Dr. Ganesh: Hi and welcome to another edition of the Kalzoom Fireside Chat. I am Ganesh Natarajan, founder of 5F World and with me today we have a very special guest – Dr. Anand Deshpande.
Anand is the Founder and Chairman of Persistent Systems. Persistent has been a breakaway success in the entire entrepreneurial sector in India and is one of the most significant companies listed on the Bombay Stock Exchange.
I am going to start with just asking Anand to tell us about his journey and the journey of Persistent and why they have always been perceived as a “Hatke” or a very different company.
Dr. Anand: We started the business in 1990. When I started the business, I was just a fresh graduate out of PHD in computer science from Indiana University in USA and I had worked for about 18 months at HP. But I was doing a lot of work in the data query processing area. When I came back from USA, I was able to find a few customers who had needs to do query processing and data related stuff. So I already had my first few customers when I came back from USA, which was a good way to start.
So one of the things that I find which is something to learn from was that you need to start with the “customer first” when you are building a business. In the early significant part of my business I would say my third customer was Microsoft. Now, we were a ten people company at that time and why would Microsoft work with us?
However, I have realized that So if you are at the right place at the right time and you are persistent, you can get into companies. Additionally, if you have a clear idea of what you want to do, you should not hesitate to go after larger companies.
In the context of Persistent, I think it is interesting to note that through the 90’s we were a very small company. But we stayed very focused on building data related projects and working with startups and early stage companies. So to give you a sense we were about a 100 people company in 1999. So nine years into the business we were relatively small. Many companies who had started after us grew very rapidly during that period. There was Y2K and a lot of work going on in the U.S. in what people refer to as the body shop business. We somehow avoided all of those things for various reasons.
We stuck to doing very database, query processing, optimization projects. But our customers grew to become large companies and we built solid relationships with them. In 2002-2003, there was a lot of growth in the outsource industry. We decided that – let’s not try to be IT outsourcing anymore and we said let us focus on product outsourcing.
Now that was an important thing from our point of view because, we started to claim very quickly that we are leaders in outsourced product development. And even though companies such as HCL and Wipro had much larger product development outfits as compared to us, they would never go out and say we do product outsourcing because for them, in their whole context of things, it was significantly smaller than their overall story.
There were two things we used at that time – One was that you have to be differentiated.
And the other story that we told people about was the difference between product development and IT services. In an IT services project you have well-defined requirements and you do trade-off between time and money. But in a product, the first thing people do is decide when they want to ship the product. Then they decide how much to spend and then you build the best possible product within that time and money. So you iterate.
Another learning was that while it was tempting to chase the big fish, it was always good to have a slightly contrarian view on it and say we do products and we don’t do IT outsourcing. Yes, we might have lost out on a lot of business because there was more business in IT outsourcing. But the fact that we were differentiated allowed us to survive and potentially flourish better than we would have been if we would have been yet another IT outsourcing company.
Dr. Ganesh: So how would you now define Persistent?
Dr. Anand: Our focus on building products has not changed. What we are seeing as different today is that products are not being built just by product companies. but by every business which is that is starting to become a software driven business.
Becoming a software driven business is similar to how you build a product. So building iteratively and incrementally is sort of one key aspect of how you become a software driven business. Integration becomes very important. So we talk about four I’s. The first ‘I’ is about incremental and iterative development. that we talk about is about incremental and iterative development. The best example that I think in this is Tesla. So Tesla is a software driven car, you upgrade the software and you get new versions of the software and you get a new version of the car. This is going to happen in every single business model you look at. In general, the ability to refresh your business model very quickly is really the key to having incremental development on the business model.
The second ‘I’ that we talk a lot about is integration. So today you know, the success of any business especially traditional business depends on how do you bring data that you have across various things and bring it all together. And this is where this whole integration and API architecture is starting to happen.
The third ‘I’ that we talk a lot about is actionable insights. So this whole Google Now kind of stuff where you look at things by, not by reports or data that is there, but by telling exactly what I need to do now in this context. So personalized actionable insights – that’s sort of where the world is moving to.
And finally, I think everything is getting loaded with intelligence and machine learning.
Those are the four main components of a digital business or where we are trying to build our expertise. Every business is trying to become a software driven business and we are the ones who can help you become one.
To be continued in Part 2 that will be coming soon.