Friday 21 December 2007

Nasscom remake

Business India, February 16-29, 2004

Coming of age

Nasscom, the apex body of Indian software and services companies, has overcome setbacks and reinvented itself to thrive in adversity.

Shivanand Kanavi

Kiran Karnik is the most unlikely face of the year. Thoughtful, self deprecating, cultured, always giving credit to others, no self promotion ... these are the many epithets that come to mind on meeting him.

When he took over the stewardship of Nasscom (National Association of Software and Services Companies) in September 2001, a comparison between him and his predecessor - Dewang Mehta, was inevitable. Mehta had died tragically in harness at 39, in a hotel in Australia. Dewang was a dynamo of manic energy that made him the premier IT evangelist of India and the face of the entire Indian IT industry. Many wondered if Karnik could fit into Mehta's big shoes. In short, if Mehta was the irrepressible Elvis Presley of Indian IT (including the side burns and hair do) then Kiran Karnik is the tambourine man - Bob Dylan.

"My answer to such posers was, 'look at it differently, I am standing on a very tall man's shoulders’”, says Karnik, in his typically modest style. Today as Karnik gets featured as the Face of the Year, 2003 by, one can objectively say that Karnik and Nasscom have finally moved out of Mehta's shadows in more ways than one.

Quietly Karnik and a host of IT stalwarts - Phiroz Vandrevala, Harish Mehta, Saurabh Srivastava, Arun Kumar and others - helped reengineer Nasscom. It is no longer centred around personalities and individuals but is becoming an institution. It is not just plain old lobbying based on contacts and charm, which Mehta excelled in, but research-based policy interventions; it is not any more a one man army of Mehta working 20 hour days, but a whole host of IT entrepreneurs and executives, giving their time willingly for India's most successful industry association.

Business India recognised Nasscom's contribution to the business landscape in India long ago in a cover story in February 2001, 'Power lobbying'. We said then, "Nasscom has functioned more than just a trade body. To be sure, it has advocated the cause of its members, but at the same time it has looked well beyond this and it has advocated changes in the national interest. In fact, Nasscom has morphed from a mere trade association to a catalyst for change on the national scale."

Three years later we can safely say that despite catastrophic events, like the loss of Mehta, a recession in the US and 11 September, Nasscom has come out trumps. Advanced countries with high cost economies are outsourcing services to countries like India. Today outsourcing has become a big buzzword. India is the first destination for many western companies and when they land up here the first address they visit is that of Nasscom. No wonder chose Karnik. "I am no celebrity, they took bits and pieces of what is happening the world over and what Nasscom is doing, and when they put it all together the face that appeared was mine," reacts Karnik.

Nasscom's annual conference showed clearly the coming of age of Nasscom and the Indian IT industry. Why do we say that? There are many small changes, some tangible and some intangible, which all add up to a new phase of Nasscom.

Earlier Nasscom brought in celebrities, Indian and foreign, to draw media and delegates. This year, celebrities in the opening session were the billion dollar club of IT companies, made in India. The panel consisted of S. Ramadorai, CEO, TCS; Nandan Nilekani, CEO, Infosys; Ramalinga Raju, chairman, Satyam; and Vivek Paul, CEO, Wipro Technologies (through a video conferencing link from California). They were not great orators, there was no grand standing, they were not a Steve Jobs, a Scott McNealy or a Larry Ellison, but there was tremendous self assurance. They impressed Suhas Patil, the grand old man of Silicon Valley. "We have come of age," he said, later.

In fact, more Indian tech gurus from the Silicon Valley, are rescinding their earlier views and admitting that Indian offshore development is a new model and it has worked. Earlier many of them used to look down upon the Indian IT sector as mere 'labour arbitrage' - a fancy word for middlemen between Fortune 500 clients, and poorly paid but highly qualified Indian programmers.

But Indian IT companies were quietly confident that they are their own models. "From the beginning that has been the case. We could not learn even from services companies like IBM or EDS. They had different cost structures and delivery models. We could not benchmark against them. So we had to go into a huddle, brainstorm, share our data and woes, pass tips to the next guy who is entering a new market, etc, and the forum that we created for that was Nasscom," says Saurabh Srivastava, chairman, Xansa, and one of the founders of Nasscom.

"It is a great place where CEOs and entrepreneurs do really share data, and their worries without any inhibitions," says Revathi Kasturi, president, Tarang Software Technologies, a Bangalore-based startup, the first woman to become an executive council member.

And that tells us something about the internal working of Nasscoml and what makes it different from other industry lobbies. While other industry associations get activated come budget time and are riven with factionalism and contrarian pulls, Nasscom has survived and thrived. Of course, some might say it is narrowly focused into software and hence the cohesion, but that is only a part of the story. After all, it consists of 800 members, only five of who contribute to 35 per cent of the industry turnover. It consists of MNCS, it consists of services companies and product companies, it consists of third party BPOs (Business Process Outsourcing companies) and captive BPOs of MNCs. SO there is enough scope for all kind of push and pull. But Nasscom continues to draw them together.

The biggies of software like TCS, Infosys, Wipro, HCL, Satyam, Cognizant and so on have long out grown their start up phases, have enough financial muscle to invest in marketing, research, overseas offices, etc, so commonsense says that they do not need the hand-holding of Nasscom. But out of 30-odd executive council members, at least 20 attend all meetings. As for the annual conference, everybody keeps it on the top of their agenda of them give a lot of their valuable time for the affairs of Nasscom. Why?

"Nasscom has a voice that carries more weight than any of the individual companies so we make the best of it. Moreover, it is a forum where we grow out of our narrow companywide concerns and brainstorm about what is good for the whole country and the entire IT industry," says Phiroz Vandrevala, executive V.P, TCS, who became a full-time spokesman for Nasscom in the post-Dewang period, before Karnik took over.

But what the industry needed in terms of tax benefits for software exports, and lower telecom tariffs that are crucial to deliver software to clients all over the world was won long ago by the diligent work Dewang Mehta and others, so what kind of policy intervention are they talking about?

Well there are always issues which affect the IT industry, where the knee-jerk reaction is usually the wrong one. For example, when everyone wanted duty protection from imports, Nasscom asked the government for zero duty on imports. When IPR had scant value in India, Nasscom carried out campaigns against software piracy, despite the fact that it could only benefit MNCS like Microsoft and not Indian services companies. Recently, when the government made noises about taxing the foreign BPO companies, Nasscom as a body advised against it, even though Indian BPO companies would have 'benefited' from it.

Why? Well let us look at the big picture. The zero duty on imported software helped in reducing the cost of IT in the domestic sector. Even though the bulk of Nasscom members depend on exports for their bread and butter, it has been their firm belief that without a large domestic base no product companies can come up here. "Moreover as Indians, all of us would like to see an IT-enabled knowledge based economy grow in India and not just in the rest of the world. We may not use fancy words like 'nation building', but we are after all proud to be Indians and want it to shine," says Harish Mehta, chairman, Onward Novell group and another founding member.

Similarly, copyright and IPR issues taken up by Nasscom have helped in the growth of product companies in India and have endeared Nasscom to MNCs as well. This is already paying off. Product companies contribute over Rs.6,600 crore to software exports, and are growing at a rapid clip of no less than 30 per cent per annum, according to Rajiv Mody of Sasken Communications, who heads the Nasscom Product Forum. The product forum is also promoting the 'India Inside' campaign, showcasing MNCS which are doing high-end research and development in India.

As a result, Microsoft, SUN, BT, Intel, Siemens and Price Waterhouse Coopers are very active participants of Nasscom. "We are deeply interested in promoting IT in the domestic sector. The benefits of e-governance, as a tool of transparency and using IT as a productivity tool in manufacturing and financial services are going to take India forward as a major economy and they transcend our narrow company interests," says Rajiv Kaul, MD, Microsoft India, who heads Nasscom, domestic IT market forum.

But why did Nasscom advise the government against taxing foreign captive BPOs? They are doing value added work here but are not showing it as a profitable business. As a result, not only is the government losing taxes but if an Indian company like TCS does it in the US then the US government's Internal Revenue Service would promptly put them in jail!

"Many times reciprocity is not the right response. If the circular issued by CBDT had gone through, then we would have got low-end work, which is not taxable and high-end work could have gone to other destinations. Our estimations are that by 2006-7 this industry might grow to about $70 billion. We know that 40 per cent of that will go as salaries. That means the government will get about $10 billion as taxes, which it would not get otherwise. So why do you want to kill the golden goose for a few dollars today?" asks Srivastava.

Business India spoke to several Nasscom executive members and all of them echoed the same sentiment independently. This shows several things. Firstly, Nasscom members are thinking their policy positions through, which are widely debated internally and backed up by hard data, leading to a united stand. Secondly, lobbying is now based on hard statistical data and not personal charm. Thirdly, they are rising above their immediate interests and looking at what is good for the country in the long term.

"If we had stayed in the same mould as we have been, then Nasscom would soon become irrelevant. I divide the growth of Nasscom into three phases, in the first phase it needed evangelizing and Mehta did it brilliantly. The second phase was putting in place the right policies and regulations, and that was hard work: telecom liberalization, 10A/10B in the Income Tax Act, Software Technology Parks, a host of things which helped the industry. The third, which started just before Dewang passed away, was brand building,” says Karnik.

“So far we have done well, but to maintain a 28-30per cent growth we need to be innovative. It cannot be incremental growth. We are promoting start ups, innovation and incubation, and continuing to influence policy, based on solid research, on hard data. For example, about lowering duty on computers and its effect on the PC market, we looked at prices and demand in different countries. But since people say India is different we looked at price elasticity in mobile phones and the CTV market, and what employment multipliers they can be and what they can do to the rest of the Indian industry including the software industry."

"Today, against the backlash to outsourcing jobs to India too, we are going to policy makers in the UK and the US, with hard research data from the Department of Labour, US, etc. We talk of gains to their domestic industry through outsourcing, we look at the demographics and the aging population profile there and the resultant drop in GDP growth, problems with immigration, etc, and hence project outsourcing as the best way out. This is a more professional and sustainable approach," explains Karnik.

