Sridhar Vembu - Amazing story from Business Line

Thanks to Rasheeda Bhagat for this nice article 

The first thing that strikes you about Sridhar Vembu, CEO of software products company Zoho Corporation, is basic honesty and zero hyperbole. 

Started in 1994 in a room in his Chennai house, with two computers his brother Kumar had brought from the US, Zoho today employs 1,600 people at its offices in the US, Chennai, Japan, China and Europe, and clocks annual sales of $150-200 million. 

The son of a stenographer in the Madras High Court, Vembu studied in the Tamil medium, becoming the first from his school to get into IIT Madras. After a B.Tech in electrical engineering, in 1989 he headed to Princeton on a scholarship for a Ph.D. Both at IIT and Princeton, he avoided computer science as “it meant writing software and I felt building was better than sitting in front of a computer.” Interested in maths and economics, he wanted to become a teacher. 

But destiny willed otherwise, and just before completing his doctorate he had doubts about his vocation. “The best analogy is that of the Catholic Church; I trained to be a bishop and I started to question God. If you do that, you are in deep trouble,” he laughs. 

Sunny weather

So he turned down a teaching assignment in Australia and joined Qualcomm, then in San Diego, primarily because its “sunny weather” was much better than the freezing winters in Princeton. “Just like you marry a girl because she looks good… a superficial reason, I accepted the job because of the weather.”

Vembu stayed there for two years, writing codes. Soon he realised that “whatever you design — car engine, camera — everything involved software.” Models were first built, simulated and tested on computers before the real thing was built. He realised that “software is the real essence of everything. It allows you to do things much faster; change things, run experiments.” This hit him even more while building a satellite-based communications system in Qualcomm… virtually on the computer.

Meanwhile, his brother Kumar, a software engineer, had also joined Qualcomm. “Those days the US was short of software engineers and you could literally board a plane and go there.” It was 1994. The two brothers would discuss the future, how India was on the verge of something big in software, “where you don’t need capital, equipment or infrastructure; only your brain. That’s how Infosys started! So should we start something…” 

An enterprise begins

Soon the home-sick Kumar left, and with his two computers, started writing software. He asked his brother Sridhar to scout for clients. “I made a few calls, wasn’t very successful, quit, and moved to Silicon Valley in my broken car.” His savings of $20,000 quickly disappeared in five months and his first venture failed. So he worked for three months as a software programmer on contract and “lived very frugally. I still have the same habits, nothing has changed and you can see that,” he grins, pointing to his crumpled T-shirt, ill-fitting jeans and inexpensive sandals. 

About six months into his contract work, a senior from IIT, Tony Thomas, sought his help — with marketing his software programs! So Vembu linked Thomas and Kumar, promptly printed a card calling himself “VP–Marketing” of the venture (it wasn’t a company yet) and looked for business. Small orders started trickling in, initially for $2,000 to $10,000. “In principle it was no different from a fruit seller’s work, or you eat what you kill. But we were surviving,” says Vembu.

By 1998 they were making enough money — sales of $300,000 — to pay themselves. Thomas moved to Silicon Valley, the Indian operations were scaled up, and AdventNet was born with Thomas as CEO. In 1999, the sales jumped to $1 million, “and we kept growing to $3 million and then $10 million, and knew we have a successful business.” Thomas insisted that the CEO’s title should pass from him to Vembu as he was the business brain. Vembu dithered for a while but took on the mantle in 2000. After two years, Thomas branched out and formed his own company. In 2009 the firm’s name was changed to Zoho Corporation. 

No suit-tie for him! 

 

So, is he planning an IPO?

“Not at all; I like the freedom of doing what I want to do and I have unusual interests.”

Such as? I prod him. “Like dressing like this… I really don’t care how I look, I don’t like to talk to Wall Street or our Dalal Street guys wearing a suit and a tie. I don’t socialise in those circles. I don’t play golf — I’m not interested and consciously avoid all of it. I do whatever I do with passion.”

