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Home Case Study

HCL Technologies- Story of One Of The Early Indian IT Giant

Pritish raj by Pritish raj
December 24, 2019
in Case Study, Industries, Tech
4 min read
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HCL Technologies- Next Big Brand

HCL Technologies- Next Big Brand

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One of the most renowned IT Companies In India, HCL Technologies Limited (Hindustan Computer Limited) is a global IT Services and consulting firm which is headquartered in Noida.

It has offices in 42 countries including the United Kingdom, the United States, France, and Germany with a global network of R&D, “innovation laboratories” and “delivery centers,” with over 137,000 staff and their clients include 250 of the Regional 2000 companies ‘ Fortune 500 and 650.

It operates across sectors including aerospace and defense, automotive, finance, capital markets, chemical and process industries, electricity and utilities, healthcare, hi-tech, industrial manufacturing, consumer goods, insurance, life sciences, manufacturing, media and entertainment, mining and natural resources, oil and gas, retail, telecom and travel, transportation, logistics & hospitality.

Let’s go through the story of one of the oldest IT Companies.

It all started as a group of 6 engineers in Delhi Cloth Mills (DCM) who were unhappy despite having well-paid jobs. Shiv Nadar and his 5 colleagues quit the company in 1976. They decided to set up a business to make personal computers. They had acquired adequate technical expertise in the calculator division of DCM, but as with all start-ups, the challenge was getting funds.

Founder, Chairman, and CEO, HCL Technologies, Shiv Nadar told CNBC-TV18, “The first person I met was Arjun and he was also a management trainee like me. He was a couple of batches junior to me. We became very good friends and we’re still very good friends. Then, the rest of them all worked for DCM and we’re all of the same age, so we used to hang out together, crib together, have fun.

Next, Nadar would need to raise cash to give wings to his concept of computer manufacturing. He floated a company called Microcomp Limited by selling teledigital calculators. This venture threw up enough cash to allow the founders to form their ultimate dream of building computers in India, at a time when computers were just sophisticated cousins of the good old calculator, but support came from the government of Uttar Pradesh as well.
Eventually, Rs 20 lakh (Rs 2 million) was put together by the founders and HCL was born.

HCL began shipping its in-house microcomputers around the same time as its American counterpart Apple, and it only took another two years to launch its 16-bit processor.
By 1983, it developed indigenously, almost at the same time as its multinational contemporaries, a relational data-based management system, a networking operating system, and client-server architecture. The path to the top was now in reach, and by visiting international shores, HCL took it a step further.

HCL Team- Next Big Brand
From the Archives, The HCL team.
Source- HCL Website.

From calculators to IT education, HCL’s first five years were a mix of growth and expansion that was fraught with confusion, but the company was now planning to set a much larger target for itself and an announcement from the government would help it take off to those heights.
In 1979, when HCL set up a company in Singapore, the first exposure with international business came into being; it was renamed Far East computers. HCL was only 3 years old and had a net value of about Rs 3 crore (Rs 30 million). In the very first year, Shiv Nadar set an ambitious goal for the company and reported revenues of Rs 10 lakh (Rs 1 million).

Co-founder, HCL Technologies, Ajai Chowdhry says, “We discovered that there was a good opportunity to reach Singapore with our own hardware that we had produced in Singapore. But the plan was very specific about selling computerization rather than computers and so we actually took the whole concept of hardware, software solution and service and bundled it and marketed it as computerization.”

From calculators to IT education, HCL’s first five years were a mix of growth and expansion that was fraught with confusion, but the company was now planning to set a much larger target for itself and an announcement from the government would help it take off to those heights.

In 1984, a new policy was introduced by the Indian government to change the fortunes of the entire computer industry. The government opened the computer market and allowed technology to be imported. HCL seized the opportunity to introduce its personal computer with new guidelines and regulations in place.

The HCL story was one of steady rise from the 70s to the 90s, but in the face of its rapid expansion and continuous flow of accomplishments, Shiv Nadar did not anticipate that he would be in for a rude shock and that it would come from someone very near.
Arjun Malhotra, a comrade, and associate of Shiv Nadar decided to leave the organization in 1998 to launch his own TechSpan, based in Sunnyvale, California. He was also one of HCL Infosystems ‘ largest shareholders at the time. It was time for Shiv Nadar to reflect again.

Revenue from the hardware business has been shrinking, and Nadar has now chosen to reinvent HCL. Once again, the company needed funding to expand and Nadar decided to look at the capital market this time around. In 1999, the Indian Stock Exchange made an initial public offer (IPO), which was a tremendous success.

Today, HCL is on the Forbes Global 2000 list. As of May 2017, it is one of India’s top 20 biggest publicly traded companies with an $18.7 billion market capitalization. The company and its subsidiaries had combined sales of $7.8 billion as of May 2018.

Thirty years after he started his firm, Shiv Nadar doesn’t have much to worry about. Today, Hindustan Computers Ltd is a $3.5 billion company with 34,000 employees.
But then the quintessential aspect that made Shiv Nadar the pioneer he was and continues to be was frustration. Unhappiness once pushed him to quit his job at DCM, and even today it’s the same quality that drives him to do much more when he can rest on his laurels quite easily.

HCL Technologies remains one of the most fabled stories of an Indian brand going on to become a Global IT Giant.

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Pritish raj

Pritish raj

Pritish Raj is a content writer at Next Big Brand. Hailing from the diversified state of Bihar, he is an engineer by education who chooses the way of poetry, photography, and writing to kick off his career. Highly enthusiastic about brands and startups, he aims to be a travel content creator.

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