The silent cylinder: Will we see more acquisitions in the days ahead?
In 1974, things were looking bad in United States, and everyone seemed bearish about stock market. Except one man – Warren Buffett. When a Forbes journalist called him, Buffett was upbeat. “I feel like an oversexed man in a whorehouse”, he said. “This is the time to start investing.” When fear is the predominant emotion, valuations tend to be low, and it’s usually a good time to buy.
It would be fair to sat that’s the case with Europe now, and that this should be a good time for IT companies to pick up a few small, promising, tech firms – make a few tuck-in acquisitions that would give them access to next generation of technologies. Recently, Infosys executives spoke about the urgency for acquisitions that would help in non-linear growth. Other than that, we haven’t really been hearing about buy outs. The announcement that came yesterday – WNS taking over a BPO firm Fusion – doesn’t really fit this bill. It’s small, alright. It might even have come cheap – at 1.5 times Fusion’s revenues. But, the revenue per employee of Fusion is actually about a third of WNS’s. And yes, Fusion is based in South Africa.
It’s possible that IT / BPO companies are working on some of these deals, but a report in Bloomberg suggests it’s not going to be easy. Reason: US businesses are in the same game too.
Design principles in UID
For a journalist, it’s tempting to see the UID project in terms of execution (it’s huge and therefore challenging) and in terms of political drama and turf wars (that’s where the action is). But in all these, it’s easy to ignore that a lot of thinking went into the design. All action here happened between the ears of highly capable men that Nandan Nilekani managed to attract into the project, and found further expression in drab conference rooms and rented apartments in Bangalore. In an interview to McKinsey Quarterly, published yesterday Nandan spoke about one element of design: “We used a lot of design principles to make the ID system as privacy enabled as possible. For example, the information we collect from individuals is very simple: just the name, address, date of birth, and gender, with e-mail addresses and phone numbers optional. We also have biometric data, but we use this only to prevent duplication (to make sure a person gets only one unique ID number) and also for authentication. We don’t share people’s data with banks; the banks’ data aren’t shared with the ID system. So whether a person is withdrawing 100 rupees or 1,000 rupees is known only to the bank. You can think of it as a federated architecture, where each player knows only his or her part of the activity.” But really, there is much more to it than this. I am hoping, someday, someone will write a case study.
Kosmix founders leave @Walmartlabs
AllThingsD reports that Kosmix founders – Venky Harinarayan and Anand Rajaraman, both IIT-Madras alumni, are quitting @Walmartlabs a year after the retail giant acquired the silicon valley start up. In 2007, a friend and I met one of the founders – Rajaraman – during his trip to Chennai and wrote about how close they came to buying Google in its early days – twice. Rajaraman and Sergey Brin had the same PhD advisor at Stanford and worked from adjacent cublicles – and Rajaraman and Harinarayan had two years headstart in running a business. They co-founded Junglee, and after they sold it to Amazon, they helped build Mechanical Turk technology for the online retailer. They are also passionate investors – through Cambrian Ventures – and were angel investors in Facebook in 2006. We had no clue Facebook would become such a big phenomenon then, and didn’t quiz Rajaraman on it. (Orkut used to be the big thing in India those days). However, ever since that meeting we have been following their career. Let me just point to two interesting pieces from the net. Here’s a story on what they were planning to do at Walmart. And here’s a Fast Company piece on how to work as a team.
Watch out for their next move. I bet it’s going to be very interesting.
Also of interest
- Facebook now lets you edit comment: Mashable
- Twitter’s outage was caused by a cascading bug: Gigaom
- All panchayats to have fibre optic connectivity in three years: Business Line