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Issue Date: October 1, 2006 issue, Posted On: 9/30/2006


Kailash Joshi

IBM’s India icon

Tech vet expresses most pride in nonprofit work


By Naomi Grossman

 

Company: IBM, The Indus Entrepreneurs

Position: Former IBM India head; TiE co-founder

Education: Bachelor’s degree from Indian Institute of Bangalore; master’s degree in metallurgical engineering from Washington State University; doctoral degree in materials science from Cornell University.

Age: 65 

SAN JOSE, Calif. — In looking back over Kailash Joshi's lengthy and eventful career its hard to know what aspect of its history to emphasize first. The fact that he shaped IBM's printing division into what is now Lexmark is very impressive. But bringing IBM back into India and creating an empire that today encompasses nearly 60,000 employees is perhaps even more so. And then, leaving IBM after 23 years to start a second career in Silicon Valley nurturing high tech startups was a notable and bold move.

At 65, Joshi, though, is most proud of the impact he has made with his not for profit work — specifically, as one of the founders of The Indus Entrepreneurs  and the America India Foundation, as well as the Bluegrass Indo-American Civic Society.

"How does my ledger look?" he asked. "My not-for-profit work is more visible, more significant and affected more people who needed help."

The astounding growth of those organizations with which Joshi is involved is a testament to that. The Indus Entrepreneurs, a networking and mentoring organization for South Asian professionals, has exploded into a global organization with 15,000 members. Similarly, America India Foundation has raised over $30 million in the past five years to accomplish its goal of generating social and economic change in India.

Still, Joshi's professional career enabled him to spearhead his volunteer work. That career started humbly with a bachelor's degree from the Indian Institute of Bangalore and was followed with a move to the United States in 1963, a master's degree from Washington State University in metallurgical engineering and a doctorate in materials science and engineering from Cornell University. Joshi stayed on for a year teaching in Cornell, but by the late 1960s he signed on with IBM.

Joshi was in a number of IBM facilities in New York State before landing in the company's printing division in Lexington, Kentucky. As the general manager of the division Joshi helped transform it into a modern facility moving it from the electronic typewriter era into the PC age. Eventually the division was spun off and by the mid 1990s it was a publicly traded corporation called Lexmark.

But by then, Joshi had his sights set on another part of the world. He knew that IBM had a bitter history with India culminating in the company's departure from country in 1976 over a dispute with the government regarding ownership issues. In the late 1980s — in what is now a prescient instinct — Joshi decided it was time for the company to go back in.

"There was an emerging market and a pool of talent," he said.

Joshi called the chairman of IBM's office and convinced him that there was a huge population of people in that part of the world who would use IBM products. In 1989, Joshi was assigned the directorship for IBM in the Asia-Pacific region.

"In hindsight, it was a breaking point for India," said Joshi. "I had an inkling that things would gradually open, but it [did] beyond my expectations."

According to Joshi, developing the relationship was a "complex process spanning over 20 months" because the previous liaison between India and IBM had ended on such a bitter note.

What ultimately made the company's reentry into India possible was a confluence of events and changes in attitudes including the most potent driver: the new government came to the conclusion that India had to open up its economy or it would be in serious trouble fiscally, said Joshi.

At the time, government policies wouldn't allow IBM to own a subsidiary in India, so Joshi decided that IBM would form a joint venture with the India-based Tata Group.  As the government laws gradually changed, IBM bought out the Tata interest and the IBM interests in India are now 100 percent owned.

Joshi also said that "a sensible set of terms with regards to foreign exchange utilization, exports and royalty repatriations" were agreed upon. 

"By addressing the 'hot buttons' for the Government of India in an understanding way, we were able to establish a lot of good will with the new government," said Joshi. "We showed [the government] we wouldn't be a net drain on foreign exchange."

"Certain things had to be done in good faith. We needed to follow the law of the land and we decided we would do that," he added.

Initially, said Joshi, there were adjustments between the manufacturing, software and marketing functions in the India operations. But IBM's growth in India - especially as governmental restrictions gradually loosened — was explosive.

Joshi decided to retire from the company in 1992, but during the last five years IBM has been flying.

"The pace of growth of IBM in India has exceeded even the wildest imagination. It is now expected that India will now replace Japan as the second largest destination, after the United States, with 60,000 employees," he said. "This, when combined with the large portion of the work being dedicated to systems development and research, makes IBM's India operations truly strategic for the company and for India."

Joshi left IBM because, he said, he wanted to "sample the Silicon Valley small company craze. I didn't have that in a large company."

Over the next 15 years Joshi invested in 30 different companies and was involved in 12 companies in a variety of capacities from running them to advising to mentoring. Among them are Oryx Technology Group, which went public, Uqua Software, which he co-founded and which was acquired, and Das Devices, which was also acquired.

Currently, Joshi is involved with four companies including Omnipros Ltd., which his wife founded and which was recently acquired; Satyam Computer Services, an IT services company for which Joshi serves as an advisor; BL Healthcare, for which he sits on the board; and Televital Inc., an electronic medical records company for which he serves in an advisory capacity.

"Some [of the companies I invested in] are successful, some are not," said Joshi. "My jackpot is TiE and America India Foundation."

The founding of TiE was precipitated by Joshi meeting some Indian friends for lunch in the Silicon Valley area sometime in the fall of 1992. The meetings became more frequent and a mentoring component was added. Within two years a conference was organized and the number of chapters mushroomed. Today there are 39 TiE chapters around the world. From 2001 through 2004 Joshi served as president of TiE Silicon Valley and vice chairman of TiE Global. Joshi remains involved in various programs of TiE and does regular mentoring of entrepreneurs.

In the aftermath of an earthquake in the Indian state of Gujarat in early 2001, former-President Bill Clinton invited 10 Indian-Americans to New York City to come up with ways to help India in private capacities. Out of that meeting emerged the America India Foundation and within a month Joshi helped raise $4.5 million.

Joshi served as the first president of the organization and is still involved, most recently in helping to develop a program to teach science and math to rural students in India. 

Joshi is also involved in EMRI, a project that is introducing 911-like emergency management systems in India and is a trustee of the Foundation For Excellence, an organization that provides scholarships to underprivileged children. He currently spends about half his time on not-for-profit work.









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