ON THE RECORD
Chairman, PanIIT USA
Sunday, July 1, 2007
The CEO of Keynote Systems talks about the Indian Institute of Technology as engineering and business alumni gather this week in Silicon Valley.
Presidential candidate Hillary Clinton will be among the speakers who will visit Santa Clara this week when several thousand graduates of India's most prestigious university network, the Indian Institute of Technology, gather for their alumni conference.
At a time when the India is exerting a growing influence on the world stage, the IIT Alumni 2007 Global Conference offers a chance to understand the experience of a group of business, political and academic leaders who have played a particularly important role in Silicon Valley.
Representing this group of prestigious alumni -- who call themselves IITians -- is Umang Gupta, chief executive officer of Keynote Systems, the San Mateo Internet tracking firm. Gupta came to the United States during the Vietnam War and worked in the technology industry. He was one of the first employees at Oracle in Redwood City before striking out on his own.
In an hourlong interview last week, Gupta looked back on his three-plus decades of experience in the tech industry, highlighted the accomplishments of his fellow alumni, and explained the genesis and importance of the Indian Institute of Technology.
Q: Tell us a bit about the conference.
A: The seven IITs in India have probably graduated more than 100,000 alumni over the last 20 years. We refer to those alumni as the PanIIT movement. We did one event in 2003 here in Silicon Valley where I think we had more than 2,000 people. We've done subsequent events in Washington, D.C., and in Mumbai (Bombay) last year. And this one is going to be the largest, we think, with more than 4,000 people attending.
Q: This has been a powerful business network. How has it impacted the Indian business experience here?
A: IITians (graduates of IIT) are not just in business. Lots are in academia. Subra Suresh recently became the dean of engineering at MIT. We have many IITians who've done extraordinarily well in businesses. Victor Menezes was senior vice chairman of Citigroup until recently. Ajit Jain is No. 2 to Warren Buffett in the insurance business. So you have a network of people who are very well-connected, obviously very talented individuals and graduates in the lead institutions in IIT, and they certainly have quite an impact on both India and our future.
Q: With that broad a network, what are the common themes, common interests?
A: The biggest common interest is how they got into the IIT. Historically, 2,000 kids get selected out of 100,000-plus by taking a joint exam. Then you go through a five-year process of going to college together.
Even though you have seven different campuses, there are lots of intercampus activities. So we're all really pretty well connected and you have the same bonds that somebody would have if you came out of Harvard or Yale or Princeton or Dartmouth. Many IITians are also part of a particular industry. In many cases, the IT industry. The other aspect is that being Indian immigrants here, they certainly have quite an element of being connected.
Q: What things do you promote in common?
A: No 1, to galvanize and network alumni to help each other, like any other alumni organization would do. No. 2, to help strengthen our alma mater, the IITs, through faculty recruitment, research projects, donating back. No. 3 is contributing to both the local communities that you're part of, or back to India to the extent that you can help in connecting between India and the communities that you're part of.
Q: For Indians coming to the United States, what has been their experience regarding acceptance here over the past 20 or 30 years?
A: I can use my experiences. I came here in 1971 as a graduate student. This was at the height of the Vietnam War. I went to Kent State University and I absolutely had no angst or feelings of being not accepted or being discriminated against. Academic institutions are always open, they're incredibly liberal, and there's a great acceptance of folks coming from overseas. However, once you leave the institution, and you get into the working world, each one of us has had different experiences.
I was fortunate. I joined IBM as a sales guy. On the other hand, friends of mine would say that they did feel discriminated against in those days. I came out here to Silicon Valley in 1978. I was employee No. 17 at Oracle. I wrote Oracle's first business plan. I was Larry Ellison's first executive to leave to start a company of my own, which I then took public in 1993, called Gupta Technologies and really the first Indian-run software company at that time.
But I was not alone. About the same time, Vinod Khosla started Daisy Systems and after Daisy systems he co-founded Sun Microsystems and has been one of the most successful venture capitalists in the world today. So we had a few entrepreneurs, I'm going to say probably a handful, in the late '80s.
