TCS: The Accidental Crown Jewel | Intermission E05 | The Ken

Intermission

This episode explores the historical evolution of Tata Consultancy Services (TCS) from a small software unit to the primary engine of the Tata

Key takeaways

• TCS's outsourcing model was an 'accident of history' driven by India's need to earn foreign exchange to pay for imported Burroughs mainframes.
• The Y2K crisis served as a massive global catalyst, allowing TCS to scale its workforce and establish deep-rooted client relationships.

Main topics

• History of TCS and Tata Group
• Impact of the License Raj on IT

Notable quotes

The servant actually decides the master's fate.

Conclusion

TCS remains a global powerhouse, but its future depends on whether it

Transcript preview

Speaker 2 (0:01) you Speaker 2 (0:03) It's 1957 and on Christmas Day, a boy is born into a powerful business family in Mumbai. His dad is Parsi and his mother is Swiss. He's named Noel, which derives from an old French word for Christmas, which traces its roots to a Latin word for birth. Six years later, in 1963, another boy is born in the village called Mohanur, which is in Tamil Nadu's Namakal district. The village sits on the banks of the powerful Kaveri river along the only stretch where it actually flows from north to south. He's the youngest of six siblings. He's from the Tamil Brahmin community. He's named Chandrashekharan, the one who wears the moon for a crown. The boys don't know it yet, but their fates are entwined. They will meet in the boardrooms of India's most powerful business group, the Tata's. Their full names are Noel Nawal Tata and Natarajan Chandrashekharan. Chandrashekharan would go on to join TCS as a software intern in 1987, then climb through the ranks till he's known just as Chandra. and then in 2009 become TCS's CEO and in 2017 become the first non-Parsi chairman of Tata Sons, the holding company behind India's most powerful business group. As boards go, perhaps there isn't a greater board in India than the Tata board. It steers a 158-year-old conglomerate with multiple dozens of companies and that collectively generate over $180 billion in revenue and employ over 1 million people. The combined market value of all the companies under the Tata Group is estimated to be close to $330 billion. But the Tata Group and the board doesn't always get things right. In 1978, it wanted one of its group companies, Tata Consulting Services, to merge with another joint venture it had with a US company called Burroughs, which was an American computing company. Had it succeeded, perhaps the Tata Group wouldn't be what it is today. Because Tata Consultancy Services would go on to become one of India's most consequential companies. It would single-handedly invent India's software and IT services export sector, a sector that today contributes close to 10 % of India's GDP. and directly employs over 6 million people and has turned hundreds of thousands of people from small town India into a Speaker 1 (2:52) global professional class. Speaker 2 (2:54) There are few examples of countries globally that have directly gone from being an agricultural economy to a services economy. India is one of them. So you could say TCS saved India. It also saved the Tata's. Over the decades, it would generate An overwhelming majority of the Tata Group's profits and Tata Sun's dividend. This is actually what allowed the group to bankroll its expansion. In FY25, TCS paid Tata Sun's its largest dividend ever, 32,722 crore. Between 2000 and 2026, TCS contributed close to 80 % of Tata Sun's total dividend income and buyback proceeds, 2.7 lakh crores. Using this dividend income, Tata Sun's made a cumulative equity investment of 1.8 lakh crores in its group companies. So yes, TCS saved the Tata's too. But on August 12, 2026, Chandra said, that he was not seeking reappointment as chairman in the absence of unanimous support from the Tata Sons board for his reappointment for the next five-year term. One board member of the two Tata trusts that actually controlled Tata Sons had not supported his extension. Chandra did not say who it was, but it is widely speculated that it was Noel Tata. Ironically, one of the criticisms of Chandra's tenure was that under him, the Tata Group had actually spent a lot of money diversifying into other businesses. TCS was not seen as the problem, even as TCS faces one of its most challenging times as a company in decades. Our story is about TCS. Welcome to Intermission. I'm Rohan Dharmakumar, co-founder and Speaker 1 (4:52) CEO of