The Hindu Business Line : The story of a ‘Little India’ in Satyam

These are days when any link with Satyam merits a second look, and a closer one. But this is a positive story, about how the first commercial dedicated satellite link of VSNL to be used by an Indian software company was of Satyam, as Dinesh C. Sharma recounts in ‘The Long Revolution: The birth and growth of India’s IT industry’ ( www.harpercollins.co.in).

In 1992, just a handful of 64 kbps (kilobits per second, a measure of bandwidth) circuits were in use, Sharma writes. A Hyderabad-based start-up, Satyam Computer Services, which had signed up its first major offshore customer in June 1991, applied to VSNL for a dedicated satellite link in August that year, he adds.

“Using this link, Satyam wanted to execute a re-engineering contract, worth $1 million, for John Deere Corporation by remotely working on Deere’s IBM mainframes located in Chicago.”

Deere & Company, founded in 1837 (collectively called John Deere), clocked more than $28 billion in net sales and revenues last year. It has ‘grown from a one-man blacksmith shop into a corporation that today does business around the world and employs approximately 52,000 people,’ informs www.deere.com.

While there are no finds for ‘Satyam’ on Deere’s site, ‘the Satyam Journey’ in www.satyam.com gratefully remembers how in 1991, the company rented a house across the street from the development centre of its first Fortune 500 customer – John Deere – and named it Little India.

“Staffed by 10 pioneering engineers, Little India connected to John Deere through a 64 kbps satellite link. The engineers weren’t allowed direct interaction with their customers, and they worked only at night to simulate the way offshore engineers would do their jobs.”

Help had come from VSNL in the form of ‘Madras to Chicago link,’ made operational on January 12, 1992, and priced at Rs 24 lakh per annum. “Later, VSNL fixed the tariff at Rs 18.75 lakh for such links from any of the four metros,” Sharma notes.

He observes that in the absence of connectivity, the only other option for many Indian firms was onsite work, with professionals sent to work at clients’ locations. “All they needed was to recruit engineers and buy one-way tickets for them to America. Once the project got going, monthly cash flow would help the company sustain itself.”

Body shopping, however, was not offering significant cost advantages, states the author. Since firms could not afford to send large teams to the US to work for a single client, they were restricted to relatively small jobs or they acted as sub-contractors in large projects, he reasons.

Also, given the restriction on the number of people who could be sent, “the Indian engineers not only did systems design but also had to write code, which is labour intensive, requires a lower level of skills and is not highly remunerative.”

As a result, although the average salary of an Indian software professional was only 15 per cent of his US counterpart, his productivity was probably no more than 30 per cent, Sharma adds, citing experts’ views.

Resuming the Satyam story, how did the Little India experiment ‘from across the road to across the sea’ go? It was “so successful that the team actually performed better than it had under its onsite manager,” declares the company’s site.

“John Deere executives were also convinced, and the global delivery model was born – a model that created significant performance and cost benefits.”

In today’s context, the above story may seem longingly evocative, with no connect whatsoever to an organisation brought to dust by the shocking revelations by Raju. Yet, it is tough to obliterate the historical facts; as much as it may be to envisage a larger India shrugging off its very own ‘Little India.’

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The story of a ‘Little India’ in Satyam