and with Prakash Bhalerao, who was director on the board of Advancel. I worked with Prabhu Goel while I was writing my book on Verilog HDL. What I did was apply all that at Cerent, Startumone and Redwood Ventures. Now I am learning from my general partners Raj Parekh and Deven Verma," he says.
Raj Singh's reputation as an optical startup machine has spread far and wide. Recently, the Chinese government invited him for a visit. "They have invited me to become an advisor to their minister of information technology and also visit them again and give seminars to young graduates on how to start a company, how to develop a business plan. In return for their hospitality, I gave them free rights to translate Digital Design and Synthesis with Verilog HDL into Chinese," recalls Raj.
Raj Singh's soulfulness is evident from an anecdote regarding Tachion Networks, now being eyed for an acquisition by Alcatel for a billion dollars. One day the president of Tachion Networks called Raj and said he had run out of money and could not meet his payroll any more. Raj decided to wire him $100,000. "He called me on Thursday, and Friday was his payroll date. I called Raj Parekh to do the same and he also wired him another $100,000. None of us had met this guy before, and it was a blind date. Investing is not just making money, it is also making the entrepreneur's dream come true," says Raj. Amen.
As for equity in his startups, Raj says: "The more you give it away, more you get out of those who get it. I found it very satisfying when John Chambers of Cisco, who bought Cerent, made a statement to his staff that he was very happy to see that stocks distribution in Cerent was very even. That enables the company to hire more talent who help build a large company."
"I would like to use my new-found wealth to benefit the society that I got it from. I have a dream of creating a venture fund out of my personal capital, the returns of which would not come to me, but would rather go to benefit charity organisations, Indian social entities, and to improve education in India. My village in India still does not have a high school. And the Hindu temple in Sunnyvale still does not have a clean carpet and a clean restroom. This fund will have part of the returns invested back into the fund, will be known as a green fund, and should hopefully continue to generate sufficient money to at least become a continuous source of money supply to some extent," he adds.
This simple man from Meerut seems to be a total misfit in the Valley, but paradoxically, that is where he is thriving.
Thursday, December 6, 2007
Interview: Nuclear myths and half truths
http://www.hindu.com/thehindu/holnus/002200712051990.htm
11 myths that make nuclear deal an unclear one
D Murali
Chennai, 5 Dec: Intense debates have been on, about the nuke deal at the political level, generating possibly more heat than light. “Many half-truths and myths are doing their rounds,” frets Shivanand Kanavi, vice-president - Special Projects, Tata Consultancy Services, New Delhi.
A theoretical physicist from IIT Kanpur and Northeastern University, Boston, he has carried out research at IIT Bombay. After a teaching and academic career, Kanavi became an economic consultant and later turned to business journalism, before joining TCS.
Author of books such as ‘Sand to Silicon: The amazing story of digital technology’ (Rupa & Co. 2006) and ‘Research by Design-Innovation and TCS’ (2007), Kanavi is currently writing a book on India’s nuclear programme.
The first myth, according to him, is that nuclear power is expensive and, that India should build coal-based power plants, instead, as we have plenty of reserves.
“You cannot make generalisations about any source of energy,” reasons Kanavi, interacting with Business Line, over the e-mail, and expressing his personal views on the subject. “The economics of power depends on distance of raw material source, fixed costs and operating costs, gestation periods, environmental costs and social cost.”
He goes on to list ten more myths, on things ranging from gestation to safety, raw material to risk management.
Excerpts from the interview.
Isn’t the ‘coal’ option cheaper?
The answer is ‘no’ when coal has to come from more than 1,000 KM away, from the coalfields of Eastern India; coal then becomes expensive compared to other options.
Considering lifecycle issues, strip mining of coal is not environmentally friendly. Indian coal has low sulphur and high ash content; hence one has to deal with huge amounts of fly ash either in the air or in tailing ponds.
Imported coal has low ash, but produces acid rain due to sulphur and nitrogen oxides. Pithead coal-based power plants in Eastern India are a must. One needs a rational energy mix without a one-shoe-fits-all thinking.
Don’t nuclear plants take a long time to build?
This is the second myth, I’d say. Some projects did get inordinately delayed due to the fact the Canadian collaborators abruptly abandoned the projects they were involved in, after Pokharan I (1974). The Indian nuclear industry took some time to learn nuclear manufacturing; and NPC (the Nuclear Power Corporation) took time to master project management.
But now they are building nuclear power plants in a highly competitive 5.5 to 6 years time (global average is about 8 years). Let’s not forget that hydroelectric stations too take a long time to build because of dams and reservoirs.
Talking of hydro, isn’t that the most apt, as energy source?
Myth, again, is that hydro is the best suited for us since its operating cost is next to nothing and it is renewable.
While it is true that there is a lot of potential in the Sahyadris and the Himalayas for hydropower, it is not a panacea. Reservoirs lead to submergence of arable land and forestland and human habitations leading to serious ecological and social problems. In addition, the life of reservoir is limited due to silting.
What about safety in the N-option?
That nuclear power in India has safety issues for workers and waste disposal is myth four. India has a better track record than most countries like the US, Russia and Japan, where serious accidents and leakages have taken place. Remember, our atomic scientists who design and operate the plants live with their families in the same colonies as workers.
You mentioned about the raw material misconception…
Yes. Some people argue that since India has a lot of thorium, why should we go for imported uranium. There is no country that has the technology today for commercially exploiting thorium for power. In fact India is in a leadership position; however, the first thorium reactor is underway, and it will take 10-15 years more to master it.
We also hear critics wonder why India is not buying reactors or uranium from Russia and France who seem to be eager to sell, instead of getting into a conditional deal with the US.
We do hear thus; but it is based on flawed reasoning. Agreed, that France and Russia are eager to engage in nuclear commerce with India. But without the IAEA (International Atomic Energy Agency) safeguards in place, and a lifting of the blockade by the Nuclear Suppliers Group, no country would do business with India. Which is why the Indo-US deal is the key to unlock multilateral blockade.
Some complain about the technology.
More specifically, they ask why India is keen to buy expensive reactors from the US when no new reactor has been built in the US for the last 30 years and their technology and skills are rusty. Wait. The deal (123 Agreement) does not say how many reactors we will buy from the US. In fact if the price and financing are not right, India may not buy any from the US or for that matter from other countries too. As pointed out before, the deal just lifts the embargo for nuclear trade with India.
Would the deal undermine our foreign policy?
A common grouse is that the deal will enslave India to the diktat of the US foreign policy. No, the 123 Agreement is strictly regarding conditions accepted by both the countries to resume nuclear commerce while recognising that India has nuclear weapons and might continue to make them just as the US does.
It also does not pressure India to sign the NPT (Non-Proliferation Treaty). The Hyde Act – an Act passed by the US Congress and not an agreement between India and the US – has sections that hope to bring alignment in the foreign policy of both the countries.
Thus, any strategic or political alignment between India and the US is a separate issue and is not part of the 123 Agreement, which is in the nature of lifting technology embargo.
At the same time since India has big power ambitions it will have to take coordinated actions with other big powers on various international issues. In other words, it will move from being an agitator to a manager. Just as China has done.
How far are valid the fears that India will lose the right to conduct another nuclear test if it signs the deal?
First of all nobody gives anybody the right to conduct a nuclear test. If India still tested in 1974 and 1998 the same were based on its own sovereign decisions and threat perceptions.
However, in both the cases, India was isolated, and almost all countries put various kinds of restrictions on high technology trade with India. It hurt India’s economic and technological development but it was a calculated risk. If India wants to test at some later date, it will once again have to take a calculated risk.
There’s a myth about risk, you said?
That’s right. “Why are we risking so much for a 3-7 per cent of our power production?” demand the sceptics. First, in an energy-starved country every percentage point, counts. Second, 3-7 per cent is the projection based on current investment plans by the Government.
We could also go the French way, who generate close to 80 per cent of their power using nuclear technology; or the Chinese, who have already started an aggressive nuclear power programme.
That makes it ten myths. What’s the last?
That India’s civilian programme has always been a cover for the weapons programme and has not produced many results.
This, an uncharitable and sweeping comment, totally ignores the achievements of our scientists and engineers under extremely hostile international conditions.
India is perhaps the only country that started both nuclear and space programmes for peaceful purposes; achieved considerable expertise; and then started its weapons and missiles programme.
For example, the Atomic Energy Commission was set up in the late forties, soon after Independence, whereas the military programme started much later, in 1970-71.
India has always been held in very high regard in the International Atomic Energy Agency and it has chaired the board as well.
There is every possibility that India will start exporting research and power reactors in the 220-500-700 MW range, fuel bundles and other accessories as well as services to operate and maintain reactors.
For example, the Rajasthan reactor’s entire core was redone at a fraction of what it cost Canada and South Korea. Similarly, India has accumulated tremendous expertise in using nuclear technology for plant breeding and medicine.
**
http://InterviewsInsights.blogspot.com
11 myths that make nuclear deal an unclear one
D Murali
Chennai, 5 Dec: Intense debates have been on, about the nuke deal at the political level, generating possibly more heat than light. “Many half-truths and myths are doing their rounds,” frets Shivanand Kanavi, vice-president - Special Projects, Tata Consultancy Services, New Delhi.
