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"Do not go
where the path may lead,
go instead where there is no
path and leave a trail"
-Ralph Waldo Emerson
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Why he deserves the
Award ?
Mr.Ramalinga Raju has built a world class IT empire right from
Hyderabad. It is absolutely amazing that he had the guts, the
will power & the vision to set up
a company here itself and face all the odds to shape up 'Satyam'. His entrepreneurship is indeed an
example for generations to come. Till the other day if anybody were to talk about Business in India ,it was only the places in Mumbai
and other northern cities that people often talked about .
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Now thanks to Satyam
and other neighboring giants, South India has come into the forefront after
being left behind for
decades. What Infosys & Wipro contributed to the revival of South India
from Karnataka, Satyam did it all alone for Andhra Pradesh.
Infact the two visionaries who have brought A.P into the world
scene are Mr.Chandrababu Naidu and Mr.Ramalinga Raju. AP never had it so good having two visionaries at the helm of affairs-One in Politics and the other in
Business. Their combination has indeed been transforming the very economy of this
land. Slowly but steadily they have led the way
in changing the face of A.P from the old economy to the new economy. No wonder that both of them shared the
dais with Mr. Bill Clinton on his historic visit to Hyderabad. One must keep in mind that the President of America was visiting south India for the first time and his visit shows that South
India, particularly
Hyderabad is fast emerging as a major economic hub.
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The Beginning:
Ramalinga Raju's grandfather was an enterprising farmer who ventured out of traditional
agriculture into agribusiness and bought a sugar mill. The venture backfired and the
family lost a
fortune. It then scattered into different parts of Andhra and Satyanarayan
Raju, Ramalinga
Raju's father, whose name inspired the group's name Satyam, moved to Hyderabad and became one of
the first farmers to start commercial grape production around Hyderabad. The family recovered
and Ramalinga Raju, the eldest son, was sent to the US in 1975 to get an MBA from Ohio after
he completed his B.com from Loyola College at Vijayawada.
In India, as a commerce student at Vijayawada, he had been a carefree young man,
from a well-to-do farming family, with not a worry in the
World. To begin, when Ramalinga Raju came
back from the US in 1977 armed with ambition and new ideas, he tried to build new
business for
the family. He went into cotton-spinning and construction. This earned him his bread and butter.
Out of curiosity he had brought a small computer back with him from the US. It was a glorified
programmable calculator. He realized that information technology would be big in the future and
took the plunge in this new business, about which he had limited
knowledge. Satyam Computer Services was incorporated in 1989, though it took of only in 1991-92.
Ramalinga Raju very soon realized that there could be higher margins if one
could convince companies abroad that Indian companies could develop the software in
India and upload it to the US companies mainframe computers through a satellite data
link. Satyam was one of the first companies to get a
dedicated 64kbps data link for such "offshore" development. Satyam was among the first
Indian companies to make the unique paradigm shift from onsite-led operations to offshore
driven ones.
The Transormation:
Satyam also became one of the few companies in the world to attain the top rating -level5-
in the capability maturity model (CMM) instituted by Carnegie-Mellon University's software
engineering institute.
Satyam's foray into corporate data and Internet services too was path breaking.
While several e-mail companies were languishing in the pre-Internet days due to
unreasonably high license fees and port charges by Dot, Satyam Infoway moved into
this space in 1995. It invested heavily in TCP/IP networks when the only internet
service provider was the government monopolized VSNL. At that time companies could only be
listed in India after three years of profitable business, while Internet play required
large funding for infrastructure and acquisitions. Satyam quickly moved to list
Satyam Infoway (SIFY) on Nasdaq with great success. On 19 October 1999 it became the first
internet company from India to be listed in the global
markets. In June Satyam infoway reached a
milestone with its subscribers base crossing the two lakh mark. SIFY posted a profit of
Rs 67 crore for the year ended March 31,2000 against Rs 10 crore in the previous year.