Also, he hates to talk about his personal net-worth; “that is one of the reasons why I don’t go public, because that will be constantly talked about. I am not defined by the number of zeroes. I am more interesting than that.”

Suddenly, turning serious, he says softly, “You know… to have a lot of money and no vision, is a very sad place to be in. When you have money and don’t know what to do with it, it’s sad. But I have lots of interesting things to do.”

Running a 10-mile marathon is one of them. He doesn’t have a trainer; “you simply have to keep running. I can now go up to 3 miles.”

Today Zoho has over 150,000 customers, half of them in the US, where he spends two-thirds of his time. He got married to Pramilla, who now runs her own company in the US, while at Princeton.

The two of them, “mostly her, home-school our child, who is autistic. He is 13, very good with the piano… my wife is now teaching him software writing too.”

That brings us to the recruitment strategies of Zoho, with 1,600 employees, spelt out in an earlier article (http://tinyurl.com/zohosuccess). While in the beginning, they recruited from lesser-known engineering colleges, as students from better colleges would naturally opt for an Infosys or TCS, Zoho University now takes Plus-Two students and trains them in code writing.

Women don’t take risks

At Zoho, the gender ratio is a little skewed with only 30 per cent women. This is because, being better academic achievers, they “get recruited by bigger companies and go for what they think are better jobs,” says Vembu.

Are women equally imaginative and creative, or are men better at product design and development?

“I don’t want to say that. What I’d say is that you have to sometimes break rules, think different, like Steve Jobs said, but women don’t want to break rules or take risks. They are more cautious and that sometimes hinders… Men are willing to take risks. Men get killed in accidents because they take stupid risks on roads, women are safer drivers. But in product business, you have to take risks. There is no other way to make progress.”

Innovation and thinking differently have been a hallmark of this entrepreneur, who has to his credit the creation of one of the first online office suites (cloud computing). He has been instrumental in broadening Zoho’s software portfolio to include innovative, cost-effective products for the SME sector. 

We talk about why our MBAs and other brilliant professionals line up for jobs rather than become entrepreneurs. Is it fear? Vembu’s response: “Actually, these are all big words. Think about the lady who is selling flowers. She is an entrepreneur too; she has no fear because she has no choice.” He quotes Helen Keller: “Security is mostly a superstition. It does not exist in nature. Nor do children of men experience it as a whole. Life is either a daring adventure or nothing.” 

With child-like wonder, he adds, “This is the absolute truth;

 I saw this only recently, but I’ve lived the spirit… that is why I could connect with it. If you give excessive structure, like 9–5 schooling, people will seek security.”

All of 15, he would often wonder about security being an illusion. “Buddhism tells you that you can be rich one day and poor the next. And then everybody dies, and what can be worse than death? So why are we so afraid?” 

Thanks to Vembu’s ability to “break rules”, veil-clad Ayisha Shahjehan, a Plus-Two student, earns Rs 20,000 at the age of 20 — “much, much more than what my father makes”.

There’s also Nandini, a railway policeman’s daughter who earns a little more at 21. More than the money, he has given both the girls, and scores of other youngsters, confidence as well as a career. As they chat and joke with him, they don’t know, or care about the zeroes in his net-worth. Neither does he. 

Zen and the art of software coding 

 

Religion

I’ve never been religious, I was always bored by rituals. These days I’ve become more partial to Buddhism. Buddha never talks about God. Buddhism is what they call the science of the mind, how you find peace within yourself. Like the Dalai Lama says, the whole purpose of everything is to be happy. 

Movies

I love the movies of Akira Kurosawa, the Japanese moviemaker, and I watch Westerns, the Clint Eastwood kind… they are similar to the samurai movies, and take influences from Kurosawa. They have similar roots. I find Indian movies too long and too emotional. I like understated movies and the Japanese are understated. 

Music

Not much, but my wife is an excellent Carnatic music singer; she is world class. She sings occasionally, and we do give home concerts. I don’t know Carnatic music but listen to it. I listen to Yanni — I just love his music. 

