Curtains for a technology pioneer as Patni bids adieu
The company was breeding ground for the founders of Infosys. Next week, its name will vanish. Vivek Sinha reports.business Updated: May 25, 2012 22:03 IST
It will be the end of an era next Monday, when shares of Patni Computer Systems de-list from the Indian bourses. And with it will also go out a name that spawned a software revolution in India at the end of a somewhat unsung story.
iGATE , a much smaller peer of Patni Computer that acquired it in January 2011 for $1.22 billion has decided to drop the brand Patni - named after the founding family —from the combined entity.
Patni Computer, along with Tata Consultancy Services (TCS) is counted as a pioneer in placing Indian software expertise on the global map.It was at Patni that dozens of IT pros learnt their ropes. The company turned out to be an early launchpad for technology entrepreneurs (a tag later usurped by Wipro). Most notable among the Patni alumni is NR Narayana Murty, who walked out of the company and took along with him his colleagues Nandan Nilekani, S Gopalakrishnan and SD Shibulal.
The rest, as they say, is history. Infosys was born and went on to become nearly two decades later as the first Indian company to list on the tech-laden Nasdaq exchange.
Meanwhile, Patni, which showed the way for others, itself stumbled. Industry watchers blame this on internal differences between the promoter Patni brothers — Narendra, Ashok and Gajendra. Efforts by HT to reach the Patni family for their views did not succeed.
The latter-day Patni clearly painted a sad picture. One Murty left Patni to launch Infosys, and it took an Infosys alumnus, Phaneesh Murthy, to breathe life back into Patni, but in the process, its identity ebbed. Patni had already sold a big chunk of itself to private equity firm General Atlantic Partners.
"Patni had a highly dysfunctional board at that time (of our buyout)," Phaneensh Murthy, iGATE's CEO who is no relation to NR Narayana Murty, told HT.
“General Atlantic was not in smooth communication with the brothers. The brothers themselves were not in communication with each other,” he added.
Phaneesh painted the picture of a man in an introspective mood a day after selling off his company to the much smaller iGATE, sitting in his office the whole day alone and meeting no one.
“This showed a fairly close emotional connect,” Phaneesh said.
It was in the early 1970s that - while working for technology research firm Forrester - that Narendra and his wife Poonam tested their offshore outsourcing model from their apartment in Cambridge, Massachusetts. They converted handwritten data into magnetic tapes - a process later shifted to Pune.
Thus was born Data Conversion, the precursor to Patni, which faded later before being acquired last year. It was not easy for the Patni brothers to let go, though it became a 25,000-strong, $1-billion sales company in the process.
"One of the emotions for Patni brothers was that we were the first to start IT and yet we are now being acquired rather than acquiring (a company ourselves) -- what's more by a smaller company," Phaneesh said.
"I think I saw traces of all of these emotions in both Ashok and Narendra Patni."
Achen Jakher, CEO of Virginia-based IT firm Svelte Systems, who had met Patni brothers on several occasions said the decision to sell-off was based on commercial logic, but at the cost of sentiments.
"Patni had all the right ingredients to grow into another Infosys or a Wipro but unfortunately we saw a great institution being dissolved," Jakher said. And so, Patni joins the ranks of companies that create industries but losing their own identity in the inevitable churning of market economics.
First Published: May 25, 2012 20:20 IST