One could start with the first recorded use of the symbol ‘0’ in India in
876 CE. But it is probably best to start with 1966–India had just been through
two wars–with China and Pakistan respectively. China had exploded a nuclear
device in 1964. And the US had cut off electronic equipment sales to India in
1965.
Prime
Minister Nehru needed a policy for "self reliance" in defense and the
Bhabha Committee on Informatics was formed to figure out how IT could further
that end. In that backdrop, the report’s central theme inevitably was "indigenization".
A word that was to drive the course of the industry for over a decade. At the
time, there were no local IT companies. There were a few MNCs like ICL and IBM–largely
selling old, refurbished systems in India with a substantial mark-up.
The first government response to the report then was to ask existing
multinationals like IBM and ICL to divest part of their equity to local
companies. When IBM flatly refused, saying it preferred to leave rather than
divest–the second response was to try and set up alternate channels.
The government took the monopoly route. The Electronics Commission of India
Ltd was set up in 1967 under the aegis of the Bhabha Atomic Research Center. Its
brief was to tie up with international companies for local manufacture of
computers–and to increase the local content to a point of "self
sustenance". At the same time, the Department of Electronics and the
Electronics Commission were established and later in 1976, Computer Maintenance
Corporation was set up. Import of computers was carefully regulated, depending
on ECIL’s production capacity, and the entry of the local private sector was
controlled. When the government felt the time was right, it re-exerted pressure
on IBM to divest. This time, when the Big Blue threatened to leave, the
government let it go in 1978.
The beginning of history
In a weird kind of way, that ignited the local Indian industry. CMC used the
opportunity and government protection to expand its skills quickly and,
eventually, found itself servicing 40 foreign platforms. It also developed a
reputation for unorthodoxy and elan.
The private sector–which had been pulling at the leash for an entry into
the industry–suddenly found the field all to itself. IBM was gone and ECIL,
despite its highly popular S-16s and S-32s, had other problems. For one, it
often took 18 to 24 months to deliver systems and there was a dreadful lack of
applications on its proprietary operating system. Importing computers was
expensive and painful–import clearances were difficult to come by and in any
case, the DoE clearance took at least six to eight months.
At the time, companies like DCM-DP (Delhi Cloth Mills-Data Products), Nelco
(headed by JRD Tata) and Microcomp (a breakaway of DCM) were making desktop
electronic calculators. They seized the moment to move into selling computers.
Others like CMS, Wipro, Blue Star followed...
|
Energy…
This was the time the Indian computer industry really took off. It was a
time of immense activity and the era had an energy that fairly leaps out through
the 20-year-old black and white issues of Dataquest. There was suddenly a
plethora of companies and products of various specifications, mostly run on
proprietary OSs and atrociously priced.
After IBM’s exit, ICL had divested part of its stake to become ICIM and was
selling its hugely popular 101s for around Rs 6 lakh. HCL’s first computer
came in 1977. Satyen Parekh–now the India head of Borland–joined HCL in 1982
and remembers selling the HCL 8C and later the HCL S-2. He prefers not to
remember the HCL S-4 that was a disaster and landed the company into a lot of
trouble including a huge issue with Nabard. Bhaskar Pramanik, now the India head
of Sun Micro, was at Nelco and started his career selling Nelco’s desktop
calculators for Rs 50,000 a piece. He remembers the Nelco 3000 and later the
Nelco 5000 that was selling at upward of Rs 5 lakh.
ORG, which was essentially a market research company, got into the business
accidentally. It had tied up with Dansk Systems for a computer for in-house use
and then decided to sell out. The ORG 60 cost about Rs 7 lakh in the early 80s.
Others in the fray included PSI’s Omni, at Rs 10-20 lakh, and Usha’s Alpha
series, at Rs 3-10 lakh.
These were mostly 8-bit or 16-bit minis running on the 8086, 8088 or Motorola
68000 series chips. A few were working around the Digital’s architecture.
Essen Computers of Gujarat was making the SN-73, based on Digital’s PDP 11/73,
and the SN-23, based on the PDP 11/23. Both were being sold through Hinditron.
It was a mad world out there.
When chaos ruled
It was also a time of immense confusion. For the Indian HW sector, the early
80s was frontier-time. Vinay Bharat Ram of DCM, Shiv Nadar of HCL, Dr Ravindran
of PSI and Azim Premji of Wipro–these were pioneers with no precedents and no
real role models.
So some of them made up rules as they went. The minis of the time were not
really locally "manufactured". Mostly components were imported and
assembled here. But imports meant government permissions under the Phased
Manufacturing Program, import orders and custom clearances. It took time.
After a prolonged battle, striking bank employees and bank administrations
had struck a deal on computerization by the end of 1983. Suddenly, the
government and the public sector were eager to computerize and the demand was
high.
So, all sorts of things happened. Late deliveries were almost the rule.
Delivered Systems not working was fairly acceptable. Sometimes systems had to be
delivered on schedule, though the components had not yet come. So empty boxes
were shipped. He won’t go on record for this now, but a senior industry person
recalls how a company once shipped empty boxes filled with bricks to give it a
feeling of weight. In government departments, most systems would go into the
stores till someone found the time and a person to install them. Within 15 days,
the components arrived and with no one the wiser, the company went and replaced
the systems quietly.
Today, such acts of effrontery are unthinkable. But that was a different age.
Everyone was learning as they went–improvization or perish was the rule.
Then came the PC...
This was boom time. Rajiv Gandhi’s New Computer Policy had liberalized a
whole lot of things, including foreign equity participation. The government was
planning to install 755 large and medium systems and 15,000 small systems.