The Ken and your host. And I'm Sita Raman Ganesan, The Ken's deputy editor and your co-host. Speaker 2 (4:58) Intermission is a show about India's greatest companies and how they came to be. Through hundreds of hours of research, reporting and conversations, we piece together the leaders, rivalries and events that made these companies what they are and what the future holds for them. Speaker 1 (5:15) There are insights, anecdotes, opinions and numbers. But above all, there is a compelling story in every episode. Speaker 2 (5:37) TCS could not have come about if not for a fortuitous alignment of two communities from South and West India, the Tamil Brahmins and the Parsis. Former CEO and Tata San's chairman Natarajan Chandrashekharan was born in 1963 into the Tamil Brahmin community. It's estimated to be just about 2-3 % of Tamil Nadu's population. that small community has played an outsized role in making TCS the company that it is. They're called Tambrams. TCS CEO Aarti Subramanian is a Tambram. The CEO who actually made TCS the global giant that it is today, S. Ramadurai Subramaniam Ramadurai, is also a Tambram. Speaker 1 (6:22) In one of Speaker 2 (6:22) the books that I read while preparing for this episode, I came across the fact that back in the 1970s, There was a time when TCS had roughly 100 software engineers. Of them, roughly 50 were Tamil Brahmins, most of them, and 25 were Telugu's and the remaining 25 were from other communities. So much so that over the years, people jokingly referred to TCS as Tamil Consultancy Services. Well, you must have heard of the Tamil Brahmin Tambrams community. Srinivasa Ramanujan born 1887 died 1920 became one of the world's greatest mathematicians after teaching himself the subject. Then there's C.V. Raman born 1888 died 1970 and his nephew Subramaniam Chandrasekhar born 1910 died 1995. Now C.V. Raman was the first Indian Nobel laureate in sciences. He won the prize for physics in 1930. His nephew, Chandrashekhar, won the same prize in 1983. Speaker 1 (7:25) And there's also presumably Venky Ramakrishnan or Venkatraman Ramakrishnan, going by his name, who studied physics and then became a structural biologist before winning the Nobel for Chemistry in 2009. Tam Brams regard mathematics Speaker 2 (7:39) as the supreme academic subject. As in, if you do well in math, you are a bright kid. But that... Scientific knowledge also coexists with deep traditional beliefs with no dissonance. I'll give you an example. There's a story that in the 1930s, C.V. Raman used to go home to bathe before an eclipse. And when he was asked why, he quipped that the Nobel Prize was for science, but a solar eclipse is personal. Speaker 2 (8:07) In India's ancient social stratification system that divided people into castes by birth, Brahmins were the highest caste. And education and learning were historically their prerogatives. Thus, a high proportion of the Tambrams were literate in multiple languages including Sanskrit. In the early 18th century, Madras, the Dubash, man of two languages was the key intermediary between the East India Company's agents and local communities. Later on, in the district collector's offices, the chief Indian officials were typically polyglot Brahmins skilled in multiple languages. Speaker 1 (8:51) This reminds me, Brahmins and language would continue to be a very touchy subject in Tamil Nadu for decades. To Carnatic music. It was dominated by Brahmins. It still is. And most of the compositions they sang were not in Tamil. They were in Sanskrit or Telugu. And that's because the trinity of Carnatic music, Muthuswami Dixitur, Thyagaraja and Shyama Sastri, they all wrote their compositions in either of these two languages. So in the 1940s, there was a movement called the Tamar Isai movement. Isai means music. That actually forced Carnatic singers to embrace Tamar songs. Over time, due to the Speaker 2 (9:32) influence of the British rule, as English became the primary language of governance and commerce, Tambrams became really fluent at it. When Tamil scholar U.V. Swaminatha Iyer was a young man in the 1870s, an acquaintance asked his father what he did and was told that he read Tamil. The acquaintance incredulously asked, why would he not study English or Sanskrit? If he studies English, he would benefit in this world. The study of Sanskrit will prepare him for the other world. Studying Tamil will bring him neither benefit. I think this is the point that you were referring to as well. Tambrams were mostly rural and often landowners. They owned much of the fertile land in Tamil Nadu in the Kaveri Delta. It is an area of paddy fields, coconut groves, banana plantations and trees with canopies. Now, most of this was in the old Tanjavur district, earlier also called Tanjore. 