Growing polarisation on religious lines

I am sad about it. I think we all need to chill out a little bit… take this Vishwaroopam thing… it’s only a movie — why take it so seriously? There is nothing right or wrong... that is Buddhist philosophy. 

Food

I mostly like South Indian vegetarian food… and yes, I do know how to cook! 

Reading

I do a lot of reading, entirely non-fiction. I love travel stories… travelling is a way of finding yourself. I read a lot on travel in China; I’m fascinated by Naipaul’s writing; he is brilliant. 

Holidays

Any peaceful place. I went to my village in Thanjavur last weekend, and was very happy. My parents were there, so we watched the harvest. Our home in the US is in the countryside… a big house in a big farm; my son loves the solitude and so do I. We now have an office in Tenkasi, which is very peaceful and scenic.

Leading Asian and Bahrain technology businesses sign MoU at one of Middle East's key ICT conferences

It was announced today that Ospyn, an Indian Singaporean firm with a proven track record in major e-governance projects, has signed an Memorandum of Understanding (MoU) at the conference with Openinside, a Bahrain ICT provider. The signing took place at MEET ICT BAHRAIN 2012, organised by Gulf Future Business and launched today at the Bahrain International Exhibition and Convention Centre.

The MoU is focused around working together to support the provision and utilisation of open-source technologies, ahead of a potential joint venture being established in the future. 

Commenting on the signing of the MoU, Prasadu Varghese, MD and CEO, Ospyn said: "Bahrain has long been a leader in supporting technology investment and innovation, which encouraged us to seek a Bahrain partner to expand our MENA region operations and specifically target expansion of open-source technology in the region. We are delighted to have found a likeminded and committed partner in Openinside, and we look forward to a long and successful relationship.

"We are also thankful to the team at Bahrain Economic Development Board, who supported us during the whole process, facilitated the initial meeting with Openinside during the Gitex exhibition in October, and have continued to support both firms as we've worked towards the agreement announced today."

Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain Economic Development Board (EDB), who attended and spoke at the official opening of the conference, commented: "This announcement is testament to how events such as MEET ICT provide a great opportunity for local, regional and international companies to meet and explore potential partnerships, as well as providing a platform to view the strong infrastructure we have in Bahrain and recent developments that have been made in this sector."

At the conference, key industry professionals, government officials and high-level decision makers are discussing the major issues concerning the ICT sector in the Middle East. The theme of this year's conference, "Leading Business Growth, Through ICT Advancements", is being covered through the various sessions and panel discussions, looking at the gaps in the market for new supply, the requirements of the Gulf market in general, and Bahrain in particular, and how to meet the needs of these markets.

The line-up of leading international participants at the conference includes Microsoft, Oracle, and Cisco, in addition to more than 35 Bahraini, Arab and international speakers, who all have outstanding contributions in the industry. Government representatives from BISTA, eGOV, Mumtalakat, EDB and TRA also attended many of the sessions and roundtables of the conference.

Sigtech develops system to monitor coastal security

A Kerala-based company has come out with a wireless solution which it claims can help authorities deal with a variety of offshore emergencies.

It is called Comprehensive Vessel Monitoring and Security System (CVMS), developed by Sigtech Wireless Technologies based in Technopark here.

The system is designed to identify the location of incoming ships and warn fishing vessels in proximity, says Vimal Gracian, director, Sigtech.

INTEROPERABLE SYSTEM

It is also interoperable with the ship’s communication system to contact it either from the vessel or through shore station in case of a warning detection.

The warning detection is automatically generated by the software and sent to the concerned vessel, Gracian said.

CVMS supports passport identification process by which a security agency vessel can query the identity of ships in the vicinity and ascertain whether they are authorised to operate in that area.

This helps the agency assess the security threat, if any, from an inbound vessel on its radar system. The system may be integrated with the existing radar system to enhance monitoring.