But in the '90s, the world changed. Completely. India started to deregulate. The Berlin Wall fell. There was no competing ideology to capitalism. By that time, many IITians had gone through a 20-year process of maturing in their particular jobs. Many of them had reached fairly good heights.
Rajat Gupta, who essentially graduated the same year as I did, ended up becoming head of McKinsey (consulting firm) in the mid-'90s. Arun Sarin is now CEO of Vodafone. These are all individuals who came to America in the early '70s but ended up working the ladder. You had others -- some of us here in Silicon Valley -- who ended up becoming entrepreneurs. It took time. But then the third thing happened, and that was the Internet.
Previously the river could only flow one way. You could send smart Indian guys out of college over here, and you could get a job but there were limits. But with the Internet, you could actually send the work over that made sense to do over there. And I know it's one of those things where oftentimes people have different viewpoints. But it has dramatically impacted both America and India for the good, because it has allowed so much of Silicon Valley to be able to take work that otherwise it just couldn't have done economically here and move it.
Q: Is there any limit to the work that can be outsourced?
A: I've always felt there's a limit. But let's go back and think about it. The Japanese -- in the late '50s, people would talk about early transistor radios being built by the Japanese. And everybody said, 'Oh, these are just cheap Japanese transistor radios.' Eventually, they built some of the best consumer electronics in the world. They did it because they ended up with a robust consumer economy.
The same happened with cars like the Datsun. Everybody thought these were cheap little cars. Eventually, when the local economy became big, they really started to become world leaders.
Now let's move back to semiconductors. People have yet to be able to really build the equivalent of an Intel somewhere else. The same is happening in software. So what's moved overseas? SAP development, Oracle application development, and those kinds of things have moved. But when you want to build the next Google, you build it here. And many companies that may start over there end up actually moving here.
You have to be close to that market. That's the reason why so many Israeli companies move here. Without a huge home market, it is almost impossible to build a world- leader company. Period. And those consumer markets for software, at least, just don't exist today in India or China or elsewhere.
Q: What is your take on Silicon Valley? What is it about the valley that makes it happen?
A: There's no place like it on Earth. It is a combination of an amazing academic setup -- Stanford and Berkeley and others -- combined with venture capital that has over time grown up here, so it's an institutional knowledge of how to invest, combined with companies that are at the center of their industries, whether it's the Internet or enterprise software or the semiconductor or hardware industries.
A spirit has emerged over time, like the wildcat spirit emerged in Texas when oil was discovered. Do similar ingredients exist elsewhere? Absolutely. Bangalore certainly has that entrepreneurial spirit, along with a fairly good set of technology companies there in the context of India.
But when you combine all of that with the presence of a local home market and venture capital and all those other things, we're still talking of a big difference. Austin certainly has a combination of venture capital and universities. Massachusetts has those, but somehow Silicon Valley here seems to definitely have a surfeit of everything.
Q: Some people would say this world that you describe has not dramatically affected America for the good, although it may have affected India. Is there a global elite, a global technocracy that's beyond nationalism?
A: Whether globalization is good or bad for America is a deeper question. America has no choice -- and no country has a choice -- but to globalize today. America led the fight against communism for the last century. What was that fight all about? Freedom of expression, freedom of property rights. There's a certain ideology of how to run one's life, country and society and everything else. We won that fight and with that win came a certain responsibility to help spread the notion of global capitalism in a global way across the world. That's what we're doing.
The real question is how do we come out winners in the globalization battle? I think the only way we're going to be winners is to continue to be highly competitive as an economy. Always be ahead of the curve on technology. The ability to innovate, the ability to explore new frontiers. That's what makes America.
Q: Cisco CEO John Chambers says the American educational system needs a lot of improvement. Is that where that logic would take you?
A: Absolutely. We can't just retreat into a shell. We have to be able to build and win the battle for globalization. The only way you do that is to help educate your citizens to be global citizens. You improve your K-12 system. You improve your college education, and you continually raise the bar for what you've got to do. And the bar for many of us, you know, was college. Many of our parents never went to college. Frankly, our grandparents, some of them never even finished high school, and so the bar just continues to go up.