28 % of Tanjavur's mirasidars, these were... hereditary landowners recognized by the Britishers as sole proprietors of land in 1805 were Brahmins. That's 28%. In 1900, an ambitious young Tamil Brahmin would probably have hoped to become a high court judge. But by 2000, he or she would be much likely to aspire to be position of a CEO in a major IT company. This is a verbatim quote from the book Tamil Brahmins, The Making of a Middle Class Cast by C.J. Fuller and Hari Priya Narasimhan. Not just the CEO of an IT company, but the chairman of Tata Sons. More importantly, how did a high caste become a middle class caste? It started in the 1900s. In 1916 came the Non-Brahmin Manifesto which was issued by the South Indian Liberal Federation which was also called the Justice Party. It argued against disproportionate power to the Brahmin community and for equitable and proportional representation for others, for education, jobs and even political representation. Speaker 1 (11:52) Very interesting fact about the Justice Party. In 1921, the Justice Party government in Madras presidency introduced reservations for the first time. This was unheard of elsewhere in India, in government jobs. This was actually 30 years before affirmative action was enshrined in the Indian constitution. They set aside 44 % for non-Raman Hindus, 8 % for Shedulkas. and the rest divided equally between Brahmins, Christians and Muslims. For decades, actually since the 1990s, Tamil Nadu has had 69 % of the jobs and seats in educational institutions set aside for backward communities. And this is higher than any other state in the country. States not allowed to go beyond 50%. Tamil Nadu is the exception to that norm. And the man who would go on to challenge Brahminical dominance in Tamil Nadu is this guy named E.V. Ramaswamy. He was also called Periyar. There were others before him like Ayyutidas and Marimalai Adigal. But it was Periyar or E.V. Ramaswamy Naikar who really, really took the fight to Brahmins in the 1910s. He was with the Congress. He quit the Congress because he felt the Congress was not quite as serious about eliminating caste-based discrimination as he was. And then he joined the Justice Party in the 30s and he actually became head of Justice Party. And Justice Party would in turn become the Dravidian party, Dravida Karagam, which would go on to be the fountainhead of the politics that reshaped Tamil Nadu in the second half of the 20th century. Speaker 2 (13:35) Speaking of Speaker 1 (13:36) the Speaker 2 (13:36) Dravidian movement that you just referred to and the political parties, the DMK and the AIDMK, in 1967, after the Congress lost state elections, Since then, with only brief interruptions, the DMK or the AADMK have continuously ruled Tamil Nadu. Speaker 1 (13:54) Yeah, I think except those years when President's rule was imposed, it was the DMK or the ADMK and Speaker 2 (14:01) that Speaker 1 (14:01) ended earlier Speaker 2 (14:02) this year. To go back to the origins of the TCS and the Tamil community, in 1961, Tamil Nadu Land Reforms Act was passed that drastically reduced the ceiling of land ownership. Remember Tamil Brahmins were a landowning community as well. And the Land Reforms Act ensured redistribution of the land to the poor. Now, as a result of which, Tambrams were not suddenly divided. They had to divide their lands. They had to sell hereditary lands. And they had to move to towns and cities looking for salaried jobs. They had to look... outward to the rest of India and overseas as places to live and work. They were pushed out of their centuries-old privilege, but they were also at the same time looking for strong pulls. They were searching for new anchors and stability. A patriotic call to nationalistic ideals was one of those pulls. Atramil Brahman, retired accountant who spent his entire career in the Food Corporation of India, FCI, reported that he was offered a post in a private company in the early 1960s, but he chose to work for the government because he answered a call from Nehru. I talked about S. Chandrashekhar earlier and I have an interesting anecdote. His father actually wanted him to join the Indian Civil Services, which is the British precursor to what's today the Indian Administrative Services, IAS. When Chandrashekhar became a US citizen in 1953, his father