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From
PCs and peripherals to cutting-edge software coding and IT
education, the HCL group has a presence in every sphere of
the IT industry, and also has a foot in other areas like telecom.
Today one of India’s top IT groups in terms of size, HCL is
one of the most powerful brands in the Indian IT market. Gaurav
Patra and Shipra Arora profile the HCL group, and find out
what makes it tick, and what the future could hold
| KEY
STRENGTHS |
- Strong
market understanding
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Pro-active understanding of the market demands
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Flexibility in fulfilling customer needs
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First-mover advantage due to its pro-activity
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Reach in terms of geography
|
To
say that HCL is a household name in India today is an understatement.
In 25 years of existence, the company has developed and implemented
solutions for multiple market segments, across a range of
technologies, covering customers in India and overseas.
“The name HCL originally stood for Hindustan Computers.
We wanted to create the country’s largest national computer
manufacturer. So having the name of the country in the name
of the company was important,” recalls Ajai Chowdhry,
founder & chairman, HCL Infosystems. “We wanted to
create a global brand,” he adds. It was HCL that founded
the Indian hardware industry and they were also the ones who
created the first software export factory in India. The HCL
group was also a pioneer in the IT training business through
NIIT. HCL is a path-breaker as far as global R&D, CAD/CAM,
the home PC market and engineering workstations are concerned.
“We are always ahead the market. When you take upon yourself
the role of creating and developing the market, you obviously
gain that advantage. And that’s the advantage we possess,”
Chowdhry claims.
HCL started operations primarily as a hardware company when
IT in India was in a nascent stage. There were few Indian
vendors then and HCL had the advantage of positioning itself
as the local hardware vendor. This meant that the user was
comfortable dealing with a local company, thus the comfort
level of users increased manifold while dealing with HCL.
“HCL understood the local market well, whereas MNC vendors
were not so comfortable doing business in Indian conditions
and did not understand the psyche of the Indian user. Thus,
HCL was able to expand channels at a much faster rate and
increased penetration,” says V Shekhar Avasthy, assistant
manager, Software and Services Research, IDC India. Again,
due to inherent knowledge about India, HCL was able to penetrate
deep into the government sector and tap most of the IT spending
coming from various government departments. HCL was flexible
enough in pricing, its sales model and terms and conditions,
which added to the comfort of its clients. “Sales teams
at HCL have always been highly objective-driven and focused
on numbers. Every month/quarter we measure the performance
of our managers by the number of times they have met the customers
face-to-face,” says Chowdhry.
 |
| Ajai
Chowdhry feels HCL is always ahead of the market because
they have taken upon themselves the role of creating and
developing the market |
The
HCL Group is today considered to be an outfit that has the
knowledge and skills in almost every part of the world of
information technology. Present in every sphere of the IT
world, HCL’s human resources have helped it advance so
far ahead in this field—in India as well as abroad—that
today it has grown in size and stature to become India’s
top IT company, with market leadership in different areas
of operations. The group is also considered as the first Indian
transnational IT company.
An immense knowledge base and technology leadership are the
keys to HCL’s ability to provide total IT solutions.
“We have been positioning the combined strengths of HCL’s
technology, delivery and managerial capabilities, along with
the pre-eminence and global reach of Perot Systems,”
explains C P Gurnani, COO, HCL Perot Systems, an HCL group
company. Not satisfied by just providing relevant technologies
to consumers, HCL has also entered into strategic alliances
with technology leaders across the world to bring in state-of-the-art
as well as futuristic technologies. HCL’s urge to excel
has paid rich dividends outside India too. As a true technology
leader, HCL enjoys wide global presence at 24 locations in
16 countries, with operations growing to a phenomenal $100
million, making it the second largest software exporter from
India. Its cutting-edge solutions have helped it acquire an
enviable client list of technology leaders and Fortune 500
firms. “A very strong leadership at the top, ambitious
plans, encouragement to executives with entrepreneurial bent,
rewards and acknowledgement of hard work are factors responsible
for the growth of this organisation,” feels Pradeep Joshi,
business consultant, Netcon Associates.
Whether it’s software, hardware, training, networking,
telecom, peripherals or system integration, HCL has an answer
for all your IT needs—thanks to its pool of competencies.