The command and control can issue directions to a fishing vessel to identify passports of nearby vessels and report it back.

‘GEO FENCING’

This can be done without the intervention of the mobile operator in the fishing vessel. The system supports what Gracian calls ‘geo fencing’ by virtue of which a ship can be warned if it operates in areas not allocated to it.

Geo fencing can work within a group or on an individual vessel. The geo fencing location can also be set dynamically.

These and other facilities can be used to communicate with ships to avoid accidental collisions and other such incidents, Gracian said.

The network administrator is enabled to track vessels. Each vessel can be identified by the unique id supplied by the agency in charge of the network.

The system is designed to generate automatic distress call signalling between vessels and to the shore.

INFAMOUS EPISODES

Vulnerabilities in the country’s coastal security regime have come to be exposed glaringly on more than one occasion in the recent past.

The western seaboard alone witnessed two infamous episodes with distinctly varied implications for life and property in the neighbourhood.

While armed guards on Italian vessel Enrica Lexie shot at and killed two fishermen in the Kerala waters, seaborne terrorists from across the border perpetrated carnage in Mumbai.

Leading the way

GTech, the Group of Technology Companies, a strategic grouping of IT firms in Kerala, starts a focus group for Corporate Social Responsibility activities

CSR or Corporate Social Responsibility is almost a byword at Technopark, with most IT firms, if not all of them, actively involved in lending a helping hand to those in need. And over the years we have heard of a multitude of CSR activities initiated by the companies, especially by the larger ones who seem to have more resources and/or man power. These activities range from blood donation drives (a regular event on campus), to organising meals and supplying necessary material comforts to the needy or simply chipping in with cash. Most of these efforts are, however, independent efforts by individual companies.

Now, GTech, the Group of Technology Companies, a strategic grouping of over 175 IT and IT enabled services companies in Kerala, has come up with a plan to start a focus group solely for CSR; a decision arrived at during its last annual general body meeting held at Technopark recently. “Since it was started in 2000, GTech has been quite successful in gaining respectability as a group and has won a place in the good books of the government for its pro-active, collective effort in initiating, steering and implementing many a project that has been beneficial to the IT community, be it business development or employee development. Now we feel it’s the time to look beyond Technopark and work towards some tangible results that bridge the gap between the people within the wall and people outside the wall. Hence, the CSR forum,” says Anoop Ambika, chief executive officer (CEO) of Kreara Solutions and secretary of GTech.

“Besides, there is this misconception that all of us who populate Technopark are rich stuff ups in suits who don’t have a care for society! For several months now, we’ve been looking at the possibility of a core group that would focus on CSR; one that could bridge the digital divide,” adds Anoop.

Notably, GTech’s earlier attempt at bridging the digital divide –the establishment of Natana, a cultural club started with the objective to “nurture the artistic talents and creative aspirations” of techies in Technopark, has “met with much success”. GTech is, of course, already involved in a number of CSR activities – buying clothes, books, sewing machines, and the like; their latest was an Ona sadya, organised in association with Abhaya, an NGO – but it had hitherto never engaged in any continuous effort at CSR.

GTech’s new CSR focus group is being spearheaded by P. Vijayakumar, CEO of Testhouse India Pvt. Ltd, who in the words of GTech’s former CEO Binu Sankar “is passionate about CSR; someone willing to spend time and resources for various CSR projects”. Says Vijayakumar: “GTech is a community of over 40,000 techies and just by sheer number alone it has the potential to do CSR activities on a scale that has never been done before in Kerala. The objective of such a focus group is to synergise all our available resources and skills to make a lasting impact and also to do something that involves a huge amount of employee engagement – something that each techie in each member company can contribute towards.”

The focus group is still in the early stages of planning but as a preliminary step it is already in talks with the Vazhuthacaud-based Coin A Day Child Care Foundation as one of its primary beneficiaries. Founded in 2009, the NGO focusses on ‘supporting talented young girls from single parent or orphaned families who have the desire and drive to achieve a better future’. “These girls, currently there are 22, are among the most vulnerable in society. But all of them have ambitious plans for the future,” says Vijaykumar.