Prices fell. An 8-bit micro with a hard disk and printer was selling for Rs 2
lakh. And then came the PC. In 1982, IBM had introduced the IBM PC. Two years
later, Microcomp launched the first PC-compatible in India called the Neptune
and it sold for about Rs 1 lakh. What followed then was a series of price wars.
|
Usha Microprocessor Controls (then a big name) launched the Usha Eagle PC for
Rs 79,000. Breaking the Rs 1-lakh barrier at the time was big. Then HCL launched
its Busybee in 1985–a runaway success–at Rs 50,000. Wipro came out with the
Wipro PC at Rs 39,000. Then a phenomenon called Sivasankaran of Sterling
Computers happened. He launched the Siva PC at an unbelievable price of Rs
29,000 and took the bottom out of the market. That was to become a habit with
Siva–he did the same in 1997–till he eventually faded out of the PC scene
altogether.
A later episode of the price wars had a completely new theme. PCs were
advertised with prices that often did not include the monitor, the keyboard,
sometimes even the hard disk! Excise duty laws also contributed. To circumvent
the high excise duties (in addition to the high customs duties), some companies
often shipped a PC AT and then billed the monitor, keyboard and hard disk
separately. In retrospect, it was all very hilarious.
In any case, the upshot was that in 1985 alone, the number of PCs sold went
up from 1,200 in the previous fiscal to 2,600–a phenomenal 116% growth. Most
of them came installed with CP/M or a version of the PC DOS and a few basic
packages like Wordstar and Lotus 1-2-3.
Unix, JVs and boomtime
The same year, the Rangarajan Committee decided that all bank
computerization would be standardized on Unix and the Motorola 68020 chip. That
led to a mad scramble among Indian companies to come out with Unix systems. HCL’s
16-bit system called Horizon that ran Hicix (its own version of Unix) was among
the first off the block. Others followed.
Suddenly, a whole lot of things were happening all at once. At one end, the
Meteorology Department wanted to import a mainframe for weather forecasting that
the US state department nixed. So it settled for five DEC Superminis instead and
paved the way for DEC’s entry into India. Digital would fill in the vacuum
left by IBM and its Microvax would service an entire generation of high-end
computing requirement in India. ECIL had tied up with Norway’s Norsk Data for
manufacturing Medhas, but this giant’s heydays were coming to an end.
At the other end of the spectrum, 8-bit systems were falling in popularity
and India was playing catch-up with the rest of the world in the PC space. The
8088 PC was being replaced with the 8088 PC-XT–it came with a hard drive. And
later, the 80286 PC-AT. By the time the 80386 was introduced, India was in-step
with the rest of the world. Wipro’s 386 on Unix V3 was the probably the first
386 Unix system in the world.
As MNC entry norms became further liberalized and the local market looked set
to boom, the late 80s and early 90s saw a sudden spurt in joint venture
operations. First came the agency operations–Hinditron selling Digital
machines, Blue Star selling HP machines. And then came the JVs proper.
By the early 90s, almost every major Indian company had a major MNC tieup.
Digital came in with Hinditron; HCL tied up with Apollo and then with HP (when
HP took over Apollo); PSI with Bull; Modi-Olivetti; DCM-DP with Control Data
Corp. Wipro was to later tie up with Acer and bring the Sun Sparc to India.
Finally in 1992, IBM returned to India in partnership with the Tatas.
This was boomtime. In 1980, the Indian computer industry was a handful of
people and gross revenues of Rs 75 crore. Before the end of the decade, in 1989,
HCL became the first company to cross the Rs 100-crore mark and the Indian IT
industry crossed Rs 1,000 crores in overall revenues.
A new paradigm
For a while, it looked like the industry was stagnating and would be
consigned to minor technology tinkering for a long time. But two events of the
80s were to set off an entirely new industry–Unix, a multi-user OS, and
Novell.
The era of local area networking had begun with the 286 itself. Novell’s
Network OS–Netware–was based on the 286 and was introduced in the late 80s.
It supported the Ethernet–a networking protocol that allowed 10 Mbps transfer
rate compared to the 19200 prevalent at the time.
But there were glitches. The cabling cost was enormous. The 286 was a good
machine but it was a 16-bit system with limited computing power. Besides, few
applications were available on Novell.
When the 386 was introduced, things changed. It was a 32-bit machine capable
of some serious applications. Case in point–ECIL’s first 386 was used to do
the entire fingerprinting project for the police in 1988. As a result, people
were looking at running Unix on the 386, connecting up terminals at a fraction
of the PC cost.
Networking product sales went up enormously. Almost all hardware, including
the printer, now needed to have drivers for Novell Netware or Unix. Among other
things, this would lead to the creation of entirely new industry–the
networking and communications sector.
Power, more power
Meanwhile, other developments were taking place. The PC servers were fine
for their time, but not entirely reliable as the backbone for a corporate
network... till Compaq came up with the Proliant range of servers based on the
486. The Proliant offered a level of redundancy not seen before on the PC.
Others like IBM and HP soon followed and PC servers finally broke into the
server space. A new era of computing began. Not long after, came the Pentium,
which had the computing power to run relationational databases comfortably. This
fueled the ERP boom, which in a pleasant cycle, fueled PC and PC server sales.
Other changes were taking place. By 2000, for one reason or another, most JVs
had broken off and almost all MNC and hardware companies were once again on
their own. The Internet era and the multimedia boom had sparked off the home PC
segment. The dot-com boom had begun, with no apparent end in sight. By early
2000, the hardware sector had plenty of reasons to celebrate–Rs 13,837 crore
worth of celebrations.
Ouch!
...And then the bubble burst. It was heralded in October-November 2000, with
companies in the US warning of sales slowdown. Then 9.11 the Indo-Pak standoff,
the squeeze on margins...
TEAM DQ