Large Indian companies haven't been entrepreneurial: Sabeer Bhatia

Hotmail founder Sabeer Bhatia was in India recently to launch InstaColl, the

Instant Collaboration tool that lets business professionals communicate and

collaborate securely over the Internet. He talks about his new venture, the

Internet and India's problems in innovation with Sunil Rajguru of CyberMedia

News.

What has been the reaction to InstaColl?

The industry reaction has been extremely positive. This product has been out

for less than a week, and we already have major pilot commitments. IBM sees this

as one of its strategic initiatives and is going to bundle it in all of the X

servers. Intel also has supported us. And, we believe that at least in the

corporate business environment, instant collaboration or web conferencing is

going to become a mainstream. It's just like what happened to the cellphone

industry, you know when cellphones first came out, everyone said its too

expensive too big I don't want to be connected every time, but everybody has a

cellphone today. So once people start seeing the benefits of this technology,

which is instantly collaborating while they are online, InstaColl will become

mainstream.

Bangalore is right now more of a services valley rather than a Silicon

Valley. When do you think the shift will take place?

I think the reason for this is that many of the large Indian companies have

not been entrepreneurial. Take all the big ones like TCS, Wipro and Infosys-they

are not entrepreneurial. They have stuck to a business model, but they really

haven't innovated in that-they haven't created new products. I think one

has to make that investment of trying to be a product company because the

ultimate returns on the work effort come when companies start thinking of

products. The returns per employee of any one of the corporations doing

outsourcing, can never be more than $50,000-60,000 a year. In product companies,

the returns per employee are like $2-3 mn a year. There are very high rewards

for being product oriented, but there are very high risks too. Only one in ten

products really makes it.

Despite Bangalore doing so well, there is a lot of criticism mainly on

infrastructure, and there is a talk of a flight of companies to Pune and Kolkata.

Will Bangalore manage to remain India's Silicon Valley?

I don't think Bangalore will be India's Silicon Valley for all times to

come, because of exactly the same reasons you mentioned. If infrastructure is

inadequate and other places are offering better infrastructure and the same type

of workforce, then the other cities will develop faster than Bangalore. So

certainly the local government here has to keep that in mind and has to realize

that they don't have a monopoly.

Today Gmail and Yahoo Mail are getting more popular than Hotmail. How

would it be if you were still in charge?

I think Hotmail has done a great job so far, but I am aware that Microsoft

for some reason is not giving the 1 GB or 2 GB of space to international users.

I would not have allowed that to happen for sure, because Internet users

anywhere in the world are equally valuable. Also, we would have certainly kept

up with all the Gmail features and search technologies to make it more relevant

and quicker. I think I would also have done a better integration with instant

messaging.

What do you think of projects like e-Chaupal and AMD Personal Internet

Communicator that are taking the Internet directly to the rural areas?

All of them are fantastic. The largest growth in the next 10 years will come

from the developing world, and to bridge this digital divide, cost is a major

factor. Less than half of the population lives on $2 a day. Power comes from

information and education is a form of information and dissemination. It's

extremely important that we provide access mechanism to the have-nots of the

world.