Q: Why don't we move on to the root of the organization and what IIT is all about.
A: The IIT system got started in the 1950s as a result of an early decision by the first prime minister of India, Jawaharlal Nehru, who felt that in order to compete there ought to be this elite set of engineering schools that would produce engineering graduates to create the heavy industry that India needed. So the five institutes were started.
One of them in Kharagpur was helped by multiple different countries. Then after that, subsequent institutes, the one in Kanpur, the one I come from, was helped by America. The one in Delhi was helped by Britain. The one in Chennai was helped by Germany and the one in Mumbai was actually helped by the Soviet Union at that time. 'Help' meaning a certain amount of financial help, professors from universities would come.
I still remember many of my professors there were from either Stanford or MIT or Cal Tech or elsewhere. I studied computer programming on the first computer ever brought to India.
It was an IBM computer, an IBM 1620, with punch cards and the whole thing. This was in the late '60s. These universities started to graduate mechanical engineers, electrical engineers and chemical, and then computer science graduates. As I mentioned, the process of getting into school was a very, very competitive exam. My graduating class was about 300. There were five institutes in the beginning, so 300 times 5 is 1,500 people out of 100,000 selected to get in. And now there are seven institutes, so there are about 2,000.
Q: Were these scholarships or were you paying?
A: We're paying, but they are heavily subsidized, no question.
Q: Why only 2,000 students?
A: Many people believe there should be more IITs. Within India there is a movement to add more IITs. Others say there should not be more IITs if you want to keep them to extremely high standards. I think over time there will be more IITs. But how many more it's hard to tell.
Q: Are we lifting up our brains in the United States in comparable ways?
A: My kids who go to school here, Ivy Leagues, and so there is absolutely no question that we produce an amazing set of elite kids in some of our Ivy Leagues today.
I think ultimately the real question is: Are we lifting up the large majority of Americans to those levels required to compete in the global world? We do a pretty good job of educating the broad majority of our citizens compared to most other countries. However, we could and we should do a better job.
Q: Where does the PanIIT organization come down on the immigration reform issue in the United States?
A: The first thing to know about our group is that we do not consider ourselves a political organization. We are first and foremost an alumni organization. To the extent that we have any opinions relative to politics, they are generally noncontroversial, at least from our viewpoint. As an organization, we believe America needs to retain its competitiveness. In order for America to retain its competitiveness, immigration reform clearly needs to focus on improving the capability for people who can help America going forward.
By and large, any immigration reform that helps to increase H-1B visas, any immigration reform that helps to improve the likelihood of IITians and other graduates like IITians entering America and doing well for America, as well as for themselves, is something that IIT supports.
Q: Is the H-1B program overly weighted to take advantage of Indian immigrants?
A: I think that has more to do with the nature of the outsourcing industry than the H-1B program. A very large part of IT outsourcing is from India. The industry didn't even exist 15 years ago, and as it started, much of that work has gone to Indian companies like Infosys and Wipro and Satyam. However, I think as the world starts to add other countries for IT outsourcing whether they be Bulgaria, Russia or China, the H-1B system will automatically start to become appropriate for different countries.
Q: China seems to be the biggest emerging threat to your present IT outsourcing. Northern Africa, Bangladesh, Pakistan and Eastern Europe seem to be emerging areas. How do you stay ahead of the curve on that?
A: Ultimately, any industry has to stay ahead of the curve by constantly being ahead of either the technology or events or sticking to its core competencies or doing better with its customers. In the initial IT world, a lot of outsourcing was: Can I do something relatively simple or cheaper? Today, the tasks require a certain level of quality that is much higher than say 15 years ago. So maintaining cost-competitiveness and ensuring high quality are the keys to sound successful outsourcing.
Q: English fluency helps.
A: That's a natural advantage India has that I think is not going away soon.