The company also has skills in the areas of hardware, and
services extend from product designing to prototyping, manufacturing
and support. Specialisation in designing custom-made solutions
for companies includes application development for client/server
environments, legacy system maintenance and re-engineering,
migration, systems redevelopment, onsite and offshore software
services, and facilities management.
Computer-based
education using advanced learning methodology has training
on offer for novices as well as professionals, in IT and non-IT
areas. A dedicated independent vendor channel for the entire
Indian mass market helps bring technology usage closer to
the individual. The group specialises in consumer-oriented,
globally applicable solutions for end-users in manufacturing,
banking and financial services, and the telecom segment; besides
being a total solution provider for technology-based communication
services through satellite communication, radio communication,
local area networks as well as broad band communication. “HCL
has played a major role in creating IT awareness in the country
and in creating a very competitive environment for growth
of the IT industry,” says Joshi. “I believe the
biggest contribution of HCL in developing the Indian IT market
is in terms of introducing newer technologies and creating
a market for them through education and creation of awareness,”
says Aman Munglani, senior analyst, Computer Products Research,
IDC India.
 |
| IDC’s
Shekhar Avasthy says HCL was instrumental in cultivating
IT penetration in India |
Indeed
HCL did do a lot in taking IT to the grassroots level. “It
was the first one to offer cheaper hardware products than
MNC counterparts and had a reach so vast that took these products
to remote areas. Thus HCL was instrumental in cultivating
IT penetration in India,” comments Avasthy. Though one
of the first Indian groups to take advantage of software services
outsourcing, it could not match Wipro or Infosys in this sphere.
The reason for this is that HCL has a different philosophy
of being focused on numbers and fast results. It could not
have waited patiently for reaping the harvest, as Infosys
did, after investing time and resources in business. Nor has
it taken big risks like some of the other pashas of software
have taken. Thus, two important areas that the group needs
to look closely in the future are risk averseness and patience.
Strengths
All of HCL’s expertise is centred around anticipating
and fulfilling the needs of the individual in all spheres
of his life. The group achieves this by providing a complete
array of IT solutions that make life simpler and better. The
company has been leveraging its core competencies to develop
new technologies and solutions that pre-empt changing consumer
needs. To complement its strengths in global state-of-the-art
technology, HCL, in the past, has had joint ventures with
international corporations such as Hewlett-Packard, Perot
Systems, Deluxe Corporation, James Martin & Co., and General
Instrument, and also partners with world leaders like AT&T
and Microsoft. And finally, forming the core strength of HCL
is the talent and innovativeness of its people, which enables
it to provide the right solutions at the right time.
“HCL has always been proactive in understanding the market
well. Thus, it always anticipates the market demand well in
advance and offers products/services accordingly,” says
Avasthy. For instance, anticipating needs in advance, the
group was one of the first ones to offer and expand its IT
education and training network through NIIT. HCL was also
quick to diversify itself into 18 companies in the mid 90’s,
and later anticipating the way the market was headed, consolidated
to three firms in 2000. Note the strategic benefits of this
move: When users were demanding point solutions from service
providers/technology vendors, HCL was offering the same through
as many as 18 companies, each one focusing on some particular
offering. The HCL group was perhaps the first
one to realise that user needs were changing and the user,
with increased maturity on the IT maturity curve, started
expecting ‘anything, anywhere, anytime’ from single
service provider/technology vendors, and thus was quick to
consolidate itself to just three companies in 2000. This effectively
met user expectations. “Our key strength is derived from
our relationship with customers and we pay a lot of attention
on delivering very high quality services. Many of our customers
have been with us for the last 15-20 years,” says Chowdhry.
HCL identified high growth verticals like banking/finance,
insurance and healthcare early on and was one of the first
few to understand that users in these verticals expect the
IT vendor to have domain expertise, and thus HCL started focusing
on these groups. HCL has been very flexible in addressing
different market needs, based on its perception of the market.
For example, what NIIT is offering today was not being offered
two years back. “Based on market needs, HCL gradually
diversified its focus from products to include services as
well. This was again in response to anticipated market demands
at every stage,” says Avasthy.
 |
| Pradeep
joshi says HCL’s success is because of its strong leadership
|
Another
plus for the group is that for a very long time now the company
has been enjoying a very strong position and success in the
government market, which has huge potential even in the future.