Besides e-governance, Karnik himself is very excited about IT in defence, which is not talked about much. Today IT is the primary weapon in defence. One can use IT in blocking, tracking, tracing and directing armament fire, etc. But it is all packaged with the hardware. If the hardware and software are disaggregated then the cost of the system will come down heavily in India's favour and Indian companies can be involved in doing the software. It will save money and make India more secure.

Nasscom, however, is also working behind the scenes on WTO negotiations. If India works out its strategy properly, then there is a great opportunity for the Indian services sector. "There are some genuine problems for CAS, etc, but let us look at the total picture. We put together a high powered task force and got people from four top companies to come and work full time on this, and put together a document on the services opportunity and how it can grow to 10 times our other exports in six to seven years, if we can get the foreign markets opened up," says Karnik.

"There are two reactions to globalisation. Either there are people who are ideologically for globalisation or old socialists like me, who are sceptics, who say for 10 years nothing has happened so it is bad per se. But today we can see that unlike other developing countries we have a great opportunity. We should open up earlier. Tactically you can have different stances.
You can hold back retailing, till they open up something else, etc, that is a different issue," says an excited Karnik.

Karnik has drawn on the collective wisdom of his members. Ganesh Natarajan, Rajendra Pawar, Rajiv Kaul, Rajiv Mody, Ramalinga Raju, Arun Seth, Bhaskar Pramanik have been drawn in to head specific activity.

What about the 80 per cent of small companies, who might not connect with the concerns of the biggies? "'Within Nasscom there are enough activities which help the SME or startup sector in terms of research, advice on marketing or IPR, etc. I have never felt any kind of discrimination of smaller companies. In fact, even if somebody makes a remark inadvertently, I don't let it get me down after all I represent 80 per cent of the membership," says Revathi Kasturi.

Nasscom is being studied by several countries since there is no other similar example in the world. "National Rifle Association in the US is probably the only other," laughs Harish Mehta. But jokes aside, the diligent Chinese are sending a delegation every month and closely monitoring Nasscom's activities to learn from it. "There is a saying that if you carry a big stick then you can talk softly and others will listen carefully. Dewang gave us a big stick so I can afford to talk softly," acknowledges Karnik.

Looking ahead there will be non-tariff barriers, not just due to job losses but because India has emerged as a major player. Other countries want to know whether they are too dependent on Indian software. "How do we sustain our competitive advantage, after all we have cleared the path for our competitors? China in the long run because of size and bandwidth will be our competitors. They will be offering everything from call centres to R&D. But ultimately our biggest differentiator will be diversity. We are used to working in multicultural teams, being ourselves a multicultural society. So it is easy for us to work in international teams."

"At a more basic level our culture is that of ambiguity. Recognising gray areas helps us think creatively. When things are given step by step as in manufacturing, the East Asians are great. When you look at us five to 10 years ahead, you will see us as great source of ideas and solutions," says Karnik.

Where do we go from here? In Karnik's words, "When I took over, a journalist asked me to summarise in one sentence what I want to do! I thought hard over it and said, 'I want to make India and IT synonymous'. When you think of wines you think of France or with watches you think of Switzerland. Of course, everybody makes wines, California, Australia, Chile and even India. Similarly everybody makes watches, but France and Switzerland stand out in our minds. In the US, associating India with IT, has already happened. That is what is seen in the backlash in a negative way. But my hope is that when this blows over, association of India with IT will remain. "We say Amen to that.

Profile: Pradeep Sindhu

Business India, January 22-February 4, 2001


Shivanand Kanavi

Pradeep Sindhu is a difficult man to interview. "If you are talking money, networth, etc, then I am walking out of this. If you have anything to discuss about Juniper, I will be glad to talk. Anything about myself and family is a no, no," he burst out.

Apparently, he has had a bad experience with Indian media and its crass obsession with dollars made. We, of course, placated him quickly, "Networth, what networth? Perish the thought! We want to ask you about routers, about Internet Protocol (IP), about how you are giving sleepless nights to John Chambers & Co at Cisco."

The effect was instantaneous. He changed into a professor, an ardent researcher, an engineer's engineer who talks English. It was so dramatic, that for a moment one thought the guy was either one-dimensional or unreal. But Pradeep is simply passionate about his work.
That is how Pradeep Sindhu and his colleagues at Juniper Networks have carved out nearly 30 per cent of the high-end router market. Earlier, Cisco was the uncrowned king of Internet infra­structure. It still is, when it comes to enterprise level networks, but for the core of the network, more and more telcos are buying Juniper's equipment.

Pradeep narrates the story of Juniper: "In 1996, when I asked myself how an exponential phe­nomenon like the Internet could be facilitated, I saw that the only protocol that could do it is IP, since it is a connectionless protocol, it is reliable and easily scalable. The elements that were miss­ing in IP were routers. When I looked at IP routers built by others, I was really surprised at their prim­itive nature. That is when I realised that there was a great opportunity to build IP routers from the ground up, using all the software and hardware techniques I had learnt at Xerox PARC (Palo Alto Research Centre). I thought every second wasted would lead to some- body else discovering the same. I called Vinod since I had done some work with Sun and he had investments in networking. He gave me an hour. I spoke to him about the macro scene and told him that if we design from first principles we could do 50 times better than what is available. He asked some questions and said he would think about it. He called back two weeks later and said let us do something together."

"When Pradeep came to me, he had no business experience. My view was: 'I like the person and I like the way he thinks'. I asked him to sit next to somebody who was trying to build an Internet net­work for three weeks and asked him to understand what the problems are. He is such a good guy that he was able to learn quickly what the problems are. Helping a brilliant thinker like Pradeep and guiding him gives me great satisfaction. This is one guy who has really changed what the Internet is. The difference he has made is fabulous," says Vinod Khosla. That is tall praise coming from Vinod, who is no mean thinker himself.

With apologies to Sun Microsystems, who produce chips named Sparc (in fact, Sindhu played a significant role in it), we are using the same for the title, since Pradeep Sindhu is really a spark that came out of PARC.

Monday 10 December 2007

Profile: Rajvir Singh

Business India, January 22-February 4, 2001

A VC with a soul

Shivanand Kanavi

“Rajvir Singh is an usual Valley VC. He still has some soul left,” an entrepreneur told us. “You must meet him before you go. I will give you his cell number and you can talk to him,” said part-time entrepre­neur and full-time academic Prof Paul Raj. “Raj, as he is popularly known in the Valley, is one of the biggest. He did Cerent and sold it to Cisco for $7 billion, and Sierra and sold it to Redback for $4.3 billion,” said yet another entrepre­neur. We were leaving the Valley the same day and we dialed the number given to us. “Oh, you must be looking for Raj Singh, I am Raj Parekh," said the voice on the other side. Our curiosity had been sufficiently aroused and when we found that both the Raj’s work for the same firm, Red­wood Venture Partners, we decided to pray for good traffic conditions so that we didn't miss the flight, and meet them anyway before we left for San Francisco.

Needless to say, we were handsomely rewarded. Though we did not have much time together, we struck a cord instantaneously. "I am from Idrishpur village, near Meerut, and was born in an ordinary farming family," began Raj Singh. We continued in this vein for a short time and then contin­ued the rest electronically. Raj Singh is a true wanderer. Not only in the physical sense of trekking, which he does regu­larly with his family ("we went to the Andes this summer," he informed us). Like a seeker of something ethereal, he keeps wandering from job to job, startup to startup, idea to idea. On the way, he also creates knowledge and wealth.

After his BE in Roorkee Engi­neering College in EE, Raj joined the Navy. After a couple of years working on the aircraft carrier Vikrant, Raj found the regime too rigid and so, he resigned. He then joined IIT Delhi and worked in TIFR'S mathematics depart­ment, studying computer sci­ence. To this day, he says he found the atmosphere at TIFR the most stimulating. In 1974, he joined a startup in Delhi, Alpha Electro, to make minicomputers. He was then given an assignment in Libya. Working for the Libyan Electricity Corporation, he developed a computer programme for grid planning and load dispatch. After a couple of years there, he joined the University of Minnesota at Minneapolis for an MS in computer science. From 1981 to 1995 Raj changed jobs - from CDC to National Semiconductors, to Trilogy Systems, to Cirrus Logic to Nexgen to Inter HDL.

Then he ventured onto his first startup Advancel Logic, which later split into Fiberlane and Stratum One. Fiberlane again split into Cerent and Siara and Cyras.

In 1999, Raj teamed up with old friend Raj Parekh to float a venture fund, Redwood Ventures.
Today, Raj is part of Comstellar Technologies, a combi­nation of an incubator and a vc firm and a specialised tech­nology holding company in a particular sector. Anil Gupta of Stanford University has called Comstellar Technologies a Metacompany and has predicted a brighter future for this model. Raj has invested in 40-50 startups. A large number of them are in the optical component space - which is why Raj is described as a fountain of optical startups. The way he has started his companies and then split them as and when required, show an extremely flexible and functional strat­egy, a key characteristic of the startup culture.

When Raj was facing a burnout, he found time to write a book, Digital Design and Synthesis with Verilog HDL, which has gone on to sell over 10,000 copies.

"I have learnt a lot from various industry stalwarts, I was lucky to directly work for people like Suhas Patil, Thampy Thomas, Atiq Raza, and Vinod Khosla. I also happened to work with Kamran Elahian in helping him start Momenta, and with Prakash Bhalerao, who was director on the board of Advancel. I worked with Prabhu Goel while I was writing my book on Verilog HDL. What I did was apply all that at Cerent, Startumone and Redwood Ven­tures. Now I am learning from my general partners Raj Parekh and Deven Verma," he says.

Raj Singh's reputation as an optical startup machine has spread far and wide. Recently, the Chinese government invited him for a visit. "They have invited me to become an advisor to their minister of information technology and also visit them again and give seminars to young graduates on how to start a company, how to develop a business plan. In return for their hospitality, I gave them free rights to translate Digital Design and Synthesis with Verilog HDL into Chinese," recalls Raj.

Raj Singh's soulfulness is evi­dent from an anecdote regard­ing Tachion Networks, now being eyed for an acquisition by Alcatel for a billion dol­lars. One day the president of Tachion Networks called Raj and said he had run out of money and could not meet his payroll any more. Raj decided to wire him $100,000. "He called me on Thursday, and Friday was his payroll date. I called Raj Parekh to do the same and he also wired him another $100,000. None of us had met this guy before, and it was a blind date. Investing is not just making money, it is also making the entrepre­neur's dream come true," says Raj. Amen.

