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Vendor lineage

HCLTech

Started because IBM left India, and forty-one years later bought IBM's software.

A group of engineers from Delhi Cloth & General Mills, led by Shiv Nadar, incorporated the company on 11 August 1976, renaming it that day from Microcomp Limited to Hindustan Computers Limited. They worked from a barsaati - a Delhi rooftop apartment - with about ₹1.83 lakh of capital, roughly $22,000 at the time, and funded the computers they actually wanted to build by selling teledigital calculators first.

The context is the whole story. India's foreign exchange regulations required multinationals to dilute equity to local shareholders, and IBM left the country rather than comply. That removed the dominant supplier from a market where there were, by one contemporary count, about 250 computers in the entire country. HCL was one of the companies that formed in the space this created.

In 1978 it shipped an indigenously designed 8-bit microcomputer - the same year as Apple's early machines and three years before the IBM PC. A networking operating system and client-server architecture followed in 1983, and a fine-grained multiprocessor UNIX in 1988, which the company notes was three years ahead of Sun and HP.

In 1982 Nadar founded NIIT, a computer training institute, on the reasoning that a domestic technology industry cannot grow faster than the supply of people who can staff it. That is a training business created as infrastructure for an industry rather than as a product, and it is the sort of decision that only looks obvious afterwards.

The software services arm was spun out on 12 November 1991, initially as HCL Overseas Limited, becoming HCL Consulting in 1994 and HCL Technologies in 1999. It listed in January 2000, crossed $10B of revenue in 2021, and renamed itself HCLTech in 2022.

And then the reversal. IBM announced the sale of Notes and Domino to HCL on 6 December 2018, and the wider transaction completed on 1 July 2019: seven software products - Notes and Domino, AppScan, BigFix, Commerce, Connections, Digital Experience, and Unica - for $1.8B, the largest acquisition by an Indian IT company at that point. Both years appear in sources because one is the announcement and the other the completion.

So the company that exists partly because IBM withdrew from India in the 1970s now owns and develops software IBM bought Lotus for in 1995. Lotus Notes has had three owners across four decades, and its current one was founded by people who started out selling calculators to fund a computer nobody else would sell them.

Two further points. Roshni Nadar Malhotra succeeded her father as chair, becoming the first woman to chair a listed Indian IT company. And the founding roster itself is genuinely disputed: sources give six founders or eight, and while Shiv Nadar, Arjun Malhotra, Ajai Chowdhry and Yogesh Vaidya appear consistently, the remaining names differ between accounts. That disagreement is left visible here rather than resolved by picking the version that reads best.

The timeline

  1. The HCL 8C

    The machine had a name, which is worth recording: not a prototype or a programme but a product, designed and built in a country that had almost no computers to learn from and no supplier willing to sell the parts freely.

  2. Fifteen years of hardware before the pivot

    The software services business was spun out after the company had spent a decade and a half building machines. The hardware business is the one that has since faded; the arm created to do something else is what carries the name today. That sequence - founding business superseded by a later one - recurs across this timeline, and it is rarely planned.

Flagship products and solutions

  • IT and engineering servicesApplication development, infrastructure management and product engineering delivered globally - the bulk of the revenue and the business most people mean by the name.
  • HCLSoftwareOwned products rather than services: Notes and Domino, AppScan, BigFix, Unica, Commerce, Connections and others, all acquired from IBM. This is the unusual part, discussed below.
  • Digital and cloud consultingMigration, data platform and artificial intelligence work sold to the same customers as the services business, at higher rates.

Key innovations

  • An Indian services firm that owns productsThe large Indian technology companies are services businesses: they build and run software other companies own. This one bought a portfolio outright and now maintains, sells and develops it, which means carrying roadmaps, support obligations and the licence revenue of an installed base rather than billing for time. It is a materially different business inside the same company, and it is rare among its peers.
  • Funding the real product with an unrelated oneSelling calculators to pay for building computers is a pattern this timeline records more than once - EMC sold office furniture before it sold memory, and Veeam was funded for over a decade by a sideline that outgrew its parent. The common shape is a founder who knows what they want to build and finds something sellable to fund it, which is what venture capital replaced and what its absence requires.
  • Building the workforce as infrastructureThe training institute described above was not a product line but a precondition. That framing - people as a supply chain problem rather than a hiring problem - is why the Indian services industry could scale at the rate it did, and it appears again at Stefanini elsewhere on this timeline, arrived at independently.

Main markets

Around two hundred and fifty of the Fortune 500 and six hundred and fifty of the Global 2000, served from sixty countries by roughly 219,000 people, at about $14B of annual revenue - the third largest India-based services firm by revenue.

It competes with the other large Indian services firms, with the global consultancies, and - uniquely among its Indian peers - with software vendors, because it now sells products they compete against.

Analyst standing

  • Assessed alongside the other large offshore services providers on delivery scale, vertical depth and pricing, with the software portfolio treated as a separate business inside the same reporting entity.
  • The question worth watching is whether owning the products turns out to have been the right trade. Acquired software carries maintenance obligations to customers who did not choose the new owner, and the portfolio was bought precisely because its previous owner no longer wanted it. Being a good steward of software somebody else gave up on is a specific competence, and the evidence on it accumulates slowly.

Acquisitions

  1. 2018 Actian $330M, with Sumeru Equity Partners

    Data management and analytics, including the Ingres database lineage. HCL America bought the remaining 19.6% in 2021 for $100.2M.

    The data and analytics division of HCL Software.

  2. 2019 Seven IBM software products $1.8B

    Notes and Domino, AppScan, BigFix, Commerce, Connections, Digital Experience, and Unica. Announced 6 December 2018 and completed 1 July 2019; the largest acquisition by an Indian IT company at the time.

    • 1995 Lotus Development (already inside IBM) $3.5B — IBM had bought Lotus in 1995 principally to obtain Notes. So this deal transferred, at roughly half the original price and twenty-four years later, the asset that had justified it. Founded by Mitch Kapor and Jonathan Sachs, 1982.

    HCL Software, and the reason Notes is still sold and supported today.

HCLTech ↗
Sources