The HCL group enjoys this position because of its price advantage
and competitiveness as compared to other vendors. “HCL
enjoys considerable success in the government space with a
major chunk of its revenues coming from this segment. To some
extent, it is dependent on the government market, though not
wholly,” says Munglani. “When government IT spending
is high, HCL performs extraordinarily. However, when the government’s
IT spending declines, HCL still manages to perform well enough
to be in the top rung, but not extraordinarily,” he adds.
And it is this relationship which has helped the company tremendously
in its growth. “I find them sincere in their approach
and they stand by their commitments. This is one of the few
organisations from private sector which delivers as per promise,”
says Col. V Sadasivam, deputy director general (technology),
Department of Posts, one of the biggest departments of the
Indian government. “Their sincere approach and standing
by promises made helps the government sector, which invariably
makes decisions at the last moment. At such times, HCL is
supportive. Their service support is also appreciable,”
he adds.
The HCL group also has the ability to offer the latest in
technology and features and also has a very strong presence
in the education and home market. “The sales and distribution
network of HCL is massive. As a result it has a good presence
in the market and manages to cater to deals that no other
vendor can. It has a visibility to deals, which no other vendor
has,” says Munglani.
Room for improvement
The HCL group has definitely been doing well in hardware.
A recent survey of IDC also placed it as a leading PC vendor.
“However, there are hardly any technological breakthroughs
from the group in the PC market. This is happening because
the group’s spending on R&D is poor,” feels
Avasthy. The group is tapping the services market well though.
Still, it is not perceived by end-users as an innovative service
provider. In the case of high-end services, like high-availability
services (where the requirement of IT uptime is 99 percent
or more), the group was a follower rather than the leader.
“It is still perceived weak in online monitoring services.
In my opinion, it is capable of providing such services as
well. Thus, it is not a question of technological capability,
but of taking a lead in providing innovative services where
the group lags,” he adds. Besides, HCL hardly garners
any revenues from sales of packaged software. It is not that
the HCL group cannot create a product or that it cannot sell
it—in fact, it has technical expertise to create any
software product and has pockets deep enough with skilled
resources to market the same. However, as the HCL group seems
to be risk averse and lacking the patience to wait for results
to come in after developing and selling packaged software.
Another area in HCL where something could have been done is
the telecom sector. “As an industry analyst, I feel HCL
was an early recogniser of the importance of the telecom business,
but somehow they could not keep pace with it,” comments
Joshi. “They may have had some bad experiences along
the line and did not return to this area again and lost the
opportunity, as it is too late now,” he adds.
The HR angle
In size and stature too, HCL dominates the Indian IT industry,
with a large infrastructure of 7,400 employees, over 3,000
trained IT professionals, and offices spread across 143 locations.
The company has recognised the fact that with this human talent,
they carry with them vast numbers of the single most powerful
tool—the human mind and with it the power to imagine.
“Ideas stem out of expertise—and expertise is the
coming together of talent and experimentation. And it is at
this place where people unleash their true potential,”
says M L Taneja, vice president-HRD, HCL Infosystems.
 |
| V
Sadasivam of India Post feels HCL is one of the few private
firms that delivers on promises |
Having
many firsts to its credit, the HCL Group has been moving with
a core philosophy that ‘personal quality is a stepping
stone towards the overall development of the organisation’,
which gets reflected in its people-related policies. Though
for many, it is a matter of pride to work with HCL, the company
is very up-front in its relationship with it employees—HR
teams at the HCL group believe that a job with HCL is not
a job but a career. And it is this entrepreneurship-driven
quality, which has helped them make success stories. The company
has also been taking a lot of employee benefit-related initiatives.
“The individual is extremely important. Hence, the company
is constantly working towards creating an environment that
allows employees to take initiatives on their own,” says
Dilip Kumar Srivastava, vice president-Human Resources at
HCL Comnet, This attitude keeps the dedicated workforce ever
inspired and on their heels all the time.
Having proper training instruments, infrastructure and administration
in place HCL outlines its training practice, which helps in
addressing the training needs of its employees. The group
believes in the overall development of an individual and hence
equal emphasis is given to technical and soft skill training.
