One could start with the first recorded use of the symbol ‘0’ in India in 876 CE. But it is probably best to start with 1966—India had just been through two wars—with China and Pakistan respectively. China had exploded a nuclear device in 1964. And the US had cut off electronic equipment sales to India in 1965.

Prime Minister Nehru needed a policy for "self reliance" in defense and the Bhabha Committee on Informatics was formed to figure out how IT could further that end. In that backdrop, the report’s central theme inevitably was "indigenization". A word that was to drive the course of the industry for over a decade. At the time, there were no local IT companies. There were a few MNCs like ICL and IBM—largely selling old, refurbished systems in India with a substantial mark-up.

The first government response to the report then was to ask existing multinationals like IBM and ICL to divest part of their equity to local companies. When IBM flatly refused, saying it preferred to leave rather than divest—the second response was to try and set up alternate channels.

The government took the monopoly route. The Electronics Commission of India Ltd was set up in 1967 under the aegis of the Bhabha Atomic Research Center. Its brief was to tie up with international companies for local manufacture of computers—and to increase the local content to a point of "self sustenance". At the same time, the Department of Electronics and the Electronics Commission were established and later in 1976, Computer Maintenance Corporation was set up. Import of computers was carefully regulated, depending on ECIL’s production capacity, and the entry of the local private sector was controlled. When the government felt the time was right, it re-exerted pressure on IBM to divest. This time, when the Big Blue threatened to leave, the government let it go in 1978.

The beginning of history
In a weird kind of way, that ignited the local Indian industry. CMC used the opportunity and government protection to expand its skills quickly and, eventually, found itself servicing 40 foreign platforms. It also developed a reputation for unorthodoxy and elan.

The private sector—which had been pulling at the leash for an entry into the industry—suddenly found the field all to itself. IBM was gone and ECIL, despite its highly popular S-16s and S-32s, had other problems. For one, it often took 18 to 24 months to deliver systems and there was a dreadful lack of applications on its proprietary operating system. Importing computers was expensive and painful—import clearances were difficult to come by and in any case, the DoE clearance took at least six to eight months.

At the time, companies like DCM-DP (Delhi Cloth Mills-Data Products), Nelco (headed by JRD Tata) and Microcomp (a breakaway of DCM) were making desktop electronic calculators. They seized the moment to move into selling computers. Others like CMS, Wipro, Blue Star followed...

Satyen Parekh country head, Borland I wanted to get into the IT industry after I finished my BSc statistics. The problem was that I’d never seen a computer before and had no idea where I could even look at one. In 1982 even getting to see one was a big thing. Thankfully my father was a bank manager and he’d heard that one of the bank’s customers – Garware Synthetics – had a computer. So he arranged for me to meet Garware’s EDP manager who took me to show the Nelco Force 5000 that they had. So I listened to the guy, read up some stuff on my own and applied to HCL for a job. To my big surprise they actually offered me one! I remember that during our induction at HCL Delhi in August 82, NIIT was doing the “introduction to computers” session and RS Pawar, Mrs (Shiv) Nadar, Vijay Thadani had all come to talk to us. My first job was Installation coordinator at a princely salary of Rs 850. My big consolation at the time was that even people like Sanjit (Sengupta) who’d come from places like IIT Kanpur or Jamnabhai Bajaj management institute, were also earning about the same

Energy…
This was the time the Indian computer industry really took off. It was a time of immense activity and the era had an energy that fairly leaps out through the 20-year-old black and white issues of Dataquest. There was suddenly a plethora of companies and products of various specifications, mostly run on proprietary OSs and atrociously priced.

After IBM’s exit, ICL had divested part of its stake to become ICIM and was selling its hugely popular 101s for around Rs 6 lakh. HCL’s first computer came in 1977. Satyen Parekh—now the India head of Borland—joined HCL in 1982 and remembers selling the HCL 8C and later the HCL S-2. He prefers not to remember the HCL S-4 that was a disaster and landed the company into a lot of trouble including a huge issue with Nabard. Bhaskar Pramanik, now the India head of Sun Micro, was at Nelco and started his career selling Nelco’s desktop calculators for Rs 50,000 a piece. He remembers the Nelco 3000 and later the Nelco 5000 that was selling at upward of Rs 5 lakh.

