India/Pakistan

Sculptors of Silicon India
A review of Chidanand Rajghatta's The Horse That Flew. How India's Silicon Gurus Spread Their Wings

By Sreeram Chaulia

It is always delightful to read Chidanand Rajghatta's investigative dispatches from Washington on India-related happenings in US policy-making circles. What comes as a pleasant shock is evidence that the diplomatic correspondent of the Times of India can also hold forth with pizzazz on the vertiginous heights attained by India's New Economy gurus in the rarefied realm of information technology (IT). A greenhorn to the arcana of high-tech and the Internet in 1995, Rajghatta diligently applied himself to learning more about the processes and products that were changing the world, in the process interviewing the movers and shakers who were reshaping the horizons of the knowledge economy. This book is the confection of an inquisitive journalist's five-year-long voyage on the trail of the Indian IT miracle and its "techie" sculptors.

Genesis
India's nascent high-tech industry received an unexpected boost from the expulsion of IBM by the Janata government in 1978. Big Blue's exit created a vacuum that was filled by indigenous hardware production and software writing companies such as Hindustan Computers Ltd (HCL), Patni Computer Systems, Wipro and Infosys.

Tightly controlled import restrictions and socialist claptrap rendered entrepreneurial growth cumbersome in the 1980s, but what captivated early Western headhunters about India was the abundant reservoir of human capital. "The infrastructure was lousy, the machines primitive, but the local talent was unbelievable." (p 11) Texas Instruments, Hewlett Packard and General Electric outsourced software development to India because, in the words of Jack Welch, "India was a developing country with the intellectual infrastructure of a developed country." (p 13)

Underneath a welter of bureaucratic shackling, the Electronics Secretary of the government, N Vittal, and later Finance Minister Manmohan Singh, acted as catalysts to the rising "thud value" of Indian IT by overriding manacles and ordering bandwidth lines and tax holidays for software exports. The Y2K paranoia and the Internet-wireless boom of the mid-'90s also enabled India to leapfrog decades of obsolete thinking and position itself for a tryst with digital America.

The superstars
The "poster boy for Indians in the high-tech boom", Sabeer Bhatia, designed Hotmail at the tender age of 26 with a stunningly simple and original idea - a standardized free e-mail service accessible on any computer through the World Wide Web without expensive proprietary software. Burning with entrepreneurial fire and stymied by the lack of innovation at Apple Computers, Bhatia scoured Silicon Valley for venture capitalists who would invest in his Hotmail. Those capitalists who did not latch on to him recalled later that Bhatia had "a sense of destiny about him. It seemed no matter of discouragement would stand in his way." (p 53) His "hallucinogenic optimism" paid off when Microsoft began shopping for its own e-mail service and spotted Bhatia's user-friendly and potentially universal Hotmail. From a first formal offer of US$200 million, Bhatia haggled with Bill Gates and finally agreed in December 1997 on a $400 million sale of Hotmail, turning him into the first Indian legend of the "e-economy". The boyish Punjabi lad "would forever be a glowing signpost on the information superhighway". (p 62)

Vinod Khosla, named by Fortune magazine as "the greatest VC [venture capitalist] of all time", founded one of the most famous brands on Earth, Sun Microsystems, at the age of 27 and went on to fund more start-ups in optical networking, router manufactures and transmission companies than any other financier on Earth. A modest middle-class Delhiite who graduated from the Indian Institute of Technology (IIT), Khosla's fame and reputation were engraved on an entrepreneurial motto he adopted very early in life: "Success comes to those that dare to dream dreams and are foolish enough to try and make them come true." (p 76) His uncanny ability to "pick winners" (Sparc microprocessor, K-6 chip, NexGen, Juniper, Corvis, Excite etc), challenge established paradigms and carve out landmark changes in the technology world led to Upside magazine naming him in the company of Alan Greenspan and Bill Gates as one of the most influential tech leaders of the coming era. The Wall Street Journal paid tribute to the Khosla Midas touch by calling him "the hottest hand in Silicon Valley".

