‘Indian IT has huge debt of gratitude to Welch’

BENGALURU: Jack Welch, who was chairman & CEO of GE from 1981 to 2001 and who passed away on Monday, had a big role to play in helping Indian IT lay its foundations, and later also in sustaining it.
“The Indian software industry has a huge debt of gratitude to Welch. He legitimised the idea that software development could be done offshore in India at a large scale,” says Ashok Soota, CEO of IT company Happiest Minds.
It started in 1989, when Welch visited India with the idea of selling GE products like airplane engines and turbines to the country.
Sam Pitroda, who was advisor to then Prime Minister Rajiv Gandhi, recollects in a blog that Welch was already a living legend at the time. He says Welch wanted to meet Gandhi, but Gandhi was preoccupied and asked Pitroda to meet him. And Pitroda met him together with Jairam Ramesh and Montek Singh Ahluwalia. Welch came with six or seven of his executives. And they met at the Taj Mahal hotel in Delhi.
“Welch knew we were aware of what he wanted, so he asked, ‘Sam, what do you propose?’
My answer surprised him. ‘Jack, I want to sell you software,’” Pitroda writes.
Some tense moments later, Welch agreed to listen to more details from Pitroda, and then finally agreed to send top people from GE in 30 days to look at possibilities.
Pitroda says that exactly 30 days later, eleven GE executives came to Delhi from the company’s plastics, consumer goods, appliances and other divisions. The Indian team’s responsibility was to show the local software talent – which resided in TCS, Wipro and Infosys, all of which were very small then, and in some government organisations.
“When I called to set up meetings, Infosys called back to say, ‘Sam, you’ve set up this meeting with GE, but we don’t even have an office.’ ‘Don’t mention that,’ I told them,” Pitroda writes.
As it turned out, the GE executives were pleased with the visit. “At its conclusion, they announced that they would be giving us the 10-million-dollar order,” Pitroda says.
Soota recollects that around 1993, the then GE CIO Gary Reiner came to Delhi with other group CIOs and wanted Wipro chairman Azim Premji to make a presentation. But Premji asked Soota, who was then president of Wipro, to make the presentation. “Though the GDC (global development centre) programme started in the early nineties, it took time for all of us to scale — must have been at least 1996-97 when several of us crossed the $100 million mark,” Soota says.
TCS, Infosys, Wipro and Patni all won deals worth $100 million each as part of GE’s GDC programme.
Later, in 2000, GE established its own R&D centre in Bengaluru, which was inaugurated by Welch himself. That centre has now grown to become one of GE’s biggest multi-disciplinary R&D centres.
Infosys co-founder NR Narayana Murthy said Welch was one of his corporate role models for his relentless focus on bottomline. “He rendered yeoman service to the Indian IT industry in 1990 (thanks to my friends Jairam Ramesh and Sam Pitroda from the Indian side for starting discussions with Jack in 1988 – 89) by recognizing India’s software talent through their partnership with 4 Indian companies – TCS, Infosys, Wipro and PCS. However, I respectfully agreed to discontinue Infosys relationship with GE in May 1995 since GE wanted us to reduce our prices aggressively which we felt were not in the best interest of Infosys.” Murthy said he was grateful to GE since this decision allowed him to take up the huge challenge of replacing their contribution of 25% of the revenue (using innovation) with other customers at higher margins. “It required me and some of my younger colleagues to work very hard for three years,” he said.
Murthy also said that Infosys borrowed his idea of “action learning” (from his leadership institute at Crotonville in New York) and improved up on it significantly at the Infosys Leadership Institute at Mysuru.

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