This helps employees to adapt, adjust and deliver the best
in any given circumstance.
Restructuring
The recent restructuring exercises have helped the Shiv Nadar-led
HCL group to retain its number one position in the IT industry.
But while the restructuring at the group level helped companies
create more synergy, the real growth came from restructuring
and repositioning within each group companies.
While HCL Technologies has been shifting focus to high-end
value added services and offshore-centric development, HCL
Infosystems under the leadership of Ajai Chowdhry has changed
its business blend too. From a company that used to sell boxes,
it has emerged as a top systems integrator selling solutions,
while also offering IT services and consultancy services.
With NIIT always a services company, the group has undergone
a major paradigm shift—from a primarily hardware-oriented
focus to being a software and services giant. NIIT, meanwhile,
has gone full-steam ahead to consolidate on its leadership
position in the IT training segment, capitalising on the slowdown,
as aspirants started rushing to big brands for assurance on
placements. It is also observed that NIIT is investing more
to create brand pull and has got aggressive with promotions.
HCL Technologies continues to reiterate its key imperatives
of focusing on technology competencies and keeping pace with
continuous growth and learning. HCLT believes that in technology,
there are no half measures. Fact is, that’s exactly what
the rest of the group swears by too, and again, just another
reason for the group’s position and success.
| HCL
Technologies |
|
Incorporated
in 1991, HCL Technologies has earned the reputation
of being one of the top IT services and product engineering
companies across the globe. With a majority of its business
coming from the international market, its operations
span across 25 locations in 14 countries, including
the US, Europe, Japan and NANZ (North Asia, Australia,
New Zealand), covering over 80 percent of the world
IT market. The quarter ending March 2002 saw HCL Technologies’
gross revenues increase 13 percent to reach Rs 4.1 billion,
and net income was up by two percent to reach Rs 1.3
billion.
Key services
The key services provided by HCL Technologies include
technology development services, application services,
designing technology and business process outsourcing.
The company renders services through its 47 client-dedicated
software development centres that it operates for some
leading global organisations, including KLA Tencor,
NCR, Convergys, Toshiba, Siemens VDO, NTT Data and Lexis-Nexis.
Strategies
At the core of the company’s growth strategy, is
its strong high-end technology capabilities and offshore
led non-linear business model. Throughout the last year,
the company continued to make rapid gains in high-growth,
high-value new thrust areas, encompassing application
development, domain expertise and IT-enabled services.
Apart from this, it has also been providing value-added
solutions to clients in the emerging and high-growth
technology areas of Internet/e-commerce, networking
and embedded systems. With technology development at
the core of HCL Tech’s business, the company expanded
its portfolio and enhanced focus on application development
the previous year. The contribution of end-user applications
increased from 38 percent in Q3 2000-2001 to 48 percent
in Q3 2001-2002. Apart from a high-quality revenue mix,
what provides for further de-risking capabilities is
a well-balanced client concentration—top five,
top 10 and top 20 customer contributions to revenues
stand at 25 percent, 38 percent and 50 percent respectively.
An offshore, non-linear growth model complements this.
Empowered by the ‘Offsourcing’ methodology,
the company’s offshore infrastructure today comprises
16-technology development centres, each focused on specific
technology and domains.
In fact, last year saw the company investing significantly
in creating vast offshore infrastructure, adding several
offshore development centres (ODCs), thereby taking
the number of client-dedicated ODCs to 47, to meet the
growing demand for offshore services. During Q3 2001-2002,
the offshore centric business maintained a steady growth
of 23 percent over Q3 last year, to cross Rs 2.9 billion,
accounting for 71 percent of HCLT’s total revenues.
Deploying
the concept of multiple growth windows, HCLTs’
non-linear growth model has enabled the company to supplement
organic growth through diverse avenues. Numerous joint
ventures, alliances and acquisitions in diverse geographical
and technological domains has also enabled HCLT to build
domain expertise, access newer markets and a high-value
customer base. Some of the significant JVs forged by
the company include alliances with HCL Perot Systems,
Deutsche Software, HCL Technologies NI, HCL Answerthink
and Zamba Solutions.