ORG, which was essentially a market research company, got into the business accidentally. It had tied up with Dansk Systems for a computer for in-house use and then decided to sell out. The ORG 60 cost about Rs 7 lakh in the early 80s. Others in the fray included PSI’s Omni, at Rs 10-20 lakh, and Usha’s Alpha series, at Rs 3-10 lakh.

These were mostly 8-bit or 16-bit minis running on the 8086, 8088 or Motorola 68000 series chips. A few were working around the Digital’s architecture. Essen Computers of Gujarat was making the SN-73, based on Digital’s PDP 11/73, and the SN-23, based on the PDP 11/23. Both were being sold through Hinditron.

It was a mad world out there.

When chaos ruled
It was also a time of immense confusion. For the Indian HW sector, the early 80s was frontier-time. Vinay Bharat Ram of DCM, Shiv Nadar of HCL, Dr Ravindran of PSI and Azim Premji of Wipro—these were pioneers with no precedents and no real role models.

So some of them made up rules as they went. The minis of the time were not really locally "manufactured". Mostly components were imported and assembled here. But imports meant government permissions under the Phased Manufacturing Program, import orders and custom clearances. It took time.

After a prolonged battle, striking bank employees and bank administrations had struck a deal on computerization by the end of 1983. Suddenly, the government and the public sector were eager to computerize and the demand was high.

So, all sorts of things happened. Late deliveries were almost the rule. Delivered Systems not working was fairly acceptable. Sometimes systems had to be delivered on schedule, though the components had not yet come. So empty boxes were shipped. He won’t go on record for this now, but a senior industry person recalls how a company once shipped empty boxes filled with bricks to give it a feeling of weight. In government departments, most systems would go into the stores till someone found the time and a person to install them. Within 15 days, the components arrived and with no one the wiser, the company went and replaced the systems quietly.

Today, such acts of effrontery are unthinkable. But that was a different age. Everyone was learning as they went—improvization or perish was the rule.

Then came the PC...
This was boom time. Rajiv Gandhi’s New Computer Policy had liberalized a whole lot of things, including foreign equity participation. The government was planning to install 755 large and medium systems and 15,000 small systems. Prices fell. An 8-bit micro with a hard disk and printer was selling for Rs 2 lakh. And then came the PC. In 1982, IBM had introduced the IBM PC. Two years later, Microcomp launched the first PC-compatible in India called the Neptune and it sold for about Rs 1 lakh. What followed then was a series of price wars.

Pawan Kumar chairman, vMosksha As as student at IIT Kanpur, I was pretty good at operating computers and had shown a flair for management. Seeing this, the faculty offered me the job at the computer center. At that time, IIT-K was one of the largest computer centers in India with IBM systems such as IBM 1620, 1401, 7044 and a process control computer—IBM 1800. When they quizzed me about the salary I would expect, I did not know what to quote. I proposed a sum of Rs 720 and when they said yes, I was thrilled.” “Back in the seventies, there were very few systems around. For example, IIT-K was supposed to be one of the best computer science labs in the country.” “When people talk of BPO today, I am really surprised. In 1978-79, I was with Tata Consultancy Services and I had the opportunity of doing a total process outsourcing for Colgate when they went for their initial public offer. Nearly 500,000 applications were processed in a matter of 60 days. Around the same time, I also remember processing UTI’s issues

Usha Microprocessor Controls (then a big name) launched the Usha Eagle PC for Rs 79,000. Breaking the Rs 1-lakh barrier at the time was big. Then HCL launched its Busybee in 1985—a runaway success—at Rs 50,000. Wipro came out with the Wipro PC at Rs 39,000. Then a phenomenon called Sivasankaran of Sterling Computers happened. He launched the Siva PC at an unbelievable price of Rs 29,000 and took the bottom out of the market. That was to become a habit with Siva—he did the same in 1997—till he eventually faded out of the PC scene altogether.

A later episode of the price wars had a completely new theme. PCs were advertised with prices that often did not include the monitor, the keyboard, sometimes even the hard disk! Excise duty laws also contributed. To circumvent the high excise duties (in addition to the high customs duties), some companies often shipped a PC AT and then billed the monitor, keyboard and hard disk separately. In retrospect, it was all very hilarious.

In any case, the upshot was that in 1985 alone, the number of PCs sold went up from 1,200 in the previous fiscal to 2,600—a phenomenal 116% growth. Most of them came installed with CP/M or a version of the PC DOS and a few basic packages like Wordstar and Lotus 1-2-3.