wrote him a bitter letter of protest. His father's name was Subramanya Iyer and he reminded his son that he was born of the traditions of the Kaveri Delta with high intellectual aspirations for four generations, was cared for by his father for 20 years, ate the salt of the Indian taxpayer, won a scholarship to Cambridge, He must therefore realize that, and I quote, his life has borne the fruit of the best of Hindu traditions combined with the British tradition. Now that's loyalty to India, Hindu and British traditions in one go. That's one pull, the nationalistic pull. The second pull was to engineering. Tam Rams have a traditional antipathy to medicine owing to ritual pollution from corpses and bodily fluids and dissection, which was obligatory for medical college. In comparison to medicine and medical college, engineering was a much more palatable option. In around 1949 or 50, India had around... 12,000 students in engineering and technology and produced just about 5,500 graduates per year. But Jawaharlal Nehru's temples, modern temples of India, which is the dams, power stations, steel plants and heavy engineering factories that were built by the state and some of the private companies like Tata's, for instance, needed a lot of engineers. So by 1970, the annual output of engineering graduates was around 20,000. It continued to rise through the decades by the time the IT sector had come. By 1997, the annual output was around 65,000 and by 2006, 220,000. Many Tambram engineers also migrated to other parts in India to find work because now that they were leaving Tamil Nadu and they were becoming engineers, they were looking for opportunities. They went to Bangalore, they went to Bombay, they went to Calcutta, they went to Jamshedpur where of course Tata's iron and steel company was there and started production in 1911. Mumbai, which was back then called Bombay, is almost certainly the Tambrams' third largest settlement area after Chennai of course and Bangalore. They mainly settled in Matunga. a residential neighborhood north of the city's historic center. And now I sound like somebody who doesn't know Bombay speaking. Speaker 1 (18:10) But Mathunga came to be known as a South Indian area. It's actually not just Tambrams who relocated in large numbers to Bombay during that period. Lots of people from Tamil Nadu, especially southern Tamil Nadu, Kanyakumari, Nagarkot, they moved to Bombay too in search of better opportunities. And a lot of them lived. Indharavi, which is not very far from Matunga, and Sain Koliwada, which is also not very far from Matunga. Interestingly, two of the three gangsters, the most feared gangsters of Bombay of that period, there were Karim Lala, Haji Mastan and Varadaraj Mudaliar. Haji Mastan and Varadaraj Mudaliar were both from Tamil Nadu. Bombay back then was Speaker 2 (18:54) a land of opportunities, just like many people think of America. And perhaps no other community reveals the scope of that opportunity than our second one, the Parsis. Parsis are an incredible study in contradictions. They belong to one of the world's oldest religious traditions. They're India's smallest community, yet they are among the ones who have actually exercised the greatest influence on the subcontinent, way out of proportion to their population and demographic size. Zoroastrianism, which is the religion of the Parsis, takes its name from the ancient Iranian prophet Zoroaster, who is variously dated to between 1400 and 1200 BC. Like the Tambrams, the Parsis too were forced to seek opportunities away from their origins. Sita, you're a Tamilian and you're married to a Parsi, so this seems like a very Speaker 1 (19:49) surreal and special episode. Yeah, I mean, I never thought these two facts of my life, being born in a time-ramp family and having a Parsi spouse, would come in handy at work, especially for intermission. Speaker 2 (20:02) In the face of Islamic persecution after the Arab conquest of Iran in the 7th century, and perhaps aware of the opportunities on the coast of northwest India, the Zoroastrians migrated from there probably around the 8th century. Initially, they live by a largely agrarian, artisanal and small-scale mercantile existence around Gujarat in relative peace and security. And perhaps they might have stayed that way if not for the arrival of the European trading powers, the Portuguese, the Dutch and the British in the 17th century. Speaker 1 (20:40) Interesting you mentioned the British because the East India Company Its first ship docked in Surat in 1908. And