A theoretical physicist from IIT Kanpur and Northeastern University, Boston, he has carried out research at IIT Bombay. After a teaching and academic career, Kanavi became an economic consultant and later turned to business journalism, before joining TCS.
Author of books such as ‘Sand to Silicon: The amazing story of digital technology’ (Rupa & Co. 2006) and ‘Research by Design-Innovation and TCS’ (2007), Kanavi is currently writing a book on India’s nuclear programme.
The first myth, according to him, is that nuclear power is expensive and, that India should build coal-based power plants, instead, as we have plenty of reserves.
“You cannot make generalisations about any source of energy,” reasons Kanavi, interacting with Business Line, over the e-mail, and expressing his personal views on the subject. “The economics of power depends on distance of raw material source, fixed costs and operating costs, gestation periods, environmental costs and social cost.”
He goes on to list ten more myths, on things ranging from gestation to safety, raw material to risk management.
Excerpts from the interview.
Isn’t the ‘coal’ option cheaper?
The answer is ‘no’ when coal has to come from more than 1,000 KM away, from the coalfields of Eastern India; coal then becomes expensive compared to other options.
Considering lifecycle issues, strip mining of coal is not environmentally friendly. Indian coal has low sulphur and high ash content; hence one has to deal with huge amounts of fly ash either in the air or in tailing ponds.
Imported coal has low ash, but produces acid rain due to sulphur and nitrogen oxides. Pithead coal-based power plants in Eastern India are a must. One needs a rational energy mix without a one-shoe-fits-all thinking.
Don’t nuclear plants take a long time to build?
This is the second myth, I’d say. Some projects did get inordinately delayed due to the fact the Canadian collaborators abruptly abandoned the projects they were involved in, after Pokharan I (1974). The Indian nuclear industry took some time to learn nuclear manufacturing; and NPC (the Nuclear Power Corporation) took time to master project management.
But now they are building nuclear power plants in a highly competitive 5.5 to 6 years time (global average is about 8 years). Let’s not forget that hydroelectric stations too take a long time to build because of dams and reservoirs.
Talking of hydro, isn’t that the most apt, as energy source?
Myth, again, is that hydro is the best suited for us since its operating cost is next to nothing and it is renewable.
While it is true that there is a lot of potential in the Sahyadris and the Himalayas for hydropower, it is not a panacea. Reservoirs lead to submergence of arable land and forestland and human habitations leading to serious ecological and social problems. In addition, the life of reservoir is limited due to silting.
What about safety in the N-option?
That nuclear power in India has safety issues for workers and waste disposal is myth four. India has a better track record than most countries like the US, Russia and Japan, where serious accidents and leakages have taken place. Remember, our atomic scientists who design and operate the plants live with their families in the same colonies as workers.
You mentioned about the raw material misconception…
Yes. Some people argue that since India has a lot of thorium, why should we go for imported uranium. There is no country that has the technology today for commercially exploiting thorium for power. In fact India is in a leadership position; however, the first thorium reactor is underway, and it will take 10-15 years more to master it.
We also hear critics wonder why India is not buying reactors or uranium from Russia and France who seem to be eager to sell, instead of getting into a conditional deal with the US.
We do hear thus; but it is based on flawed reasoning. Agreed, that France and Russia are eager to engage in nuclear commerce with India. But without the IAEA (International Atomic Energy Agency) safeguards in place, and a lifting of the blockade by the Nuclear Suppliers Group, no country would do business with India. Which is why the Indo-US deal is the key to unlock multilateral blockade.
Some complain about the technology.
More specifically, they ask why India is keen to buy expensive reactors from the US when no new reactor has been built in the US for the last 30 years and their technology and skills are rusty. Wait. The deal (123 Agreement) does not say how many reactors we will buy from the US. In fact if the price and financing are not right, India may not buy any from the US or for that matter from other countries too. As pointed out before, the deal just lifts the embargo for nuclear trade with India.
Would the deal undermine our foreign policy?
A common grouse is that the deal will enslave India to the diktat of the US foreign policy. No, the 123 Agreement is strictly regarding conditions accepted by both the countries to resume nuclear commerce while recognising that India has nuclear weapons and might continue to make them just as the US does.
It also does not pressure India to sign the NPT (Non-Proliferation Treaty). The Hyde Act – an Act passed by the US Congress and not an agreement between India and the US – has sections that hope to bring alignment in the foreign policy of both the countries.
Thus, any strategic or political alignment between India and the US is a separate issue and is not part of the 123 Agreement, which is in the nature of lifting technology embargo.
At the same time since India has big power ambitions it will have to take coordinated actions with other big powers on various international issues. In other words, it will move from being an agitator to a manager. Just as China has done.
How far are valid the fears that India will lose the right to conduct another nuclear test if it signs the deal?
First of all nobody gives anybody the right to conduct a nuclear test. If India still tested in 1974 and 1998 the same were based on its own sovereign decisions and threat perceptions.
However, in both the cases, India was isolated, and almost all countries put various kinds of restrictions on high technology trade with India. It hurt India’s economic and technological development but it was a calculated risk. If India wants to test at some later date, it will once again have to take a calculated risk.
There’s a myth about risk, you said?
That’s right. “Why are we risking so much for a 3-7 per cent of our power production?” demand the sceptics. First, in an energy-starved country every percentage point, counts. Second, 3-7 per cent is the projection based on current investment plans by the Government.
We could also go the French way, who generate close to 80 per cent of their power using nuclear technology; or the Chinese, who have already started an aggressive nuclear power programme.
That makes it ten myths. What’s the last?
That India’s civilian programme has always been a cover for the weapons programme and has not produced many results.
This, an uncharitable and sweeping comment, totally ignores the achievements of our scientists and engineers under extremely hostile international conditions.
India is perhaps the only country that started both nuclear and space programmes for peaceful purposes; achieved considerable expertise; and then started its weapons and missiles programme.
For example, the Atomic Energy Commission was set up in the late forties, soon after Independence, whereas the military programme started much later, in 1970-71.
India has always been held in very high regard in the International Atomic Energy Agency and it has chaired the board as well.
There is every possibility that India will start exporting research and power reactors in the 220-500-700 MW range, fuel bundles and other accessories as well as services to operate and maintain reactors.
For example, the Rajasthan reactor’s entire core was redone at a fraction of what it cost Canada and South Korea. Similarly, India has accumulated tremendous expertise in using nuclear technology for plant breeding and medicine.
**
http://InterviewsInsights.blogspot.com
Tuesday, December 4, 2007
Profile: Desh Deshpande
Business India, January 24-February 4, 2001
Lighting up
Shivanand Kanavi
“Serial entrepreneurship is not interesting to me", sounds facetious coming from Gururaj 'Desh' Deshpande, if you do not know the context in which he said it. After all, he is one of the most celebrated serial entrepreneurs among Indians in the US. "If serial entrepreneurship means doing the same thing again and again, then it does not interest me. Making some money every time you have an idea, which you build to a certain extent and then sell out, is not my game. Big-time wealth creation is in building a company as a long-term play," he says. "I am not deprecating the value of that kind of serial entrepreneurship, may be one's capabilities end with idea generation and taking it forward to a certain extent, then it is better to sell out," adds he.
Sycamore is not a hot startup any more. It was one or two years ago. Today, it has over 750 employees and nine offices in US, and seven international offices in UK, Germany, France, Sweden, South Korea, Japan and Canada. They notched up revenues of over $100 million in the quarter ending 30 October 2000. Though the stock value has fallen from the astronomical valuations 10 months ago, and the market cap has dropped from $55 billion to about $15 billion, it still trades at a P/E multiple of around 450. (Compare that to the P/E of Cisco: 81, Juniper: 275, Nortel: 50, and Lucent: 16.5.)
Vinod Khosla, partner in Kleiner Perkins Caulfield Byers, and another doyen among Indian entrepreneurs, agrees with Desh: "A decade or two later will we (Indians) make a difference to the economy by building a Sun, a Microsoft, an Intel, a Dell or an Oracle? Will we change the technology scenario? That is the crucial question to me. It looks like with Sycamore, Desh wants to build such a company."
We went to Boston to see just how Desh is building his company and how he has achieved what he has. We reached Boston in the middle of the night after a tiring trans-Atlantic flight and hassles at JFK. However, the limousine driver taking us from Boston's Logan Airport to the Radisson Hotel at Chelmsford, Massachusetts made our day. He seemed very well informed about Sycamore. "It seems to be a really good company. I ferry around lots of people. Many of them come for interviews and they all say they want to work with Desh. He must be a very nice and smart guy to attract people like that. I have not met him but people say he is very simple and accessible. Till the papers in Boston wrote about him, we did not know such a wealthy guy lived among us," he added. Just to test him a bit we asked: "What is Sycamore into?" "Oh, Optical Networking, where they use lasers and stuff like that," he replied. When we told him we were visiting the company and meeting Desh the next day, he was thrilled. We had a similar experience two more times the next day - at a small electronics store near the hotel and with another cab driver who took us to Desh's house in Andover. To have a reputation among your peers, investment bankers, employees, customers is one thing. But to have it in the community around you, despite being low profile, speaks volumes about the person.
In every which way Desh looks and sounds like an unlikely candidate for a high-powered entrepreneur. He is firm in his views, quick and clear thinking but never throws his weight around. Desh comes from a modest family in Karnataka. His father served in the government's labour department and there's been no history of business in the family. Desh's education took place in really small towns of Karnataka like Sankeshwar, Dandeli and finally he joined the well-known National College in Bangalore.