HCLT’s high dependence on US clients is a major
minus point though, as the company’s performance
is largely influenced by US market conditions. According
to industry analysts, the company’s billing rates
are also considered to be on the higher side. So, undercutting
by competitors may narrow down margins in the days to
come.
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| HCL
Infosystems |
|
Successfully
shedding off its unidirectional ‘hardware’
image, HCL Infosystems has come a long way, boasting
of a presence across the entire spectrum of the IT industry.
With an end-to-end services and product portfolio, the
company operates across the domains of hardware, software
and networking. This makes it a total technology integrator.
While
offering a wide array of products ranging from PCs to
workstations and business servers, the company also
leverages its expertise in total technology solutions
and services to offer value-added services in key areas
like SAP implementation, software applications, networking
consulting and management and a range of support services.
With a heavy focus on increasing revenues and market
share in the quarter ended March 31, 2002, the company
reported a turnover of Rs 351.4 crore as against Rs
271.9 crore in the quarter ending December 2001. Profit
after tax was reported at Rs 10.3 crore in the quarter.
The year 2000-2001 was particularly significant for
the company’s hardware business as it regained
its Number one position in the desktop market.
And
helping the company gain leadership position in all
these segments (particularly PCs) was its huge channel
infrastructure of over 1,000 support engineers, coupled
with a strong brand image. The company’s strength
lies in the government segment, which contributes a
lion’s chunk of HCL Insys’ revenue share.
Services
Capturing both ends of the market spectrum—enterprise
solutions and PCs—HCL Insys has made significant
strategic infrastructural investments in the Professional
Services Organisation (PSO), the Support Services Organisation
(SSO) and in its manufacturing plants at Noida and Pondicherry.
Hardware is today considered as one of the key components
of the total solution by the company. The build-up of
the services business (both PSO and SSO) enables HCL
Insys to offer complete solutions as well as raise manufacturing
volumes to internationally competitive levels. Established
in 1994, Professional Services Organisation (PSO) provides
consulting, project management, facilities management,
software development and systems integration, as well
as centres of excellence for providing IT solutions
in manufacturing, telecommunications, finance and banking
industries.
An increasing focus on integrated enterprise solutions
has strengthened HCL Infosystems’ SSO’s capabilities
in supporting installation types ranging from single
to large, multi-location orders. The SSO comprises a
direct support force of over 800 members, and is operational
at 151 locations across the country and is the largest
such human resource of its kind in the IT business.
HCL provides three indigenously developed and manufactured
PC brands—’Infiniti’, ‘Busybee’
and the ‘Beanstalk’. A fully integrated and
business-ready intranet family of servers and workstations,
the ‘Infiniti’ line is targeted at medium
and large companies to help them to manage their intranet-related
applications. On the other hand, the Frontline division
of HCL Insys’ markets national and international
brands of computer systems (including Toshiba notebooks)
and peripherals within the country. With its extensive
network of 800 resellers across 300 cities, the Frontline
division has actively promoted the penetration of PCs
in the home and the small office/home office (SOHO)
segments.
With an aim of becoming a dominant player providing
global IT services, HCL Insys has reorganised and consolidated
its hardware and services businesses. Towards this,
it has set up overseas subsidiaries in the US, UK, Singapore,
Malaysia and Australia.
Over the years the company has been experiencing phenomenal
growth. The single-most important factor that contributed
to the growth of HCL Infosystems, has been price competitiveness.
The prices offered by HCL are more competitive than
vendors like Compaq and others. There is a price differential
of about 11-12 percent between HCL and offerings from
others in the desktop space. HCL also scores in terms
of competitiveness in offering the latest technologies
and features. In fact, HCL was the first vendor to offer
Intel Pentium P4-based PCs in the country. This was
primarily because HCL is a domestic player. MNCs have
to deal with a lot of factors like manufacturing, testing
etc at a global level that are time consuming and delay
the introduction of the latest technology developments.
The company has a very strong brand image and a huge
channel infrastructure, which as mentioned before, not
only aids sales, but also provides support and services.