that's also where the East India Company set up its first factory. And you have to remember Surat is just an hour away from one of the earliest Parsi settlements, which is Sanjan. They landed in Diu, then they moved to Sanjan, and that's where they were for a very long time. And that was very, very close to Surat. So they had a ringside view to the rise of the East India Company. Speaker 2 (21:11) With the British and the Europeans, the Parsis moved to their new roles in international trade and shipping. When the English took possession of Bombay in 1662, the Parsis migrated in increasing numbers to what they saw as a new secure space. The English actually sought to attract migrants and to encourage minorities, they offered freedom of religion and equal justice before the law. Various minorities including the Jains and the Parsis chose to live under this new regime in Bombay. Bombay therefore was one of the earliest examples of a truly cosmopolitan place, a cosmopolitan island in India and naturally the place where the Parsis flourished first as middlemen in trade and then as independent traders. In this process, they also changed from a largely rural setting to an urban one. Parsis became, over time, one of the most westernized communities in India. They were also one of the most generous benefactors to causes, all sorts of public causes and charities across the history of pre-partition India. Speaker 1 (22:18) The Parsis built and Speaker 2 (22:19) ran Bombay's dockyard and they were one of the largest ship owners. They were pioneers in education. They were pioneers in social reform. They were the ones who pioneered the cotton mill industry and actually industrialization in India. They were, you know, pioneers in banking, in social justice. If you look at the politics side, they were one of the strongest forces in the creation of the Indian National Congress in the 19th century and then subsequently contributed most of the leadership of the Indian National Congress. Actually, many of the leaders of the Indian National Congress. into the 20th century as well. All of these are from the book called Parsis in India and the Diaspora, which was edited by John Hinnels and Alan Williams. Now, like the Tambrams, the Parsis are also interestingly polyglots and they have, I mean, they're great at languages, their vernaculars and language goes in Persian, Gujarati and English and of course, all the countries that they've settled in. not to mention the Speaker 1 (23:25) oldest Iranian languages as well. Now Speaker 2 (23:27) the Tambrams and the Parsis are two communities. They're both starting to suddenly look in many ways very similar. They're both long-termists in the sense that they're like always looking for creation of long-term value. They're traditionalists. They're both communities that in some senses been forced to move away from what their original areas were in search of new opportunities. They both have a very strong sense of family and community. They're both very focused on education. They're both very patriotic as well. And we find both of these communities reacting to adversity and opportunity in very unique but their own ways. Speaker 2 (24:18) Let me take you to 1839. A Parsi boy is born. And in these stories, it's always the boys that are born. He's the youngest of five siblings and he's the only boy. He's born in his mother's family home, which is a low-roofed, single-story home in a tiny lane in Dasturva, which is the priest's quarters in Navsari, Gujarat. His name is Jamshedji Nusirwanji Tata. Speaker 1 (24:46) Nafsari is a very interesting place. It was also home to two other very prominent Parsis. One is Dadabhai Naroji, one of the founders of the International Congress. And Jamshedji Jijibhai, who was an opium and cotton trader. He lent his name to JJ School of Ours and JJ Flyover in Bombay. And Nafsari is very special to Parsis. because it housed what's called the Iran Shah Atash Behram. The Atash Behram is the highest grade of places of worship for Parsis. Atash Behram or the fire of victory. has a flame which is consecrated using 16 different kinds of fires. You have to get a flame from a baker, potter, an ironsmith, a goldsmith, and even atmospheric lightning. So Navsari was home to the Iran Shah Atash Behram for 300 years. It was first in Sanjan, which is where they built it. It moved to Navsari for 300 years. And this is where the Tata family was actually... You know, they had a number of priests working at this very Atish Bhairav. Speaker 2 (25:58) Jamsetji's