As for equity in his startups, Raj says: "The more you give it away, more you get out of those who get it. I found it very satisfying when John Chambers of Cisco, who bought Cer­ent, made a statement to his staff that he was very happy to see that stocks distribution in Cerent was very even. That enables the company to hire more talent who help build a large company."

"I would like to use my new-found wealth to benefit the society that I got it from. I have a dream of creating a ven­ture fund out of my personal capital, the returns of which would not come to me, but would rather go to benefit char­ity organisations, Indian social entities, and to improve education in India. My village in India still does not have a high school. And the Hindu temple in Sunnyvale still does not have a clean carpet and a clean restroom. This fund will have part of the returns invested back into the fund, will be known as a green fund, and should hopefully continue to generate sufficient money to at least become a continuous source of money supply to some extent," he adds.

This simple man from Meerut seems to be a total misfit in the Valley, but paradoxically, that is where he is thriving.

Thursday 6 December 2007

Interview: Nuclear myths and half truths

11 myths that make nuclear deal an unclear one

D Murali

Chennai, 5 Dec: Intense debates have been on, about the nuke deal at the political level, generating possibly more heat than light. “Many half-truths and myths are doing their rounds,” frets Shivanand Kanavi, vice-president - Special Projects, Tata Consultancy Services, New Delhi.

A theoretical physicist from IIT Kanpur and Northeastern University, Boston, he has carried out research at IIT Bombay. After a teaching and academic career, Kanavi became an economic consultant and later turned to business journalism, before joining TCS.

Author of books such as ‘Sand to Silicon: The amazing story of digital technology’ (Rupa & Co. 2006) and ‘Research by Design-Innovation and TCS’ (2007), Kanavi is currently writing a book on India’s nuclear programme.

The first myth, according to him, is that nuclear power is expensive and, that India should build coal-based power plants, instead, as we have plenty of reserves.

“You cannot make generalisations about any source of energy,” reasons Kanavi, interacting with Business Line, over the e-mail, and expressing his personal views on the subject. “The economics of power depends on distance of raw material source, fixed costs and operating costs, gestation periods, environmental costs and social cost.”

He goes on to list ten more myths, on things ranging from gestation to safety, raw material to risk management.

Excerpts from the interview.

Isn’t the ‘coal’ option cheaper?

The answer is ‘no’ when coal has to come from more than 1,000 KM away, from the coalfields of Eastern India; coal then becomes expensive compared to other options.

Considering lifecycle issues, strip mining of coal is not environmentally friendly. Indian coal has low sulphur and high ash content; hence one has to deal with huge amounts of fly ash either in the air or in tailing ponds.

Imported coal has low ash, but produces acid rain due to sulphur and nitrogen oxides. Pithead coal-based power plants in Eastern India are a must. One needs a rational energy mix without a one-shoe-fits-all thinking.

Don’t nuclear plants take a long time to build?

This is the second myth, I’d say. Some projects did get inordinately delayed due to the fact the Canadian collaborators abruptly abandoned the projects they were involved in, after Pokharan I (1974). The Indian nuclear industry took some time to learn nuclear manufacturing; and NPC (the Nuclear Power Corporation) took time to master project management.

But now they are building nuclear power plants in a highly competitive 5.5 to 6 years time (global average is about 8 years). Let’s not forget that hydroelectric stations too take a long time to build because of dams and reservoirs.

Talking of hydro, isn’t that the most apt, as energy source?

Myth, again, is that hydro is the best suited for us since its operating cost is next to nothing and it is renewable.

While it is true that there is a lot of potential in the Sahyadris and the Himalayas for hydropower, it is not a panacea. Reservoirs lead to submergence of arable land and forestland and human habitations leading to serious ecological and social problems. In addition, the life of reservoir is limited due to silting.

What about safety in the N-option?

That nuclear power in India has safety issues for workers and waste disposal is myth four. India has a better track record than most countries like the US, Russia and Japan, where serious accidents and leakages have taken place. Remember, our atomic scientists who design and operate the plants live with their families in the same colonies as workers.

You mentioned about the raw material misconception…

Yes. Some people argue that since India has a lot of thorium, why should we go for imported uranium. There is no country that has the technology today for commercially exploiting thorium for power. In fact India is in a leadership position; however, the first thorium reactor is underway, and it will take 10-15 years more to master it.

We also hear critics wonder why India is not buying reactors or uranium from Russia and France who seem to be eager to sell, instead of getting into a conditional deal with the US.

We do hear thus; but it is based on flawed reasoning. Agreed, that France and Russia are eager to engage in nuclear commerce with India. But without the IAEA (International Atomic Energy Agency) safeguards in place, and a lifting of the blockade by the Nuclear Suppliers Group, no country would do business with India. Which is why the Indo-US deal is the key to unlock multilateral blockade.

Some complain about the technology.

More specifically, they ask why India is keen to buy expensive reactors from the US when no new reactor has been built in the US for the last 30 years and their technology and skills are rusty. Wait. The deal (123 Agreement) does not say how many reactors we will buy from the US. In fact if the price and financing are not right, India may not buy any from the US or for that matter from other countries too. As pointed out before, the deal just lifts the embargo for nuclear trade with India.

Would the deal undermine our foreign policy?

A common grouse is that the deal will enslave India to the diktat of the US foreign policy. No, the 123 Agreement is strictly regarding conditions accepted by both the countries to resume nuclear commerce while recognising that India has nuclear weapons and might continue to make them just as the US does.

It also does not pressure India to sign the NPT (Non-Proliferation Treaty). The Hyde Act – an Act passed by the US Congress and not an agreement between India and the US – has sections that hope to bring alignment in the foreign policy of both the countries.

Thus, any strategic or political alignment between India and the US is a separate issue and is not part of the 123 Agreement, which is in the nature of lifting technology embargo.

At the same time since India has big power ambitions it will have to take coordinated actions with other big powers on various international issues. In other words, it will move from being an agitator to a manager. Just as China has done.

How far are valid the fears that India will lose the right to conduct another nuclear test if it signs the deal?

First of all nobody gives anybody the right to conduct a nuclear test. If India still tested in 1974 and 1998 the same were based on its own sovereign decisions and threat perceptions.

However, in both the cases, India was isolated, and almost all countries put various kinds of restrictions on high technology trade with India. It hurt India’s economic and technological development but it was a calculated risk. If India wants to test at some later date, it will once again have to take a calculated risk.

There’s a myth about risk, you said?

That’s right. “Why are we risking so much for a 3-7 per cent of our power production?” demand the sceptics. First, in an energy-starved country every percentage point, counts. Second, 3-7 per cent is the projection based on current investment plans by the Government.

We could also go the French way, who generate close to 80 per cent of their power using nuclear technology; or the Chinese, who have already started an aggressive nuclear power programme.

That makes it ten myths. What’s the last?

That India’s civilian programme has always been a cover for the weapons programme and has not produced many results.

This, an uncharitable and sweeping comment, totally ignores the achievements of our scientists and engineers under extremely hostile international conditions.

India is perhaps the only country that started both nuclear and space programmes for peaceful purposes; achieved considerable expertise; and then started its weapons and missiles programme.

For example, the Atomic Energy Commission was set up in the late forties, soon after Independence, whereas the military programme started much later, in 1970-71.

India has always been held in very high regard in the International Atomic Energy Agency and it has chaired the board as well.

There is every possibility that India will start exporting research and power reactors in the 220-500-700 MW range, fuel bundles and other accessories as well as services to operate and maintain reactors.

For example, the Rajasthan reactor’s entire core was redone at a fraction of what it cost Canada and South Korea. Similarly, India has accumulated tremendous expertise in using nuclear technology for plant breeding and medicine.


Tuesday 4 December 2007

Profile: Desh Deshpande

Business India
, January 24-February 4, 2001

Lighting up

Shivanand Kanavi

“Serial entrepreneurship is not interesting to me", sounds facetious coming from Gururaj 'Desh' Deshpande, if you do not know the context in which he said it. After all, he is one of the most celebrated ser­ial entrepreneurs among Indians in the US. "If serial entre­preneurship means doing the same thing again and again, then it does not interest me. Making some money every time you have an idea, which you build to a certain extent and then sell out, is not my game. Big-time wealth creation is in building a company as a long-term play," he says. "I am not deprecating the value of that kind of serial entre­preneurship, may be one's capabilities end with idea gen­eration and taking it forward to a certain extent, then it is better to sell out," adds he.

Sycamore is not a hot startup any more. It was one or two years ago. Today, it has over 750 employees and nine offices in US, and seven international offices in UK, Ger­many, France, Sweden, South Korea, Japan and Canada. They notched up revenues of over $100 million in the quarter ending 30 October 2000. Though the stock value has fallen from the astronomical valuations 10 months ago, and the market cap has dropped from $55 billion to about $15 billion, it still trades at a P/E multiple of around 450. (Compare that to the P/E of Cisco: 81, Juniper: 275, Nortel: 50, and Lucent: 16.5.)

Vinod Khosla, partner in Kleiner Perkins Caulfield Byers, and another doyen among Indian entrepreneurs, agrees with Desh: "A decade or two later will we (Indians) make a difference to the economy by building a Sun, a Microsoft, an Intel, a Dell or an Oracle? Will we change the technol­ogy scenario? That is the crucial question to me. It looks like with Sycamore, Desh wants to build such a company."

We went to Boston to see just how Desh is building his company and how he has achieved what he has. We reached Boston in the middle of the night after a tiring trans-Atlantic flight and hassles at JFK. However, the lim­ousine driver taking us from Boston's Logan Airport to the Radisson Hotel at Chelmsford, Massachusetts made our day. He seemed very well informed about Sycamore. "It seems to be a really good company. I ferry around lots of people. Many of them come for interviews and they all say they want to work with Desh. He must be a very nice and smart guy to attract people like that. I have not met him but people say he is very simple and accessible. Till the papers in Boston wrote about him, we did not know such a wealthy guy lived among us," he added. Just to test him a bit we asked: "What is Sycamore into?" "Oh, Optical Net­working, where they use lasers and stuff like that," he replied. When we told him we were visiting the company and meeting Desh the next day, he was thrilled. We had a similar experience two more times the next day - at a small electronics store near the hotel and with another cab dri­ver who took us to Desh's house in Andover. To have a rep­utation among your peers, investment bankers, employees, customers is one thing. But to have it in the community around you, despite being low profile, speaks volumes about the person.