After his BTech in electrical engineering from IIT Madras in 1973, Desh had a job offer from Telco at Pune which included a princely salary of Rs500 a month. Meanwhile he was admitted with a full scholarship to the University of New Brunswick. So he dropped the idea of joining Telco and went to New Brunswick. He did his MS there on microwaves and dielectric wave-guides (optic fibres are also dielectric wave guides).
Desh thought he found his true vocation in teaching.
But teaching needed a PhD, so he joined the University of Queens, Canada. After his PhD adviser Dr Peter Brackett, had joined Codex, a startup which was not doing well Motorola took it over and Brackett asked Desh to join him there as head of engineering. Desh liked the idea; they were supposed to build modems and networking products for Motorola.
By 1984, Desh pretty much took Codex from zero dollars to $100 million in revenues and employee strength rose from 20 to 400 people. This was a very important learning period. Desh participated in marketing, sales as well as engineering. On the personal front, in 1980 Desh married Jayashree Kulkarni, a physicist from IIT Madras. Jayashree had switched over to computer science and was working in Toronto, Canada, after her MS. "We did not know each other at IIT Madras, since I entered IIT Madras after Desh graduated, but our mothers were classmates and the families knew each other in Hubli," says Jayashree.
In 1984, the entrepreneurial itch started. Canada was not the place to launch hi-tech startups, so Desh and Jayashree decided to move to the US. Motorola offered him the choice to move to the Silicon Valley or to Boston. Desh chose Boston and worked for three more years at Codex waiting for his green card. But the pull of entrepreneurship was too strong. Local area networks (LAN) were coming into vogue and Motorola was not interested in it. One of the possibilities was building high-speed LANS using optical fibre. Thus Desh got together with a friend to develop Fibre Distributed Data Interface. They pooled in $10,000 each and started working. Desh still had his job at Motorola, so he would go to the startup at 4 am in the morning and at 8 am would proceed to attend his duties at Motorola!
Then the Black Monday of September 1987 took place.
The stockmarket crashed by over 23 per cent in one day. Prospects for funding vanished and the $20,000 kitty also dried up. Desh's partner, whose wife was expecting and who was working full-time in the startup, had to quit. That was the end of the first effort.
As soon as he got his green card, Desh gave up his job at Motorola and started Coral Networks. Desh had enough savings to pull on for 18 months with Spartan living. It took a while to get seed funding. Finally they raised $4 million and hired 20-25 people. At this stage, a dispute arose between the two founders. According to Desh: "It was easy to come up with well-engineered routers that were five times faster than those available and it was difficult but possible to get them to be eight times faster but 10 times faster was almost impossible at that stage." Coral had kept the target of producing 10 times faster routers. Desh realised the market was ready to gobble up five times faster routers right away. So his view was that they should be produced and sold while working on eight times faster routers. But his partner had a different view - he wanted 10 times faster or bust. He also thought it doable and asked for three weeks time. However, three weeks went by and then another two weeks and another four weeks and still they were nowhere near. Desh saw that the two views could not coexist, and walked out. "It gives me no pleasure to say now that I was right, but I was. After 18 months and $12 million more, Coral was still nowhere near the product, and finally it was sold for $15 million," recalls Desh.
However, Desh faced a fresh problem. In order to raise their two kids, Jayashree had given up her job. Now both were jobless. Desh went to India in 1990 for a visit and his parents were scared. But in his own words: "It was very hard to work for anybody else but yourself."
When Desh started Cascade Communications it took time to get seed funding. "In fact, the scariest moment was when Ravi (family name for Desh), came home one day and told the kids not to get hurt while playing, since the health insurance had run out," recalls Jayashree. Soon things started turning around. Desh sums up the Cascade story: "Ed Anderson, a VC I had known from my first attempt in Fibre Distributed Data Interface (FDDI), called me up one day and asked: 'what are you doing nowadays?' I had a lot of credibility due to what I had achieved in Motorola, though I had lost a bit due to the failure of Coral Network. We had lunch and I explained my idea to him. He was impressed and two weeks later he wrote a cheque for $125,000. And that is how we got started at Cascade. In '91 June we got funded and in nine months, by '92 March, we rolled out our first product. We had a good engineering team. Dan Smith joined us in June '92 as CEO. Till then I was the CEO. He had more business experience. Our revenues grew from $ 700,000 the first year to $330 million in '97 and the company grew to 1,000 people. We had the IPO in 1994 and from an offer price of $15 the stock went up at one time to $540. We even reached a market cap of $10 billion, which came down later. We had 60-70 per cent of market share and in July 1997 Ascend acquired Cascade for $3.7 billion. Ascend itself was acquired by Lucent later in 1998 for nearly $20 billion and analysts said about $17 billion of that value was contributed by Cascade acquisition!
Desh then spent a few months with his family. He began mentoring other entrepreneurs - 20-30 entrepreneurs were visiting his home every week in those days and even agreed to become chairman of one of their startups, Cimaron Communications. This became a huge success later on. But soon the entrepreneurial itch started again. He thought: 'What if we could create tonnes of bandwidth on demand, since the New Economy is going to be driven by bandwidth?' In a Christmas party hosted by Matrix Partners, a well-known Boston-based VC fund, Desh met Rick Barry and Eric Swanson from MIT, who came with a deep knowledge of optics. Soon Sycamore Networks was born. The Cascade alumni were full of entrepreneurial energy. Already 18 new startups had come out of former cascade employees. When Desh started Sycamore with Berry and Swanson, several people from the Cascade team came and joined Desh. The rest is history. Within nine months they rolled out their first product and signed up their first customer. The IPO in October 1999 was a resounding success - a stock offered at $34 was listed at $210. Today, when dozens of companies including those who thought it all hype, are talking about intelligent optical networking, Sycamore is clearly recognised as the pioneer.
Why the name Sycamore? "Finding the right name is an art. I don't know how to do it. But I know the right one when I see it. Generally the name should have nothing to do with what you are doing at the moment, so that when you want to broaden your business, you don't get tied down. If one succeeds, of course, everybody will say it was a very good choice," says Desh tongue in cheek. "However, one point to remember is that the Sycamore tree, like Redwood and Sequoia, lives for a long time - more than 500 years." So, let us keep our fingers crossed and wish that this serial entrepreneur par excellence will create something long lasting this time around.
Desh and Jayashree, both alumni of IIT Madras have promised $100 million to their alma mater to fund research over the next 20 years. But Desh is not ignoring his immediate environment in Boston either, where he wants to make MIT more responsive to industry, now that he has joined its governing board .
Friday, November 30, 2007
Profile: Paul Raj
Business India, January 24-February 4, 2001
Thinker, teacher, soldier, sailor: Paul Raj
Shivanand Kanavi
Rarely does one meet a personality with as varied an accomplishment list and as interesting a career path, as Prof A. Paul Raj, of Stanford University. When his name was suggested to us by another academic at IIT Madras, Ashok Jhunjhunwala, we dashed off an e-mail expressing our intent to meet him. We asked for an appointment, giving a brief outline of our purpose. We got a reply that said: "I am not sure whether I fit the profile of the people you are trying to meet. I worked for almost 25 years in the Indian Navy, now I am doing research and teaching at the EE department of Stanford University and have just done a startup called Gigabit Wireless (now renamed Iospan Wireless) while I was on sabbatical."
Our naval contacts said: "Oh Paul Raj, he was a most unusual whiz kid." Naturally, our antennae were up with curiosity to meet this off beat entrepreneur. When we met him, Paul Raj dropped names, accomplishments, career changes, patents and so on in his staccato narration of a fascinating story. It was so incredible, that we had to check with all sorts of sources to confirm various parts of the story, which we had heard sitting in a Palo Alto restaurant. Needless to say, it all checked out and we gladly admit our own ignorance in the subject.
Paul Raj joined the Indian Navy through the National Defence Academy and completed his engineering degree from the Naval Engineering College at Lonavla. Since the degree was not recognised in those days by various non-military engineering colleges and IITS, it was not possible for him to pursue higher studies. The naval brass, however, were impressed and, as a special case, sent Paul to IIT Delhi in 1969, for a MTech.
However, after the M-Tech, Prof P.V. Indiresan of IIT Delhi, encouraged him to do a PhD. But the navy said no. Then, in the 1971 war with Pakistan, battleship INS Khukri was sunk, torpedoed by a Daphne class submarine at close quarters. Clearly, Khukri's sonar had failed to detect the attacking vessel. Khukri was sunk at around 1 am in the morning. At 6 am Paul was pulled out from IIT Delhi's campus and taken to Mumbai to see another ship of the same class and figure out how the Sonar failed. "I was very theoretical those days and even my thesis was in stochastic communication theory. But still I said that the sonar could be improved," says Paul. He worked on the problem at IIT Delhi and improved the sonar system by using techniques of digital signal processing. Bharat Dynamics manufactured it and put it into all Naval ships. It became a major success for Naval R&D.
"Then British Naval R&D invited me. There I discovered that India had given a majors Sonar contract to some British and French companies. I also found that we knew more about the system than they did. I told the navy that we would do it on our own. Between '77 and '82 we did a major project. Today, INS Delhi, INS Mysore and all other modern ships have my Sonar. In 1983, Indian Sonars were more advanced than American sonars and the CIA was very worried about whether we were selling them to the Russians. For shallow waters, it was the best in the world. It was unbelievable that we went from zero to there."