Vinod Dham, father of Intel's Pentium chip and the rival K-6 chip that together dominate personal computing the world over, worked in half a dozen high-profile companies to attain the reputation of an all-arounder who has mastered not just the semiconductor but also sales, marketing and other aspects of business. His rise owed to the qualities of handling pressure, deadlines and unexpected situations with beatific calm, trademarks now attributed to all Indian tech high fliers. Dham's own lessons in contingency planning were learned catching Delhi's crowded buses. "A ... bus in Delhi will never stop before a bus stop or after a bus stop. You have to strategize and plan constantly to get on." (p 93) Prone to bedside reading of the Bhagavad Gita and Paramahansa Yogananda's Man's Eternal Quest, Dham's deep scientific-philosophical spirit was on full display when AMD sent shivers up Intel's spine in April 1997 with the K-6. He told the media, "Electrons move at the same speed, whether they are at Intel or AMD. Physics works the same for all of us." (p 104)

Kanwal Rekhi, president of The Indus Entrepreneurs (TIE) and "godfather of the Indian mafia" in Silicon Valley, helped fuel Indian enterprise in the United States on an unprecedented scale and helped give substance to the new image of Indians as not just "software-coolies" writing codes but as managerially and financially adept chief executives. Frequently lapsing into the lingo of a shopkeeper from Delhi's Karol Bagh, Rekhi spent several years in the early 1970s struggling against residual racism that decreed that irrespective of talent and experience, Indians could never rise above the rank of a systems engineer. Americans knew Indians could design, but they were not sure if Indians could sell and market.

"The issue was whether Wall Street investors were ready for an Indian CEO. It wasn't just because I was an Indian. Women, Jews, blacks ... all had the same problem," Rekhi reminisced. Having gone through trying start-up blues himself, Rekhi vowed to not allow the same stifling of brilliance for the generation that followed and he co-founded TIE as an Indian techie networking organization that is today the toast of expatriate Indians and the envy of every other immigrant group. What is more, Rajghatta claims that Rekhi and TIE "engendered a pan-Indian identity involving not just the diasporic Indians but also other subcontinentals like Pakistanis and Bangladeshis". (p 125) Rekhi's rise from the quotidian struggles of post-partition uprooting and joblessness in the United States to status of angel investor "Don Rekhi" to whom hundreds of Indians owe their success is nothing but remarkable.

The nerds that roared
Suhas Patil, founder of Cirrus Logic, loved fixing bicycles and rickety radios as a toddler and when he was dissatisfied with the chemistry lab in his Jamshedpur high school he attempted making one at home. After working at the University of Utah on avant-garde two-dimensional languages for etching circuitry in silicon, he cranked up his own start-up, Patil Systems Inc, in 1981 (renamed Cirrus Logic). For years, Patil designed cutting edge CD-ROM drives without adapters, fax modem cards, microprocessors and chips for wireless communications. At its peak, Cirrus's roster of clients included Apple, Compaq, Dell, H-P, IBM, Motorola, Sony, Sun and Toshiba. "Every PC has at least one chip from us," Patil proudly proclaimed. (p 135) Patil diversified into angel investing in the late 1990s, seeding CyberMedia, RightWorks, Navinmail and Cradle Technologies.

Umang Gupta, owner of Gupta Technology, whose market capitalization reached US$400 million in 1993, was one of the first Indians to secure a sales and marketing job at IBM in the early 1970s. After a three-year stint at Oracle, he bootstrapped Gupta Corp and pioneered a new generation of software, inventing the term "client server" and devising the world's first ever client-server database program and tools for personal computers (PCs). In 1997, he mentored and invested in Keynote Systems, which produced a web monitoring service that provided correctives before a seizure, crash or hack attack. Keynote gained the reputation of "Kleenex of the Net" and its stock touched a dizzying $4 billion in late 1999.

Desh Deshpande, serial entrepreneur and founder of Sycamore Networks, which had a market capitalization of $40 billion before the Nasdaq downturn of April 2000, had a small-town upbringing in the boondocks of Mangalore and Belgaum, followed by the invariable IIT degree. After sulking through a job at Kodex, his fecund mind came up with Cascade Communications, a networking and packetizing company that specialized in routers. By 1994, 70 percent of the expanding Internet traffic was running through Cascade products. Desh's prescience quickly diverted his attention to the new buzzword, bandwidth. "Just as oil was the most important commodity of the last 25 years, it struck me that bandwidth will be the most important commodity in the next 25 years." (p 156) Sycamore was created with the aim of developing wavelengths of light (via optical fibers) instead of conventional electric signals to transmit information, multiplying the traffic carrying capacity of Internet servers. Like those of his brother-in-law, N R Narayana Murthy, Desh's superlative achievements are peppered by personal modesty and optimism that "Indians have it in them to overcome all hurdles". (p 160)

Pradeep Sindhu, whose Juniper Networks was named among the top 20 Internet infrastructure companies of the world by Forbes and Fortune, found working on a fat salary at Xerox a Sisyphean job and spotted the mass market in router technology as Internet traffic began doubling every nine, six and then three months in the mid-1990s. "I could visualize the technology to implement a new breed of routers, more reliable and scalable, to meet the enormous demand for bandwidth," he told Rajghatta. (p 163) Juniper's M-40 was the first router to allow Internet service providers to handle traffic at the rate of 10 gigabits per second. Mentor Vinod Khosla felt that Sindhu was "the unsung hero of the Internet" since "he permanently changed the definition of what a router does and got Internet protocol on a robust footing".

