Student Media Body of IIT Kgp


Know Your Entrepreneur #12

Posted on Dec 13, 2018

Arjun Malhotra, HCL

Presenting you the 12th in series of Know Your Entrepreneur, this time we interviewed Mr. Arjun Malhotra, Co-founder of HCL Technologies. HCL Technologies is a next-generation global technology company that helps enterprises reimagine their businesses for the digital age. HCL serves leading enterprises across key industries, including 250 of the Fortune 500 and 650 of the Global 2000.

How was the phase when you stepped down from your job and set out with your friends to create a company out of scratch? What kept you motivated?

In 1975, six of us stepped out of DCM (Delhi Cloth and General Mills Co. Ltd, their DCM Data Products group) to start Microcomp (which helped in starting Hindustan Computers Ltd. as a Joint Sector company with UP Electronics Corporation [UPTRON]). DCM was doing very well in the Electronic Calculator space and had around 90% market share in India. We even had an export order for over $1mn. This was because of large investment in R&D sector by the company. The R&D team had worked on the microprocessors from the time it was launched and had developed both an advanced Programmable Calculator based on the Rockwell PPS-4 Microprocessor (which we called a microcomputer) as well as a bit-slice 16-bit mini-computer. India was a socialist economy in those days (our form of socialism was called Fabian Socialism) and DCM was the fourth largest private sector company in the country by revenues. There was an act called the Monopolies and Restrictive Trade Practices Act (MRTPC) which basically restricted and fined private companies that moved into new areas. DCM's internal legal team advised them not to move from Calculators to Computers as they would run afoul of the act and get punitive fines. Since Data Products was approx. 1% of their annual revenues, so, at that time DCM decided not to get into the computer business.

Being in the market and having developed the micro and minicomputer and believing in the power of Microprocessors to "change the world" six of us decided we would do it ourselves. We had no money, no business plan, just the belief that we knew the market and that this new technology would have a major impact on this industry. It also helped that in our view we saw that IBM and ICL (the major computer players in India at that time) selling imported "obsolete" computers. So, we decided we would go out and leverage microprocessors and change the world.

What role do you think has IIT Kharagpur played in making the person you are today? Can you tell us about your most prominent memory of IIT Kharagpur?

I believe IIT Kharagpur played a very important role in making me the person I am today. A lot of who I come from my friends, my batchmates and my Professors there. It would be impossible to identify who did what in making me who I am but they all contributed in some way.

I have many memories from my days in IIT KGP. My biggest take away was to learn how to survive and succeed in a group of people who are smarter than you. Coming to IIT with a good academic record in School and a good low JEE rank, I was shocked in my first term as I was 12th in a class of 23. I decided then that I needed to work much harder on my studies and to see how to balance my extracurriculars like sports and debate/plays etc and make sure that at least I maintain the rank I had when I joined IIT and I was happy to achieve it. I realized the importance of hard work. I believe you must put in the hours intelligently if you want to succeed and that as a formula has worked for me.

What was the idea behind founding Prof. G.S. Sanyal School of Telecommunications at IIT Kharagpur?

I graduated from the ECE department at IIT Kgp. Prof. G S Sanyal was a professor when I joined as a fresher and the Head of Department when I graduated. He was also the President of the Gymkhana when I was G.Sec. (Sports). I had a lot of interactions with him in the Department and outside. Besides being a great teacher, I got to know what a genuine unselfish person he was, who was only interested in what was best for his students.

Since I felt I owed IIT Kharagpur for what it had taught me, and I had made some money once HCL was established and successful, I wanted to pay back something in some way to IIT KGP. At that time, in 1996, the telecom revolution had just started, and I knew that the ECE department had one of the strongest Line Communication groups in the country. So, I decided to see how to reinforce this and get the Institute to focus on this emerging area. As part of our tradition of Guru-Dakshina. My wife, Kiran, and I decided to endow the school of Telecom and name it after Prof Sanyal (he was very reluctant, but I managed to persuade him).

What differences do you observe in the work culture in India and California?

I will answer without passing my value judgement of what is better or worse.