At that time, Paul got an offer from Prof Tom Kailath of Stanford University, a doyen in control systems, to teach in Stanford for two years. Paul finished the assignment, honed his research interests further and went back. "I was asked to start the Centre of Advanced Robotics and later the Centre for Development of Advanced Computing (CDAC). Meanwhile, I also built two labs for BEL. I started CDAC'S Bangalore centre to develop software. My view was: 'Let us not publicise too much.' I also felt that building a parallel computer using transputers was an M-Tech project. What we needed was software for parallel processing without which we cannot use it, either for weather prediction or computational fluid dynamics. Because of these differences I left CDAC," says Paul.
Since he had already retired prematurely from the navy to join BEL, Paul was free to pursue his academic interests. In 1992, Paul joined Stanford as a faculty member. Here he switched to wireless. Today, his group at Stanford is recognised as a leader in wireless technologies in the world. It has done pioneering work in spacetime coding and modulation of wireless data.
"Our technology, in which I hold the principal patent, is called MIMO (multiple input multiple output). It is a huge multiplier. It is like Wavelength Divisional Multiplexing (WDM). Just as WDM lets you shoot more data through different wavelengths, in MIMO every additional antenna gives you more bandwidth. We started Gigabit Wireless to develop broadband wireless access. Using our technology in fixed wireless, it will provide 5-15 MBps bandwidth in a radius of five to ten miles. This will be way ahead of 3G," he adds. Iospan Wireless, formerly Gigabit Wireless, has 50 PhDs in a team of 150. Two major customers for Iospan are Worldcom and Sprint. The product is expected to ship in June 2000.
Paul Raj is a good friend of the Nambiars of BPL and is on their board. He is also trying to help the Navy by bringing in Naval students to Stanford. "The Navy is like a strong family, you can never forget them," says this partsailor, part-teacher, part-thinker and part-tinkerer.
Clearly, Paul Raj is a man of many parts.
Thinker, teacher, soldier, sailor: Paul Raj
Shivanand Kanavi
Rarely does one meet a personality with as varied an accomplishment list and as interesting a career path, as Prof A. Paul Raj, of Stanford University. When his name was suggested to us by another academic at IIT Madras, Ashok Jhunjhunwala, we dashed off an e-mail expressing our intent to meet him. We asked for an appointment, giving a brief outline of our purpose. We got a reply that said: "I am not sure whether I fit the profile of the people you are trying to meet. I worked for almost 25 years in the Indian Navy, now I am doing research and teaching at the EE department of Stanford University and have just done a startup called Gigabit Wireless (now renamed Iospan Wireless) while I was on sabbatical."
Our naval contacts said: "Oh Paul Raj, he was a most unusual whiz kid." Naturally, our antennae were up with curiosity to meet this off beat entrepreneur. When we met him, Paul Raj dropped names, accomplishments, career changes, patents and so on in his staccato narration of a fascinating story. It was so incredible, that we had to check with all sorts of sources to confirm various parts of the story, which we had heard sitting in a Palo Alto restaurant. Needless to say, it all checked out and we gladly admit our own ignorance in the subject.
Paul Raj joined the Indian Navy through the National Defence Academy and completed his engineering degree from the Naval Engineering College at Lonavla. Since the degree was not recognised in those days by various non-military engineering colleges and IITS, it was not possible for him to pursue higher studies. The naval brass, however, were impressed and, as a special case, sent Paul to IIT Delhi in 1969, for a MTech.
However, after the M-Tech, Prof P.V. Indiresan of IIT Delhi, encouraged him to do a PhD. But the navy said no. Then, in the 1971 war with Pakistan, battleship INS Khukri was sunk, torpedoed by a Daphne class submarine at close quarters. Clearly, Khukri's sonar had failed to detect the attacking vessel. Khukri was sunk at around 1 am in the morning. At 6 am Paul was pulled out from IIT Delhi's campus and taken to Mumbai to see another ship of the same class and figure out how the Sonar failed. "I was very theoretical those days and even my thesis was in stochastic communication theory. But still I said that the sonar could be improved," says Paul. He worked on the problem at IIT Delhi and improved the sonar system by using techniques of digital signal processing. Bharat Dynamics manufactured it and put it into all Naval ships. It became a major success for Naval R&D.
"Then British Naval R&D invited me. There I discovered that India had given a majors Sonar contract to some British and French companies. I also found that we knew more about the system than they did. I told the navy that we would do it on our own. Between '77 and '82 we did a major project. Today, INS Delhi, INS Mysore and all other modern ships have my Sonar. In 1983, Indian Sonars were more advanced than American sonars and the CIA was very worried about whether we were selling them to the Russians. For shallow waters, it was the best in the world. It was unbelievable that we went from zero to there."
At that time, Paul got an offer from Prof Tom Kailath of Stanford University, a doyen in control systems, to teach in Stanford for two years. Paul finished the assignment, honed his research interests further and went back. "I was asked to start the Centre of Advanced Robotics and later the Centre for Development of Advanced Computing (CDAC). Meanwhile, I also built two labs for BEL. I started CDAC'S Bangalore centre to develop software. My view was: 'Let us not publicise too much.' I also felt that building a parallel computer using transputers was an M-Tech project. What we needed was software for parallel processing without which we cannot use it, either for weather prediction or computational fluid dynamics. Because of these differences I left CDAC," says Paul.
Since he had already retired prematurely from the navy to join BEL, Paul was free to pursue his academic interests. In 1992, Paul joined Stanford as a faculty member. Here he switched to wireless. Today, his group at Stanford is recognised as a leader in wireless technologies in the world. It has done pioneering work in spacetime coding and modulation of wireless data.
"Our technology, in which I hold the principal patent, is called MIMO (multiple input multiple output). It is a huge multiplier. It is like Wavelength Divisional Multiplexing (WDM). Just as WDM lets you shoot more data through different wavelengths, in MIMO every additional antenna gives you more bandwidth. We started Gigabit Wireless to develop broadband wireless access. Using our technology in fixed wireless, it will provide 5-15 MBps bandwidth in a radius of five to ten miles. This will be way ahead of 3G," he adds. Iospan Wireless, formerly Gigabit Wireless, has 50 PhDs in a team of 150. Two major customers for Iospan are Worldcom and Sprint. The product is expected to ship in June 2000.
Paul Raj is a good friend of the Nambiars of BPL and is on their board. He is also trying to help the Navy by bringing in Naval students to Stanford. "The Navy is like a strong family, you can never forget them," says this partsailor, part-teacher, part-thinker and part-tinkerer.
Clearly, Paul Raj is a man of many parts.
Friday, November 23, 2007
Profile: Vinod Khosla
Business India, January 24-February 4, 2001
Ceasar: Vinod Khosla
Shivanand Kanavi
You can put my name in any search engine and you will get enough material on me, and I have said whatever I have to say in most of my interviews. So you can dispense with the usual questions and fire away," said Vinod Khosla, when we met him in his office at Sand Hill Road at Menlo Park. The words were not tinged with arrogance but were a genuine attempt at getting to the core issues quickly.
That is how Vinod has made his famous picks: Juniper Networks, Cerent, Sierra, Redback and more. Which, according to Fortune, have made over $16 billion for KPCB, thereby making him "the most successful vc of all times". Clearly he has gotten to the core of the next generation of networking.
Vinod is famous for his brevity. Rajvir Singh, who has become a fountain of Optical start-ups, recalls how the first thing Vinod advised him in an e-mail when he invested in Fiberlane (later split into Cerent and Sierra) was: "Keep the B.S. out of all communication".
We say amen to that, and give below a few notes from our conversation, albeit pared with Occam's razor:
Money: In 10 years I have never done a rate of return calculation. I have only looked at economic contribution. After all, if you have made economic contribution, then money will come anyway. Many people talk about how much they will be worth. I reject all those who only talk about money. That is Wall Street mentality. It goes against my intellectual curiosity, predicting trends and so on.
Venture Capitalism: It is all about helping entrepreneurs build companies. Juniper is a classic example. When Pradeep Sindhu came to me, he had no business experience. I guided him in building Internet routers and then helped him find the team, I helped him find Scott Kriens. All these things are really hard to do if you are just an engineer, because you have never done anything like this. What we do is help make an idea into a company. It is like being a coach for a soccer team or a football team.
Startups: I do not miss being in a startup myself. It is a lot of work and you get stuck in one area. Technology is moving rapidly in so many areas and I have interest in so many areas. Every two to three years I completely change the area I am investing in. I take a few months off to learn the whole technology and develop a vision of what the world is going to be like - it is literally going back to school- then start investing.
Current interests: Whether it is optical components, which is physics and material science or enterprise software, the only way to do it is to take three months off, learn and come back. My position lets me do it. I have got curiosity. I change my interests regularly when I get bored .All three of my degrees are in completely different areas. Right now, as hobbies, I keep up with string theory and evolutionary biology.
Big vs small companies: It is not big vs small. People who refused to take risks are losing. Lucent had more talent than Nortel. But Nortel has changed: they have absorbed entrepreneurial culture. Lucent has wrong acquisition strategy and wrong culture. People don't leave Cisco when it acquires, but they do when Lucent does. It is much harder for big companies but Nortel has done it.