Several Indian "network nawabs" and honchos have sculptured their own niches after Desh, with Mukesh Chatter's Nexabit Networks eclipsing every other start-up and delivering a router machine with promised speeds 160 times as fast as the swiftest product on the market. Lucent Technologies bought Nexabit for a walloping $900 million. Avici Systems, led by Surya Panditi, designed a "next generation" router that could eventually grow large enough to accommodate six terabits of data, amounting to 72 million telephone calls at one time. Hemant Kanakia left a lucrative Bell Labs assignment and started Torrent Technologies, which supplied high-capacity edge routers to companies such as Concentric, Exodus, France Telecom and Sonera.

Jagdeep Singh, whose Lightera Networks was sold to Ciena for $657 million, went into Dense Wave Division Multiplexing to increase the capacity of optical fibers and then moved to scalable switches. Arun Netravali, one the biggest Indian success stories in the US, was appointed president of Bell Labs (the largest telecom research and development facility in the world) in 2000, where he is supervising innovations in optical fibers, wireless, the world's smallest transistor and the world's fastest switch. Rajvir Singh, the hardy man from Meerut who wears Indian patriotism on his sleeve, made not just chips and semiconductors but pioneered the heart, lungs, nerves and veins of the Internet with his Fibrelane and StratumOne Communications. Next only to Vinod Khosla in serial entrepreneurship, Singh instituted Redwood small venture funds for and by Indian techies and has spun off so many start-ups that Ragjhatta muses whether he is "the nearest thing to a Banyan tree in the Indian-American community". (p 189)

Dealmakers, hardware heroes and a few heroines
Prakash Bhalerao, the best-known "hustler investor" in Silicon Valley, founded, led or guided a whopping 40 IT companies, including Amber, Ambit, Ishoni and Alopa Networks. Splitting, cannibalizing and spinning off start-ups with alacrity, Bhalerao gained a hardball reputation famous for speed and stealth, qualities he claims to have inherited from his Peshawar origins and childhood lessons about Shivaji's tactics against Mughal emperor Aurangzeb. An even more colorful dealmaker is Naveen Jain, whose brash manners enamored the high-tech media. After burning boats at Microsoft, he bragged about his start-up InfoSpace becoming "the world's first trillion-dollar company". Stitching clever agreements MoUs with AOL, Lyocs and go.com, Jain took InfoSpace's web directory to scintillating scales, with a maximum valuation of $20 billion and a personal fortune of $861 million. Steadily re-strategizing and reorienting in a fast moving and unpredictable field like the Internet, "Jain's genius lay in his ability to constantly reinvent InfoSpace and change course with the evolution of both the technology and market sentiment." (p 217). Another manic and high-octane worker like Jain, Hatim Tyabji of Saraide.com and Verifone sublimated private life for the companies he headed and coughed up incredible results in revenues and profits.

One big misnomer floating around lay circles is that Indians excel only at programming and codewriting. The success of K B Chandrashekhar and B V Jagadeesh's Exodus Communications shows how Indians have risen up the value chain of the hardware sector. Notching up a market capitalization of $20 billion by 1999, Exodus came up with around-the-clock hosting and high-speed connection for heavy traffic websites such as MSNBC, Inktomi, Hotmail, Amazon, Yahoo, CNN et al. While Wal-Mart took 20 years, Microsoft 15 years and Cisco 10 years to make their first billion in revenues, Exodus led by two spunky little Indian immigrants did it in a hair-raising five years. Chandra was named Ernst & Young Entrepreneur of the Year in 1999 and the US government declared Exodus a "National Infrastructure Asset" in 2000. His new venture, Jamcracker, then forayed into Applications Service Provision (ASP), a one-stop dotcom where companies shop for e-mail, expense reports, payroll, spreadsheets etc without back-end hosting.

The earthy and down-to-earth Kannadiga, Kumar Malavalli, earned his claim to fame by mastering Storage Area Networks (SAN) that allow big companies like Sony and CNN to stash away vast reams of data at secure off-site locations. His Brocade Communications (market capitalization of $30 billion) commanded 80 percent of the SAN market by 2000, making it the cynosure, envy and focus of Wall Street. Vivek Mehra, founder of Cobalt Systems, is another hardware hero, though lesser known. He quit Apple at the age of 31 and started working with a small team on "commercially counterintuitive" servers, that is, low-cost lightweight Internet servers. His Qube 2700 model, priced under $1,000, plugged by only two connections - for the power and for the network - became a rage in the education market. PC magazine named Qube Innovation of the Year.

