According to Forbes, Bharat Desai founded Syntel stands at 27th spot in the Forbes annual list of America’s 200 Best Small Companies. The U.S. business magazine rated Desai among “eight self-made stars who have built tidy empires in an array of industries.”
“Small companies can yield big fortunes, especially if you run the show. One of the self-made members on our list, billionaire Bharat Dasai, is the 212th richest American, by Forbes estimates,” said the U.S. business magazine.
Desai founded Syntel, the informationtechnology services provider, with wife Neerja Sethi, in Troy, Michigan, in 1980. The company went public in 1997 as the tech boom raged.
Last February, Desai stepped down as chief executive but as chairman of the board, he maintains a 43 percent stake in his company.
Forbes annual list of America’s 200 Best Small Companies features outfits that have annual revenue between $5 million and $750 million have been publicly traded for at least a year and have a stock price no lower than $5.
Years ago, an idea and some modest seed capital led to the start of today’s Syntel. A quarter-century and more later, Syntel is a global player in the fast growing IT services marketplace.
When they met, Bharat Desai and Neerja Sethi were both working as programmers for a leading Indian IT services firm in Detroit, Michigan on the Burroughs account. Upon successful completion of the project, Bharat had the desire to launch his own company. In 1980, while still working on his M.B.A. from The University of Michigan, with $2,000 in savings, Desai launched Systems International, Inc. (as Syntel was first known) from the couple’s apartment in Troy, Michigan. “We started providing IT staffing services to Detroit-based automotive companies, and earned $30,000 in our first year of operations,” he says.
The business model was simple in those days: Work with local corporations to place well-trained programmers at the customer’s location. What Bharat didn’t anticipate was how challenging it would be to get those all-important first clients. “I would work the phones for hours, trying to get meetings with prospective clients in those early days,” says Desai. “People struggled with my name and most would never return my calls. I vowed then and there that when I signed a client, I would do whatever it took to exceed their expectations and keep them as customers.”
This was the foundation of the “Customer for Life” philosophy that is still centric to Syntel’s corporate culture today. Clients such as Detroit Edison, Chrysler, Ford and General Motors did arrive and the company added consultants and began building momentum as a local IT staffing firm.
In 1992, when most IT services firms were focused on delivering on-site services, Syntel was busy launching its first Global Development Center in Mumbai, India. Working closely with its customer, American International Group (AIG), Syntel became the first U.S.-based IT services company to launch a global delivery concept. By leveraging the outstanding pool of technology talent, a 10-1/2 hour time zone variance, and economies of scale, Syntel became the first firm to run an around-the-clock IT project approach.
“What has happened since then has been an exercise in continuous evolution and anticipating trends. From Y2K, the dot-com bust, the push to offshore-centric delivery, the emergence of Web-enabled business services, the growth of Knowledge Process Outsourcing right through to remote infrastructure services, to cloud computing and SaaS, we have tried to anticipate the direction the market is taking and stay ahead of the curve,” he says.
A series of large-scale Applications Outsourcing contracts began building Syntel’s growth momentum and in 1994, the company topped the $50 million mark in revenue and surpassed 1,000 employees. In 1997, Syntel exceeded the $100 million revenue point and earned the highest “Preferred” performance rating from DaimlerChrysler.
In 1997, Syntel launched its initial public offering (IPO) with the sale of 3.45 million shares of stock, trading on NASDAQ under the symbol SYNT. All Syntel employees at the time became shareholders, and the company began life in the public eye. In 1998, Syntel surpassed the 2000 employee mark and booked more than $150 million in revenues. Between 1999 and 2004, Syntel added Blue Chip clients such as HCA, Wells Fargo and Humana to the roster.
The Path toward globalization is irreversible believes Desai. Syntel itself is proof of this. “Today, over 80 percent of our work is performed in India and we have successfully transitioned our core legal, finance and human resources functions to India. This makes us one of the very few companies to have successfully made the transition from being 100 percent onsite, and positions us uniquely to help our clients make this journey themselves as they adapt to the new realities of the global economy.”
“Since we opened our first Global Development Center in Mumbai, we have recognized that world class facilities and infrastructure are critical to building a strong brand to attract talent and customers. Since we broke ground on our Pune Development Campus in 2006, Syntel has continued to invest aggressively in infrastructure, with the vast majority of capital expenditures focused on our Indiabased facilities. Syntel has committed to investing nearly $100 million in capital expenditure on our Pune and Chennai campus facilities,” he says.
[ BY HEMA FERNANDO ]