The Hindu Business Line : The excitement continues

If the Founder and Chairman of Satyam Computers, B. Ramalinga Raju "didn't think about not returning to India... the thought didn't even cross my mind" after completing his MBA at the Ohio University in 1977, it was thanks to "the entrepreneurial spirit that my father had instilled in me; I and my brother Ramaraju (MD) would not have been able to do what we have done but for our father. He encouraged us to be independent and he himself was an entrepreneur."

After completing B.Com in 1974 from the Andhra Loyola College he went to the US for his MBA. After returning, "true to the trends prevalent at that time, I got into many activities — real estate, manufacturing, prawn culture and all kinds of things."

On when the idea of setting up an IT company came to him, he says the various activities the family undertook earlier had to do "with a process or a technology and we were also using IT in all our businesses and felt this was an exciting thing to do." Excited at the prospect of getting into a knowledge industry, "I wrongly imagined at that time that creativity here is far greater than in other businesses. But that view has changed over a period of time because creativity can be there in anything that you undertake."

Looking back, Raju is amazed that they decided to get into IT — Satyam started operations in 1989 — thinking that "you didn't have to invest much and you could do some interesting stuff. But after starting we quickly realised that it does require a lot of investment!"

The initial years were "very tough because unlike other industries where you can look at the assets coming up... the construction is an asset and so is the machinery... here the asset is in an intangible form, and the investments are not insignificant either because of the expenditure required in international travel, human resources, communications."

So, did he go through a period of doubt?

"If you are an entrepreneur... you always have to weigh your benefits and risks on a day-to-day basis and there were many moments when we were not sure about our decision. But we did have a lot of confidence in the knowledge-led industry that was progressively taking shape then. But the fact that we persevered paid off."

Satyam's turning point

One of the turning points was Satyam's ability to establish the first 64-kilobyte satellite connectivity between its office and a customer in the US through the VSNL. "That was a major turning point and was done at a customer's initiative."

On how it feels to be an Indian IT industry leader at a time when the world looks at India with a new respect compared to the situation in 1989, he says, "Oh, that's the difference between night and day; a phenomenal change has come in. I remember those days in the 1980s when we were led by a control economy driven by production. But then almost overnight you stepped into an economy that is driven by the markets, quality and professionalism of the highest order. Today there is more importance attached to human resources than to just capital."

He is proud that India has come to a threshold where "everyone recognises that we are among the countries that will define the future of the world. We are no longer in the backseat; we are in the driver's seat! Without a doubt these are very exciting times. Opportunities are all across and this tells you that it is not wealth distribution that dominates our profession today but wealth creation. And, that wealth can be created and very quickly. Today you can create value from almost thin air, and then blend in knowledge and do things that have never been done before."

The digital divide

And yet you have backward regions in the country, such as the tribal villages of Orissa where starvation deaths are still a possibility. How do we bridge the difference between the two very different Indias?

"Every company and every industry has a role to play," is Raju's response.

But the fact remains that the IT industry has raised such huge expectations that even a fisherman's son in Ramanathapuram in Tamil Nadu dreams of becoming a software engineer! Doesn't that put an enormous challenge and responsibility on his industry?

"Yes, and the industry is also shouldering that responsibility rather well... there are about 1,000 companies in Nasscom and many of these companies are looking well beyond their immediate gains. The fact that they have benefited from their surroundings, the fact that people got good education and the right environment has been well appreciated by them and they want to give back. Therefore there is a lot of positive energy. But having said that let me repeat that our industry depends more and more on organisations and individuals doing what they do well. That has to be recognised."

Raju says reaching out to smaller towns and rural India is fine, but "if we don't do a good job of what we take up, then our ability to bring about a turnaround suffers and along with that our image in the world will suffer. If the Indian IT industry does well then its ability to contribute to the rest of the country will only increase." Hence companies would have to focus on building their businesses around core competencies because that is the key to success."

But his own Foundation — Byrraju Foundation — has taken initiatives in rural India which include starting GramIT, a rural BPO in Kakinada, where Satyam has shifted its bookkeeping operations and is looking to shift some more lower-end jobs.

Dramatic pace of business

On the kind of threat the Indian IT industry faces from China, Raju says, "We have to look at threats arising out of lost opportunities, and not from other countries. Of course other developing countries are also going to look for global opportunities in this sector, but there will be sufficient opportunities for all and apart from what can be done in rural India there are many newer ways of doing things within India itself."

He points out that in the beginning of the last century, the world had less than $1 trillion of GDP. "That had grown to over $20 trillion by 1990, exceeded $32 trillion by 2000 and is presently around $40 trillion. So the world is adding more wealth every year than what it possessed at the beginning of the last century. This $40 trillion in the next 15 years will become $80 trillion."

As you take in the heady figures he quotes, Raju adds that today services are growing faster than the world GDP, so the proportion of services in the world GDP is increasing. "But even more interesting is the fact that global trade is increasing at a faster pace than services and the world is becoming a globalised world."

Earlier the mindset was about which companies one could provide services or goods to in the region. "But now in whatever you do the context is opportunities available on a global scale. Therefore my economic activity is vis-à-vis global opportunity. This has very important implications and an even more dramatic trend is virtualisation of services."

billion-dollar plus

Satyam has already become a $1-billion company, so what next?

"The mindset today is one of initiative, innovation, of wanting to get the best people and the best companies globally. At one time we were looking at bridging the gap between us and the large systems integrators, but today we're saying we can do things as well, if not better. And in many of their practices we see a lot of room for improvement and we are working on it. We want our company to be one of the top few globally and respected for what we do. I give a lot of importance to people and consider the company's 28,000 employees its biggest asset."

On women's contribution to the IT industry, Raju says, "They are making a significant contribution, the environment today is very conducive. But the contribution of women in our country has always been understated; what they have contributed in every spectrum is very significant and continues to be so. Actually their indirect contribution to the IT industry will be far greater than what men would have contributed."

He responds to your puzzled look with a smile. "The IT industry is founded on education and education is always driven by women; the kind of effort women have put in to create the asset of educated Indians is phenomenal."

Beyond business

Reading: It's my passion and I like reading non-fiction. I find it very relaxing.

Astronomy: I'm really interested in it and have a 14" telescope, but don't find much time to use it!

Food: I'm a non-vegetarian and my favourite cuisine, other than Indian, is Thai.

Music: Can't call myself a connoisseur; but like anything that sounds pleasant!

Movies: When I have time; I visit cinema houses a few times in a year.

Dream for India: To see ourselves attaining a developed country status in a short time.

Response may be sent to rasheeda@thehindu.co.in

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