  • We work much harder and longer in India than they do in California.
  • People in California do a much better job of relaxing than most folks in India. If you have a relaxed mind you are more innovative in how you approach a problem.
  • In India we are very good at solving the problem and not try to see the big picture most of the time. Folks in California do look at the big picture more often.
  • We tend to be reluctant to get into a discussion on a design problem if some senior is around and we feel uncomfortable. In California people are quick to give their opinion.

You are the most popular public figure of HCL. But I am sure you have a crucial role to play behind the screen. What was your role of which everyone else is not aware in making HCL what it is today? What ups and downs has HCL faced?

I will let you comment on most popular public figure. Yes, as the company grew I had to play an important role behind the scenes. The obvious ones are doing the strategy for the future, deciding which technology to back, planning the go to market etc. But probably more important is motivating people to perform and making sure everyone is aligned to the goals of the company. This sounds simple but communicating and getting people aligned to a common goal just takes a lot of time and effort.

You hear only about the success of any company and that is true with HCL too. We have had many failures. One that stands out for me is our foray into Electronic Cash Registers (ECR). We spent a lot of time and effort making this, but it never worked as perfectly as we wanted. We discovered that the ECR was basically a mechanical device and that the Electronics was secondary. We were an Electronics company and not that strong in Mechanical work. So after more than a year of trying to perfect this we sold the technology to Bradma of India who knew the Mechanical part but did not understand the electronics.

What changes have you seen in the Indian as well as foreign market from the time you co-founded HCL till today?

I assume you want me to talk about the computer market. The Indian market has matured. Computers are now being used not just for ledger posting work, but we see some decision making data coming from the IT folks. Also, our domestic market is large and so it is possible for local product companies to thrive and make products specifically for the Indian market. While the US market is still quite sophisticated, and you do see some cutting edge solutions being implemented there, most of their work is related to productivity increases as the cost of manpower and the problems in managing people is becoming the big issue for most companies.

Where do you see HCL in next few years? What are the future goals and expansion plans of HCL?

I left HCL in 1998. That is 20 years ago. I am still in touch with them informally, but I would not be the right person to tell you what their future goals would be. They have a huge company with over 125,000 employees and in multiple countries. What I can say is where the industry is going, and I guess HCL will have to move in that direction too. The days of labour arbitrage and commodity programming are on their way out. Everyone will have to do more value add to their clients and that means being domain knowledgeable. So, programmers will need to understand an industry and be able to talk to the business folks and help in business decision while leveraging technology. That is a change that the IT Services industry is going to see.

We had a talk with erstwhile Dean, Planning and Coordination about Vision 2020 and he said that the institute was not following that report and was instead following on the Project Vishwajeet. Ultimately Project Vishwajeet was also nearly scrapped by the Govt. What's your take on the turn of events right from the conceiving of the idea of Vision 20-20 as the chairperson.

Vision 2020 was an ambitious program and most parts of it are still being pursued but not in an integrated way. The Institute administration and then I realized very early in its implementation that unless people in the Institute believed in the goals there was no way we would be able to reach these goals. So, we decided instead of pursuing the program as it was, we should concentrate on getting people to believe. This is a slow ongoing process and is presently active on campus today.

How do you think will cryptocurrency affect the Indian Markets in few years down the line? According to you is it a boon or a bane?

Cryptocurrency, in my view, will come in one day. I think it is too early at this time and anyone playing in that market is really doing so like you would play the "Satta Bazar". There are no rules, so it really is like tossing a coin. Again, that is just my view.

What does a IT company look for in students that come to join it? What prominent skills students must develop to lead their way to success?

They want you to good programming skills, be a good and fast learner and have good communication skills. If you have these and you have the drive to excel, you will do well.

What is difference in being an entrepreneur 43 years back and being an entrepreneur now? What message would you like to give to the budding entrepreneurs at IIT KGP?

When I started in 1975 it was 43 years ago. So, I will compare then with now. Then we worried about govt policy and annual Govt. budgets much more than we do now. We worried about being able to import (we had Foreign exchange shortages), having access to the latest technology (we were aligned to the Soviet bloc) and the availability of basic infrastructure like air conditioner, voltage stabilizers etc as well as availability of programmers (which is why we funded and started NIIT). Today you just worry about the market and time to market gets more and more critical.

43 years ago, we had access to probably the best talent as there were not too many jobs available. Also, retention of that talent was not as big a problem as today. Today finding and holding talent is much more difficult.

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