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It was May 1984 when I joined this fledgling industry as President of Wipro, which was then little more than a start-up, but destined to become an industry giant.In March 84, Dataquest India, the magazine which would chronicle the growth of this industry was born. The first DQ Top-10 list of May 1984 revealed an industry of Rs.125 crores of which a cluster of computer companies contributed about Rs.100 crores. The software pioneers, Tata Consultancy and Datamatics, had started much earlier and had been joined in 1981 by Infosys. These presumably contributed much of the balance Rs.25 crores in the industry total of Rs.100 crores. The top 10 companies were headed by two “biggies” of Rs.20 crores / Rs.15 crores (ICIM and ECIL) who would later fade away. Two of the companies, HCL and Wipro, would go on to become the only 2 significant domestic computer companies and the only two to also play a significant role in the growth of the software industry later. The credit for laying the foundation for the computer and software industries goes to the entrepreneurs behind these companies – Azim Premji, Shiv Nadar, Narayana Murthy and F C Kohli of TCS who, rightly, is known as the father of India's software industry.

In 1984 when I joined Wipro, absurd as it may sound, Wipro's production was limited by a license capacity of Rs.6 crores. The atrociously high import duties limited demand. It was not until Rajiv Gandhi's new Electronics and Computer policy of 1984 that some of these shackles were cast aside and the computer industry began a few years of heady growth of above 50%. However, when the liberalization of 1991 occurred, the Indian computer companies were still too small by global standards and had to supplement the sales of their own brands with imported MNC brands. Indian computer manufacturing never escaped from the tyrannies of the country's dreadful manufacturing infrastructure, erratic customs clearance cycles, high import duties etc., and never established a global manufacturing presence, though HCL did make a brave but unsuccessful attempt.


In the meanwhile, the success story of India's software exports was gathering momentum under covers. Aiding the effort were two remarkable bureaucrats. The first, Dr Seshagiri spearheaded a model copyright law, giving technology companies confidence that their IP would be protected in India: prior to that, AT&T would not even allow the source code of UNIX into India! The second, Mr N Vittal who, in his tenure as Secretary, DoE, shaped the STPI policy and also permitted use of communication links from global companies and not just the DoT monopoly. I would also highlight the role of Dewang Mehta who, as Nasscom President, lobbied for favourable policies for software exports and the first Nasscom-McKinsey report which helped create the Vision of a $ 50 bn industry.

Ironically, one of the major spurts for growth of the industry came when visa restrictions began. The industry scrambled to increase the offshore content and thereby enhanced the value proposition to customers, besides building an industry based on sound processes and delivering the highest quality. Another phenomenon which emerged was the recession of 1991-92. As customers sought to curtail costs, there was a boom in off shoring. We seemed to have discovered an industry which flourished in both growth and recession scenarios.

Another aspect of the growth of India's software industry was that it was a classical case of a disruptive industry where the incumbents didn't understand the significance of the change until a formidable global competitor had been created. At first it was felt that the industry would be able to operate only in steady state environments such as mainframe application maintenance. As new technologies evolved, communication technologies improved in parallel. Progressively, Indian software industry demonstrated the capability to execute in a client-server environment and also to deliver Internet based projects with a short turnaround time.

The growth of India's enterprise software industry, led by TCS and Infosys, is well chronicled. I would like to highlight the creation of two major new segments which arose from our computer industry capabilities.

The years after IBM's departure from India saw the growth of an Indian computer industry where it was necessary to design everything on our own: operating systems, device drivers, computers, board design etc. The liberalization of 1991 brought in a flood of imports and it became difficult to sustain these R&D costs. It was Dr Sridhar Mitta of Wipro who conceived the idea to make this capability available to the world; in effect create a lab on hire. The idea succeeded and thus was born India's R&D / Engineering design segment of Indian software exports. Sridhar's band of followers like Lakshman Rao, Subroto Bagchi and Janakiraman who were prepared to risk their careers in a pioneering role brought in early results. HCL, the other company with such design capabilities, transformed its failing minicomputer export business into a design Services business under the leadership of Arjun Malhotra.

The second segment was Remote Infrastructure support. Once again, the capabilities existed in the two large domestic computer companies, Wipro and HCL who were involved with computer maintenance and facilities management. As technology evolved, this capability transformed to an ability to support infrastructure remotely on a 24x7 basis. Wipro had started its Global Support business as early as 1997, but it was HCL which was the first to develop critical mass in what is now the fastest growing segment.

The IT industry is a people business. Any history of its success would not be complete without mentioning the role of training organizations like NIIT, Aptech and a host of Institutions that gave us excellent computer science graduates who form the backbone of this industry.

It should be acknowledged that dozens of small and mid-size players played an important role and also opened new segments: GIS was driven by Infotech Enterprises, PLM by Getronics etc. I have also not touched the BPO segment where the earliest players included Spectramind and Daksh, with Raman Roy of the former acquiring the sobriquet of father of the BPO industry.

One important feature of the Indian IT industry has been the adherence to highest standards of Corporate Governance with a couple of sad exceptions. It has been a matter of pride and joy for me to have been a part of this fantastic journey and contributed to its success. n

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