In every which way Desh looks and sounds like an unlikely candidate for a high-powered entrepreneur. He is firm in his views, quick and clear thinking but never throws his weight around. Desh comes from a modest fam­ily in Karnataka. His father served in the government's labour department and there's been no history of business in the family. Desh's education took place in really small towns of Karnataka like Sankeshwar, Dandeli and finally he joined the well-known National College in Bangalore.

After his BTech in electrical engineering from IIT Madras in 1973, Desh had a job offer from Telco at Pune which included a princely salary of Rs500 a month. Mean­while he was admitted with a full scholarship to the Uni­versity of New Brunswick. So he dropped the idea of joining Telco and went to New Brunswick. He did his MS there on microwaves and dielectric wave-guides (optic fibres are also dielectric wave guides).

Desh thought he found his true vocation in teaching.

But teaching needed a PhD, so he joined the University of Queens, Canada. After his PhD adviser Dr Peter Brack­ett, had joined Codex, a startup which was not doing well Motorola took it over and Brackett asked Desh to join him there as head of engineering. Desh liked the idea; they were supposed to build modems and networking products for Motorola.

By 1984, Desh pretty much took Codex from zero dol­lars to $100 million in revenues and employee strength rose from 20 to 400 people. This was a very important learning period. Desh participated in marketing, sales as well as engineering. On the personal front, in 1980 Desh married Jayashree Kulkarni, a physicist from IIT Madras. Jayashree had switched over to computer science and was working in Toronto, Canada, after her MS. "We did not know each other at IIT Madras, since I entered IIT Madras after Desh graduated, but our mothers were classmates and the families knew each other in Hubli," says Jayashree.

In 1984, the entrepreneurial itch started. Canada was not the place to launch hi-tech startups, so Desh and Jayashree decided to move to the US. Motorola offered him the choice to move to the Silicon Valley or to Boston. Desh chose Boston and worked for three more years at Codex waiting for his green card. But the pull of entrepre­neurship was too strong. Local area networks (LAN) were coming into vogue and Motorola was not interested in it. One of the possibilities was building high-speed LANS using optical fibre. Thus Desh got together with a friend to develop Fibre Distributed Data Interface. They pooled in $10,000 each and started working. Desh still had his job at Motorola, so he would go to the startup at 4 am in the morning and at 8 am would proceed to attend his duties at Motorola!

Then the Black Monday of September 1987 took place.

The stockmarket crashed by over 23 per cent in one day. Prospects for funding vanished and the $20,000 kitty also dried up. Desh's partner, whose wife was expecting and who was working full-time in the startup, had to quit. That was the end of the first effort.

As soon as he got his green card, Desh gave up his job at Motorola and started Coral Networks. Desh had enough savings to pull on for 18 months with Spartan living. It took a while to get seed funding. Finally they raised $4 mil­lion and hired 20-25 people. At this stage, a dispute arose between the two founders. According to Desh: "It was easy to come up with well-engineered routers that were five times faster than those available and it was difficult but possible to get them to be eight times faster but 10 times faster was almost impossible at that stage." Coral had kept the target of producing 10 times faster routers. Desh realised the market was ready to gobble up five times faster routers right away. So his view was that they should be pro­duced and sold while working on eight times faster routers. But his partner had a different view - he wanted 10 times faster or bust. He also thought it doable and asked for three weeks time. However, three weeks went by and then another two weeks and another four weeks and still they were nowhere near. Desh saw that the two views could not coexist, and walked out. "It gives me no pleasure to say now that I was right, but I was. After 18 months and $12 million more, Coral was still nowhere near the product, and finally it was sold for $15 million," recalls Desh.

However, Desh faced a fresh problem. In order to raise their two kids, Jayashree had given up her job. Now both were jobless. Desh went to India in 1990 for a visit and his parents were scared. But in his own words: "It was very hard to work for anybody else but yourself."

When Desh started Cascade Communications it took time to get seed funding. "In fact, the scariest moment was when Ravi (family name for Desh), came home one day and told the kids not to get hurt while playing, since the health insurance had run out," recalls Jayashree. Soon things started turning around. Desh sums up the Cascade story: "Ed Anderson, a VC I had known from my first attempt in Fibre Distributed Data Interface (FDDI), called me up one day and asked: 'what are you doing nowadays?' I had a lot of credibility due to what I had achieved in Motorola, though I had lost a bit due to the failure of Coral Network. We had lunch and I explained my idea to him. He was impressed and two weeks later he wrote a cheque for $125,000. And that is how we got started at Cascade. In '91 June we got funded and in nine months, by '92 March, we rolled out our first product. We had a good engineering team. Dan Smith joined us in June '92 as CEO. Till then I was the CEO. He had more business experience. Our rev­enues grew from $ 700,000 the first year to $330 million in '97 and the company grew to 1,000 people. We had the IPO in 1994 and from an offer price of $15 the stock went up at one time to $540. We even reached a market cap of $10 billion, which came down later. We had 60-70 per cent of market share and in July 1997 Ascend acquired Cascade for $3.7 billion. Ascend itself was acquired by Lucent later in 1998 for nearly $20 billion and analysts said about $17 billion of that value was contributed by Cascade acquisition!

Desh then spent a few months with his family. He began mentoring other entrepreneurs - 20-30 entrepre­neurs were visiting his home every week in those days ­and even agreed to become chairman of one of their star­tups, Cimaron Communications. This became a huge suc­cess later on. But soon the entrepreneurial itch started again. He thought: 'What if we could create tonnes of band­width on demand, since the New Economy is going to be driven by bandwidth?' In a Christmas party hosted by Matrix Partners, a well-known Boston-based VC fund, Desh met Rick Barry and Eric Swanson from MIT, who came with a deep knowledge of optics. Soon Sycamore Networks was born. The Cascade alumni were full of entrepreneurial energy. Already 18 new startups had come out of former cascade employees. When Desh started Sycamore with Berry and Swanson, several people from the Cascade team came and joined Desh. The rest is history. Within nine months they rolled out their first product and signed up their first customer. The IPO in October 1999 was a resound­ing success - a stock offered at $34 was listed at $210. Today, when dozens of companies including those who thought it all hype, are talking about intelligent optical networking, Sycamore is clearly recognised as the pioneer.

Why the name Sycamore? "Finding the right name is an art. I don't know how to do it. But I know the right one when I see it. Generally the name should have nothing to do with what you are doing at the moment, so that when you want to broaden your business, you don't get tied down. If one succeeds, of course, everybody will say it was a very good choice," says Desh tongue in cheek. "However, one point to remember is that the Sycamore tree, like Red­wood and Sequoia, lives for a long time - more than 500 years." So, let us keep our fingers crossed and wish that this serial entrepreneur par excellence will create something long lasting this time around.

Desh and Jayashree, both alumni of IIT Madras have promised $100 million to their alma mater to fund research over the next 20 years. But Desh is not ignoring his imme­diate environment in Boston either, where he wants to make MIT more responsive to industry, now that he has joined its governing board .

Friday 30 November 2007

Profile: Paul Raj

Business India, January 24-February 4, 2001

Thinker, teacher, soldier, sailor: Paul Raj

Shivanand Kanavi

Rarely does one meet a personality with as varied an accomplishment list and as interesting a career path, as Prof A. Paul Raj, of Stanford University. When his name was suggested to us by another academic at IIT Madras, Ashok Jhunjhunwala, we dashed off an e-mail expressing our intent to meet him. We asked for an appointment, giving a brief outline of our purpose. We got a reply that said: "I am not sure whether I fit the profile of the people you are trying to meet. I worked for almost 25 years in the Indian Navy, now I am doing research and teaching at the EE department of Stanford University and have just done a startup called Gigabit Wireless (now renamed Iospan Wireless) while I was on sabbatical."

Our naval contacts said: "Oh Paul Raj, he was a most unusual whiz kid." Naturally, our antennae were up with curiosity to meet this off beat entrepreneur. When we met him, Paul Raj dropped names, accomplishments, career changes, patents and so on in his staccato narration of a fascinating story. It was so incredible, that we had to check with all sorts of sources to confirm various parts of the story, which we had heard sitting in a Palo Alto restaurant. Needless to say, it all checked out and we gladly admit our own ignorance in the subject.

Paul Raj joined the Indian Navy through the National Defence Academy and com­pleted his engineering degree from the Naval Engineering College at Lonavla. Since the degree was not recog­nised in those days by various non-military engineering colleges and IITS, it was not pos­sible for him to pursue higher studies. The naval brass, however, were impressed and, as a special case, sent Paul to IIT Delhi in 1969, for a MTech.

However, after the M-Tech, Prof P.V. Indire­san of IIT Delhi, encour­aged him to do a PhD. But the navy said no. Then, in the 1971 war with Pakistan, battle­ship INS Khukri was sunk, torpedoed by a Daphne class subma­rine at close quarters. Clearly, Khukri's sonar had failed to detect the attacking vessel. Khukri was sunk at around 1 am in the morning. At 6 am Paul was pulled out from IIT Delhi's campus and taken to Mumbai to see another ship of the same class and figure out how the Sonar failed. "I was very theoretical those days and even my thesis was in stochastic communication theory. But still I said that the sonar could be improved," says Paul. He worked on the problem at IIT Delhi and improved the sonar system by using techniques of digital signal process­ing. Bharat Dynamics manufactured it and put it into all Naval ships. It became a major success for Naval R&D.

"Then British Naval R&D invited me. There I discovered that India had given a majors Sonar contract to some British and French companies. I also found that we knew more about the system than they did. I told the navy that we would do it on our own. Between '77 and '82 we did a major project. Today, INS Delhi, INS Mysore and all other modern ships have my Sonar. In 1983, Indian Sonars were more advanced than American sonars and the CIA was very worried about whether we were selling them to the Russians. For shallow waters, it was the best in the world. It was unbelievable that we went from zero to there."