And unlike most stop gap CSR activities, Vijaykumar says that GTech has plans for a “long term strategy” to lend a helping hand to Coin A Day. “We’re planning a direct mentoring relationship with the children – tutoring them in English, math, science, computers…,” says Vijayakumar, as Anoop adds: “Using our skills at project management and entrepreneurship, we plan to take Coin A Day and at a later stage, other similar self-help groups, to the next level. Ultimately, we want to make these organisations self-sufficient.”

A new ‘era’ in wired research administration

THIRUVANANTHAPURAM, OCT. 5: 

Are Indian research organisations/universities ready to enter the new ‘era’ of electronic research administration (ERA)?

Probably yes, if fast-paced developments in the development and evolution of ERA are any indication.

NICHE SPACE

ERA is the process through which the administrative and business side of research funds/grant activity is automated via electronic communication.

This is a niche space purveyed by specialist engineers, programmers and developers.

ERA drives government-funded research projects in the US where the system is well developed, says Sabari Nair, technical architect to Coeus, a cradle-to-grave award management tool.

Massachusetts Institute of Technology (MIT) owns the intellectual property rights over Coeus.

“If it can work in the US, there is no reason why it shouldn’t here as well,” says Boston-based Nair, who runs Polus Software specialising in Coeus implementation, customisation and hosting.

It has development centres in Bangalore and Thiruvananthapuram.

RINGS A BELL

Sabari Nair says ERA might just ring a bell in contemporary Indian context; e-governance programmes initiated here could be surprise beneficiaries.

The suitably rich workflow associated with the system could be easily tweaked to support the e-governance programme, he says.

Institutions such as Indian Space Research Organisation, Indian Institute of Science and other seats of research could also benefit.

For instance, they can use the system to support student management or even take care of routing of funds/grant for research.

But why should this rules-based and compliance-enforcer system evolved in the US research/grant ecosystem largely for local consumption be of any appeal to India?

OPEN SOURCE

This has to do with the release on June 1 this year of Kuali-Coeus, a combine of pedigree products as open source software and therefore available free.

Kuali is a foundation formed by a group of US universities, including MIT, Indiana University and Cornell University, among others, while MIT and the Coeus consortium developed predecessor Coeus. At least 75 universities have licensed the product from MIT.

“Over the next 18 months, we are looking at moving all these schools to Kuali-Coeus,” Sabari said. “We plan to rollout Kuali-Coeus to non-US markets as well, including India.”.

While Sabari Nair was the technical architect of Coeus, Polus Solutions that he founded is already a Kuali commercial affiliate and works closely with the Kuali Foundation.

Helping parents to keep tabs on mobile

Few gifts evoke so much excitement in a teenager as a smartphone with the latest features. But it could turn out to be a nightmare for the parents and children, if the number of cyber crimes involving the misuse of mobile phones is any indication.


Cyber crime specialists say that children are especially vulnerable to malicious texting, cyber stalking, and harassment using mobiles. Technology, however, promises to resolve the problem it has unleashed.

Attinad software, a company based on the Technopark campus here, has developed a mobile parental control system that enables parents to keep a tab on the use of their children’s phone.

The mobile application can track the location of the gadget, monitor calls, and block or filter the content that can be viewed from the phone. The system named Concord Mobile Parental Control issues automatic alerts if there is an attempt to access blocked content..“It has proved to be a big hit in the U.S. and the Middle East. We are planning to roll it out in India soon,” says Mohammed Rijas, CEO of the company.

The company is talking to the government of Kerala about promoting a mobile app for blood donation. Designed for health officials, hospitals and blood banks, the product can be used to register blood donors, announce requirements, and carry out donation campaigns. It can issue mobile alerts for requirement of blood and guide potential donors to the location of the needy person.