father, Nusravanji, was only 17 years old when he was born. He came from a long line of priests in Navsari. He was the first in his family to try his hand at trade, though. He tries trading in commodities. When Jamsetji turns 14, his father asks him to come over to Bombay and... He enrolls for studies in Elphiston College. This is around the time of the first Indian uprising of 1857. And then, of course, he would grow on and take on his father's business. There are ups and downs. But the founder of the Tata Group essentially makes his fortune in cotton mills and textiles. And he becomes one of the biggest and wealthiest landowners in Bombay. The surname Tata, I must tell you, I found this while researching a book, comes from the Gujarati words tamta or... Tikha, which signifies someone who is peppery and hot-tempered. Speaker 1 (27:02) This is very interesting because this doesn't follow the typical Parsi convention when it comes to last names, which is also quite Gujarati. It's usually a title, Patel, Munshi, or it refers to the place the person comes from, Bharucha. They're from Bharuch in Gujarat, or Poonawala, or Tarapurwala, or trade. You have Mistrys, Vakils, Ready Manis. Reddy Mani was, again, a very prominent Parsi family. I actually looked at the Parsi directory of one of the, you know, colonies, Parsi colonies in Bombay, which is where my mother-in-law lives. And I found some very interesting names. There were printers, doctors, wardens, photographers. These are surnames? Yes. Engineers, lawyers, messmen, and there was even a paymaster. But my absolute favorite has to be confectioner. And then you also had some families, you talked about how the Parsis were probably the most westernized community. And some of them even actually embraced English last names. You have Cooper and Forbes, which is why this seems a bit odd to me. Speaker 2 (28:14) That factoid about the Tata name was from the book, The Tatas, Freddie Mercury and Other Bawas, An Intimate History of the Parsis by Kumi Kapoor. Now, Jamsetji was a supporter of the Indian National Congress and he argued that for India to develop, it had to develop industrially as well. He wanted to bring about a Western-style industrial revolution in India. Jamsetji's major plans for India included a world-class hotel, and this is interesting, a steel plant, a hydropower plant. and an institute of higher education in science and technology. He would go on to achieve all of them, but three of them only after his death. In 1903, he built the first world-class luxury hotel in the country, the Taj Mahal Hotel, with its red-tiled Florentine Gothic domes and what's called the Indo-Saracenic arches. It was a first sight. I mean... to greet Indian visitors coming into Bombay Harbour at Apollo Bunder. We are all familiar of the sight of the Statue of Liberty that greets people when they come into New York. The Taj Hotel was something of a landmark. It was built even before the Gateway of India which actually was completed only in 1924. Jam Sethi died in 1904. But he also pioneered the Tata Steel Plant at Jamshedpur, which obviously now we know is named after him, Jamshedpur, and began three years after his death. Here's an interesting bit about Jamshedji. He had travelled to England in 1880. There he attended a lecture by Thomas Carlyle, who was a celebrated essayist and social critic. And he said that those who control iron and steel will in time... come to control the gold as well. Now these words struck a chord with the young Jamshedji. The chief commissioner of the Indian Great Peninsular Railways was Sir Frederick Upcott, who was consulted about the possibility of purchasing steel rails from a potential Tata plant at some point. He scoffed at the idea and said he would eat every pound of steel rail that the Tatas succeeded in making. But in spite of these insults, Jamshedji travelled to the US because I think Britain was out of question because they probably didn't think it was possible. He hired some of the leading geologists to come back to India to locate the suitable land to build this iron ore and steel plant. And that place was, which we will come to know as Jamshedpur, which was given to him by the Maharaja of Mayurbhanj. It was an area of 20 square miles that was given to the Tata's. The original village that rested there was called Sakchi. It's now the state itself is in Jharkhand. Sakchi was renamed as Jamshedpur by the Viceroy of India in 1919. And, you know, I think it's testament to the success of the Tata's and to the institution that