How many people remember that 1980s classic, The Gods Must Be Crazy? The story of Xi, a Kalahari bush tribesman, and his journey with an empty Coca-Cola bottle across the continent in search of the edge of the world turned out to be a comedy classic from South Africa. While the movie was pretty much a gag a minute, it was also a story of connectivity, in many ways. And that’s exactly the story Ramesh Awtaney is living out today.
Founder and chairman of one of Africa’s largest information technology and IT enabled services companies (IT and ITeS), the ISON Group, 50-year-old Awtaney is one of the more flamboyant entrepreneurs I’ve met. Dressed in a black T-shirt and grey trousers, Awtaney is well-built, with a mop of jet-black hair, and a moustache to match. In the looks department, though, he jokes, he doesn’t live up to his hometown Jodhpur’s standards, which boasts some of India’s most handsome men. But he says he makes up for it with some other attributes: “I have been a daredevil and hugely confident. I am my own hero ... I have always believed that the buck stops with me.”
Over coffee at his house in New Delhi’s Vasant Kunj, Awtaney constantly talks of A4. And no, he’s not talking of the standard paper size. In his slow, deliberate style, he explains that A4 represents the tenets of his life: audacity, agility, and the ability to deal with ambiguity. Why does ability, the cornerstone of most success stories, come last? “You can delegate implementation and execution to someone with abilities, but you cannot teach people to be audacious and agile; it has to be in the blood,” he explains. “Even if they have the abilities but aren’t audacious and agile, they may let great opportunities pass.”
Audacity is something Awtaney has always had, it seems. And he’s needed all of it in his journey from dealmaker to entrepreneur. Born in Agra, he spent his school and college days in Rajasthan. A degree in civil engineering from a college in Jodhpur was followed with a master’s in international trade from New Delhi’s Indian Institute of Foreign Trade.
He does have a way with risk, but says he doesn’t agree with the concept of “calculated risk”. As if to drive home his point, he tells me a story. During his engineering college days, he wanted to set up a students’ association. To fund it, he organised a “premiere” of the just-released Hindi film Loha in Jodhpur, selling tickets at Rs 500 and Rs 1,000. Audacious maybe, but he managed to collect nearly Rs 1.5 lakh for his efforts. “It became a huge talking point in college in those days ,” he says.
That streak stayed with him well into the middle of his career. In 2001, he left Ericsson India in a huff because he was not made managing director even after spending years running both sales and operations. “I was effectively working as a CEO, managing all their profit and loss accounts,” he says.
In his next big job, at IBM, Awataney was tasked with building a $6 million (Rs 37 crore at current rates) annual business in telecom services from scratch. “I felt offended with such a small target because I was doing business worth $125 million when I left Ericsson,” he says. “But I had no choice because I was broke, as my previous employer hadn’t settled my dues.”
However, building a $6 million business was no easy task. One of the earliest pitches he made was to Airtel. He met Akhil Gupta, a veteran Airtel hand and currently vice-chairman of Bharti Enterprises, and Jay Menon, then chief information officer of Airtel. Gupta asked him to come back with solutions because the company was finding it extremely difficult to manage the huge number of vendors for various jobs such as upkeep of PCs, networking, and storage.
Awtaney went one step ahead and chalked out a deal that went beyond providing IT solutions for the company. He came up with a proposal for a technology platform that could be seamlessly scaled up as the business grew. To make the deal sweeter, IBM would make the necessary investments and share a percentage of the revenue over a 10-year period.
This worked perfectly for Airtel. First, the company would not have to invest all the money at one go. Second, it could leave the backend job for experts to handle, allowing the company to focus on its core functions. Third, Airtel would be able to figure out ballpark figures for its annual IT expenditure.
After a year of meetings and two dozen calls to IBM’s headquarters in New York, Awtaney bagged a 10-year contract in 2004 for $750 million, making it the biggest outsourcing deal in India’s history.
However, there was more to come. The revenue-sharing model, introduced for the first time, had been based on the assumption that there would be 45 million subscribers in the next 10 years. That milestone was crossed in just four years. By the time the tenth year was over, the deal was worth $2.5 billion. Not bad for a person who started off with a target of $6 million a year.
But Awtaney had to wait for nearly 18 months before he cracked his next deal. “The market was waiting to see how the Airtel deal panned out,” he says. In December 2005, he began talks on a similar deal with Idea Cellular. Sanjeev Aga, then CEO of Idea Cellular, remembers how Awtaney wrapped up the discussions in two months. “Speed and getting it right the first time was of the essence. We had an unwritten agreement and Ramesh kept his word,” he says.