Q: IT companies in India are trying to move up to research and development rather than being just cost-cutting outfits.
A: I think you will always find the ability to go up the food chain is a lot easier than going down the food chain. It is much easier to move from doing, let's call it SAP- and Oracle-style coding for an IT shop in any of corporate America's Fortune 500 companies, to move up to do programming for companies like Google or Microsoft where you are actually building parts of an operating system.
But, going the other way, which is to find rural Indians who don't necessarily speak English or even if they do speak English, it's rudimentary English. They may have a B.A. degree, but that B.A. or B.S. degree from a rural college in India is not the same thing as an IIT degree.
Q: Your group has a rising influence. What do you talk about and what are those things that are important to you?
A: Is there something common that all Indians would generally say, 'Yes, this is something we should stand behind?' It certainly would be immigration. We all believe that more immigration is good. We should encourage more globalization, more openness. We must move forward with being able to help be more competitive as a nation. Those are all things that IITians would unite on.
Q: How about domestic issues, health care?
A: Not at this point. Individuals absolutely do, but not as an organization.
Q: How has the environment changed in Silicon Valley in terms of the way folks who immigrate here are treated. Is there racism in the valley?
A: I have not felt personally, or known of, instances of racism. This is an amazingly open part of America. Silicon Valley is another meritocracy, very much so, and that's probably one of the reasons why our IITians love being here, because they've been part of a meritocracy so long in the IIT system. The answer is no. We haven't seen any racism.
Q: Is there a wall for advancement to the executive suite for Indians? Is that final frontier for Indians to be at the top of the heap in the valley, to be the financiers and the venture capitalists?
A: It is definitely happening. I don't think Vinod Khosla is the only one who has done well as a venture capitalist. Promod Haque of Norwest Venture Partners has done extremely well in the venture capital industry. You have people who have done well with major corporations like Vodafone, for example, or McKinsey. So I think that is definitely happening.
It just takes a long time. I think back to my days when I joined IBM. I could speak English reasonably well and so was very well accepted by and large. But I never thought of myself as the guy who was going to rise up the chain and finally end up being president of the IBM Corporation. I didn't look like somebody who could be president of IBM and I never even thought that's what I wanted to do. I just at some point left and said, "Fine, I'll start my own company and that's the way I'll do it." I think there are a lot of Indians who feel that way.
Q: Has America become the place whose lunch everybody wants to eat? Does America get to eat the world's lunch, or is America disadvantaged in the future?
A: I think it's a deeper economic question. If you go back in history again when New York was in the ascendancy and the Midwest and the West were just being discovered and people were saying, "Well, gee, you know all the money goes into New York," the issue of deficits between New York and Iowa never existed.
Why? Because we're all one nation. People thought it was OK. People could move back and forth and move money back and forth. The globalists would argue that we are becoming one large globe. And to the extent that has occurred, or to the extent that American values are going everywhere and American capitalism is going everywhere and people are trading with each other in peace, generally speaking in a way so that we can all improve our standard of living. Nobody has to eat anybody else's lunch. There is plenty for everybody.
Title: Chairman and chief executive officer, Keynote Systems Inc.
Education: Bachelor's degree in chemical engineering from the Indian Institute of Technology at Kanpur in 1971; MBA from Kent State University in 1972.
Work experience: Started his career with IBM in 1973. Joined Oracle Corp. in 1981 and wrote the company's first business plan. Served as vice president and general manager of Oracle's Microcomputer Products Division through 1984. Founded one of the early enterprise client/server computing firms, Gupta Technologies Corp., which he took public in 1993. Chairman and CEO of Keynote Systems since 1997.
Personal: Married to Ruth Gupta. Two surviving children, daughter, 25, and son, 18. The Guptas support charities for the developmentally disabled, including the Raji House in Burlingame, named in memory of their middle child.
Participating in this interview were Business Editor Ken Howe, Deputy Business Editor Alan T. Saracevic, staff writers Tom Abate, Ralph Hermansson and Jessica Guynn, and editorial assistants Colleen Benson and Steve Corder.