they built that Jamshedpur is the only city in India which Speaker 1 (31:30) does not have Speaker 2 (31:31) a municipal authority. Because all other Indian cities are run by municipal authorities, not Jamshedpur. Every time that has come up for debate, the citizens of Jamshedpur, over 1 million at last count, say that they prefer that the city is run by the Tata's. Remember of the four things that he wanted to build, one of them was a hydro power plant. That was completed in 1915 when India's first hydroelectric power plant was commissioned in Khopoli in Maharashtra, which was at the edge of the Western Ghats. But perhaps Jamshedji's most ambitious goal for India was to create an Indian university of science and technology. He wanted this to provide not just the best education, but the best... teaching facilities for Indians. He wanted to build something which was modeled on the likes of US John Hopkins Institute in Baltimore. To build this, and this is really interesting, this shows how much of philanthropists the Parsis were. Jamshedji actually offered 14 buildings that he owned in Bombay and half his fortune as an endowment to the proposed university. Speaker 1 (32:46) Johns Hopkins University, which was America's first research university, is obviously named after Johns Hopkins. He was a railroad baron and slaveholder. He donated $7 million in the 1870s to set up a hospital, associated training colleges, a university, and an orphanage. This was at that time the largest ever philanthropic bequest in America. In today's dollars, that would be close to $200 million. Speaker 2 (33:15) But even Jamshed Ji's 14 buildings, 4 properties and half of his wealth wouldn't have been enough. He hoped that the balance would be made up by donations by Indian rulers. Remember, India is still not a free country then. And the British government. However, that doesn't happen. It's not so easy. And the only person who comes forward is the Maharaja of Mysore, who is encouraged by his Diwan, Sir Sheshadri Iyer, a Tambram. He offers 300 acres of land in Bangalore and an annual subsidy. It was only after Jamsetji's death in 1904 that Lord Curzon, who's the British Viceroy, gives a go-ahead for the institute and agrees to match the contributions from the British government side as well. By that time, Jamsetji's sons, Durabji and Ratanji, are the ones running the Tata Group. The Indian Institute of Science formally opens for admissions in 1911. Speaker 1 (34:18) The Tata empire is overseen by his cousin Speaker 2 (34:22) J.R.D. Tata from 1938. J.R.D. Tata is born in Paris in 1904. He moves back to India and joins the Tata companies in 1925. In 1926, he joins the Tata board after the death of his father. In 1938, he becomes chairman of the group and he continues there till 1993. Speaker 1 (34:47) Yeah, he was born in Paris and actually the first 12, 13 years of his life, the family actually alternated between Bombay and Paris. And I didn't know he was actually drafted into the French army for a year before his father asked him to come back to Bombay. Speaker 2 (35:02) JRD Tata expanded the Tata Group significantly. He took it into chemicals, into automobile manufacturing and he expanded further on the scientific and engineering side. He was also India's first commercial pilot. He got that license in 1929 and that is part of the reason why he was so interested in airlines and he started his airline which eventually became Air India which eventually got nationalized by the Indian government and of course that Tata's finally bought it back and it features later on in our story. Speaker 1 (35:40) We talked about Speaker 2 (35:41) Jawaharlal Nehru and the temples of modern India. The dams, the power plants, the heavy engineering factories etc. that were required to industrialize India. But in order to build and run these, India would require scientists, engineers, managers, administrators. And where do they come from? For that, you need a new type of temple. Colleges. So under Jawaharlal Nehru, India's first prime minister, India sets about building the IITs with the help of different countries, just like the IIMs. IIT Kharagpur is the first one to come up in 1951 and it is built with help from multiple countries. IIT Bombay comes up in 1958, built with collaboration from Russia. IIT Kanpur in 1959 with collaboration from the US. IIT Madras in 1959 with collaboration from Germany. and finally IIT Delhi in 1961 with collaboration from UK. But even while the Indian government is doing this, the Tata's are way ahead of the