It all adds up to
One of India's "Big Five" IT service companies, HCL Technologies is
both a success story in its own right and part of a much larger
success story that dates back to a calculator distribution startup
in the 1970s. A provider of services including software-led
IT solutions, remote infrastructure management, engineering and
R&D services, and BPO, HCL Technologies has a global presence
and a client list to match. The $2 billion in revenue it
generated through its offshore business model in 2008 represented a
substantial share of parent company HCL Enterprise's $4.9 billion
for the year.
HCL Technologies' largest market remains in the U.S., and seems set
to do so in spite of recent economic concerns. Indeed, in
September 2008, the company announced plans to add a new U.S.
delivery center in Wake County, N.C., by the end of the year.
A $3.2 million investment, the new facility will take HCL's U.S.
employee base well above the 3,000 mark (out of a total of more
than 50,000 worldwide), and increase the firm's home-market
proximity to many of its clients. The new facility comes on
top of existing strategic locations in Sunnyvale, Calif., Downers
Grove, Ill., and Florham Park, N.J.
From calculators to
The first part of the firm's moniker is an acronym of the name it
was founded under in 1976: Hindustan Computers Limited.
Viewed by many as a classic Indian startup, HCL was founded by six
engineers with an entrepreneurial spirit. Led by Shiv
Nadar-who remains as chairman and chief strategy officer of HCL
Technologies today-the group pooled some Rs 1.83 lakhs (roughly
$165,000) in savings to set up a calculator distribution company,
getting into the domestic manufacturing business just as the
government was tightening restrictions on imports.
The next decade saw the firm become the top IT concern in India, a
situation aided by those government restrictions keeping the likes
of Apple and IBM out. Indeed, HCL produced India's first
domestic microcomputer in 1978, the same year that Apple's first
personal computer hit shelves in the U.S. The import
restrictions worked in the company's favor in other ways, too; it
gave the firm a level of expertise in R&D that ensured a steady
flow of income throughout the 1980s. The clients for that
first foray into providing outsourced tech services?
Hewlett-Packard, which contracted HCL to develop a multiprocessor,
as well as the likes of Nokia and Ericsson, which tapped the firm
to distribute their cell phones and switches in India.
Not content merely to become an ever-bigger fish in a small pond
(and possibly spurred on by relaxation of import restrictions in
the 1990s), in 1997 Nadar decided to spin off the R&D division
as a software services company and keep the hardware part of the
business domestic. The move created HCL Technologies through
a public offering in 1999. Today, HCL Technologies focuses on
international operations in software and services, while HCL
Infosystems still sells hardware domestically. Having already
handed over leadership of HCL Infosystems to co-founder Ajai
Chowdhry at the time of the spin-off, in October 2007, Nadar handed
over his own leadership of HCL Technologies to Vineet Nayar, who
had served as president of the firm since 2005. Nadar
retained his position as chairman and chief strategy officer.