After that there was no stopping Awtaney. He became IBM’s blue-eyed boy, sewing up a 10-year deal for $750 million with Vodafone in December 2007 and a $800 million deal with Maxis in 2009. But one deal at IBM that he is especially proud of was in hardware. Some time in the early 2000s, Awtaney sold 12,000 computers to Reliance Industries in a single day. This was a huge feat because in those days the IBM plant in Puducherry was producing 50,000 computers a year.
He was nominated for the Golden Circle, the club for top IBM performers, often hanging out with them in New York. His only regret was losing the Aircel deal to Wipro. “It was unthinkable, especially after winning so many 10-year deals,” he says.
Awtaney says that the person who made a big impression on him during his IBM stint was Airtel’s Akhil Gupta. “He was approachable and had great clarity of thought and humility. He is an example of how to do super business in a super simple way.”
Such learnings would come in handy for Awtaney because in the midst of his dream run, the idea of starting out on his own was beginning to take root. “I wanted to build a platform for my son so that he would start from where I finished, not from where I started. I wanted to leave something for him.’’ In February 2009, he quit IBM days after signing the Maxis deal, and a year later, ISON was born.
The person who would be his partner in the remarkable journey was Vivek Gupta. Gupta met Awtaney in 1996 at Ericsson and followed him to IBM as his junior. “Vivek is a true professional and like a younger brother,” says Awtaney. Even before they launched ISON, they entered into a joint venture with the Zamil Group, a West Asian conglomerate, to set up a telecom infrastructure company, Zamil Infra. Awtaney says Gupta still heads Zamil Infra because, unlike him, Gupta “likes asset-heavy companies”.
In 2010, when Airtel took over Kuwait-based Zain Group’s telecom business in Africa, Awtaney figured it would outsource the IT and BPO services. True to the tenets of agility and audacity, he decided to go for the kill, setting up operations in all the 16 African countries where Airtel would have offices.
Manoj Kohli, then CEO of Airtel’s Africa business, handed the contract to IBM, which in turn outsourced it to RISON, a joint venture between ISON, Spanco BPO, and Maradin, a local company. In 2013 the joint venture became ISON BPO, with ISON buying out Spanco. Today the company has Airtel’s business in 10 countries, while Tech Mahindra handles the other six. The full business is worth $10 million a month.
Sanjay Kapoor, former CEO of Bharti Airtel, who worked with Awtaney on the Airtel deal, says the ISON founder is as savvy a professional as humble he is a human being. “His transformation from executive to entrepreneur not only shows his Sindhi genes but has also increased my professional respect and appreciation for him.”
I ask Awtaney how he decided on the name of his company. “It was my tribute to my two former employers—‘I’ from IBM and ‘SON’ from Ericsson,” says Awtaney, adding that it also gave him a chance to tell clients about his stints in the two multinational companies.
Running a BPO business in Africa has its own challenges. “There are enough educated, English-speaking youths in sub-Saharan Africa to meet our [BPO] needs in countries such as Nigeria, Uganda, and Botswana. But the IT jobs need a longer training period,” says Awtaney. The biggest challenge, however, is not local laws, unions, or the different languages or cultures, but currency fluctuations. For example, in Nigeria, the currency has fallen dramatically. In Nigeria, even if a business grows 50% in local currency, it could be going down 20% in dollar terms.
In order to hedge his bets, Awtaney formed another company, ISON Innovations, which invested nearly $40 million in 16 startups in India and Africa and has already exited from five. Most of the startups are in sectors such as artificial intelligence (AI) and chatbots, which are predicted to play a big role in the future of BPOs.
I ask him what drives his investing decisions. “We only invest in startups where we can bring our knowledge and ecosystem. We are active investors,” he says. “I look at two things: the promoters and senior management of the company and whether we can provide value to it.”
Although acutely aware of the disruption that AI, robotics, and chatbots can cause to the BPO business, he is not losing much sleep over it. It will take another five to 10 years because BPOs are a low-cost business and companies will first automate their more expensive businesses before turning to them. Moreover, he says, there will still be a need for people for tasks such as managing social media.
Future growth will come through the inorganic route because African BPO companies with $30 million to $40 million in revenues are up for grabs. “By merging these entities with our flagship company, we can easily increase margins by 8% to 10%. It is a substantial gain,” he says. Apart from this, telecom data centres and towers are among the other big growth areas.
I also ask him about his future plans for India. “We will be looking at getting 10% of our total business from India because there are far too many big boys here. Whatever we do, we will always be the small players,” he says. “I want to dominate the markets where I am present. So I would rather be a big fish in the small African pond than a small fish in the big Indian pond.”