Optical Networking: In both optical and wireless, valuations are hyped and over-hyped. But if you look at the impact they are going to have on society, on the way business is going to be run and so on, then they are underestimated. Investors are like lemmings, suddenly they go from greed to fear.
Indian entrepreneurs: The stockmarket is not a good indicator. Some have built businesses but some have built market caps. It is a bad value system. Issue is what can you create that has lasting value. Desh has real revenue. I like what Desh did. In the end his value will be judged if he makes an economic contribution. That is what Pradeep is doing. Intel, Sun, Dell, Microsft, Oracle all made contributions.
Education in India: A country of the size of India, a billion strong, does not have a major university which is world class and which is leading in research so that it does not have to depend on all the research in US. You have to take a SO-year view of this, not five to ten years. Over the long haul, India has the talent, language (English), enough infrastructure. It will grow in a very, very big way in the knowledge economy. Hopefully, people from all over the world will go to India to do research. That is the genesis of my interest in Global Institutes of Science and Technology.
Role models: I was 15-16 and living in Dehi Cantonment, as my father was in the army. I used to go to Shankar market and rent old issues of trade journals in electronics, which you get free there. I read about Intel being started up by a couple of engineers. That was my dream long before I went to lIT. In 1975, even before I finished lIT, I tried to start a company. Those days in India, it was not possible if your father did not have connections. That is why I resonate with role models. Andy Grove and Intel became role models for me.
Vinod Khosla loves travel and photography. Blown up pictures of his children taken by him are all over his office
Ceasar: Vinod Khosla
Shivanand Kanavi
You can put my name in any search engine and you will get enough material on me, and I have said whatever I have to say in most of my interviews. So you can dispense with the usual questions and fire away," said Vinod Khosla, when we met him in his office at Sand Hill Road at Menlo Park. The words were not tinged with arrogance but were a genuine attempt at getting to the core issues quickly.
That is how Vinod has made his famous picks: Juniper Networks, Cerent, Sierra, Redback and more. Which, according to Fortune, have made over $16 billion for KPCB, thereby making him "the most successful vc of all times". Clearly he has gotten to the core of the next generation of networking.
Vinod is famous for his brevity. Rajvir Singh, who has become a fountain of Optical start-ups, recalls how the first thing Vinod advised him in an e-mail when he invested in Fiberlane (later split into Cerent and Sierra) was: "Keep the B.S. out of all communication".
We say amen to that, and give below a few notes from our conversation, albeit pared with Occam's razor:
Money: In 10 years I have never done a rate of return calculation. I have only looked at economic contribution. After all, if you have made economic contribution, then money will come anyway. Many people talk about how much they will be worth. I reject all those who only talk about money. That is Wall Street mentality. It goes against my intellectual curiosity, predicting trends and so on.
Venture Capitalism: It is all about helping entrepreneurs build companies. Juniper is a classic example. When Pradeep Sindhu came to me, he had no business experience. I guided him in building Internet routers and then helped him find the team, I helped him find Scott Kriens. All these things are really hard to do if you are just an engineer, because you have never done anything like this. What we do is help make an idea into a company. It is like being a coach for a soccer team or a football team.
Startups: I do not miss being in a startup myself. It is a lot of work and you get stuck in one area. Technology is moving rapidly in so many areas and I have interest in so many areas. Every two to three years I completely change the area I am investing in. I take a few months off to learn the whole technology and develop a vision of what the world is going to be like - it is literally going back to school- then start investing.
Current interests: Whether it is optical components, which is physics and material science or enterprise software, the only way to do it is to take three months off, learn and come back. My position lets me do it. I have got curiosity. I change my interests regularly when I get bored .All three of my degrees are in completely different areas. Right now, as hobbies, I keep up with string theory and evolutionary biology.
Big vs small companies: It is not big vs small. People who refused to take risks are losing. Lucent had more talent than Nortel. But Nortel has changed: they have absorbed entrepreneurial culture. Lucent has wrong acquisition strategy and wrong culture. People don't leave Cisco when it acquires, but they do when Lucent does. It is much harder for big companies but Nortel has done it.
Optical Networking: In both optical and wireless, valuations are hyped and over-hyped. But if you look at the impact they are going to have on society, on the way business is going to be run and so on, then they are underestimated. Investors are like lemmings, suddenly they go from greed to fear.
Indian entrepreneurs: The stockmarket is not a good indicator. Some have built businesses but some have built market caps. It is a bad value system. Issue is what can you create that has lasting value. Desh has real revenue. I like what Desh did. In the end his value will be judged if he makes an economic contribution. That is what Pradeep is doing. Intel, Sun, Dell, Microsft, Oracle all made contributions.
Education in India: A country of the size of India, a billion strong, does not have a major university which is world class and which is leading in research so that it does not have to depend on all the research in US. You have to take a SO-year view of this, not five to ten years. Over the long haul, India has the talent, language (English), enough infrastructure. It will grow in a very, very big way in the knowledge economy. Hopefully, people from all over the world will go to India to do research. That is the genesis of my interest in Global Institutes of Science and Technology.
Role models: I was 15-16 and living in Dehi Cantonment, as my father was in the army. I used to go to Shankar market and rent old issues of trade journals in electronics, which you get free there. I read about Intel being started up by a couple of engineers. That was my dream long before I went to lIT. In 1975, even before I finished lIT, I tried to start a company. Those days in India, it was not possible if your father did not have connections. That is why I resonate with role models. Andy Grove and Intel became role models for me.
Vinod Khosla loves travel and photography. Blown up pictures of his children taken by him are all over his office
Weather forecasting, Monsoon
The Weekend Observer, June 1992
Vagaries of weather forecasting
Shivanand Kanavi
The monsoon is not only a meteorological phenomenon for Indians but it deeply affects their literature, music, culture and the very psyche itself. Not only are the famous raga Megh Malhar and the poetic work Meghdoot expressions of it, but D.D. Kosambi, one of the great Indian encyclopaedists observed that the regularity of the cycle of seasons might have given rise to a fatalistic world view and even the myth of satyug, tretayug, dwaparyug and kalyug
Thus anybody who can predict and hopefully change the pattern of monsoons is always sought after, be they sooth sayers, astrologers, sadhus, performing yajnas and havans and even scientists. When the predictions or promised changes in weather do not come through, Indians seem to find any number of justifications for the failure of all the traditional wisdom but the meteorologist is never spared. He is the cartoonist’s delight. Who can forget R.K. Laxman’s cartoon of a long bus queue in pouring rain where everybody has provided himself with a raincoat or an umbrella except one fellow, and a guy whispering “must be from the weather bureau”!
All this is good for a laugh but when you meet a hardened weatherman like Dr. S Kumar, Deputy Director General of Meteorology heading the Colaba (Bombay) observatory and responsible for the western zone, and learn the rudiments of meteorology then you start appreciating the complexity of the subject.
The word monsoon owes its origin to the Arabic word mausam meaning season. It is believed to have been used by seamen, six or seven centuries ago to describe a system of alternating winds in the Arabian sea, these winds appear to blow from northeast for six months and from the southwest for another six months. Seasonal changes of wind are primarily the result of differences in the quantity of heat received from the sun by different parts of the earth.
As a consequence of its chemical composition and its soil structure, the conduction of heat into the earth is a comparatively slow process. Thus most of the solar energy received at the ground by the continents is used up in hating air rather than the earth’s surface. Whereas oceans are heated up to greater depths due to convection currents and a smaller part of the energy is available for heating the air, monsoon as a system of winds has the following notable features:
1. A system, with marked seasonal shifts, caused by the differential heating of the land and the sea.
2. A wind system that is largely confined to the tropics, that is the region between 20° N and 20° S latitudes on both sides of the equator.
3. Indian monsoon can be thought of as southeast trade winds which on crossing the equator are deflected to the right by the earth’s rotation (Coriolis force) and hence approach the land from a south-westerly direction.
4. The trade winds of the northern and southern hemispheres are divided by the Inter Tropical Front (ITF) which is a region of considerable cloudiness and rainfall. The southwest monsoon, originates in the ITF and moves northwards, due to the pull of a low pressure area in the hot Indo-Gangetic basin, but of the subcontinent after reaching the southern tip of India around June 1, it splits into two branches; the Arabian sea branch, and the Bay of Bengal branch.
The Arabian Sea branch gradually advances northwards to Bombay. The advance from Trivandrum to Bombay takes about ten days and is fairly rapid.
The Bay of Bengal branch moves northwards into the central Bay of Bengal and rapidly spreads over most of Assam by the first week of June. On reaching the Himalayan barrier, the bay branch of the monsoon is deflected westwards. As a consequence, its further progress is towards the Gangetic plains of India rather than towards Burma. The arrival of monsoon at Calcutta is lightly earlier than at Bombay. By mid-June, the Arabian Sea branch spreads over Saurashtra-Kutch and the central parts of the country. Thereafter the two branches tend to merge into a single current. The remaining parts of western UP, Haryana, Punjab and the eastern Rajasthan experience the first monsoon showers by the first of July. Some times the first showers at Delhi arrive from the east as an extension of the Bay of Bengal branch and sometimes from the south that is from the Arabian sea branch. Often it is a race between the two. By mid July it will extend to Kashmir and remaining parts of the country but only as a feeble current because by this time it has shed most of its moisture.