At that time, Paul got an offer from Prof Tom Kailath of Stanford University, a doyen in control systems, to teach in Stanford for two years. Paul finished the assignment, honed his research interests further and went back. "I was asked to start the Centre of Advanced Robotics and later the Centre for Development of Advanced Computing (CDAC). Meanwhile, I also built two labs for BEL. I started CDAC'S Bangalore centre to develop software. My view was: 'Let us not publicise too much.' I also felt that build­ing a parallel computer using transputers was an M-Tech project. What we needed was software for parallel process­ing without which we cannot use it, either for weather pre­diction or computational fluid dynamics. Because of these differences I left CDAC," says Paul.

Since he had already retired prematurely from the navy to join BEL, Paul was free to pursue his academic interests. In 1992, Paul joined Stanford as a faculty member. Here he switched to wireless. Today, his group at Stanford is recognised as a leader in wireless technologies in the world. It has done pio­neering work in space­time coding and modulation of wireless data.

"Our technology, in which I hold the princi­pal patent, is called MIMO (multiple input multiple out­put). It is a huge multiplier. It is like Wavelength Divisional Multiplexing (WDM). Just as WDM lets you shoot more data through different wavelengths, in MIMO every additional antenna gives you more bandwidth. We started Gigabit Wireless to develop broadband wireless access. Using our technology in fixed wireless, it will pro­vide 5-15 MBps bandwidth in a radius of five to ten miles. This will be way ahead of 3G," he adds. Iospan Wireless, formerly Gigabit Wireless, has 50 PhDs in a team of 150. Two major customers for Iospan are Worldcom and Sprint. The product is expected to ship in June 2000.

Paul Raj is a good friend of the Nambiars of BPL and is on their board. He is also trying to help the Navy by bring­ing in Naval students to Stanford. "The Navy is like a strong family, you can never forget them," says this part­sailor, part-teacher, part-thinker and part-tinkerer.
Clearly, Paul Raj is a man of many parts.

Friday 23 November 2007

Profile: Vinod Khosla

Business India, January 24-February 4, 2001

Ceasar: Vinod Khosla

Shivanand Kanavi

You can put my name in any search engine and you will get enough mate­rial on me, and I have said whatever I have to say in most of my interviews. So you can dis­pense with the usual questions and fire away," said Vinod Khosla, when we met him in his office at Sand Hill Road at Menlo Park. The words were not tinged with arro­gance but were a genuine attempt at getting to the core issues quickly.

That is how Vinod has made his famous picks: Juniper Networks, Cerent, Sierra, Redback and more. Which, according to Fortune, have made over $16 billion for KPCB, thereby making him "the most successful vc of all times". Clearly he has gotten to the core of the next generation of networking.

Vinod is famous for his brevity. Rajvir Singh, who has become a fountain of Optical start-ups, recalls how the first thing Vinod advised him in an e-mail when he invested in Fiberlane (later split into Cerent and Sierra) was: "Keep the B.S. out of all communication".

We say amen to that, and give below a few notes from our conversation, albeit pared with Occam's razor:

Money: In 10 years I have never done a rate of return cal­culation. I have only looked at economic contribution. After all, if you have made economic contribution, then money will come anyway. Many people talk about how much they will be worth. I reject all those who only talk about money. That is Wall Street mentality. It goes against my intellectual curiosity, predicting trends and so on.

Venture Capitalism: It is all about helping entrepreneurs build companies. Juniper is a classic example. When Pradeep Sindhu came to me, he had no business experi­ence. I guided him in building Internet routers and then helped him find the team, I helped him find Scott Kriens. All these things are really hard to do if you are just an engi­neer, because you have never done anything like this. What we do is help make an idea into a company. It is like being a coach for a soccer team or a football team.

Startups: I do not miss being in a startup myself. It is a lot of work and you get stuck in one area. Technology is mov­ing rapidly in so many areas and I have interest in so many areas. Every two to three years I completely change the area I am investing in. I take a few months off to learn the whole technology and develop a vision of what the world is going to be like - it is literally going back to school- then start investing.

Current interests:
Whether it is optical components, which is physics and material science or enterprise soft­ware, the only way to do it is to take three months off, learn and come back. My position lets me do it. I have got curiosity. I change my interests regularly when I get bored .All three of my degrees are in com­pletely different areas. Right now, as hobbies, I keep up with string theory and evolutionary biology.

Big vs small companies: It is not big vs small. People who refused to take risks are losing. Lucent had more talent than Nortel. But Nor­tel has changed: they have absorbed entrepreneurial culture. Lucent has wrong acquisition strategy and wrong culture. People don't leave Cisco when it acquires, but they do when Lucent does. It is much harder for big companies but Nortel has done it.

Optical Networking: In both opti­cal and wireless, valuations are hyped and over-hyped. But if you look at the impact they are going to have on society, on the way business is going to be run and so on, then they are underestimated. Investors are like lemmings, suddenly they go from greed to fear.

Indian entrepreneurs: The stockmarket is not a good indicator. Some have built businesses but some have built market caps. It is a bad value system. Issue is what can you create that has lasting value. Desh has real rev­enue. I like what Desh did. In the end his value will be judged if he makes an eco­nomic contribution. That is what Pradeep is doing. Intel, Sun, Dell, Microsft, Oracle all made contributions.

Education in India: A country of the size of India, a billion strong, does not have a major university which is world class and which is leading in research so that it does not have to depend on all the research in US. You have to take a SO-year view of this, not five to ten years. Over the long haul, India has the talent, language (English), enough infrastructure. It will grow in a very, very big way in the knowledge economy. Hopefully, people from all over the world will go to India to do research. That is the genesis of my interest in Global Institutes of Science and Technology.

Role models: I was 15-16 and living in Dehi Cantonment, as my father was in the army. I used to go to Shankar market and rent old issues of trade journals in electronics, which you get free there. I read about Intel being started up by a couple of engineers. That was my dream long before I went to lIT. In 1975, even before I finished lIT, I tried to start a company. Those days in India, it was not possible if your father did not have connections. That is why I resonate with role models. Andy Grove and Intel became role models for me.

Vinod Khosla loves travel and photography. Blown up pictures of his children taken by him are all over his office

Weather forecasting, Monsoon

The Weekend Observer, June 1992

Vagaries of weather forecasting

Shivanand Kanavi

The monsoon is not only a meteorological phenomenon for Indians but it deeply affects their literature, music, culture and the very psyche itself. Not only are the famous raga Megh Malhar and the poetic work Meghdoot expressions of it, but D.D. Kosambi, one of the great Indian encyclopaedists observed that the regularity of the cycle of seasons might have given rise to a fatalistic world view and even the myth of satyug, tretayug, dwaparyug and kalyug

Thus anybody who can predict and hopefully change the pattern of monsoons is always sought after, be they sooth sayers, astrologers, sadhus, performing yajnas and havans and even scientists. When the predictions or promised changes in weather do not come through, Indians seem to find any number of justifications for the failure of all the traditional wisdom but the meteorologist is never spared. He is the cartoonist’s delight. Who can forget R.K. Laxman’s cartoon of a long bus queue in pouring rain where everybody has provided himself with a raincoat or an umbrella except one fellow, and a guy whispering “must be from the weather bureau”!

All this is good for a laugh but when you meet a hardened weatherman like Dr. S Kumar, Deputy Director General of Meteorology heading the Colaba (Bombay) observatory and responsible for the western zone, and learn the rudiments of meteorology then you start appreciating the complexity of the subject.

The word monsoon owes its origin to the Arabic word mausam meaning season. It is believed to have been used by seamen, six or seven centuries ago to describe a system of alternating winds in the Arabian sea, these winds appear to blow from northeast for six months and from the southwest for another six months. Seasonal changes of wind are primarily the result of differences in the quantity of heat received from the sun by different parts of the earth.

As a consequence of its chemical composition and its soil structure, the conduction of heat into the earth is a comparatively slow process. Thus most of the solar energy received at the ground by the continents is used up in hating air rather than the earth’s surface. Whereas oceans are heated up to greater depths due to convection currents and a smaller part of the energy is available for heating the air, monsoon as a system of winds has the following notable features:
1. A system, with marked seasonal shifts, caused by the differential heating of the land and the sea.
2. A wind system that is largely confined to the tropics, that is the region between 20° N and 20° S latitudes on both sides of the equator.
3. Indian monsoon can be thought of as southeast trade winds which on crossing the equator are deflected to the right by the earth’s rotation (Coriolis force) and hence approach the land from a south-westerly direction.
4. The trade winds of the northern and southern hemispheres are divided by the Inter Tropical Front (ITF) which is a region of considerable cloudiness and rainfall. The southwest monsoon, originates in the ITF and moves northwards, due to the pull of a low pressure area in the hot Indo-Gangetic basin, but of the subcontinent after reaching the southern tip of India around June 1, it splits into two branches; the Arabian sea branch, and the Bay of Bengal branch.

The Arabian Sea branch gradually advances northwards to Bombay. The advance from Trivandrum to Bombay takes about ten days and is fairly rapid.

The Bay of Bengal branch moves northwards into the central Bay of Bengal and rapidly spreads over most of Assam by the first week of June. On reaching the Himalayan barrier, the bay branch of the monsoon is deflected westwards. As a consequence, its further progress is towards the Gangetic plains of India rather than towards Burma. The arrival of monsoon at Calcutta is lightly earlier than at Bombay. By mid-June, the Arabian Sea branch spreads over Saurashtra-Kutch and the central parts of the country. Thereafter the two branches tend to merge into a single current. The remaining parts of western UP, Haryana, Punjab and the eastern Rajasthan experience the first monsoon showers by the first of July. Some times the first showers at Delhi arrive from the east as an extension of the Bay of Bengal branch and sometimes from the south that is from the Arabian sea branch. Often it is a race between the two. By mid July it will extend to Kashmir and remaining parts of the country but only as a feeble current because by this time it has shed most of its moisture.

The normal duration of monsoon varies from two to four months. The withdrawal is much more gradual than its onset. Generally the monsoon withdraws from northwest India by the beginning of October and from the remaining parts of the country by the end of November. Though theoretically it seems possible for both the southwest monsoon and the northeast monsoons to co-exist in the southern half of the peninsula in October, in reality such situations are rare.

This in brief is the story of the monsoon but there are any number of disturbances of local and regional origin that can upset the text book schedule for example a cyclone in the Arabian sea that starts drawing the moisture away can lead to delays and dissipations.

