Sootas new innings will be challenging

Written by Darlington Jose Hector | Updated: Sep 5 2011, 06:21am hrs
Early last week, Ashok Soota launched his new IT firm Happiest Minds. With five of MindTrees top officials jumping ship, one thought it would make MindTree minds a tad unhappy. But one gets to know that Krishnakumar Natarajan, CEO & MD at MindTree, is still a happy mind with or without Soota, who recently sold a large part of his stake in MindTree for over R130 crore to Cafe Coffee Day owner VG Sidhartha, after exiting the firm in January. He now holds less than 4% stake in MindTree.

People like Salil Godika, former chief strategy officer at MindTree, Puneet Jetli, Dattatri Salagame, Aurobinada Nanda and Joseph Anantharaju, are the ones who have left MindTree and joined Happiest Minds as co-founders. The founding team also has former Wipro executives Ramakanth Desai and Prasenjit Saha and Infosys Raja Sekher. Its new CEO & MD is Vikram Gulati, who was holding the CEOs position at Intelligroup, a company which was bought over by Japanese outfit NTT Data Corp last year. This looks like a happy bunch.

Happiest Minds has put together an initial capital of R200 crore, and some of the money has come from the new co-founders.

After all corporate happiness is rooted in funds. The firm has also signed a term sheet with one VC player. Looks like its a good start, but there will be challenges aplenty.

The company has said that it will develop solutions in security, multi-channel retailing, demand shaping and forecasting, with the focus firmly on cloud, mobility and analytics. The next two years will present the company with some hard times, as it tries to build capability. Analysts are not expecting many of MindTrees clients to switch over to Happiest Minds in a hurry. They have to start building credibility and attain critical mass. With Soota at the helm, it may be an easier task.

Clearly, they will have to learn from some of MindTrees mistakes. MindTree was building up quite a brand and had announced an ambition plan to become a $1 billion firm by 2014. But things started to go wrong, as it signed an agreement with Kyocera Wireless Corp (KWC) to acquire its Indian subsidiary Kyocera Wireless India (KWI). It doled out $6 million for the deal. The company thought product engineering services will be a major revenue earner, but the move backfired. MindTree realised that capital requirements in the business were far higher. It had to rejig the business, to save the ship. The firm is now focusing only on a few verticals such as BFSI, manufacturing, travel and transportation, retail and media.

Happiest Minds will have the advantage of hindsight. And thats a happy thought for them!

Rajus uphill battle continues

Ramalinga Raju continues to fight an uphill battle. The Andhra Pradesh High Court on Tuesday rejected the bail plea of the Satyam Computer founder and seven others accused in the multi-crore accounting fraud at the IT outsourcing company. The CBI informed the court judge that a petition filed by the CBI special court seeking extension of time for launching the trial was pending before the Supreme Court.

The investigating agency also stated that the probe was in an advanced stage and release of the accused on bail at this juncture would hamper the trial process. This was the second time Raju approached the AP High Court for bail in recent weeks. Apart from Ramalinga Raju, his brother and former managing director B Rama Raju, former CFO Vadlamani Srinivas, former employees G Ramakrishna, D Venkatapathi Raju, former PwC auditor Subramani Gopalakrishna and former internal chief auditor VS Prabhakar Gupta have been in jail ever since the CBI arrested them in January 2009.

Now his only option is to approach the SC for bail.