While at TED India, I had the privilege of sitting down with Ajai Chowdhry, the founder and CEO of HCL.

While I admire their early grit and determination, most of the largest Indian IT companies don’t really impress me anymore.  The market cap of any Indian IT giant is directly proportional to how long they’ve been in business, not to innovative services or bold moves.  That’s how cost arbitrage works – stick around long enough, and people will eventually figure out that you’re the cheaper option. [yawn]

That said, I’ve always been impressed with HCL, primarily for their decision to stay focused on the Indian market, during a time when companies like Infosys and Tata Consulting were raking in the dough from foreign IT contracts.

This short interview covers HCL’s decision to focus on India, Ajai’s view of the state of Indian education, and the major IT challenges that India currently faces.

A warning for our American readers: this interview is Ajai in his own words, so please respect the Hinglish.

Why did HCL choose to focus on IT projects with customers in India? At the time, it seems that foreign projects would have been the much more attractive, if not the blatantly obvious choice.

It was our vision and passion towards creating an ICT market that guided us right from our inception and our efforts over the years to pioneer the technological evolution and revolution in the country and to prominently project India on the global IT map. The Indian IT story has come a long way since then. Globally, India has been a strong player in software and services. However, the PC penetration in India is still low and a lot is to be achieved to bridge the ‘Digital Divide’ and therefore makes it an exciting challenge for us to address even today. In the words of C.K. Prahlad “Improving the lives of the billions of people at the bottom of the economic pyramid is a noble endeavor. It can also be a lucrative one”.

What is the biggest advantage of working with clients in India?

One of the fundamental components is understanding the tradition that forms the basis of India’s society. With this deep understanding we have been able to develop and sustain long-lasting relationships with our customers. Moreover, with a strong presence across the country features which are salient to India gave us the competitive edge to serve our customers better.

Please give us your perspective on the state of Indian education as it applies to software. What are a few things that can be done easily to make improvements?

India is recognized for its competitive & effective education system and is having one the largest talent pools of experienced scientists, engineers and professionals that prove its capability and potential for education. HCL with its deep understanding of the Indian education segment has constantly innovated and brought IT solutions that are relevant for Indian consumers. With increasing global exposure it is imperative for the Indian education sector to take rapid strides towards inclusive learning. Innovative methods to facilitate learning thru IT with localized content and solutions that improve managed internet-era learning outcomes in the classroom, as well as across campuses and schools will enhance the learning experience.

What are the major IT challenges for Indian companies today?

The Indian information technology sector has been instrumental in driving the nation’s economy onto the rapid growth curve. India’s IT growth in the world is primarily dominated by IT software and services such as Custom Application Development and Maintenance (CADM), System Integration, IT Consulting, Application Management, Infrastructure Management Services, Software testing, Service-oriented architecture and Web services.

There is a direct co-relation with number of PC’s and GDP per capita. Study shows that for countries like China, the per capita GDP is expected to increase from $ 8000 to $ 18000 as PC penetration increases from 5% to 24% from 2005 to 2015. India too is poised for a similar growth and hence there is an urgent need to increase PC penetration at war footing.

Digitizing will empower the people of India to receive, absorb & act on information faster thereby opening a plethora of opportunities for growth.

The challenges that the country is facing to rapidly expand digitization can be bridged by enablement of three pillars

1. Higher PC Penetration

2. Availability of Broadband and Internet Access

3. Content

Today, India contributes less than 1% of global production, where China outnumbers us almost 100 times. India has a great opportunity to be a part of the global supply chain but we have to realize that there is only a small window of opportunity and we are fighting tooth and nail with countries such as Vietnam, Czech Republic and Mexico City where manufacturing clusters are fast emerging.

This is an industry of scale: a key driver to bringing down costs. For countries such as India, this is a chicken-and-egg situation. The first thing is to build the size of the PC market, which is the door opener for the entire ecosystem. Over a period of time, with the right policy and logistics environment, the ecosystem will be build, but there are no short cuts. It is no coincidence that the mobile phone manufacturing ecosystem began to develop, once critical scale emerged.

The focus should be on building a large domestic market, supporting existing computer manufacturers and thus encourage them to pull in their suppliers to India.