On 50 Years of Indian IT

Though the global media took note of Indian IT only recently,

thanks to Y2K, IT has deep roots in India going all the way back to the

discovery of Zero. The government, academia, industry and its associations, and

media have all played their role in this spectacular growth story.

On the government side, the Homi Bhabha Committee realized the

need for focus in electronics and computers. On June 26, 1970 the DoE

(Department of Electronics) came into being as a Scientific Ministry directly

under the prime minister. The setting up of IITs and IIMs in 50s and 60s and the

encouragement to the private sector to start technical colleges helped the

growth of technical manpower. Public sector ECIL manufactured 12-bit (TDC 12)

and 16-bit (TDC 16) computers in the late-70s and early 80s, with IBM shutting

down operations in 1975, another public sector company CMC was set up to

maintain computers (CMC had 923 computers comprising 60 models made by 34

manufacturers at one time!).

Recognizing the importance of software exports, SEEPZ

(Santa-Cruz Electronics Export Processing Zone) was set up in Bombay in 1973.

The Mini Computer Policy of 1978 opened up computer manufacture to private

sector. The New Computer Policy of Nov 19, 1984 and the software policy of 1986

kick-started the Indian IT story.

Communications infrastructure improved with the setting up STPI

hubs in Bangalore and other cities. The STPI policy removed the inspector raj

from software companies; the bonus of corporate tax exemption and duty-free of

hardware made the Indian software companies profitable; NICNET (1982 onwards)

brought Internet to government offices; and ERNET (1986 onwards) brought

Internet to educational and research institutes in India.

The 1999 IT task force led by prime minister (and several chief

ministers at the State level), IT policy at every State, IT Ministry at the

center and IT fairs brought right focus to the IT industry.

The Rangarajan Committee (1984) on Bank Computerization, chief

vigilance commissioner Vittal's directive (1997) on full computerization of

banks by March 31, 2005, Project IMPRESS (computerization of Railways Ticketing)

started in 1986, e-Governance initiatives like e-Seva (single point delivery of

citizen services) in 2002, Bhoomi (land records) in 2003, Electronic Voting

Machines (500,000 machines serving 600 mn voters in 2004 general elections) and

MCA 21 (ministry of Company Affairs) in 2005 are other key government

initiatives that spurred the growth of Indian IT industry.

As for academia, IIT Kanpur got an IBM 1620 way back in 1963 and

TIFR bought a CDC 3600 in 1965. TIFR was very much involved with the growth of

IT in India. Professor R Narasimhan was heading the committee that recommended

the setting up of DoE. IITs started computer science departments way back in

70s. IIM, IIT and TIFR were key players in the TDC story of ECIL. IIT Kanpur was

home to Computer Society of India. Generations of students have learnt

programming from the textbooks of Professor Rajaraman.

C-DAC helped in the development of Param Padma supercomputer

that made its debut into the Super 500 list in 2003. Academic-turned

entrepreneur Professor Vijay Chandru and his team designed Simputer, which

became the New York Times Technologies of the Year in 2001.

The Malhotra-Kumar-Maheshwari Algorithm (1978) and the recent

Manindra Agarwal's Primality Algorithm (2005) are major academic contributions

to computer science from the Indian research community. Of course, the

contribution of IITs, NITs and IIMs (and recently IIITs) is so important that

one can state that IT is a subset of IIT & IIIT!

Special programs like MCA that was planned at IITs and launched

in various universities in 80's helped the growing Indian software industry

immensely. The indirect contribution to global IT by way of IIT alumni

contributing to the global academic / research community and IT industry has

been well-documented. In turn, it has helped in building the India brand and

promoted entrepreneurship through organizations like TiE. It has also helped in

alumni contributions back to IITs. The real impetus for global attention to

Indian IT story is the contribution by the industry. In late 70's and early 80's,

many pioneering companies were born. This includes DCM, HCL, ORG, NELCO, PCL,

Wipro and Zenith that built mini-computers and later PCs. There were peripherals

manufacturers too—Godrej (printers), L & T (printers), LIPI (Printers),

Wipro (Printers, Terminals), TVS-E (Disk drives, Point-of-sale terminals,

Printers, UPS, Tape Drives), VXL (Terminals) and the recent global leader

Moser-Baer (CD/DVD). Many software companies took birth in 80's-Infosys,

Mastek, Patni, Satyam, Softek, Tata Infotech and Wipro. Another interesting

trend was the setting up of offshore development centers by MNCs. The 90's saw

spectacular success of the Indian software industry. There were interesting

products too—InstaPlan from Wipro, compilers from Softek, Tally accounting

software from Tally Systems and Marshal from Ramco that had global customers;

accounting software Tally and core banking product Flexcube from iFlex became

market leaders in the local and global markets respectively. Infosys had its IPO

in 1993 and listed in NASDAQ (the first Indian company) in 1999. There were all

round entrepreneurial activities leading to companies like VisualSoft and

Pramati Technologies. The software companies in India had outstanding

achievements in quality levels. Motorola Bangalore center was the first in the

world (along with Lorel Space center in USA) to achieve the SEI Level 5 level of

quality. By 1999 six of the 12 SEI Level 5 companies in the world were Indian

companies. The BPO industry grew enormously in the 90's with established

players Infosys and Wipro entering the space. Serial-entrepreneur Ganesh founded

CustomerAsset (now ICICIOneSource) and Nagajan-founded 24x7 Customer Service

merit special attention. Software industry grew to $1 bn by 1995 and to $ 8+ bn

by year 2000. The Indian IT industry employed 1.5 mn professionals.

Y2K proved a watershed event for the growth of the Indian

software industry. Though many predicted that Indian software story will be

finished by 2000 end, the story got more interesting in the past six years.

Mindtree Consulting that was founded in 1999 grew into $100 mn within five

years. 1999-born iFlex not only got its product Flexcube ranked global No 1 but

also got acquired by Oracle for nearly $1 bn in 2005.

TCS (2002), Infosys (2003), Wipro (2004) and Satyam (2005) are

billion dollar companies! TCS and Infosys have market capitalization of more

than Rs 1 tn in 2006. Indian software industry has grown from $100 mn (1985),

200 mn (1990), 1 bn (1995), 8.4 bn (2000) to 35 bn (2006).

Recently, there are technology companies like Sasken, Ittiam

(most preferred DSP algorithm company in the world) and ImpulseSoft (that

unwired Apple iPod) that focus on technology, IP and standards.

The entry of MNCs with their offshore development centers

started with Texas Instruments opening its center in Bangalore in 1986. 125 of

the Fortune 500 companies are present in India today. This includes global IT

services majors IBM, EDS, Accenture and Cap Gemini and others.

Among the media and associations, Computer Society of India was

born in 1965 addressing the needs of the users of IT. MAIT (Manufacturers

Association of IT) was set up in 1982 to address the needs of hardware industry.

other associations include ISPAI and ISP. IT magazines including Dataquest, CIOL

and Computers Today were launched in the 80's.

With IBM announcing $6 bn investment over 3 years; Microsoft,

Cisco and EMC announcing $2 bn investment each; and SAP announcing $1 bn

investment, the Indian IT industry is grabbing global headlines too. Azim Premji

of Wipro, NR Narayana Murthy of Infosys and S Ramadorai (of TCS) are in the

global list of leaders. "Getting Bangalored" and New Jersey State

banning job migration to India are also in the news. Indian companies are

acquiring global companies (Subex acquired Azure in UK) and global companies are

acquiring Indian companies (Philips acquiring Ishoni Networks and Nokia

acquiring Amber Networks for example). With VC funding expected to touch $2 bn,

the Indian IT story continues to be exciting.