The normal duration of monsoon varies from two to four months. The withdrawal is much more gradual than its onset. Generally the monsoon withdraws from northwest India by the beginning of October and from the remaining parts of the country by the end of November. Though theoretically it seems possible for both the southwest monsoon and the northeast monsoons to co-exist in the southern half of the peninsula in October, in reality such situations are rare.
This in brief is the story of the monsoon but there are any number of disturbances of local and regional origin that can upset the text book schedule for example a cyclone in the Arabian sea that starts drawing the moisture away can lead to delays and dissipations.
The short term forecasts deal with a period of twenty four to seventy two hours which are mainly done with the help of data from over 500 weather stations spread all over the country, the data from the ships in the ocean, the satellite pictures from he NASA polar satellite NOVA which scans India every six hours, pictures from the geo-stationary INSAT satellite and even input from airline crews.
But a satellite picture, as Dr Kumar points out, is like a X-Ray photograph in the hands of a physician. It needs interpretation which is bound to be subjective. This is where the years of experience of our weathermen count.
Attempts are on to developing computer programmes to forecast weather in the medium term that is three to ten days at the Super Computer facility in Delhi.
The long term forecasting that is from ten days to a few months, is being attempted by the group in Pune. Over sixteen phenomenons all over the globe are being watched by this group and correlated with the Indian monsoon. Some of tem are the total snowfall over Eurasia during the previous winter, the convective wind between Darwin in the southern hemisphere and Tahiti islands in the pacific, the El Nino oceanic current off the coast of Peru in south America etc.
Considering the enormity of a weather system like the Indian monsoon, and the usual constraints of funds and technology and the very nature of a field where controlled experiments are well nigh impossible, our weathermen are doing a competent job, to say the least.
Vagaries of weather forecasting
Shivanand Kanavi
The monsoon is not only a meteorological phenomenon for Indians but it deeply affects their literature, music, culture and the very psyche itself. Not only are the famous raga Megh Malhar and the poetic work Meghdoot expressions of it, but D.D. Kosambi, one of the great Indian encyclopaedists observed that the regularity of the cycle of seasons might have given rise to a fatalistic world view and even the myth of satyug, tretayug, dwaparyug and kalyug
Thus anybody who can predict and hopefully change the pattern of monsoons is always sought after, be they sooth sayers, astrologers, sadhus, performing yajnas and havans and even scientists. When the predictions or promised changes in weather do not come through, Indians seem to find any number of justifications for the failure of all the traditional wisdom but the meteorologist is never spared. He is the cartoonist’s delight. Who can forget R.K. Laxman’s cartoon of a long bus queue in pouring rain where everybody has provided himself with a raincoat or an umbrella except one fellow, and a guy whispering “must be from the weather bureau”!
All this is good for a laugh but when you meet a hardened weatherman like Dr. S Kumar, Deputy Director General of Meteorology heading the Colaba (Bombay) observatory and responsible for the western zone, and learn the rudiments of meteorology then you start appreciating the complexity of the subject.
The word monsoon owes its origin to the Arabic word mausam meaning season. It is believed to have been used by seamen, six or seven centuries ago to describe a system of alternating winds in the Arabian sea, these winds appear to blow from northeast for six months and from the southwest for another six months. Seasonal changes of wind are primarily the result of differences in the quantity of heat received from the sun by different parts of the earth.
As a consequence of its chemical composition and its soil structure, the conduction of heat into the earth is a comparatively slow process. Thus most of the solar energy received at the ground by the continents is used up in hating air rather than the earth’s surface. Whereas oceans are heated up to greater depths due to convection currents and a smaller part of the energy is available for heating the air, monsoon as a system of winds has the following notable features:
1. A system, with marked seasonal shifts, caused by the differential heating of the land and the sea.
2. A wind system that is largely confined to the tropics, that is the region between 20° N and 20° S latitudes on both sides of the equator.
3. Indian monsoon can be thought of as southeast trade winds which on crossing the equator are deflected to the right by the earth’s rotation (Coriolis force) and hence approach the land from a south-westerly direction.
4. The trade winds of the northern and southern hemispheres are divided by the Inter Tropical Front (ITF) which is a region of considerable cloudiness and rainfall. The southwest monsoon, originates in the ITF and moves northwards, due to the pull of a low pressure area in the hot Indo-Gangetic basin, but of the subcontinent after reaching the southern tip of India around June 1, it splits into two branches; the Arabian sea branch, and the Bay of Bengal branch.
The Arabian Sea branch gradually advances northwards to Bombay. The advance from Trivandrum to Bombay takes about ten days and is fairly rapid.
The Bay of Bengal branch moves northwards into the central Bay of Bengal and rapidly spreads over most of Assam by the first week of June. On reaching the Himalayan barrier, the bay branch of the monsoon is deflected westwards. As a consequence, its further progress is towards the Gangetic plains of India rather than towards Burma. The arrival of monsoon at Calcutta is lightly earlier than at Bombay. By mid-June, the Arabian Sea branch spreads over Saurashtra-Kutch and the central parts of the country. Thereafter the two branches tend to merge into a single current. The remaining parts of western UP, Haryana, Punjab and the eastern Rajasthan experience the first monsoon showers by the first of July. Some times the first showers at Delhi arrive from the east as an extension of the Bay of Bengal branch and sometimes from the south that is from the Arabian sea branch. Often it is a race between the two. By mid July it will extend to Kashmir and remaining parts of the country but only as a feeble current because by this time it has shed most of its moisture.
The normal duration of monsoon varies from two to four months. The withdrawal is much more gradual than its onset. Generally the monsoon withdraws from northwest India by the beginning of October and from the remaining parts of the country by the end of November. Though theoretically it seems possible for both the southwest monsoon and the northeast monsoons to co-exist in the southern half of the peninsula in October, in reality such situations are rare.
This in brief is the story of the monsoon but there are any number of disturbances of local and regional origin that can upset the text book schedule for example a cyclone in the Arabian sea that starts drawing the moisture away can lead to delays and dissipations.
The short term forecasts deal with a period of twenty four to seventy two hours which are mainly done with the help of data from over 500 weather stations spread all over the country, the data from the ships in the ocean, the satellite pictures from he NASA polar satellite NOVA which scans India every six hours, pictures from the geo-stationary INSAT satellite and even input from airline crews.
But a satellite picture, as Dr Kumar points out, is like a X-Ray photograph in the hands of a physician. It needs interpretation which is bound to be subjective. This is where the years of experience of our weathermen count.
Attempts are on to developing computer programmes to forecast weather in the medium term that is three to ten days at the Super Computer facility in Delhi.
The long term forecasting that is from ten days to a few months, is being attempted by the group in Pune. Over sixteen phenomenons all over the globe are being watched by this group and correlated with the Indian monsoon. Some of tem are the total snowfall over Eurasia during the previous winter, the convective wind between Darwin in the southern hemisphere and Tahiti islands in the pacific, the El Nino oceanic current off the coast of Peru in south America etc.
Considering the enormity of a weather system like the Indian monsoon, and the usual constraints of funds and technology and the very nature of a field where controlled experiments are well nigh impossible, our weathermen are doing a competent job, to say the least.
Tuesday, November 13, 2007
Optical Networking, Tejas
Business India, August 7-20, 2000
Will Tejas light up?
Brought into being by Sycamore Networks, ASG-Omni and Desh Deshpande, the new technology baby in Bangalore, Tejas Network, aims to put India on the global hi-tech map
Shivanand Kanavi
“The bible of Optical Networking, which we all study at Sycamore and other Optical Networking companies, was written by this guy, in Bangalore," said Gururaj 'Desh' Deshpande introducing Dr Kumar Sivarajan, chief technology officer of Tejas Networks, while launching Tejas recently. "The technology business is totally people centric. If you have a world-class team, then you can compete in the global market. Our first milestone is recruiting 100 world class people with the right mindset in the next six-nine months," adds Sanjay Nayak, CEO, Tejas Networks.
"Tejas will be India's first globally competitive product company," says Deshpande. With that kind of confidence bordering on cockiness, Tejas was launched in a simple function in Bangalore on 25 July. Tejas aims to develop products for the fast growing optical networking market, which is expected to reach $40 billion by 2004 and also sell and support Sycamore's optical networking products.
Everybody in India claims to be globally competitive, "state-of-the-art,” etc which needs to be taken, not with just a pinch of salt, but a fistful. However what makes Tejas special is the track record of the team which is launching it. Deshpande, founder and chairman of Tejas, is fast becoming a folk hero in India. Though Deshpande has been a successful entrepreneur in North America for almost 20 years, what made him an icon in India, and a highly-respected figure in the cutthroat US market itself, is the launch of his third startup Sycamore in 1998. The Sycamore share which was offered during late 1999 on Nasdaq at $38 listed at $210. A start-up struck a market cap of about $18 billion within weeks of listing and is currently valued around $35 billion, of which Deshpande owns 29 per cent.