Indian government remarkably. They've already established Indian Institute of Science in 1911, the Tata Institute of Social Sciences in 1944, the Tata Institute of Fundamental Research in 1945. TIFR would go on to build India's first computer in 1960. One of the scientists at TIFR is Abdul Kalam who eventually goes on to become the president of India. Speaker 1 (37:08) In 1956, Speaker 2 (37:10) JRD Tata sets up the Tata Administrative Services or TAS because the Tata group would need managers and administrators and not just scientists and engineers as well. In 1951, when the first IIT-IIT Kharagpur is opened, a young Punjabi, 27-year-old Punjabi comes back to India from the US after degrees from Canada and the US MIT. His name is Fakirchand Kohli. He was born in Peshawar, which is in Pakistan. His father is Gobindram Kohli and he runs Kirparam Drapers in Peshawar cantonment. Like most engineers back at that time, he's foreign educated because there weren't Indian engineering colleges. Like most young scientists and engineers, he joins the business group that is most synonymous with science and engineering in India at that time. That's a TATA group. He joins the Tata Electric Company. Because the Tatas are based in Bombay, it is the city that has made them the group that they are. Bombay at that point is the nerve center of science and engineering. Bombay is where American computer giant, you must have heard of them, IBM operated from. They refurbished and leased their expensive mainframe computers. And this is a term that will come up again and again to Indian companies or institutions. India's... by and large too poor to buy mainframes outright. But Calcutta had India's first computer actually in 1965 at the Indian Statistical Institute. The IBM 14001 is the first mainframe computer from IBM. It was introduced in 1959 and it became the backbone of what most computer usage back then was, which is data processing, which is payroll, sales, inventory, accounting, etc. Now, mainframes, unlike most of the computers today, are designed to handle... very high volumes of input and output. They take in incredible amounts of data and they spew out the results, which is called throughput. Therefore, mainframes are designed to maximize throughput. It doesn't matter compared to our computers today. You don't say how powerful is the chipset? How much memory does it have? Mainframes do one thing really well, which is throughput. And therefore, To maximize throughput, they tend to operate in something called batch mode. Let's get lots of information in one shot and then give the results. Because they are optimized for high throughput, you know, the way to kind of look at mainframe success is through this very interesting term called MTBF, which is mean time between failure. It is a term that captures how long has a computer been operating before there is a failure. And can you guess that for mainframes, that time MTBF is often measured in decades. As in, if you commission a mainframe today, It may not go down for the next 10 years, 20 years or 30 years because it is engineered for reliability and throughput. Back then in the 1960s and 70s, IBM was largely importing, refurbishing second-hand computers from developed markets, refurbishing them and leasing them back to India at a significantly higher rent. By 1965, there are a grand total of 30 computers in India and these 30 computers are enough. to create a fear of job loss. Trade unions launch protests and 23rd February 1968 is declared the National Day Against Automation. Meanwhile, the Tata Group is becoming a sprawling conglomerate. Its group companies now span steel, auto, power, chemicals, etc. And each of these, in turn, is doing incredible amounts of data processing around finance, payroll, inventory management, stock certificates, etc. It's around this time that Colonel Leslie Sani, who's actually a Tata exec and JRD's brother-in-law, suggests that Why is Tata Sons doing all of this at each company level? It makes sense to centralize as a conglomerate and do data processing in a single unit. In 1962, JRD Tata sets up a division within Tata Sons and invests Rs. 50 lakhs. This division has no name as of yet. The initial team is assembled from TAS, Tata Administrative Services. Speaker 1 (41:49) And TAS also inadvertently would give rise to a large competitor to Tata Consultancy Services. I wonder if Azeem Premji would have founded Wipro when he did, had it not been for TAS. He was very eager to take his family beyond soaps and vegetable oil. But he