Nadar and his five colleagues quit DCM in the summer of 1976. They decided to set up a company that will make personal computers. This firm was called HCL Technologies, which manages to hold its own against Infy & Wipro.
In 1976, during lunchtime at Delhi Cloth Mills, DCM, a group of six young engineers at the office canteen were discussing their work woes at DCM’s calculator division. Despite them all have having jobs that paid them well, they were an unhappy lot - they wanted to do more riding on their own gumption. They decided to quit their jobs and start a venture of their own. The man who was fueling the ambitions of his five other colleagues at that canteen was a 30-year-old engineer from Tamil Nadu, Shiv Nadar. And this is how the story of Hindustan Computers Limited, HCL began.
Nadar and his five colleagues quit DCM in the summer of 1976. They decided to set up a company that will make personal computers. They had gathered enough technical expertise at DCM’s calculator division but like all start-ups, getting funds was the problem. But Nadar’s passion for his new dream company and the support of his enthusiastic colleagues soon made the task very easy.
Founder, Chairman and CEO, HCL Technologies, Shiv Nadar told CNBC-TV18, “The first person I met was Arjun and he was also a management trainee like me. He was a couple of batches junior to me, we became very good friends and we are still very good friends. Then the rest of them all worked for DCM and we all are of similar age, so we used to hang out together, crib together, have fun together, work together.
Nadar would first have to gather cash to give wings to his idea of manufacturing computers. He floated a company called Microcomp Limited - through which he would sell teledigital calculators. This venture threw up enough cash to allow the founders to give shape to their ultimate dream to manufacture computers in
The year after HCL was floated, the Indian government reigned in the ambitions of the foreign companies in
Managing Editor, The Smart Manager, Dr. Gita Piramal says, “Few Indian businessmen were happy when George Fernandes became Industry Minister in 1977, when the Janata Party came to power. Foreign businessmen were even less happy that Coca-Cola and IBM left
HCL started shipping its in-house microcomputers around the same time as its American counterpart Apple, and took only two more years to introduce its 16 bits processor. By 1983, it indigenously developed a relational data based management system, a networking operational system and client-server architecture, almost at the same time as its global peers. The road to the top was now in sight and HCL took it a step further by exploring foreign shores.
HCL’s first brush with international business came about in 1979 when it set up a venture in
Co-Founder, HCL Technologies, Ajai Chowdhry says, “We discovered that there was a good opportunity to enter
Even as it was basking in its success in
Nadar explains, “We knew many people in IIT and Indian Institute of Science. We formed an advisory panel and asked them, can you help us navigate this whole thing and they were very enthusiastic about this and they of course shaken up a little bit when they saw that we started advertising in Bombay - selling education as a commercial project.”
From calculators to IT education, the first five years of HCL was a combination of growth and expansion riddled with uncertainty but the company was now gearing up to set a much bigger target for itself and an announcement from the government would help it takeoff to those soaring heights.
In 1984, the Indian government announced a new policy that would change the fortunes of the entire computer industry. The government opened up the computer market and permitted import of technology. With new guidelines and regulations in place, HCL grabbed the opportunity to launch its own personal computer.
The demand for personal computers was slowly but surely mounting in the Indian market. Most banks were shifting to the UNIX platform. A few companies approached HCL for personal computers, so, the founders flew all over the world to bring back PCs they could take apart, study and reproduce and indigenously upgrade. Their first innovative personal computer was ready in three weeks’ times and soon they launched their first range of computers, and they called it the Busybee.
Chowdhry says, “In a lot of ways, it opened up the market because one thing was that, you no longer had to develop basic stuff in
In two years, HCL became one of the largest IT companies in
The adrenaline rush of the first half of the 1980s and the rapid expansion strategy soon caught up with HCL. A turning point came in 1989, when HCL on the basis of a report by McKinsey and Company decided to venture into the American computer hardware market. HCL America was born but the project fell flat on its face. HCL had failed to follow a very crucial step necessary to enter the
Piramal says, “For every entrepreneur, the
It didn’t take too long for HCL to brush off the disappointment in the
Chowdhry explains, “In 1991, when
In 1997, HCL was already a multi-dimensional company spun off HCL Technologies Limited to mark their entry into the global software space. It made up its mind to focus on software development, which was twenty years behind its entrepreneurial journey, Shiv Nadar was now ready to take on global competition with all his might. From 70s to 90s, the HCL story was one of steady rise but in the face of its rapid expansion and continuous flow of achievements, Shiv Nadar didn’t anticipate that he would be in for a rude shock and that it would come from someone very close.
In 1998, Arjun Malhotra, Shiv Nadar’s comrade and friend decided to leave the company to start his own TechSpan, headquartered in
The revenues were shrinking from the hardware sector and Nadar now decided to redesign HCL. The company once again needed funds to grow and this time around, Nadar decided to look at the capital market. An initial public offer (IPO) was made on the Indian Stock Exchange in 1999, which was a stupendous success.
President, HCL Technologies, Vineet Nayar says, “The shareholders supported us and then I think we started with Rs 580 an IPO and went up to Rs 2,800 or something like that. So, it was a dream run, I think the shareholders bought the argument we were making, they liked the articulation of the strategy, they liked the management team and they liked the vision we were painting and they supported the stock full time and that was a turning point for HCL.”
Shiv Nadar now put aside his dream of becoming a global hardware major and venture into software with an open mind and a clean slate. Technology was opening up vistas of opportunities in the software sector and HCL now wanted to build new businesses. Global business became a priority, so, now they started a BPO in
The years that followed saw HCL in an expansion mode. In 2005 alone, HCL signed a software development agreement with Boeing for its 787 dreamliner programme. Next came a venture with NEC,
The successes of 2005 spilled over into 2006 and the company now produced over 75,000 machines in a single month, with more parallel joint ventures growing on its list. But in spite of this overwhelming success, Shiv Nadar would not rest. There was a nagging sense of dissatisfaction and perhaps not having exploited its full potential that still drove Nadar and the company to achieve much more.
Thirty years after starting his company, Shiv Nadar really does not have much to complain about. Hindustan Computers Ltd today is an empire worth USD 3.5 billion with staff strength of 34,000. But then dissatisfaction has been the quintessential factor that has made Shiv Nadar the visionary that he was and continues to be. Dissatisfaction once drove him to quit his job at DCM and it is that same quality even today, that is driving him to achieve much more when he can quite easily rest on his laurels.
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