Though female executives are rare in the high-tech sector, a few Indian women are leading the battle of the sexes. Radha Basu, head of H-P India for 15 years, was voted one of the 25 most influential people in the tech community. Her recipe for success? "You cannot be a good manager if you have experience in only one layer. You had to be anchored in a functional area ... but you also have to have two other acquired skills." (p 246). Vani Kola, co-founder of RightWorks and carrier of the "CEO on steroids" label for indefatigable energy, fought off traditional south Indian familial reluctance to allow daughters into engineering, and through dogged drive bore an e-commerce giant with $40 million in annual revenues. Srinija Srinivasan, chief ontologist and web editor of Yahoo, showed early inclination toward math in childhood and went on to team up with Jerry Yang and David Filo to create the basis structure of the Yahoo directory. Newsweek feted her as one of the 50 people who matter the most on the Internet. Lata Krishnan, co-founder of SMART Modular, was the highest-compensated female executive in Silicon Valley, with a salary and stock options worth $3.9 million. These bright spots have set off a trend whereby "Indian women are now chucking up history, philosophy, literature and plain old home-making to go the tech route". (p 262)

The twin towers
N R Narayana Murthy, the founder of India's most successful software firm, Infosys Technologies, is nothing short of an "entrepreneurial Mahatma" who has "redrawn not just the Indian business map, but also fundamentally changed the country's entrepreneurial ethos and culture". (p 300) From a nondescript Rs10,000 ($200) company in a 120-square-foot apartment to India's premier business house (market capitalization of $40 billion), Infosys's story is extraordinary and inspiring. Until India's economic liberalization began in 1991, Infosys struggled to pay its employees' salaries, but with the opening of the economy and the entry of software headhunting corporations such as GE, Reebok and Nortel, Murthy's stock and visibility soared. In 1999, Infosys became the first Indian company to list on Nasdaq, turning into an economic bellwether in India. Murthy, the unassuming son of a Kannada schoolteacher, was named one of the world's "seven hottest entrepreneurs" by Business Week. By 2000, Infosys had the world's largest software facility and also the company with the most millionaires (every employee of the company, from chefs to chauffeurs, is a stakeholder).

Azim Premji, CEO of Wipro Technologies, became the world's second-richest man in early 2000 after his company's stock appreciated by a record 8,000 percent. But the "Talmudic tycoon" who redirected his father's vegetable-oil business into IT services was least affected by stock booms and busts and retained a self-effacing charm that is second only to Murthy's. "He often flew economy class, wore shirts and ties from Zodiac, and consciously avoided ostentation." (p 322) His business empire is predicated on three principles - hiring the most intelligent engineers, eschewing bribery and dishonest means and harping on quality and mistake-minimization in programming. Premji has also taken on the role of major spokesman on the role of IT in India's destiny, stating that if the government took bold and innovative steps and harnessed India's competitive advantage in IT, "we have nothing to lose but our poverty". (p 338)

India's fight against the digital divide
With cautious optimism (natural, after the dotcom bubble burst) and meticulous study of market surveys and projections, Rajghatta concludes that India, one of the world's poorest countries with the largest concentration of illiterates and barely 6 million PCs, has the potential to bridge the digital divide and employ IT as a motor for rapid economic growth. For decades, Asian Tigers have grown by manufacturing exports. "India could now be the first country to rely on growth driven by human and intellectual capital." (p 23) According to the World Bank's Javed Burki, by 2025 IT will contribute at least 1 full percent to the country's growth rate and India could be the world's third-largest economy at about $13 trillion.

Farmers in Dhar district of Madhya Pradesh, fishermen in Kerala and Pondicherry, slum dwellers in Delhi's Kalkaji and a myriad other remote, marginalized and underprivileged Indians are being connected to the Internet and wireless for aiding production, marketing and education activities. Internet kiosks and videophones are being introduced into electrified rural areas by companies such as Tarahaat, and it is evident that if India lives up to its IT potential with the apposite economic and governmental policies "the 21st century can be an Indian century". (p 355)

The Horse that Flew dazzles with rich language, funny puns, anecdotes and illuminating personal profiles of the "ubergeek" frontiersmen who have put India on the world map and sculptured the wonder that is Silicon India.

The Horse That Flew. How India's Silicon Gurus Spread Their Wings. Harper Collins, 2001. ISBN: 81-7223-431-7. Price: US$42.50. 375 Pages

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