HCL Tech’s new CEO
HCL Tech has announced that Anant Gupta will take over as CEO from Vineet Nayar effective today. Nayar will continue as the Vice Chairman and Joint Managing Director till July 2013 and then as its vice chairman. It has been clear for sometime now that Gupta will succeed Nayar, especially after his appointment as COO last July.
The talks about a change in HCL Tech’s power structure started in earnest last year. In a June 2012 report, Morgan Stanley spoke about a change in management citing two reasons: one, they heard that Gupta, then the head of infrastructure, was being given more responsibilities; two, Vineet Nayar had sold almost all his stake in the company.
Sure enough, a month later Gupta was made the COO of HCL Tech. Nayar, then said he would focus on strategic issues and ‘employee first’ initiatives, suggesting most of the operations responsibilities will go to Gupta.
A person who was working at HCL Tech till three months ago told me that Nayar was seen less and less in the management review meetings, and it was clear that Gupta was running the show for several months now.
Nayar, who drove HCL Tech’s growth using what can best be described as red ocean strategy, turned his attention to finding the next drivers of growth. He set up a team for this purpose and said he will spend most of his time in Silicon Valley. Some of the industry insiders I spoke to said they were skeptical that such an exercise will work, but almost uniformly added that Nayar could still pull something out of it. (It’s not clear if he would continue to pursue that. A BSE announcement says ”Nayar’s Foucus will be on relationship with key customers and leadership development.”)
In any case, a part of their respect for Nayar came from the fact that market value of HCL Tech went up by nearly 70% in the last one year. (Compared to 24% in case of TCS, 4% in case of Wipro, and 7% in case of Infosys (post the recent surge)). The challenge for Gupta would be to match that, even while he finds long term drivers of growth for the company.
eBay and mobile transactions
Every new set of financial results from tech companies these days underscore the importance of having a strong mobile platform. In case of eBay, it’s particularly important. Bloomberg quotes Bill Smead, Bill Smead, chief investment officer of Smead Capital Management which works with eBay: “The legacy marketplaces business — it’s kind of carried into mobile. You get involved with bidding or selling something on EBay, and it’s nice to carry around the device where you’re doing that with you.” At eBay, mobile consumers shop more frequently than computer users and over 4.3 million new users came to eBay through mobile devices in 2012, according to a Reuters report.
Apple’s China problem
Apple is not concerned just about its supply chain in China, but also about the demand for its products. Last month, IDC said Apple’s ranking dropped by two places to sixth, as customers went for cheaper smart phones. There were reports that Apple is planning a cheaper iPhone, but later (without entirely denying the news) its marketing head Phil Schiller said it would never make a ‘cheap’ phone. Now, demand is a function of price – it goes up, as price comes down. But, demand is also a function of financing – it can be generated by giving easier access to money. That’s exactly what Apple seems to be doing now to gain market share in China. Techchrunch reports that the company has started offering users of its Chinese online store the option to buy devices on credit. More
Also of interest
- “The hybrid model is very compelling for a lot of users,” (SAP Chief Information Officer Oliver) Bussmann told Reuters last week. “The iPad is not replacing the laptop. It’s hard to create content. That’s the niche that Microsoft is going after. The Surface can fill that gap.” - Reuters
- Hewlett-Packard CEO Meg Whitman argued once again for patience in her effort to get her troubled company back on its feet, saying at The Wall Street Journal’s CIO Journal conference that what people say and think about the company now is several steps behind the company’s actual condition. – AllThingsD
- A developer at a US-based critical infrastructure company, referred to as “Bob,” was caught last year outsourcing his work to China, paying someone else less than one fifth of his six-figure salary to do his job. – TNW
- President Barack Obama called for the Center for Disease Control and Prevention (CDC) to renew scientific inquiry into the relationship between “video games, media images, and violence,” and urged Congress to support a bill that would grant the organization $10 million to conduct this new research. – WSJ