The short term forecasts deal with a period of twenty four to seventy two hours which are mainly done with the help of data from over 500 weather stations spread all over the country, the data from the ships in the ocean, the satellite pictures from he NASA polar satellite NOVA which scans India every six hours, pictures from the geo-stationary INSAT satellite and even input from airline crews.

But a satellite picture, as Dr Kumar points out, is like a X-Ray photograph in the hands of a physician. It needs interpretation which is bound to be subjective. This is where the years of experience of our weathermen count.

Attempts are on to developing computer programmes to forecast weather in the medium term that is three to ten days at the Super Computer facility in Delhi.

The long term forecasting that is from ten days to a few months, is being attempted by the group in Pune. Over sixteen phenomenons all over the globe are being watched by this group and correlated with the Indian monsoon. Some of tem are the total snowfall over Eurasia during the previous winter, the convective wind between Darwin in the southern hemisphere and Tahiti islands in the pacific, the El Nino oceanic current off the coast of Peru in south America etc.

Considering the enormity of a weather system like the Indian monsoon, and the usual constraints of funds and technology and the very nature of a field where controlled experiments are well nigh impossible, our weathermen are doing a competent job, to say the least.

Tuesday 13 November 2007

Optical Networking, Tejas

Business India, August 7-20, 2000

Will Tejas light up?

Brought into being by Sycamore Networks, ASG-Omni and Desh Deshpande, the new technology baby in Bangalore, Tejas Network, aims to put India on the global hi-tech map

Shivanand Kanavi

“The bible of Optical Networking, which we all study at Sycamore and other Optical Networking companies, was written by this guy, in Bangalore," said Gururaj 'Desh' Deshpande introducing Dr Kumar Sivarajan, chief technology officer of Tejas Networks, while launching Tejas recently. "The technology business is totally people centric. If you have a world-class team, then you can compete in the global market. Our first milestone is recruiting 100 world class people with the right mindset in the next six-nine months," adds Sanjay Nayak, CEO, Tejas Networks.

"Tejas will be India's first globally competitive product company," says Deshpande. With that kind of confidence bordering on cockiness, Tejas was launched in a simple function in Bangalore on 25 July. Tejas aims to develop products for the fast growing optical networking market, which is expected to reach $40 billion by 2004 and also sell and support Sycamore's optical networking products.

Everybody in India claims to be globally competitive, "state-of-the-art,” etc which needs to be taken, not with just a pinch of salt, but a fistful. However what makes Tejas special is the track record of the team which is launching it. Deshpande, founder and chairman of Tejas, is fast becoming a folk hero in India. Though Deshpande has been a successful entrepreneur in North America for almost 20 years, what made him an icon in India, and a highly-respected figure in the cutthroat US market itself, is the launch of his third startup Sycamore in 1998. The Sycamore share which was offered during late 1999 on Nasdaq at $38 listed at $210. A start-up struck a market cap of about $18 billion within weeks of listing and is currently valued around $35 billion, of which Deshpande owns 29 per cent.

"The new economy unfairly rewards excellence and unfairly punishes mediocrity," says Deshpande. "Today markets do not look at your balance sheets and revenue streams to decide on valuations. They are looking at the people leading the company, their track record in trying their darnest to turn their convictions into reality. There is no stigma attached to failure as long as you did your best in a transparent way. After all, one of my start ups, Coral Networks did not work out and when I disagreed with my partner on business strategy, I had to walk out. At that time, my wife had also given up her job to bring up our children and we had to manage our family with no income for 9-10 months. But I still decided to quit Coral and start a new company called Cascade Communications which took a longtime to attract any investment by venture capitalists," adds he. Later, of course, Cascade grew into a large company with $500 million in revenues prior to its acquisition by Ascend Communications in June 1997 for $3.7 billion. (Ascend in turn was acquired by Lucent.)
"Sanjay has been a successful CEO when he headed Synopsys India, and View Logic's operations in India. Similarly Kumar Sivarajan who was working in the Indian Institute of Science, Bangalore has earlier worked in Caltech and IBM'S Watson Research Centre. Our director engineering Arnob Roy has over 13 years of industry experience and has contributed significantly to product development in Synopsys, View Logic Systems and Cadence Design Systems and is an expert in Electronic Design Automation. We have in a short period of time recruited about 17 excellent people and are already talking to our first customers," says Deshpande.

"Products company is a big poker game,” Desh Deshpande

Q. Why is Tejas the first such start-up in India?
A. Products is a very different game. It requires a different level of confidence. In the services business you boot strap. You put some money in, more comes out. You use it to expand etc. It is a cost plus business. The product business is a big gamble. You have to say: here is my 25 million dollars, bang. It is a big poker game. That is not the culture that exists in India. It exists only in US, nowhere else in the world. That is the culture I built my business on. That is the only thing that I know how to do. I don't know how to build a service business.

Q. Will Tejas support Sycamore products worldwide?
A. Absolutely. You build the capabilities and then go wherever you can. So the professional services group in Tejas will go to the US, China, Malaysia, Indonesia and so on. There won't be any territorial issues. Right now the market is growing at such a rapid pace that everybody can have a piece of the pie if they can deliver.

Q. You promise bandwidth nirvana, but do you have a problem of bandwidth in India for Tejas? A. Of course. The amount of money you have to pay in India is ridiculous. For a 2 MB pipe to US, it is $50,000 a month. In Europe, it is $3,500 a year and Singapore it is even cheaper.

Q. Europe is a large market, so if closeness to market is the issue then how come there are no great product companies from Europe except in mobile telephony?
A. Because they are not entrepreneurial. It's the same thing in Japan. You look at Siemens, Alcatel, etc, they are not entrepreneurial. They cannot think out of the box, they cannot innovate. As a result, all these companies and countries are very good at going after a large market: 1 million cars, 100 million watches, 10 million cameras, they are good at that. But whenever the market changes very rapidly where you have to innovate and competition is very intense, they are not good at it. The only country which has done very well in such markets is the US, because they are a very, very open country. They do not say, "Hey Desh, you are from India and so you cannot set up a company in the US. So you can get the best people in the world and go after the competition. India needs to do the same thing.
Indians are very entrepreneurial too; that is why they have done very well in the US. You need people in India with ambition, you need role models and benchmarks. After all, one lives against so many odds here that you have to be entrepreneurial. There are a few start-ups in Bangalore but you need a big hit.

Q. There is a lot at stake in Tejas since everybody will be watching it. Does that create pressure?
A. No. If you want to win the Olympics then you have to say I am going to win it and you will be watched every minute of your life and you have to live up to it. But you have to sign up. If you don't, you will never win

Q. DoT has about 200, 000 km of fibre in the ground. What if it teams up with you and provide all the bandwidth we need.
A. Internationally innovation does not favour the incumbent. Look at AT&T, Mel, WorldComm, Sprint and so on. If they all did the right things, there would never be a Williams, Quest, Level Three and any of these guys. It is the speed at which you can implement and innovate which creates a brand new market. If you open up the market, there is always room for others. DoT's market share which is 1 00 per cent now will fall, but its revenues will go up. There is not enough fibre in India which will meet the demand for next 1 0 years, so there have to be a lot of players.
Today in the US, voice is practically free. It used to be 50 cents a minute and now it is 1 .5 cents. It (demand) will come from data and new applications which require high bandwidth. Pure capacity is also not an issue, it is speed of service, quality of service, etc. For example you go to a company and say I need 2 GB for two days from Mumbai to Delhi and one guy says I have got 1 00 GB capacity but it will take me six months to give it to you and then you have to sign up for five years and another guy says it will take me five minutes and I will give it to you for two days, then the second guy wins.

"The speed with which this project has been taken from concept to market place is truly amazing and is setting new benchmarks," says Ashok Vasudevan of ASG-omni, a Connecticut-based consulting and incubating firm. "In less than three months we incorporated it, recruited our top team and got our office ready from scratch to where a hundred people can work. Even in Boston this is difficult to beat," adds he.

"In fact Sanjay Nayak, our CEO, joined in two-and-a-half days," says Hans Taparia another member of the ASG-omni team who is involved with Tejas. "We had breakfast one day, he took the evening flight to Boston, spent a day with Desh and Sycamore, he returned the next and joined us as CEO!"

"The way Sanjay was talking to other people while interviewing for Tejas was like a veteran of many years. It is conviction that matters. Once you have people who have the conviction then you need the structure that gives them the independence. Kumar and Sanjay have the full power to take whatever decisions and we are there just to help. If this was a startup of a couple of people in Bangalore then you would not have the confidence, but if you know that you are going after a $40 billion market in 2004 and you have the right group of people then you will invest a lot of money. The confidence comes because Tejas is associated with Sycamore, that means you have market access," emphasises Deshpande.

How much money have the three promoters Deshpande, Sycamore and ASG-Omni put into Tejas? They are still very tightlipped about it. "We will disclose it at the right time but money is not a problem. At Sycamore itself we are sitting on $1.5 billion in cash after our IPQ, which is more than many of our large competitors. But I am on the board, Kevin Oye of Sycamore is on the board. Our management time is at a premium and I am spending a lot of time here. We are looking for some thing really big here," says Deshpande.

We have had several very successful software services startups in India which have become world class services companies. However, we still do not have a successful technology products company. One reason that has been always given by the industry pundits is that we are far from the market place (read the US). So will Sycamore playa facilitating role in this startup? "Definitely. Access to market knowledge is an absolute must for any product company, but Sycamore will straightaway provide a tunnel into the US market, which is still the most important market. Tejas is at a different vantage point from Sycamore. Sycamore had to live on its own, it had to compete with Lucent, Nortel and all the big boys. Tejas does not have to fight for survival, it just has to execute. If you can get 100 very, very talented people with a certain culture then that is a huge asset. To build products you need market knowledge, you need the process, domain knowledge, etc of world class which does not exist in Bangalore. So you need a lot of interaction with Sycamore and that is what we have been doing. Some of the speed at Tejas is coming from there. At Sycamore we take a lot of pride in all this. Everybody says the last guy did something in 30 days and I will do it in 27 days and so on. You can already see the flavour of that at Tejas and once you have the culture and the machinery to execute, then developing products is just identifying the right target and going after it," explains Deshpande.

