Impressive Success Story!

As I am going through the "From Concept to Hyper-growth" Video on YouTube by one of the Co-founders of YouTube - "Jawed Karim", I thought for a while, after Sanjaya Mallakar, it was time for Jawed to be on my Blog. Below is the Video shared from YouTube



By the way, how did i get onto this Video. In continuation of my thoughts after my last post, there were queries in my mind, how are the other guys doing? That meant to the companies like MSFT, GOOG, APPLE! A brief info based on the Q2 2007 results, and some crude and simple analysis similar to what i posted on Sasken.

• Google with 13748 full-time employees generated US$3.87 Billion last quarter with Profit After Tax (PAT) being 1.1 Billion US$. That meant every employee was contributing US$ 80,011 per quarter which meant 0.32 million US$ profit a year! This is really incredible!
• Apple with 20186 full(and part) -time employees generated US$5.41 Billion last quarter with Profit After Tax (PAT) being 818 Million US$. That meant every employee was contributing profit of US$ 40,523 per quarter which meant 0.16 million US$ profit a year!
• Microsoft with 76000 full-time employees world wide generated US$13.37 Billion last quarter with Profit After Tax (PAT) being 3.035 Billion US$. That meant every employee was contributing US$ 39,934 per quarter which meant 0.16 million US$ profit a year!

These three are currently the best IT Software(MS / Apple) / Hardware(Apple / MS) / Service(Ads - Google / MS) Companies!

When I did end up searching how GOOGLE name was born, ended up on Wikipedia and the page had info about Youtube which topped the list of the highest disclosed paid acquisition by Google. So what is the background of YouTube? Founded by three engineers with an Average age of 28 during Feb 2005 was acquired by Google in Oct 2006 for a whooping sum of US $ 1.65 billion. The fact that 17 month old company being acquired for US $ 1.65 billion is remarkable!

Let us get back to India and lets see the top 4 IT companies and see their story wrt last quarter

• Infy with 75971 employees generated US$872 Million last quarter with Profit After Tax (PAT) being 253 Million US$. That meant every employee was contributing US$ 3,324 per quarter which meant 13296 US$ profit a year! Is this really credible? WIll share my thoughts below
• TCS with 94902 employees generated US$1.3 Billion last quarter with Profit After Tax (PAT) being 291 Million US$. That meant every employee was contributing profit of US$ 3,066 per quarter which meant 12264 US$ profit a year!
• WIPRO with 72137 employees generated US$1.07 Billion last quarter with Profit After Tax (PAT) being 175 Million US$. That meant every employee was contributing US$ 2426 per quarter which meant 9704 US$ profit a year!
• Satyam with 38381 employees generated US$452 Million last quarter with Profit After Tax (PAT) being 93 Million US$. That meant every employee was contributing US$ 2426 per quarter which meant 9704 US$ profit a year!

It is surprising to see how similar the results are wrt Satyam and Wipro though their employee numbers and the Revenue numbers are very different! May be they are operating at a very optimal level by adopting the best practices etc. That is a different story!

Microsoft with US$ 44.2 Billion $ last year (2007) was ranked 49th in Fortune 500 companies. Sunguard with US$ 4.323 Billion was ranked 500th in the list. Here is the Full List! May be this year definitely Wipro and TCS will be qualified to be in the list! But i guess that list is for companies in US. Keeping that apart, since entire work engaged done by these companies is based on outsourcing it would be really worthwhile to see how will they respond to the challenge when the heat is ON! Will it be Cuts, CUts, and more Job Cuts especially because of the fact that IT industry in india has started greying with HIGH Salaries!

I guess a succesful product company like iFlex can be a good example for these folks to focus and be balanced to face the HEAT that might arise tomorrow! With the gigantic Size to which they have grown up to, is the time too late to react?

Remind you, it is not that these guys never tried doing products, both WIPRO and Infy have burnt good money in the process!

Coming to my earlier reference in the above Infy results posting, the only worry is if 25% work is not outsourced (may be

• OBAMA could be the reason if he wins the next election or
• OSAMA - can he still be the reason?) ,

assuming 25% engineers on bench, will Infy, Wipro, TCS be able to retain them their balance sheet would turn RED, RED, RED, VERY RED!

The above video can inspire some minds eventually that could lead to atleast one product (/ service similar to google unlike peanut IT service) out of India that could be bought @ 1 US$ Billion, which might set the change for the new entrepreneurs! :)

BTW I got handful amount of info on ITTIUM which is entirely a out-of-the-box company focussing on IP and their revenue model being licensing and royalty on the IP owned by them!