On the flip side, HCL could face problems on the PC
front in days to come, because it lacks a wide product
range in the corporate desktop space, as compared to
multinational rivals. And the HP-Compaq merger means
the company has to think of some new strategies, as
far as its hardware business is concerned. As regards
the government sector, HCL has been able to outperform
other vendors in the desktop PC segment. According to
industry gurus, an important characteristic of the government
sector is that they prefer to give IT projects to Indian
brands and HCL is one of the best. But, once the mindset
of the government sector changes, HCL will have a tough
time in retaining this market. In fact, some companies
like HP are also making inroads into the government
segment, thus providing strong competition to HCL in
this segment.
HCL had an extraordinary last year because of the good
IT spending in the banking and government sector. In
Q1 2001, the government segment was very strong in terms
of IT spends. However, in 2002, there has not been much
of government buying, which reflects on the company’s
annual performance.
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| NIIT |
|
Starting
off as an IT education and training company, NIIT has,
over the years, evolved a hybrid business model with
its expansion into the domain of software development.
The company’s operations span across 38 countries
with regional headquarters in the US, Europe, ASEAN,
Japan and India.
Having
undergone a re-structuring exercise and having framed
new business strategies last year, NIIT and its subsidiaries
bounced back in Q2 (Jan-Mar 2002), churning out a global
operating profit of Rs 13.7 crore. The company thereby
exceeded its operating profit guidance of Rs 11.5 crore
announced in Q1. The company reported global revenues
of Rs 189.2 crore in Q2, a nine percent increase over
the previous quarter ending December 31, 2001. International
revenues contributed 54 percent of global revenues,
while the remaining 46 percent came from the domestic
market. Of the international revenues of Rs 101.4 crore,
the US contributed 49 percent, followed by Asia Pacific
at 28 percent and Europe at 23 percent. The software
business at Rs 107.8 crore constituted 57 percent of
global revenues, a QoQ increase of eight percent. On
the other hand, the learning business contributed Rs
81.4 crore, accounting for 43 percent to global revenues,
a 10 percent growth over Q1.
Last year, NIIT evolved a four-pronged business strategy,
which involved a renewed focus on portfolio management,
new business development with a target to generate over
30 percent of revenues each year from initiatives started
in the previous three years, inorganic growth, and transition
to new technologies. Under the new structure, four new
independent business units have been carved out. These
include units for software solutions, knowledge solutions,
education and training and an initiative called Project
K-12. The re-structuring exercise is targeted towards
achieving the Rs 10,000-crore revenue target over the
next six years. Apart from re-structuring, NIIT also
outlined aggressive cost management strategies to reduce
costs in Q2.
Software
In software, NIIT targets the specific domains of finance,
transport and retail with offerings including custom
software development and maintenance, legacy modernisation
and maintenance, enterprise integration, knowledge management
and e-learning. The software arm’s operating profit
in Q2 grew four-fold with about 20 new customers added
during this period. In keeping with the inorganic growth
strategy to augment growth, NIIT also made two acquisitions
in the US during the last quarter, including the custom
development business of Click2Learn and Osprey Systems,
a full-lifecycle SAP solution provider.
Enterprise Knowledge Solutions launched
NIIT’s Knowledge Solutions practice launched Enterprise
Knowledge Solutions, a comprehensive technology, content
and services package for businesses worldwide. With
this, NIIT has become the first company from India to
offer customised knowledge solutions for corporates,
enabling them to maximise employee productivity and
improve business results.
Training
The year 2002 has been particularly significant for
NIIT’s training business with a foray into IT Enabled
Services (ITES) training. The company launched its ‘NIIT
Smartserve’ programme to address the burgeoning
market for ITES.
NIIT’s training programmes offered through a global
network of over 2,500 centres include Futurz—a
series of programs of varying duration leading to the
GNIIT title; CATS—Curriculum for Advanced Technology
Studies, which offers training on advanced technology;
and SWIFT—Short Work Programs in Information Technology,
which caters to the literacy needs of people keen to
learn computers. NIIT@School addresses the school student
segment, delivering IT training to over 1,100 schools
in states of Tamil Nadu, Karnataka, Punjab and West
Bengal.
NIIT has a very strong brand equity in software services
and the leadership position in IT education. But, the
economic slowdown has negatively impacted the training
business with a drop in fresh registrations. Again,
in the education segment, the company faces extremely
strong competition from regional players.
|
| HCL
Comnet |
|
After
virtually surviving a closedown in 1997, the Rs 152.86
crore HCL Comnet Systems & Services, a 100 percent
subsidiary of HCL Technologies, has come a long way
to be recognised as one of the key players in the IT
networking services space today. The driving force,
believes the company, has been its constant evolution
up the value chain to move beyond the image of a satellite
communications company and metamorphose itself into
an end-to-end IT infrastructure management service provider.
