Gentlemen, thank you very much for joining us on the show. Let me start by asking you an absolutely magnificent history that the company has seen, a 30-year-old history, and it reads almost like a Bollywood script. Six friends working at DCM get together, possibly over a drink, and decide to turn entrepreneurs. Is that how it happened?
Well, we worked at it for a while and more or less that's the way it happened. When we did this work for DCM, we found that the total amount of money required to make this work was very limited. It was very people intensive, very knowledge intensive and capability intensive. So if we were going to do it for DCM, we did the calculator range of it and went up to programmable calculators. But when it came to computers, we figured that why don't we do it ourselves. So between us, we said let's just go and try it. And all it took was 1.87 lakh rupees and a lot of enthusiasm.
Actually, we said that the microprocessor was just making its appearance and we said why not take a microprocessor and change the world.
So, you sort of thought like that. Audacious thing to think when you're 30, 25 and 30. You really have only two lakhs to sort of start off with. It was an audacious dream, wasn't it? At that point.
Yes. But I guess what gave you the strength and the belief that you could actually do it? The strength and belief came from Shiv.
What gave you the strength and the belief?
When we worked out on the programming calculator when we were in DCM, there was a time I used to spend a lot of time in the R&D and we worked out the rough way to go into not only a microprocessor-based system but also a bit-slice processor-based system. And we finished the specifications in '77. We announced the product in '77, we shipped it in early '78, the same quarter when Apple shipped an identically spec'd machine, three years before IBM's PC started. Now, 30 years later, Apple survived, we are the number one in India, and I suppose the rest are gone. We are not pioneers of just Indian technology, we are pioneers of world technology.
That's exactly the point that I'm trying to make. I'm saying that in the 30-year history that you've actually had, there's been several firsts to HCL's credit. Yet, when you look at public perception, when you look 30 years down the line, when you talk to common, ordinary individuals on the street, when they talk about technology, they don't talk about HCL technology. Does that disappoint you in that sense?
To me, in a whole auditorium if there are thousand people sitting there and clapping, that is not what I look for as my appreciation which I would care for. But if in a room of 10 people I have people like Rajat Gupta and Amartya Sen and people of that nature say something of what I have contributed, that is meaningful to me.
But if you were to look at the market cap game at this point in time, you're below TCS, you're below Infosys, you're below Wipro, and you're below Satyam. How do you explain that?
Age. Because HCL Technologies is six years old. I think Satyam started probably late '80s. Wipro started early '80s, and if I'm not mistaken, TCS started in '69. So we've got a lot of years to catch up with in terms of growth. I think they in some manner got into the Y2K. We missed the Y2K bus completely because we were never existing around that time. We weren't around there. So it is just that we got into it now and we have our own plans of how we want to take this forward.
One is help in the transformation area. And the second area where we would definitely go in would be we are product people. We understand products work. We understand services associated with products world, and we would in some form or other be there in the next five years' time.
All right. I'm sure there have been several learnings through the years for you. I was reading somewhere that in the initial couple of years you would actually drive your Fiat to the airport to make the deliveries on your own as well. It must have been trying times for you to actually get this company up and running.
It was fun time actually. Yes. Because when you're creating something it's tremendous because that's what gives you the passion to do more and more. And if you look at it from those days, HCL has been very clearly associated with a lot of passion and pride of being an Indian company. And when the initial products came out of the factory, we were just five or six days to go before the last day of deliveries when we came up with our first product.
That's correct. And since I had committed to my customer that I will make sure that the product gets delivered in time, I picked up my beat-up Fiat and went to the airport, picked up the computers, put them in my car, personally delivered to IIT Madras professors, and they were thrilled because we had met our commitment. So I think from those days we learned one very key thing: customer is the key for our organization and in a manner customer pays our salary.
Well, I'll come to the turning points that the company has seen and there have been several over the years, but let me talk to you about something interesting that Time magazine actually talked about and they said HCL Technologies is an intellectual clean room with endless possibilities. How does an Indian company where R&D really in India at that point in time wasn't taking off in a big way, there was no government support, there was no entrepreneurial initiative to drive R&D, how does a company like HCL develop this intellectual clean room with endless possibilities?