"The new economy unfairly rewards excellence and unfairly punishes mediocrity," says Deshpande. "Today markets do not look at your balance sheets and revenue streams to decide on valuations. They are looking at the people leading the company, their track record in trying their darnest to turn their convictions into reality. There is no stigma attached to failure as long as you did your best in a transparent way. After all, one of my start ups, Coral Networks did not work out and when I disagreed with my partner on business strategy, I had to walk out. At that time, my wife had also given up her job to bring up our children and we had to manage our family with no income for 9-10 months. But I still decided to quit Coral and start a new company called Cascade Communications which took a longtime to attract any investment by venture capitalists," adds he. Later, of course, Cascade grew into a large company with $500 million in revenues prior to its acquisition by Ascend Communications in June 1997 for $3.7 billion. (Ascend in turn was acquired by Lucent.)
.
"Sanjay has been a successful CEO when he headed Synopsys India, and View Logic's operations in India. Similarly Kumar Sivarajan who was working in the Indian Institute of Science, Bangalore has earlier worked in Caltech and IBM'S Watson Research Centre. Our director engineering Arnob Roy has over 13 years of industry experience and has contributed significantly to product development in Synopsys, View Logic Systems and Cadence Design Systems and is an expert in Electronic Design Automation. We have in a short period of time recruited about 17 excellent people and are already talking to our first customers," says Deshpande.
"Products company is a big poker game,” Desh Deshpande
Q. Why is Tejas the first such start-up in India?
A. Products is a very different game. It requires a different level of confidence. In the services business you boot strap. You put some money in, more comes out. You use it to expand etc. It is a cost plus business. The product business is a big gamble. You have to say: here is my 25 million dollars, bang. It is a big poker game. That is not the culture that exists in India. It exists only in US, nowhere else in the world. That is the culture I built my business on. That is the only thing that I know how to do. I don't know how to build a service business.
Q. Will Tejas support Sycamore products worldwide?
A. Absolutely. You build the capabilities and then go wherever you can. So the professional services group in Tejas will go to the US, China, Malaysia, Indonesia and so on. There won't be any territorial issues. Right now the market is growing at such a rapid pace that everybody can have a piece of the pie if they can deliver.
Q. You promise bandwidth nirvana, but do you have a problem of bandwidth in India for Tejas? A. Of course. The amount of money you have to pay in India is ridiculous. For a 2 MB pipe to US, it is $50,000 a month. In Europe, it is $3,500 a year and Singapore it is even cheaper.
Q. Europe is a large market, so if closeness to market is the issue then how come there are no great product companies from Europe except in mobile telephony?
A. Because they are not entrepreneurial. It's the same thing in Japan. You look at Siemens, Alcatel, etc, they are not entrepreneurial. They cannot think out of the box, they cannot innovate. As a result, all these companies and countries are very good at going after a large market: 1 million cars, 100 million watches, 10 million cameras, they are good at that. But whenever the market changes very rapidly where you have to innovate and competition is very intense, they are not good at it. The only country which has done very well in such markets is the US, because they are a very, very open country. They do not say, "Hey Desh, you are from India and so you cannot set up a company in the US. So you can get the best people in the world and go after the competition. India needs to do the same thing.
Indians are very entrepreneurial too; that is why they have done very well in the US. You need people in India with ambition, you need role models and benchmarks. After all, one lives against so many odds here that you have to be entrepreneurial. There are a few start-ups in Bangalore but you need a big hit.
Q. There is a lot at stake in Tejas since everybody will be watching it. Does that create pressure?
A. No. If you want to win the Olympics then you have to say I am going to win it and you will be watched every minute of your life and you have to live up to it. But you have to sign up. If you don't, you will never win
Q. DoT has about 200, 000 km of fibre in the ground. What if it teams up with you and provide all the bandwidth we need.
A. Internationally innovation does not favour the incumbent. Look at AT&T, Mel, WorldComm, Sprint and so on. If they all did the right things, there would never be a Williams, Quest, Level Three and any of these guys. It is the speed at which you can implement and innovate which creates a brand new market. If you open up the market, there is always room for others. DoT's market share which is 1 00 per cent now will fall, but its revenues will go up. There is not enough fibre in India which will meet the demand for next 1 0 years, so there have to be a lot of players.
Today in the US, voice is practically free. It used to be 50 cents a minute and now it is 1 .5 cents. It (demand) will come from data and new applications which require high bandwidth. Pure capacity is also not an issue, it is speed of service, quality of service, etc. For example you go to a company and say I need 2 GB for two days from Mumbai to Delhi and one guy says I have got 1 00 GB capacity but it will take me six months to give it to you and then you have to sign up for five years and another guy says it will take me five minutes and I will give it to you for two days, then the second guy wins.
"The speed with which this project has been taken from concept to market place is truly amazing and is setting new benchmarks," says Ashok Vasudevan of ASG-omni, a Connecticut-based consulting and incubating firm. "In less than three months we incorporated it, recruited our top team and got our office ready from scratch to where a hundred people can work. Even in Boston this is difficult to beat," adds he.
"In fact Sanjay Nayak, our CEO, joined in two-and-a-half days," says Hans Taparia another member of the ASG-omni team who is involved with Tejas. "We had breakfast one day, he took the evening flight to Boston, spent a day with Desh and Sycamore, he returned the next and joined us as CEO!"
"The way Sanjay was talking to other people while interviewing for Tejas was like a veteran of many years. It is conviction that matters. Once you have people who have the conviction then you need the structure that gives them the independence. Kumar and Sanjay have the full power to take whatever decisions and we are there just to help. If this was a startup of a couple of people in Bangalore then you would not have the confidence, but if you know that you are going after a $40 billion market in 2004 and you have the right group of people then you will invest a lot of money. The confidence comes because Tejas is associated with Sycamore, that means you have market access," emphasises Deshpande.
How much money have the three promoters Deshpande, Sycamore and ASG-Omni put into Tejas? They are still very tightlipped about it. "We will disclose it at the right time but money is not a problem. At Sycamore itself we are sitting on $1.5 billion in cash after our IPQ, which is more than many of our large competitors. But I am on the board, Kevin Oye of Sycamore is on the board. Our management time is at a premium and I am spending a lot of time here. We are looking for some thing really big here," says Deshpande.
We have had several very successful software services startups in India which have become world class services companies. However, we still do not have a successful technology products company. One reason that has been always given by the industry pundits is that we are far from the market place (read the US). So will Sycamore playa facilitating role in this startup? "Definitely. Access to market knowledge is an absolute must for any product company, but Sycamore will straightaway provide a tunnel into the US market, which is still the most important market. Tejas is at a different vantage point from Sycamore. Sycamore had to live on its own, it had to compete with Lucent, Nortel and all the big boys. Tejas does not have to fight for survival, it just has to execute. If you can get 100 very, very talented people with a certain culture then that is a huge asset. To build products you need market knowledge, you need the process, domain knowledge, etc of world class which does not exist in Bangalore. So you need a lot of interaction with Sycamore and that is what we have been doing. Some of the speed at Tejas is coming from there. At Sycamore we take a lot of pride in all this. Everybody says the last guy did something in 30 days and I will do it in 27 days and so on. You can already see the flavour of that at Tejas and once you have the culture and the machinery to execute, then developing products is just identifying the right target and going after it," explains Deshpande.
"If it needs about $25 million to develop a world class product, it does not mean that anybody with $25 million can successfully build a product. It needs deep market knowledge and domain knowledge. Thus Sycamore is key to Tejas' success," adds he.
Tejas will have two divisions working in tandem. One at product development and the other vending Sycamore products in India which will also build capabilities for network design, deployment and support. The Tejas team is already talking to many people in India who have declared their intention to build large, broadband networks.
So what is new? Have not all Indian companies started with services and then slowly ventured into components and products? The crucial thing is not to look at services as bread and butter and invest the revenues from services into product development later, as is wont with Indian companies. The services team will build for the global market. "Even this is being done with our product strategy in mind; after all there is a lot more to do in a product company than just build products. While we build a world class R&D centre for products we will be building a sales and marketing network for Sycamore's products which will be very crucial when we come out with our own products. Opportunities will not wait at that time for us to build up our marketing," adds Sanjay Nayak.
"People like Sanjay and Kumar would not have joined us if we had started a sales office for Sycamore. Such talent can be attracted only if it is a product startup with all the attendant challenges and rewards. They have built products in the past, but for others. Now they will be doing it for themselves," says Deshpande.
Tejas, is a Sanskrit word that means brilliance, radiance and energy. A million eyes are literally watching Tejas to see if it will light up. For their first product roll out, watch this space.
Will Tejas light up?
Brought into being by Sycamore Networks, ASG-Omni and Desh Deshpande, the new technology baby in Bangalore, Tejas Network, aims to put India on the global hi-tech map
Shivanand Kanavi
“The bible of Optical Networking, which we all study at Sycamore and other Optical Networking companies, was written by this guy, in Bangalore," said Gururaj 'Desh' Deshpande introducing Dr Kumar Sivarajan, chief technology officer of Tejas Networks, while launching Tejas recently. "The technology business is totally people centric. If you have a world-class team, then you can compete in the global market. Our first milestone is recruiting 100 world class people with the right mindset in the next six-nine months," adds Sanjay Nayak, CEO, Tejas Networks.
"Tejas will be India's first globally competitive product company," says Deshpande. With that kind of confidence bordering on cockiness, Tejas was launched in a simple function in Bangalore on 25 July. Tejas aims to develop products for the fast growing optical networking market, which is expected to reach $40 billion by 2004 and also sell and support Sycamore's optical networking products.