In sync with changing market dynamics the company has
been able to maintain a stable growth rate of 39 percent
since 1998, growing from Rs 50 crore in 1998 to a targeted
Rs 200 crore in 2002. The company’s strategy has
been towards providing complete end-to-end solutions,
right from networking services to security services,
followed by Internet consultancy services and complete
IT infrastructure management services. And now it’s
time for the growth graphs to surge upwards as the company
bets big on its managed services business, especially
with the recent introduction of remote delivery capability.
HCL Comnet pegs the expected growth rate at an optimistic
50 percent plus.
With a Rs 100 crore investment for its managed services
business, this sector defines the future roadmap for
the company as it targets IT infrastructure management’s
lucrative $36,248 million market opportunity. Today,
the company offers its entire eFrastructure services
(Network Intelligence, Security Services, Connectivity
Services) under the umbrella of managed services. Apart
from its presence across the entire gamut of IT infrastructure
services, Comnet’s distinctive advantage is the
management capability. Management will be the key differentiating
factor in the future. Comnet offers its management services
across the four domains of application, database systems
and network, both for legacy enterprise infrastructure
and Internet infrastructure. As part of its expansion
plans within the space, the company is looking at adding
new offerings to its database management line and strengthening
its systems and server lines, with a major thrust being
on the applications domain, especially application development
for Web-enabled businesses.
Apart from eFrastructure services, HCL Comnet’s
business focus is also directed towards Internet consulting
services. Its operations within this segment include
the areas of performance management, customer intelligence,
vulnerability assessment and Web-enabling services.
The focus for Comnet continues to remain the key vertical
segments of banking and finance, and manufacturing.
Apart from this the company is also strengthening its
reach across service providers like ISPs, telcos and
contact centres, as well as the government sector. The
government sector currently makes for 25 percent of
the company’s domestic operations.
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HCL
Perot
Positioning the combined strengths of HCL’s technology,
delivery and managerial capabilities, along with the
global reach of Perot Systems, HCL Perot Systems (HPS),
a joint venture between HCL Technologies and Perot Systems
Corporation, is effectively leveraging on the best of
both worlds—an India advantage and global management
and work culture. Fighting to get itself out of the
business constraints brought about by the slowdown with
a CAGR of 61 percent, the $101 million company is leveraging
on this dual advantage to set the future pace for growth
and consolidation. And the company is well on track,
having evolved into a global software solutions company
and figuring among the top software exporters within
seven years since inception. The growth impetus for
the company has been its strong R&D focus. In fact,
the company spends about eight to 10 percent of manpower
on R&D activities.
It has established Centres of Excellence (COE), which
undertake R&D to help deliver tools and products,
driving the competitive edge. HPS has already established
COE in areas of migration technologies, OO/Web technologies
and workflow technologies. Some leading examples of
the tools developed include “Theme” (The Migration
Expert); Sybase-Oracle database migration, which automates
migration by over 60 percent; HPS Application Framework
(HAF), which is a set of reusable components, implemented
in J2EE and .Net technologies. HAF has over 300 components
in the finance, travel and telecom domains.
Further, HPS’ competency development centre (CDC),
a dedicated training facility, has been instrumental
in identifying key competency areas, and proactively
training associates to meet the market needs in these
areas through in-house R&D (pseudo) projects. Being
in the services sector calls for even greater R&D
focus, as it means working towards the specific deliverables
that lead to client satisfaction. HPS had also undergone
a re-structuring exercise in Q2 2000 with regard to
cost reduction measures and rationalisation of resources.
Every changing market situation requires companies to
a re-look at the operations and internal structures
in the light of the new business dynamics. The year
2000-2001 saw the company unveil its mega growth plan,
underlined by the strategy to increase capacity. While
the year 2001 saw the company establishing its development
centre in Woking, U.K. and a fully functional campus
in Bangalore, 2002 has been the year for foraying into
Singapore with the setting up of a software development
centre.