You know, that's because at that time India also did something. India shut itself to the rest of the world. And that prevented other technology moving out was a good thing for you. That just happened by sheer accident. The date on which our product announcement came and the date on which IBM's decision to quit India came was the same, 7th of August 1977.
That's right. Okay. And that's a strange coincidence.
It's an extraordinary coincidence. You know, it just happened.
Your entry into the US market was also by accident. McKinsey actually did a free study for you to tell you about the potential that the US market had. You say that the strategy was right but the product at that point was wrong. Was that one of the turning points for you?
Actually, you know, for a company of our size to think of exporting hardware to the United States is a real big deal. And we actually did it. We actually manufactured the first few products in the United States those days. We set up shop in the valley and started it all and we were very, very successful getting orders. But we hadn't planned for something which was environmental approvals. So it put paid to our plans.
Mr. Chetri, talking about the hardware market, you hope to capture about 25% of the market. There's been trying times on account of the kind of anomalies we've seen by way of the budget. We haven't seen penetration increasing drastically even though prices have come off quite drastically. What's the journey been like for you? How have you assessed the journey so far for yourself?
Now, if you look at the whole PC business, the penetration till now is still around 15 out of a thousand people. So how do you make PCs cheaper? Number one, how do you make PCs available on a monthly basis? So we were the first in the country to launch a campaign around 490 rupees per month. So that's how we started the whole EMI thing. We started EMI in the country. The other issue that I have been propagating always is that there's going to be three things that will actually make PC penetration happen. One, affordability. Two, availability of broadband at low cost. Three, availability of content in multiple languages. Now, the first one is happening. The second one is starting to happen. And the third one is gradually happening. Just about getting there because if you notice, Microsoft has just released multilingual operating systems. Linux is now available in multiple languages. But despite that the Indian content is still to happen in some of the other areas but if you look at Indian content from entertainment area it's available.
There's a constant innovation. If something doesn't work you move on to the next thing, you move on to the next thing. Does that stem from your philosophy that entrepreneurs have to be perpetually paranoid? You strongly believe that.
Paranoid is one thing. You know, we are in a technology in which if you want to be ahead, you're always trying the threshold. Whenever you're trying the threshold, sometimes you'll push a little bit more and you'll fall. But the point is don't just stay there. Get up and run.
Coming back again to the entrepreneurial spirit of the company, I was randomly looking through the number of former HCL employees who've then gone on to do their own thing, to do their own startups. I came across about 20 or 25 of them. Of course, you've got several others who are heading Indian or global corporations. What is it about this company that drives or nurtures this entrepreneurial spirit? Let me put that question to both of you. Let me start with you.
We really nourish leadership.
The first thing is in this company I don't think age matters. I remember once I was meeting up with a bunch of management trainees. And they were in my room and after introductions, one of them asked, he says, how do you expect to be called, addressed? And knowing that their age group, I said, I roughly belong to if your father or your mother was an engineer she would have passed out with me. So you could call me Mr. Nadar or you can call me sir or if you're very western inclined you can call me Shiv. There was a girl whose mother was, father was I think three, four years junior to me in college. She first thing addressed me was Shiv, what I want to hear from you.
No, they were all part of the company. Yeah, I still remember our first ad which said take a bunch of young engineers and put their mind on fire. So that's how this company has been made. We always took young people, believed in them and gave them a whole lot of responsibility and said go and make it happen. Therefore, it's happened for us.
Talking about the two of you now, the company goes back about 30 years. I believe you go back almost 32, 33 years.
34 years. So, a lot of common interests as well. You both enjoy sports. You both like the arts. Do you actually manage time to sort of meet up and discuss other things apart from work or is it always the boardroom that you sort of get together in?
Well, we see a whole bunch of cricket matches together. Went to South Africa together. We went for the World Cup. We went to Lahore together. Yeah, we went to Lahore recently. We're just planning the next World Cup. We see films together.