"If it needs about $25 million to develop a world class product, it does not mean that anybody with $25 million can successfully build a product. It needs deep market knowledge and domain knowledge. Thus Sycamore is key to Tejas' success," adds he.

Tejas will have two divisions working in tandem. One at product development and the other vending Sycamore products in India which will also build capabilities for network design, deployment and support. The Tejas team is already talking to many people in India who have declared their intention to build large, broadband networks.

So what is new? Have not all Indian companies started with services and then slowly ventured into components and products? The crucial thing is not to look at services as bread and butter and invest the revenues from services into product development later, as is wont with Indian companies. The services team will build for the global market. "Even this is being done with our product strategy in mind; after all there is a lot more to do in a product company than just build products. While we build a world class R&D centre for products we will be building a sales and marketing network for Sycamore's products which will be very crucial when we come out with our own products. Opportunities will not wait at that time for us to build up our marketing," adds Sanjay Nayak.

"People like Sanjay and Kumar would not have joined us if we had started a sales office for Sycamore. Such talent can be attracted only if it is a product startup with all the attendant challenges and rewards. They have built products in the past, but for others. Now they will be doing it for themselves," says Deshpande.

Tejas, is a Sanskrit word that means brilliance, radiance and energy. A million eyes are literally watching Tejas to see if it will light up. For their first product roll out, watch this space.

Brahmi, Memory enhancing pills

Will you remember to take your memory pills?

Middle- aged people with failing memories, parents pushing their children to join IITs, students cramming the year’s syllabus a month before exams- these are being targeted by the manufacturers of memory-enhancing drugs. Shivanand Kanavi investigates the efficacy of these drugs.

“I trust Memory Plus,” grandmaster Vishwanathan Anand has been assuring TV audiences in the country. Though he does not explicitly say that regular ingestion of Memory Plus helped him achieve phenomenal success in world chess, that is what the ad implies.

Velvette International Pharma Products Ltd., a Madras-based listed company, introduced the product in the market in July 1996. Whether the drug really had an effect on Anand during the past 18 months is a moot point. Anand was a grandmaster well before the drug was launched.

According to V.P. Kambhoj, an eminent drug researcher and scientist emeritus at the Central Drug Research Institute, Lucknow, Memory Plus has been tested on mince for several years, It does improve the “Short-term and long-term memory” of mice.

But, hey, we want to know if we can become grandmasters after a course of Memory Plus! Conclusive proof of Memory Plus helping human beings has yet to come. Kambhoj says data is being collected at various research centres about it effectiveness on human beings.

One thing is certain, says Kambhoj: the drug is not toxic. In accordance with the standards of modern medicine, research at the CDRI has shown that Memory Plus does not have any harmful side-effects on human beings.

According to C.K. Rajkumar, Velvette International’s effervescent managing director, trials on the drug’s effect on the elderly are now under way at the Ayurvedic Research Centre at G.S. Medical College, attached to the well-known King Edward Memorial Hospital in Mumbai.

In short, it is still an opent question whether your memory will improve if you do remember to take your two ballets of Memory Plus a day for 90 days (a box of 30 pills costs Rs.105). You can’t be sure whether your investment of over Rs.630 on these tablets has improved your memory. By the time you finish the course, however, there is one thing you are unlikely to forget: how much you spent on it.

Research conducted on mice at the Industrial Toxicology Research Centre at Lucknow has shown that Memory Plus reduces anxiety and stress. Researchers found that Memory plus lowered the levels of HSP-70, a protection associated with stress, in the brain cells of mice.

The active ingredients in Memory Plus, which were chemically isolated by the CDRI, are called triterpenoid glycosides. They are also known as bacosides A and B, as atey are extracted from the brahmi plant (bacopa munniera).

In the charak Samhita, written nearly 2,000 years ago, brahmi has been prescribed as a nerve tonic for “anxiety, weak intellect and lack o concentration”. The Sushruta Samhita, written about 100 years later, also mentions brahmi as “effective for loss of memory and intellect”. Still later ayurveda texts also sang hosannas to the powers of brahmi.

Brahmi extracts have been indicated as therapeutic for patients of epilepsy and asthma as well. This is why the CDRI took up the study of brahmi in the 1960s, using modern pharmacological and chemical means.

Today, Memory Plus is being marketed as a herbal medicine and not as an allopathic drug. The studies conducted so far are more than enough to qualify it for such a table. Since 1976, the World Health Organisation has allowed the introduction of traditional medicines in to the market without further clinical trials, provided they have been in use for a long time. Brahmi, which has been used in India for thousands of years, certainly qualifies.

Rajkumar seized upon the idea, bought from the CDRI the technology for separating enough bacosides in the very first extract of brahmi, and introduced Memory Plus. He has pulled off a coup of sorts in imaginative marketing. Within the first 15 months, he claims, he sold about Rs.15crore of Memory Plus, making other pharma entrepreneurs jealous. International enquiries are pouring in, and Velvette Pharma recently launched the drug in Sri Lnaka and Malaysia.

The ultimate tribute to success is imitation. Dalmia Industries Ltd., the New Delhi-based Sanjay Dalmia group Company, has introduced a drug called MegaMind 2 Plus(available for Rs 108). It contains a brahmi extract, and small amounts of a herb called vacha. The company introduced it in July 1997, and says it is too early to provided sales data. It explains that, while brahmi is recommended for retention for facts, vacha helps recall. Whether human memory can be divided into retention and recalls is a big question. But the company claims that G P Dube of the Centre of Psychosomatic and Biofeedback Medicine at the Banaras Hindu University has researched the drug’s efficacy on human beings.

Dube claims that trials on normal people, as well as on those with degenerating memories, showed beneficial effects. Ayurveda, and not modern medicine, motivated his work. However, Dube has not been able to chemically isolated the active compounds.

Dalmia Industries is banking on his preliminary tests and advertising the drug as having been tested on human beings- a questionable claim. Without getting into the controversy of “retention and recall”, Dube claims that the use of small amounts of vacha, an ingredient o MegaMind, helps people with communication difficulties like stuttering and stammering.

So, for now, we have to depend on testimony of our grandmaster, roped in by Memory Plus, or some other celebrity that the makers of MegaMind may rope in tomorrow. If you do want to give in a try, remember to take the drug regularly without sipping a day. Both manufacturers warn that if you miss even one dose, the drug may not be effective, after all.

But if you can remember to take your two tablets every single day for three whole months, then do you really need the drug?

Tuesday 23 October 2007

Auto emission norms India

Business India, May 31-June 13, 1999

Clearing up emissions

Thanks to the Supreme Court, Indian consumers will see a major leap in automotive technology and fuel quality

Shivanand Kanavi

By the stroke of a pen, the Supreme Court pushed the Indian auto industry into a technological leap. Since then, the media has been filled with smog about Euro-I and Euro-II for almost two weeks. But what are these norms and more importantly what are the factors responsible for the high levels of auto emissions and what are the technologies available for mitigating them? Which of these technologies are likely to be brought into India to meet the new norms? These are some of the questions that Business India looked into.

Not that the technologies involved in abating auto-emissions are of the cutting edge variety, but Indian consumers have been denied them for two reasons. First of all, they need further investments in automotive engines, catalytic converters, and oil refineries and secondly they would push up the price of an automobile by about 10 per cent in a highly price sensitive market.

But the increasing awareness about the health hazards posed by constituents of auto exhaust like smoke (particulate matter), nitrogen oxides (NOX), carbon monoxide (CO), benzene, unburnt fuel (HC), lead and so on, especially in highly congested Indian cities, has been steadily forcing the government and the auto industry to gear up to cut the emissions. Accordingly, the government brought in unleaded petrol in 1996 in the metro cities and brought in new emission norms into force the same year.

The ministry of surface transport moved to notify India 2000 norms in August 1997. These norms were derived from the Euro-I norms (see table). They required lower sulphur levels and the refineries were advised to invest in hydro-desulphurisation to reduce sulphur content in diesel to 0.25 per cent.

It is important to understand that the emissions from an engine depend on how the engine is driven. How frequently do you brake? How frequently do you shift gears? What are your cruising speeds? What is your top speed? Do you check the emissions after the engine is warmed up or from a cold start? What about emissions due to evaporation of fuel from the automobile? And so on and so forth. A detailed study of the actual driving conditions: road conditions, traffic conditions, rush hour, off rush hour etc. has to be made. Then one arrives at what auto engineers call, the driving cycle. Then there are two ways of testing the vehicles: the engine dynamometer test and the chassis dynamometer test.

Thus Euro norms are not just some figures for various constituents of exhaust but also they per force specify the European Driving Cycle. Thus our table is a highly simplified version of the norms and does not cover two-three wheelers. Developing the driving cycle is a long drawn out affair and the data needs to be continuously updated as traffic conditions and road conditions change. So, for pragmatic reasons, the European Driving Cycle has been adopted with some modifications, like the top speed of 120 kmph has been reduced to 90 kmph.

The industry was gearing up to meet the Euro-I norms by 1 April 2000 in terms of vendor development, engine improvement, etc, and so were the refiners gearing up to improve fuel quality. There was also discussion going on about further cutting down emissions by 2005, which would be more in consonance with the Euro-II norms. However the increasing pollution in Delhi, (though polluting vehicles are not the only culprits) led the Supreme Court to bring forward the deadline for India-2000 norms to 1 June 1999, instead of 1 April 2000, as far as Delhi is concerned. The government was also directed to notify the equivalent of Euro-II norms with utmost speed and bring them into effect from 1 April 2000 - a five-year leap. The move naturally sent the automobile manufacturers into a tizzy. Though the order pertains to the National Capital Region around Delhi - which has the dubious distinction of being the fourth most polluted city in the world - it is clear that this might soon be extended all over India.

Despite a battery of the best and brightest lawyers arguing for extension of the deadlines on behalf of the auto manufacturers the court stuck to its guns. Now, work has to be taken up on a war footing on several fronts to achieve
these laudable objectives. First of all, the government has to quickly notify the Euro-II norms (for want of a better term). The Automobile Research Association of India (ARAI), an industry funded organisation that is affiliated to the industry ministry, has to gear itself up for quick certification of various models that are going to pour into its labs. S.R. Puranik, director of the lab, says the institute has already certified nearly seven petrol driven models and 11 diesel driven models for India 2000. He pointed out that once the Euro-I1 norms are notified ARAI can do the emission tests in two-three days per model and the detailed certification under Central Motor Vehicle Regulation which requires noise and safety tests along with emission tests in two-three weeks per model.