Mr. Rijas and five co-founders of Attinad had left Infosys to float the new company. “To leave a secure job and venture out on our own was fraught with risks. But we had a strong desire to do something for society,” recalls Mr. Rijas.

Attinad has developed a tablet-based database management system for cancer screening and diagnosis. The system can record the data generated by periodic screening of people for different types of cancer. “Our automated database makes patient information and analysis easy and manageable. The system has offline capability to handle data in remote areas without connectivity,” says Mr. Rijas.

The company made a breakthrough in the Middle East market with its software to improve safety in the oil and gas sector. “Opening a valve on an oil rig or gas meter reading involves a series of permit-to-work decisions made at different levels, all based on paperwork, and accidents are common. Our middleware leaves an electronic trail of the decisions taken by key persons, ensuring smooth process control and accountability.”

Attinad’s plans for Kerala include a centralised electronic medical records system that can be accessed by the patient. “The patient can get it subsidised by insurers. We are talking to hospitals and insurers to build up a network,” says Mr. Rijas.

The company’s flagship product is the Concord Mobility Platform which extends business critical applications to mobile devices, providing real time information for officials on the go.Attinad has been selected by IBM and Microsoft for their global entrepreneurship programme, under which it will receive free software and guidance on investment and product development.

Bavarian business team to visit state

Bavaria’s Minister for International Affairs Emilia Muller is expected to a lead a team of industrialists and businessmen to Kerala in September as part of efforts by the south-east German State to explore possibilities of improved business, industry, and cultural relations with India.

The team from Bavaria will visit Kochi and Thiruvananthapuram and expects to forge a strong relationship with Kerala as it has with Karnataka, with which it has a partnership agreement.

The partnership agreement, signed in 2007, specifies areas of cooperation such as industry, education, and cultural affairs, said executive director of the India office of the State of Bavaria John Kottayil.

He said that the partnership agreement resulted in substantially improved business-to-business and people-to-people contact between the two States, educational exchanges being a key area and a highlight of the relationship.

Bavaria, the ninth largest economy in the European Union and the most prosperous State in Germany, is home to multinational companies such as Siemens, Adidas, and BMW, which have their presence in India

There are around 80 Indian companies that operate out of Bavaria and Indian investors in the State include the Kochi-based NeST group of companies, Tata Consultancy Services, Wipro, Dr. Reddy’s, and HCL.

India-Bavaria trade is worth three billion euros annually

Ireland seeks tie up in life sciences, technology sectors

With the focus on technology and life sciences and a growth-oriented industrial ecosystem, Ireland could be a gateway for Indian business to the European market, according to Feilim McLaughlin, Ambassador of Ireland to India.

During a visit to The Hindu office here on Monday, Mr. McLaughlin, who is leading an official delegation to Kerala, said his mission was to raise awareness of Ireland as a good place for Indian business to invest.

“In many ways, we have quite a lot in common; not the least in terms of the focus on high technology and the proactive way the government here has tried to promote those technologies through industries. It is very similar to the approach the Irish government has taken.”

Mr. McLaughlin said the familiarity with English language and the industrial ecosystem were obvious reasons for promoting better ties between the two countries. “The focus on technology and life sciences is common to Ireland and India. The cluster-based industrial growth model is also similar to that in India.”

Explaining the model, he said, “Clusters have developed in Ireland in particular sectors. The best example is in medical devices. The clusters are based around universities or institutes of technology.”

Investment destination

Mr. McLaughlin said, “In the next stage, we are trying to move up the value chain. The government's intention is to make Ireland the best small country in the world to do business in.”

On bilateral links with India, he said, “We want to see improvement in government-to-government links in terms of frequency and intensity of the relationship that the two countries have. It is not just government, not just business, academia or sports. There is a whole range of areas in which we see the relationship developing.”

Areas of collaboration

The Irish delegation is participating in an event organised by the Group of Technology Companies (GTech) here on Monday to identify areas of collaboration between companies in Ireland and Kerala.

