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a very dated 1950s Morris Minor design。 Everyone in the government drove one。 So we
had a five…car caravan and we were driving back from the airport to town。 I was in
the back car； and at one point we heard this loud bang； and I thought； What happened？
I shot to the front； and the lead car's hood had flown off and smashed the
windshield…with these GE people inside！ So this whole caravan of GE execs pulls over
to the side of the road； and I could just hear them saying to themselves； 'This is
the place we're going to get software from？'〃
Fortunately for India； the GE team was not discouraged by the poor quality of Indian
cars。 GE decided to sink roots； starting a joint development project with Wipro。 Other
companies were trying different models。 But this was still pre…fiber…optic days。
Simon & Schuster； the book publisher； for instance； would ship its books over to India
and pay Indians 50 a month （compared to 1；000 a month in the United States） to type
them by hand into computers； converting the books into digitized
electronic files that could be edited or amended easily in the future …particularly
dictionaries； which constantly need updating。 In 1991； Manmohan Singh； then India's
finance minister； began opening the Indian economy for foreign investment and
introducing competition into the Indian telecom industry to bring down prices。 To
attract more foreign investment； Singh made it much easier for companies to set up
satellite downlink stations in Bangalore； so they could skip over the Indian phone
system and connect with their home bases in America； Europe； or Asia。 Before then；
only Texas Instruments had been willing to brave the Indian bureaucracy； becoming
the first multinational to establish a circuit design and development center in India
in 1985。 TI's center in Bangalore had its own satellite downlink but had to suffer
through having an Indian government official to oversee it…with the right to examine
any piece of data going in or out。 Singh loosened all those reins post…1991。 A short
time later； in 1994； HealthScribe India； a company originally funded in part by
Indian…American doctors； was set up in Bangalore to do outsourced medical
transcription for American doctors and hospitals。 Those doctors at the time were
taking handwritten notes and then dictating them into a Dictaphone for a secretary
or someone else to transcribe； which would usually take days or weeks。 HealthScribe
set up a system that turned a doctor's touch…tone phone into a dictation machine。
The doctor would punch in a number and simply dictate his notes to a PC with a voice
card in it； which would digitize his voice。 He could be sitting anywhere when he did
it。 Thanks to the satellite； a housewife or student in Bangalore could go into a
computer anddownloadthat doctor's digitized voice and transcribe it…not in two weeks
but in two hours。 Then this person would zip it right back by satellite as a text
file that could be put into the hospital's computer system and become part of the
billing file。 Because of the twelve…hour time difference with India； Indians could
do the transcription while the American doctors were sleeping； and the file would
be ready and waiting the next morning。 This was an important breakthrough for
companies； because if you could safely； legally； and securely transcribe from
Bangalore medical records； lab reports； and doctors' diagnoses…in one of the most
litigious
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industries in the world…a lot of other industries could think about sending some of
their backroom work to be done in India as well。 And they did。 But it remained limited
by what could be handled by satellite； where there was a voice delay。 （Ironically；
said Gurujot Singh Khalsa； one of the founders of HealthScribe； they initially
explored having Indians in Maine…that is； American Indians…do this work； using some
of the federal money earmarked for the tribes to get started； but they could never
get them interested enough to put the deal together。） The cost of doing the
transcription in India was about one…fifth the cost per line of doing it the United
States； a difference that got a lot of people's attention。
By the late 1990s； though； Lady Luck was starting to shine on India from two directions：
The fiber…optic bubble was starting to inflate； linking India with the United States；
and the Y2K computer crisis…the so…called millennium bug…started gathering on the
horizon。 As you'll remember； the Y2K bug was a result of the fact that when computers
were built；they came with internalclocks。 In order tosave memory space； these clocks
rendered dates with just six digits…two for the day； two for the month； and； you
guessed it； two for the year。 That meant they could go up to only 12/31/99。 So when
the calendar hit January 1； 2000； many older computers were poised to register that
not as 01/01/2000 but as 01/01/00； and they would think it was 1900 all over again。
It meant that a huge number of existing computers （newer ones were being made with
better clocks） needed to have their internal clocks and related systems adjusted；
otherwise； it was feared； they would shut down； creating a global crisis； given how
many different management systems…from water to air traffic control…were
computerized。
This computer remediation work was a huge； tedious job。 Who in the world had enough
software engineers to do it all？ Answer： India； with all the techies from all those
IITs and private technical colleges and computer schools。
And so with Y2K bearing down on us； America and India started dating； and that
relationship became a huge flattener； because it demonstrated to so many different
businesses that the combination of the PC； the Internet； and fiber…optic cable had
created the possibility of a whole new form of collaboration and horizontal value
creation： outsourcing。
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Any service； call center； business support operation； or knowledge work that could
be digitized could be sourced globally to the cheapest； smartest； or most efficient
provider。 Using fiber…optic cable…connected workstations； Indian techies could get
under the hood of your company's computers and do all the adjustments； even though
they were located halfway around the world。
〃＇Y2K upgrading＇ was tedious work that was not going to give them an enormous
competitive advantage；〃 said Vivek Paul； the Wipro executive whose company did some
outsourced Y2K drudge work。 〃So all these Western companies were incredibly
challenged to find someone else who would do it and do it for as little money as
possible。 They said； 'We just want to get past the damn year 2000！' So they started
to work with Indian ＇technology＇ companies who they might not have worked with
otherwise。〃
To use my parlance； they were ready to go on a blind date with India。 They were ready
to get 〃fixed up。〃 Added Jerry Rao； 'Y2K means different things to different people。
For Indian industry； it represented the biggest opportunity。 India was considered
as a place of backward people。 Y2K suddenly required that every single computer in
the world needed to be reviewed。 And the sheer number of people needed to review
line…by…line code existed in India。 The Indian IT industry got its footprint across
the globe because of Y2K。 Y2K became our engine of growth； our engine of being known
around the world。 We never looked back after Y2K。〃
By early 2000； the Y2K work started to wind down； but then a whole new driver of
business emerged…e…commerce。 The dot…com bubble had not yetburst； engineering talent
was scarce； and demand from dotcoms was enormous。 Said Paul； 〃People wanted what they
felt were mission…critical applications； key to their very existence； to be done and
they could go nowhere else。 So they turned to the Indian companies； and as they turned
to the Indian companies they found that they were getting delivery of complex systems；
with great quality； sometimes better than what they were getting from others。 That
created an enormous respect for Indian IT providersf。＇ And if ＇Y2K work＇ was the
acquaintanceship process； this was the falling…in…love process。〃
Outsourcing from America to India； as a new form of collaboration；
exploded。 By just stringing a fiber…optic line from a workstation in Bangalore to
my company's mainframe； I could have Indian IT firms like Wipro； Infosys； and Tata
Consulting Services managing my e…commerce and mainframe applications。
〃Once we're in the mainframe business and once we're in e…commerce…now we're married；〃
said Paul。 But again； India was lucky that it could exploit all that undersea
fiber…optic cable。 〃Ihad an office very close to the Leela Palace hotel in Bangalore；〃
Paul added。 〃I was working with a factory located in the information technology park
in Whitefield； a suburb of Bangalore； and I could not get a local telephone line
between our office and the factory。 Unless you paid a bribe； you could not get a line；
and we wouldn't pay。 So my phone call to Whitefield would go from myoffice in Bangalore
to Kentucky； where there was a GE mainframe computer we were working with； and then
from Kentuck