Another important issue is the quality of fuel required to meet the Euro-II norms. The question of fuel quality has to be addressed very seriously since the new norms will require not 0.25 per cent of sulphur but 0.05 per cent. So far only Reliance has said that it will be able to supply such fuel from July 1999, when its giant 27 million-tonne refinery goes on stream. Others are still working out the consequences of these norms. A.K. Jain and K.K. Gandhi, scientists at the Indian Institute of Petroleum, Dehradun, point out that the fuel required to satisfy lower emission norms has to satisfy several criteria. For example, the sulphur content of petrol has to be brought down as well. Moreover, benzene and aromatic content has to brought down, volatility of the fuel has to be controlled carefully as it influences' the warm up time and evaporative emissions, oxygenated blend components to reduce co and HC emissions have to be added, multifunctional additives to control deposit formation within the engine have to be added and so on. Similarly, according to Jain and Gandhi, the diesel required has to not only have 0.05 per cent sulphur but also a lower density, lower boiling point (from 370 celsius to 340 celsius) higher cetane number (from 45 to 49-53 low aromatics, good oxidation stability and lesser amount of heavy cuts blended.

While the refiners upgrade themselves to meet these requirements, auto component manufacturers and auto makers have a lot of work to do. Automobile engines, be they petrol fuelled or diesel fuelled, are powered by burning fuel inside the engine in an explosive fashion. In a petrol engine, a mixture of petrol and air is compressed and is ignited by a spark from the spark plug. The combustion, however, takes place best when the air to fuel ratio is 14.7. However, even the most sophisticated carburettors rarely achieve this ratio and definitely not under all driving conditions. A multi point fuel injection (MPFI) system, which is controlled by a micro chip called electronic control unit (ECU) can achieve much less emissions and better fuel efficiency in petrol engines. Better combustion lowers HC and co emissions but can lead to higher NOX emissions. Improved catalytic converters like pre-heated or dose loop ones can take care of most of the noxious matter.

In the case of diesel engines, turbo charging inter-cooling, exhaust gas re-circulation, de-Nox catalytic converters, higher injection pressures, particulate traps and so on can similarly ensure that Euro-II norms are met. The technologies likely to be brought into India at the moment are multi point fuel injection with electronic control unit (not the state of the art engine management system), better catalytic converters, higher injection pressures for diesel engines and at least' soft' turbo charging - that is turbo charging to cut emissions but not for increasing the power since that will require major changes in the drive train. It is estimated that the new technologies can cost up to 10 per cent of the present vehicle price.

These are all proven technologies; though none of them are cutting edge the issue is: can changes in mass production be made within the stipulated time at the lowest cost to consumers? The coming months will prove as to who among the various vehicle makers is up to the task.

Process Engineering, de-bottlencking, Chemical Industry

Business India, December 28-January 10, 1999
More from less

Debottlenecking has become a mantra to help chemical companies stay a float during hard times

Shivanand Kanavi

For years, M.M. Sharma, FRS, the doyen of Indian chemical engineers, used tacky slogans in every chemical industry meet to propagate the importance of clever R&D for healthy bottom lines. "More from less!", "Convert liabilities into assets!", "Knowledge engineering!" were some of them. The response was mixed. Protected markets and lack of serious domestic competition due to licensing were hardly the ideal conditions to breed lean and mean companies. However, the current hard times have more than convinced many businessmen of the wisdom of these words. In smart companies, these slogans have led the effort in intensive debottleneckrng, leading to tangible benefits. The list of 'smart' companies is long. It includes giants like Reliance, IPCL, the psu oil refineries engaged in commodity chemical business as well as midsize players like Arti Organics, Herdillia Chemicals, Excel, Bombay Oil, Hindustan Organic Chemicals, Atul and Alkyl Amines who have a mixed portfolio of commodity and specialty chemicals or purely specialty chemical players in the pharmaceutical industry like Ranbaxy.

It is not that the tongue twister, "debottlenecking" is new to the chemical industry. In fact, under the licence raj many companies used to report that they debottlenecked and increased the capacity at an incremental cost, as soon as the government increased their licensed capacity. This made their claims largely suspect. It was assumed that the declared capacity was understated in the first place. With liberalisation, there is no incentive to understate capacity. Now, chemical imports are pushing the price level down, export markets are under great pressure, most greenfield projects are being shelved, profit margins are thin and any incremental innovation is welcomed. Thus, debottlenecking is turning into a fine art.

The word "debottlenecking", though it does not occur in any dictionary, means removing the bottlenecks in a process. The exercise consists of identifying the bottlenecks and then removing them one by one. There are many levels at which the process works. The more pedestrian level is of making a physical analysis of the equipment in the plant like pumps, compressors and distillation columns. This can lead to clues to increasing the capacity of particular compressors, pumps, etc, leading to higher throughput. This can be called level one debottlenecking. Due to overdesign by plant designers (as they have to give guaranteed performance in terms of throughput, quality, etc) there is always scope to increase the plant rough put by 25 per cent with hardly ny additional investment. A more thor ugh analysis and some marginal investment can readily yield 50-60 per cent increase. For example, Reliance is currently manufacturing about 250,000 tonnes of PT A from a 180,000-tpa plant at Patalganga near Mumbai. There are reasons to believe that soon it may go up to even 300,000 tonnes. The lessons learnt here are being readily applied in the larger plants at Hazira, where two 350,000-tonne PTA plants are being fine-tuned to yield 500,000 tonnes each. Some RIL engineers believe that this can be further increased to 600,000 tonnes each. In fact, ICI plants in Wilton, UK were debottlenecked after learning from the experience at Reliance.

The second level consists of improving the design of equipment like columns, heat exchangers and reactors. -Por example, using appropriate packing in a distillation column, changing the contact surface, etc, can change the throughput. Similarly, studying impeller design in the reactor, or in plain English, "stirring the brew properly" can increase reaction rates. "The first thing is to find out what are the factors limiting the reaction rate in a plant," says Prof. J.B. Joshi of the University Department of Chemical Technology (UDCT), Mumbai, one of the busiest industry consultants. Without mentioning names of companies, for confidentiality reasons, Joshi reels out example after example, of benefits from applying scientific methods to debottlenecking. In fact, he derives great intellectual satisfaction from these exercises. As a result of his extensive research into reactor design, using hitech tools like laser dopplerimetry, and vast consulting experience, he teaches a course on multiphase reactor design at UDCT, only one of its kind in world.

"One needs to do just about 40-50 laboratory experiments in a small one- litre capacity reactor to understand the process," Joshi claims. He has developed new methods involving Gamma Ray Tomography to study running plants without disturbing them. The results have been so fantastic that he is one of the most sought after consultants by even international giants like ICI. For example, his work has improved the process developed by the Indian Institute of Petroleum, Dehradun, for cracking heavy petroleum residue in a refinery (vis breaking) to get more diesel and kerosene.The non-invasive Gamma Ray Tomography technique is being applied to "vis breaking" at the IOC refinery, near Baroda, which can yield a 10 per cent increase in the middle distillates (diesel, kerosene, naphtha). In plants of millions of tonnes of capacity, this can be a substantial gain. In fact, this is an example of advanced debottlenecking where quality and composition of the products can be changed without any significant addition of equipment. The end is achieved purely through better reactor and process design. Another striking example of this is the way Reliance has understood the PVC process. The result: a PVC plant designed to produce 180,000 tpa is today producing nearly 300,000 tpa, thereby amazing even the licensors - Geon. Reliance consistently beats financial analysts’ projections by seating it plants, turning into reality Sharma's catch phrase, "more from less".

Joshi points out such work can give " better quality products with lower impurity profile, higher selectivity and lesser load on the environment Contrary to common perception, both Joshi and Sharma emphasise the fact that debottlenecking is not just for large commodity chemical companies but will yield even higher returns for specialty chemical companies. Joshi cites the case of a company which was making a specialty chemical with a market price of about Rs200 a kg. The detailed analysis of the process led to a 20 per cent increase in the yield almost increasing the profit margin by Rs40 a kg. This is a win-win exercise. Not only does the company benefit through better margins but the quantum of effluents, as in the case of dyes and pharma companies, can also be greatly reduced through better conversion. "In many cases a 100 per cent material balance can be established," claims Joshi. Practically nothing will be wasted. This is what Sharma calls "converting liabilities into assets".

Rajeev Pandia, managing director, Herdillia Chemicals, who applied some of Sharma's recipes, concurs: "Some of the waste products which we were burning were converted into fumaric acid, and there were even times when the price of fumaric acid in the market was higher than that of the primary product, pthalic anhydride," he adds.

The next level of debottlenecking is termed knowledge engineering by Sharma. This might involve development of new and better catalysts with higher selectivity, etc. At times the developments have already occurred elsewhere in the world and one needs to understand them and change the catalysts.

"All these steps require a certain willingness on the part of the management to take risks," says Joshi and this he claims to have found in plenty in mid-sized companies with Rs100-500 crore turnover. The returns to companies too have been handsome.

"There are other side benefits of this debottlenecking exercise", claims Pandia. "The multidisciplinary engineering team from technical services, R&D, operations, etc, which gets involved, gets so charged by this process, that it has very good HRD benefits," he adds. A senior Grasim executive confirms this. He claims that debottlenecking is a highly creative process and he greatly enjoyed it when he was a plant R&D engineer.

When the exports are under severe pressure and there is heavy competition from crisis-hit Asian countries, one way to ensure you don't lose your markets is to supply products of premium quality consistently. Debottlenecking helps in achieving this, claims Joshi, and cites the success in exports of Arti Organics, Alkyl Amines, Herdillia Chemicals and so on.

Observers of East Asia claim that many companies there are becoming leaner and meaner during the present crisis and might come out with even more vigour internationally at the end of the crisis. Complacent Indian companies who take shelter in the fact that the crisis in India is not so severe might thus be jolted out of their wits in a couple of years. However, the industrial downturn has definitely made some Indian companies smarter and more productive. Realising its importance, the Indian Chemical Manufacturers Association is planning a workshop on debottlenecking for the benefit of its members. The unpronounceable word is obviously yielding pronounced results.