“We are looking at a clutch of Kerala-based tech companies. Because Ireland is very strong in technology, we are trying to see how we can link that together,” said Minakshi Batra, Director India, Investment and Development Agency (IDA), Ireland, a member of the delegation.

Patrick O'Riordan, commercial counsellor, Embassy of Ireland, New Delhi, who is also part of the delegation, said the medical devices and precision engineering industries could open up opportunities for collaboration. “There are huge capabilities in Ireland in these areas. Indian companies could use Irish expertise to innovate.”

IT Sector eyes new overseas markets

T. NANDAKUMAR

·  

The IT industry in Kerala is turning to Australia, New Zealand, Canada and the Benelux countries (Belgium, the Netherlands and Luxembourg) for fresh business opportunities.

The Group of Technology Companies (GTech), the industry body of software companies in the State, is preparing to send a business delegation to the six countries to scout for new markets and work out partnership deals with compatible enterprises.

‘Market connect'

The decision to engage new stakeholders is part of a ‘market connect' strategy, aimed at helping domestic companies, especially small and medium enterprises, to touch base with new business partners and reduce the dependence on the US market. The Benelux countries are seen as a springboard to the lucrative European market.

GTech is working closely with trade promotion bodies like Invest in Luxembourg, Brussels Invest and Export, Australian Trade Commission and the Netherlands business office in Chennai as well as the Canadian High Commission to organise the delegations.

“We have had three separate delegations from Canada this year, one headed by a minister, and another by an MP. They showed keen interest in doing business with Kerala. Also, during the Emerging Kerala road show in Delhi, we had the maximum attendance from the Canadian mission”, says V.K. Mathews, chairman, GTech.

“The Canadians probably feel they could have a better connect with Kerala than other states because of our social and political awareness and cleanliness. Lobbying by Canadian MPs of Kerala origin and other Malayalis in good positions has also helped,” Mr. Mathews said.

Nordic region

Anoop Ambika, secretary, GTech said the visit to the Benelux countries would be a follow up of a scouting trip to the Nordic region last year by a delegation from Kerala. The Nordic region comprises the Scandinavian countries, namely Denmark, Sweden, Norway and Finland. GTech had zeroed in on the Scandinavian countries primarily because of their outward looking economies that are not wary of the outsourcing model of doing business. Last year, GTech had sent a delegation to Germany, Switzerland and the Netherlands.

Union Budget 2012 misses big ticket economic reforms: GTech

Group of Technology companies (GTech) representing the IT / ITeS industry in Kerala has expressed the view that Union budget 2012-13 presented by the Finance Minister missed the opportunity to make bold economic reforms. However, GTech welcomes moves like reduction in customs duty on a host of items, larger outlay for agriculture, incentives for the aviation industry and increased emphasis on the usage of IT for effective service delivery.

Interacting with the media after a Budget viewing session organised by CII Trivandrum Zone, V K Mathews, Chairman, GTech and Executive Chairman, IBS Group, who is also the Chairman, CII Kerala Chapter, said, “The political compulsions seem to have held the Finance Minister from making big ticket announcements. While the steps towards financial consolidation are appreciable, no corrective action on Minimum Alternative Tax (MAT) for SEZ has been taken. We must remember that MAT destroyed the SEZ scheme and STPI benefits were stopped. Tax concession on R & D is definitely a step in the right direction and should benefit the IT industry. Also surprising is that no requests from Nasscom have been addressed in this budget.”

Meanwhile in a release, Anoop Ambika, Secretary, GTech said, “It is good to note that the current rates of corporate taxes have been maintained. What is disappointing is that the Finance Ministry seems to be in a mute mode on some of the major issues that is troubling the IT industry such as transfer pricing, taxation on packaged / downloaded software, double taxation, etc. Also there seems to be no incentive for investors looking at the Tier II / III cities for their further expansion”.

“GTech recommends that the State government in its budget sets up an SPV under the Kerala State IT Mission to make use of central funds and augment entrepreneurship in the State”, added Anoop.