SGI Targets India

Electronic News, Oct 2, 2000 by Uday Lal L Pai

SGI aims at acquisitions in India as part of is global expansion plans

COCHIN, INDIA--SGI Inc., Mountain View, Calif., is likely to increase its involvement in India and could fund a few start-up ventures developing products around the Linux operating system. The company is also mulling over setting up a development center in India.

Robert Bishop, SGI worldwide chairman and chief executive officer, who recently was in India, praised Indian technical expertise saying, "We at SGI in Silicon Valley are increasing the number of Indians in our organization." He added the company is currently evaluating options of how to recruit more Indians from India, and then take them to the United States.

"The entire world appreciates the talent here and India is being recognized as a technological powerhouse globally. This is a great position to be in," Bishop said. Talking in regard to SGI's relationship with India, he said, "Our partnership with India will entail (putting) high-quality tools from us in the hands of highly capable people."

Plans to Acquire Indian Companies

SGI will focus on acquiring companies in India as part of its expansion plans here. "It is an area of great interest to us", Bishop said. "The company is looking at acquiring entrepreneurial companies that will meet SGI's objectives.

"In Silicon Valley most companies are being spearheaded by Indians. We have a lot of faith in India and are in the process of identifying such companies which will help us in meeting our objectives of technical and creative computing," he added.

Calling for a partnership between SGI and Indian professionals and entrepreneurs, Bishop said that while SGI has the necessary technology, India with its enterprise, entrepreneurs, culture and brainpower is an ideal partner.

"I appreciate the talent that is available in India, which has been acknowledged by the world at large," Bishop said. "This vast resource combined with SQL technology will make India an IT superpower in the 21st century." Bishop added that the company is working on a strategy to tap Indian talent.

SGI has been suffering losses globally and as part of the company's revival plans, SGI is looking at a significant contribution from India.

Development Center in India

Prasad V Medury of SGI India hinted that the company might set up a development center in India. "The options are open before us. We might recruit people in India and take them to the United States or set up a facility here. With the latter, managing projects becomes a bit of a problem." The primary areas that Indians excel in, he noted, are engineering, research and development, and software development, among others.

The development center will work with the five to six companies SGI has already invested in and the company now wants to professionalize this program to promote promising start-ups working on Linux.

He also said that SGI was hopeful of doubling its business in India in the next two years. Last year, SGI India grossed about $22.2 million, growing 20 percent over the previous year.

On the opportunities that the freely available Linux operating system offers to the Indian IT industry, Bishop said that associating with Linux would turbocharge the Indian IT industry in the future.

"I think India will be connected to the Linux in a big way in future because the source code of the system is freely available unlike the proprietary systems," he said.

"Besides, Linux allows software engineers to participate immediately and instantly in its new developments on a global development platform," he said. Bishop said that in line with the rapidly growing acceptance of Linux, SGI has developed two lines of product families--one based on its proprietary model and the other based on the Linux-Intel combination. "In our company, these two families run side by side."

Eyeing 100 Percent Growth in India

SGI is targeting a revenue growth of 100 percent from its Indian operations in the next two years, according to Bishop. Announcing SGI's plans in India, Bishop said "India is a key market for us and we are working toward a 50 percent revenue growth in the next year and a 100 percent growth over the next two years."

Set up in 1993 in India, SGI India recorded 20 percent growth in 1999-2000 taking its revenues to $22.2 million. According to Bishop, "When we find that there is a strong young company in any part of the world, including India, whose business vision overlaps with ours, we encourage it by incubating that company."

Bishop did not say if SGI would commit fresh investment for the seven-year-old Indian subsidiary and added that the company was still working out its plans for India.