Targeting sectors like banking and finance, telecom,
travel and transportation and healthcare, HPS’
offerings include onsite-offshore IT outsourcing services.
This includes application management, application development,
migration & re-engineering, testing and e-integration.
The delivery models range from a dedicated offshore
centre, turnkey projects, or risk-reward engagements,
to time and material assignments. The company’s
operational strength lies in its IT infrastructure and
development facilities in Noida, Bangalore, Singapore
and UK. The top 10 clients contributed over 70 percent
of revenues in 2001.
Believing that there is always scope for improvement,
HPS is looking for opportunities to increase its market
presence as part of its future agenda. The company is
getting its infrastructure and offshore operations ready
for large-scale outsourcing engagements. It has also
recently strengthened all its facilities with effective
business continuity planning/disaster recovery measures.
HCL Infosolutions
Targeting the mass markets, HCL Infosolutions is operating
in the space of office computing, home computing, peripherals
and support services for IT products—thereby bringing
technology usage closer to the individual from the small
and medium offices to the home users. The company has
a vendor independent channel for the Indian mass market.
Its strength lies in its ability to provide reach and
penetration tailored to the diverse needs of mass markets.
There lies the potential to partnering organisations
that need reach and penetration in the Indian market.
HCL Infosolutions, in fact, boasts of a vendor-independent
channel for the entire Indian mass market, right from
small and medium offices to the home users. The growth
strategy for the company is through a focused channel—mass
markets handled through a chain of dealers, resellers
and retailers. However, all the technical inputs are
handled by HCL Frontline’s sales force and value-added
resellers. The wide array of products for the end-user
include computer hardware and software solutions, packaged
software (including multimedia and edutainment) accessories
and peripherals.
HCL Consulting
HCL Consulting provides onsite and offshore software
development and IS consulting services. The focus areas
for the company includes, custom-made solutions for
companies. The services portfolio of HCL Consulting
includes application development for client/server environments,
legacy system maintenance and re-development, with its
core strength in flexibility and adaptability of technology.
In terms of technology the company is focusing on areas
like client/server technology, firmware, networking
and imaging and workflow. The company also has expertise
in working on the following operating environments—IBM
S/390 Mainframe, AS/400, Novell, UNIX, Windows NT and
Mail Servers, allowing for Token Ring and Ethernet connectivity.
HCL GI
Re-defining the technology of broadcasting is what defines
HCL GI. The company’s operations lies in developing
technology systems. The company also provides product
solutions for interactive delivery of video, voice data
and broadband communication. This enables broadband
communication through cable TV. Its product portfolio
includes set top terminals, line amplifiers, RF and
fibre optic distribution equipment and head-end electronics.
The company is a joint venture between HCL Corporation,
India and General Instrument Corporation, USA, a leader
in broadband communication equipment.
HCL Office Automation
HCL Office Automation caters to office automation equipment,
multimedia solutions and workflow solutions. The company
is a joint venture between HCL Corporation, and various
leading office automation product companies like Toshiba,
Canon etc. The strong partnership base has enabled the
company to bring in international office automation
products into the Indian market. The company boasts
of a strong product portfolio ranging from photocopiers
and fax machines to networking products and services.
HCL Deluxe
HCL Deluxe is an information technology joint venture
between HCL and Deluxe Corporation, USA, exclusively
targeting the financial services vertical in the country.
The company provides technology-based solutions for
the financial industry, including banking, insurance,
capital markets and non-banking financial companies.
The solutions portfolio being offered by HCL Deluxe
include financial payment systems, integrated electronic
payment systems and bank/branch automation solutions,
ATM services, merchant acquisition (POS), EFT, and card
management services, credit verification, switching
and networking related to these activities.
HCL James Martin
Virginia-based HCL James Martin, a 60:40 joint venture
between HCL Consulting and James Martin & Co., USA,
provides system re-development solutions to customers
across the globe. The company leverages the strengths
of both parent companies to deliver value to its customers.
The company delivers services using the System Redevelopment
Methodology (TSRM). TSRM is an intellectual property,
where the company is currently focusing on addressing
the century date change issue. TSRM is a blueprint that
enables organisations to set and achieve clear redevelopment
objectives and avoid trial-and-error approaches.
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