Everybody in India claims to be globally competitive, "state-of-the-art,” etc which needs to be taken, not with just a pinch of salt, but a fistful. However what makes Tejas special is the track record of the team which is launching it. Deshpande, founder and chairman of Tejas, is fast becoming a folk hero in India. Though Deshpande has been a successful entrepreneur in North America for almost 20 years, what made him an icon in India, and a highly-respected figure in the cutthroat US market itself, is the launch of his third startup Sycamore in 1998. The Sycamore share which was offered during late 1999 on Nasdaq at $38 listed at $210. A start-up struck a market cap of about $18 billion within weeks of listing and is currently valued around $35 billion, of which Deshpande owns 29 per cent.
"The new economy unfairly rewards excellence and unfairly punishes mediocrity," says Deshpande. "Today markets do not look at your balance sheets and revenue streams to decide on valuations. They are looking at the people leading the company, their track record in trying their darnest to turn their convictions into reality. There is no stigma attached to failure as long as you did your best in a transparent way. After all, one of my start ups, Coral Networks did not work out and when I disagreed with my partner on business strategy, I had to walk out. At that time, my wife had also given up her job to bring up our children and we had to manage our family with no income for 9-10 months. But I still decided to quit Coral and start a new company called Cascade Communications which took a longtime to attract any investment by venture capitalists," adds he. Later, of course, Cascade grew into a large company with $500 million in revenues prior to its acquisition by Ascend Communications in June 1997 for $3.7 billion. (Ascend in turn was acquired by Lucent.)
.
"Sanjay has been a successful CEO when he headed Synopsys India, and View Logic's operations in India. Similarly Kumar Sivarajan who was working in the Indian Institute of Science, Bangalore has earlier worked in Caltech and IBM'S Watson Research Centre. Our director engineering Arnob Roy has over 13 years of industry experience and has contributed significantly to product development in Synopsys, View Logic Systems and Cadence Design Systems and is an expert in Electronic Design Automation. We have in a short period of time recruited about 17 excellent people and are already talking to our first customers," says Deshpande.
"Products company is a big poker game,” Desh Deshpande
Q. Why is Tejas the first such start-up in India?
A. Products is a very different game. It requires a different level of confidence. In the services business you boot strap. You put some money in, more comes out. You use it to expand etc. It is a cost plus business. The product business is a big gamble. You have to say: here is my 25 million dollars, bang. It is a big poker game. That is not the culture that exists in India. It exists only in US, nowhere else in the world. That is the culture I built my business on. That is the only thing that I know how to do. I don't know how to build a service business.
Q. Will Tejas support Sycamore products worldwide?
A. Absolutely. You build the capabilities and then go wherever you can. So the professional services group in Tejas will go to the US, China, Malaysia, Indonesia and so on. There won't be any territorial issues. Right now the market is growing at such a rapid pace that everybody can have a piece of the pie if they can deliver.
Q. You promise bandwidth nirvana, but do you have a problem of bandwidth in India for Tejas? A. Of course. The amount of money you have to pay in India is ridiculous. For a 2 MB pipe to US, it is $50,000 a month. In Europe, it is $3,500 a year and Singapore it is even cheaper.
Q. Europe is a large market, so if closeness to market is the issue then how come there are no great product companies from Europe except in mobile telephony?
A. Because they are not entrepreneurial. It's the same thing in Japan. You look at Siemens, Alcatel, etc, they are not entrepreneurial. They cannot think out of the box, they cannot innovate. As a result, all these companies and countries are very good at going after a large market: 1 million cars, 100 million watches, 10 million cameras, they are good at that. But whenever the market changes very rapidly where you have to innovate and competition is very intense, they are not good at it. The only country which has done very well in such markets is the US, because they are a very, very open country. They do not say, "Hey Desh, you are from India and so you cannot set up a company in the US. So you can get the best people in the world and go after the competition. India needs to do the same thing.
Indians are very entrepreneurial too; that is why they have done very well in the US. You need people in India with ambition, you need role models and benchmarks. After all, one lives against so many odds here that you have to be entrepreneurial. There are a few start-ups in Bangalore but you need a big hit.
Q. There is a lot at stake in Tejas since everybody will be watching it. Does that create pressure?
A. No. If you want to win the Olympics then you have to say I am going to win it and you will be watched every minute of your life and you have to live up to it. But you have to sign up. If you don't, you will never win
Q. DoT has about 200, 000 km of fibre in the ground. What if it teams up with you and provide all the bandwidth we need.
A. Internationally innovation does not favour the incumbent. Look at AT&T, Mel, WorldComm, Sprint and so on. If they all did the right things, there would never be a Williams, Quest, Level Three and any of these guys. It is the speed at which you can implement and innovate which creates a brand new market. If you open up the market, there is always room for others. DoT's market share which is 1 00 per cent now will fall, but its revenues will go up. There is not enough fibre in India which will meet the demand for next 1 0 years, so there have to be a lot of players.
Today in the US, voice is practically free. It used to be 50 cents a minute and now it is 1 .5 cents. It (demand) will come from data and new applications which require high bandwidth. Pure capacity is also not an issue, it is speed of service, quality of service, etc. For example you go to a company and say I need 2 GB for two days from Mumbai to Delhi and one guy says I have got 1 00 GB capacity but it will take me six months to give it to you and then you have to sign up for five years and another guy says it will take me five minutes and I will give it to you for two days, then the second guy wins.
"The speed with which this project has been taken from concept to market place is truly amazing and is setting new benchmarks," says Ashok Vasudevan of ASG-omni, a Connecticut-based consulting and incubating firm. "In less than three months we incorporated it, recruited our top team and got our office ready from scratch to where a hundred people can work. Even in Boston this is difficult to beat," adds he.
"In fact Sanjay Nayak, our CEO, joined in two-and-a-half days," says Hans Taparia another member of the ASG-omni team who is involved with Tejas. "We had breakfast one day, he took the evening flight to Boston, spent a day with Desh and Sycamore, he returned the next and joined us as CEO!"
"The way Sanjay was talking to other people while interviewing for Tejas was like a veteran of many years. It is conviction that matters. Once you have people who have the conviction then you need the structure that gives them the independence. Kumar and Sanjay have the full power to take whatever decisions and we are there just to help. If this was a startup of a couple of people in Bangalore then you would not have the confidence, but if you know that you are going after a $40 billion market in 2004 and you have the right group of people then you will invest a lot of money. The confidence comes because Tejas is associated with Sycamore, that means you have market access," emphasises Deshpande.
How much money have the three promoters Deshpande, Sycamore and ASG-Omni put into Tejas? They are still very tightlipped about it. "We will disclose it at the right time but money is not a problem. At Sycamore itself we are sitting on $1.5 billion in cash after our IPQ, which is more than many of our large competitors. But I am on the board, Kevin Oye of Sycamore is on the board. Our management time is at a premium and I am spending a lot of time here. We are looking for some thing really big here," says Deshpande.
We have had several very successful software services startups in India which have become world class services companies. However, we still do not have a successful technology products company. One reason that has been always given by the industry pundits is that we are far from the market place (read the US). So will Sycamore playa facilitating role in this startup? "Definitely. Access to market knowledge is an absolute must for any product company, but Sycamore will straightaway provide a tunnel into the US market, which is still the most important market. Tejas is at a different vantage point from Sycamore. Sycamore had to live on its own, it had to compete with Lucent, Nortel and all the big boys. Tejas does not have to fight for survival, it just has to execute. If you can get 100 very, very talented people with a certain culture then that is a huge asset. To build products you need market knowledge, you need the process, domain knowledge, etc of world class which does not exist in Bangalore. So you need a lot of interaction with Sycamore and that is what we have been doing. Some of the speed at Tejas is coming from there. At Sycamore we take a lot of pride in all this. Everybody says the last guy did something in 30 days and I will do it in 27 days and so on. You can already see the flavour of that at Tejas and once you have the culture and the machinery to execute, then developing products is just identifying the right target and going after it," explains Deshpande.
"If it needs about $25 million to develop a world class product, it does not mean that anybody with $25 million can successfully build a product. It needs deep market knowledge and domain knowledge. Thus Sycamore is key to Tejas' success," adds he.
Tejas will have two divisions working in tandem. One at product development and the other vending Sycamore products in India which will also build capabilities for network design, deployment and support. The Tejas team is already talking to many people in India who have declared their intention to build large, broadband networks.
So what is new? Have not all Indian companies started with services and then slowly ventured into components and products? The crucial thing is not to look at services as bread and butter and invest the revenues from services into product development later, as is wont with Indian companies. The services team will build for the global market. "Even this is being done with our product strategy in mind; after all there is a lot more to do in a product company than just build products. While we build a world class R&D centre for products we will be building a sales and marketing network for Sycamore's products which will be very crucial when we come out with our own products. Opportunities will not wait at that time for us to build up our marketing," adds Sanjay Nayak.
"People like Sanjay and Kumar would not have joined us if we had started a sales office for Sycamore. Such talent can be attracted only if it is a product startup with all the attendant challenges and rewards. They have built products in the past, but for others. Now they will be doing it for themselves," says Deshpande.
Tejas, is a Sanskrit word that means brilliance, radiance and energy. A million eyes are literally watching Tejas to see if it will light up. For their first product roll out, watch this space.
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