Unix, JVs and boomtime
The same year, the Rangarajan Committee decided that all bank computerization would be standardized on Unix and the Motorola 68020 chip. That led to a mad scramble among Indian companies to come out with Unix systems. HCL’s 16-bit system called Horizon that ran Hicix (its own version of Unix) was among the first off the block. Others followed.

Suddenly, a whole lot of things were happening all at once. At one end, the Meteorology Department wanted to import a mainframe for weather forecasting that the US state department nixed. So it settled for five DEC Superminis instead and paved the way for DEC’s entry into India. Digital would fill in the vacuum left by IBM and its Microvax would service an entire generation of high-end computing requirement in India. ECIL had tied up with Norway’s Norsk Data for manufacturing Medhas, but this giant’s heydays were coming to an end.

At the other end of the spectrum, 8-bit systems were falling in popularity and India was playing catch-up with the rest of the world in the PC space. The 8088 PC was being replaced with the 8088 PC-XT—it came with a hard drive. And later, the 80286 PC-AT. By the time the 80386 was introduced, India was in-step with the rest of the world. Wipro’s 386 on Unix V3 was the probably the first 386 Unix system in the world.

As MNC entry norms became further liberalized and the local market looked set to boom, the late 80s and early 90s saw a sudden spurt in joint venture operations. First came the agency operations—Hinditron selling Digital machines, Blue Star selling HP machines. And then came the JVs proper.

By the early 90s, almost every major Indian company had a major MNC tieup. Digital came in with Hinditron; HCL tied up with Apollo and then with HP (when HP took over Apollo); PSI with Bull; Modi-Olivetti; DCM-DP with Control Data Corp. Wipro was to later tie up with Acer and bring the Sun Sparc to India. Finally in 1992, IBM returned to India in partnership with the Tatas.

This was boomtime. In 1980, the Indian computer industry was a handful of people and gross revenues of Rs 75 crore. Before the end of the decade, in 1989, HCL became the first company to cross the Rs 100-crore mark and the Indian IT industry crossed Rs 1,000 crores in overall revenues.

A new paradigm
For a while, it looked like the industry was stagnating and would be consigned to minor technology tinkering for a long time. But two events of the 80s were to set off an entirely new industry—Unix, a multi-user OS, and Novell.

The era of local area networking had begun with the 286 itself. Novell’s Network OS—Netware—was based on the 286 and was introduced in the late 80s. It supported the Ethernet—a networking protocol that allowed 10 Mbps transfer rate compared to the 19200 prevalent at the time.

But there were glitches. The cabling cost was enormous. The 286 was a good machine but it was a 16-bit system with limited computing power. Besides, few applications were available on Novell.

When the 386 was introduced, things changed. It was a 32-bit machine capable of some serious applications. Case in point—ECIL’s first 386 was used to do the entire fingerprinting project for the police in 1988. As a result, people were looking at running Unix on the 386, connecting up terminals at a fraction of the PC cost.

Networking product sales went up enormously. Almost all hardware, including the printer, now needed to have drivers for Novell Netware or Unix. Among other things, this would lead to the creation of entirely new industry—the networking and communications sector.

Power, more power
Meanwhile, other developments were taking place. The PC servers were fine for their time, but not entirely reliable as the backbone for a corporate network... till Compaq came up with the Proliant range of servers based on the 486. The Proliant offered a level of redundancy not seen before on the PC. Others like IBM and HP soon followed and PC servers finally broke into the server space. A new era of computing began. Not long after, came the Pentium, which had the computing power to run relationational databases comfortably. This fueled the ERP boom, which in a pleasant cycle, fueled PC and PC server sales.

Other changes were taking place. By 2000, for one reason or another, most JVs had broken off and almost all MNC and hardware companies were once again on their own. The Internet era and the multimedia boom had sparked off the home PC segment. The dot-com boom had begun, with no apparent end in sight. By early 2000, the hardware sector had plenty of reasons to celebrate—Rs 13,837 crore worth of celebrations.

Ouch!
...And then the bubble burst. It was heralded in October-November 2000, with companies in the US warning of sales slowdown. Then 9.11 the Indo-Pak standoff, the squeeze on margins...

TEAM DQ