Entrepreneurial Revolution in technology – Shiv Nadar and HCL

Entrepreneurial Revolution in technology – Shiv Nadar and HCL

Entrepreneurial Revolution in technology – Shiv Nadar and HCL

Some people wait for opportunities that would come knocking to their doorstep. Some others forge their path to success with their vision and hard work. Shiv Nadar belongs to the latter group, who with his insight and determination paved his own course to success, not just building a company but putting India on the global map. This story of an entrepreneurial revolution in technology is indeed an inspiration for all. Let’s listen to this interesting story.

The birth of HCL

In 1976, during lunch time at Delhi Cloth Mills, a group of six young engineers working in DCM’s calculator division were discussing the future of their careers. At the end of the discussion, they decided to quit and start a venture of their own. Nadar and his five colleagues left DCM to set up a company that would make personal computers. Though they had enough technical expertise working at DCM’s calculator division, getting funds was a hindrance. To raise cash, Nadar floated a company called Microcomp Limited, through which he sold tele-digital calculators. This venture brought in enough cash for founders to start the company to manufacture computers.

They put together Rs 20 lakh and Hindustan Computers Ltd was born.

Ringing in the success

HCL started shipping its in-house microcomputers and took only two more years to introduce its 16 bits processor. By 1983, it developed a relational data–based management system, a networking operational system and client-server architecture. The company started climbing the rungs of success and HCL took it a step further by exploring foreign shores. In 1979 it set up a venture in Singapore called Far East computers. The venture notched up sales of Rs 10 lakh (Rs 1 million) in the very first year. As the revenues started bringing in profits, Nadar planned a whole new area of expansion – computer education. Aware that the next century belonged to IT engineers, HCL set up NIIT in 1981 to impart high quality IT education in India.

The rise to the top

In 1984, the Indian government ushered in a new policy that would change the landscape of the country’s computer industry. The government opened up the computer market and permitted import of technology. For HCL this was the opportunity to establish their footing in the personal computer market. The demand for personal computers was opening up and most banks were shifting to the UNIX platform. Nadar, along with his team, studied the technology behind PC’s and soon launched their first range of computers, the Busybee. HCL soon became one of the largest IT companies in India. The founders set up sales and marketing offices in various corners of India and recruited some of the best minds from the campuses across the county.

A brush with failure

In 1989, 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 soon faltered. They had failed to follow a very crucial step necessary to enter the US market. The computers they made did not get environmental clearances. However, the unexpected failure didn’t deter Nadar or his team. HCL entered into a partnership with HP (Hewlett-Packard) to form HCL HP Limited. It opened new avenues for HCL and gave opportunities to boost its revenues. In 1994, HCL expanded beyond the horizons of PCs and tied up with Nokia cellphones and Ericsson switches for distribution.

Expanding its reach

1998 was a crucial year for HCL as well as Nadar. Arjun Malhotra, one of the largest shareholders in HCL Infosystems and Shiv Nadar’s friend decided to leave and start his own company. The revenues were shrinking from the hardware sector and Nadar, at this juncture decided to take a major step. An initial public offer (IPO) was made on the Indian Stock Exchange in 1999, which was a huge success.

Opportunities were opening up around the globe in the software sector and HCL now wanted to expand to new territories. Global business was the need of the time and they started a BPO in Ireland in 2001. HCL created several valuable joint ventures and alliances with marquee partners such as Hewlett Packard, Cisco, Perot Systems, Deutsche Bank and Toshiba among others, to emerge as a global technology enterprise. HCL Infosystems launched it sub Rs 10,000 personal computer and joined hands with AMD and Microsoft to bridge the digital divide. In 2014, HCL diversified and launched HCL Healthcare, providing innovative medical services, products and training to meet the growing demand for quality healthcare.

The journey continues

From a dream that began in a small canteen in Delhi, Nadar, built HCL to a billion dollar global enterprise with over 120,000 professionals. He is not only an astute businessman but one of the leading philanthropists of the county. Nadar’s philanthropic initiatives through his foundation focus on the development of education in India; the institutions he founded are today the drivers for social change and transformational education. In 2008, the government of India, recognizing his contribution to business and philanthropy in India and across the globe, awarded Nadar with Padma Bhushan, the third highest civilian award. His life and his achievements through the past four decades stand testimony to his extraordinary vision, for his company and his nation. Shiv Nadar not only dreamt of a winning future but shaped it too.

As a business mentor, I have followed HCL’s entrepreneurial revolution with awe. There are many lessons that we can all follow. The brilliance of extrapolating on trends to determine the next big wave and be prepared for it is the first lesson. However, the most impressive lesson is the approach Nadar took to finance his dream venture – by floating another company which leveraged his expertise.

More such interesting success stories coming your way soon!

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