Setting Standards:
While high-flying SIFY has caught people's imagination, the flagship Satyam Computer
Services, a software services company, has grown from a turn over of less than Rs4.7 crore in1993 to Rs679 crore in 2000(146 times) and its net profit 149 times from
Rs 90 lakh to Rs134 crore. Satyam today has become folklore in Andhra
Pradesh.
Satyam now has six development centers in India, seven overseas and marketing offices in 30
countries. The company services over 140 multinational and Fortune 500 clients, many of them
among the largest corporations in the world.
To increase technology competency continuously, the company has started a Tech Guru
scheme. These are
top line tech professionals from the global IT industry, who come to the
impressive Satyam
Technology center (STC), Hyderabad and conduct courses for about two weeks. Already nearly 30 such
professionals have been to the center. A brainchild of Ramalinga Raju, STC is
perhaps the most impressive corporate campus in India and would be well placed in the rest of the World.
Choosing
the right partner @ speed of thought:
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Choosing the right partner in software services the world over, has been the key strength of Ramalinga
Raju. The November 1999, the all-cash Rs499 crore India-world deal looked
astronomical. It made several people to sit up and take notice. Nasdaq certainly did. It gave an even
higher valuation to Satyam's
subsidiary - Satyam Infoway (Sify), than before. Consequently, its
market cap went up by $800
million.
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Recently it has tied up with Computer Associates international
to provide online access to advanced E-business applications for small and medium
enterprises. The venture will have an initial investment of $3million.It has also entered into an agreement with
Texas-based Enterprise Inc. to enable E-market solutions for traditional businesses and dotcom
companies worldwide. Focusing on the auto sector, Satyam decided to tie up with
TRW under which the latter will outsource to the venture at least $200 million worth of
projects, spread over a
five- year period. In June Satyam Infoway Ltd took 25% stake in the popular Cricket website
Cricketinfo.com by issuing $37 million worth of American Depository
shares (ADS) in an all stock
deal.
SIFY's buying spree continues. It has just announced that it
has signed an agreement to buy-out 100 per cent of IndiaPlaza.com
for $8.1 million. It is an all-stock deal.
Now Satyam computers is tying up with CCMB(Centre for Cellular and Molecular Biology) in
bio-informatics, a hot new field which combines molecular biology with data mining and warehousing
in information technology. An 'MOU' to this effect is to be signed soon. True
to its reputation for speed, Mr.Raju is in advanced discussions with CCMB for setting up an International training
center in bio-informatics, among others.
How he runs the Company:
Raju has always felt that to really succeed one must have a vision and must be ready to take
risks. That's the reason Satyam's management style is unique. It does not function as a normal
pyramidal hierarchy. Every department or division is formed as a circle where the head operates
as a CEO of an enterprise, with all the responsibility of running an independent
company, including making profits. Even though the perks in Satyam are lower than the industry standards, What holds the staff together is Raju's unique "power in one" philosophy that promotes togetherness on the mind's plane, including the singing of a corporate anthem together. Its staff attrition rate is a half of the industry's turnover of 15 per cent per annum.
Content wise, the crux of the philosophy is Japanese. Raju recently received the
Ernst & Young Entrepreneur of the Year Award for the Services
sector. In the manner true to him he explained that he was receiving the award on behalf of
all Satyam associates.
The Person:
Raju is a very soft-spoken person and quite accessible. His passion is reading and has an
extensive library at home. His reading interests include philosophy, science and management
subjects. Raju and his wife, Nandini, have two sons, Teja and Ramu, who are both studying engineering.
Reachout in
continuation of its trademark punch lines for every Businessman it
profiles , goes a step further by summing up as to what makes Satyam
Computers a success story. The team it has built, the right kind of
alliances that has been formed, the
speed & spirit of its working and above all what mattered most was the kind of
leadership that has been going on with the organization. Mr.Ramalinga
Raju for sure has been leading the 6000 -strong Satyamite brigade right
from the front. We at Reachout salute this remarkable Businessman
of Hyderabad. The satyamites have started marching..
-2000
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