PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

M&A, Venture Capital, and Private Equity: A Thriving Investment Climate
• Indian BPO holding company e4E Group’s 2005 acquisition of Santa Clara enterprise
applications management BPO iCelerate;
• Mahindra & Mahindra’s 2004 acquisition of Milpitas business process and technology
consulting company Bristlecone; and
• Mumbai IT services and consulting firm Larsen & Toubro Infotech. Ltd.’s 2006
purchase of GDA Technologies, Inc., a San Jose end-to-end semiconductor designer.
Arun Kumar, a partner in global accounting and tax firm KPMG’s India practice, values the 93
acquisition transactions at some $8 billion, dominated by large deals that were primarily but not
entirely in IT. He sees an emerging two-way U.S.-India investment corridor forming, with investors
on both ends seeking markets and talent. KPMG and competing firms provide M&A due
diligence, tax and regulatory strategy consulting, and audit services to U.S. and Indian parties.
Reflecting on the emerging cross-border model, Kumar sees particular opportunities in the
automotive and telecom sectors. He also sees new markets in India in areas such as medicine,
water treatment and delivery, and environmental technologies and processes. In India, Kumar
says, “business and government are more conscious of opportunities to do social good and provide
services to people at the bottom of the pyramid.”
He expects a clean division of labor—with efficient back-end processes, proximity to emerging
markets, and access to talent coming from India, and with innovation, management expertise,
and capital coming from the Bay Area—to remain in place for some time.
Knowledge Investment
Ajoy Mallik, global head of venture capital for Tata Consultancy Services (TCS), sees
investment in a different way: he envisions a future of ad hoc global innovation clusters
that bring the best specialized talent to a project or enterprise, collaborate as long as
needed, and then reform in new groupings tailored to solve the next problem or bring the next
product to market.
Launched in early 2006, the TCS Co-Innovation Network (COIN) is an ecosystem of universities,
entrepreneurial startups, venture investors, and strategic partners linked to and providing specialized
knowledge and support to the worldwide network of TCS Innovation Labs. “Our focus,”
Mallik says, “is on how to bring the right set of innovation assets across the globe to solve problems
for clients. What we love is to hear CIOs say that they want TCS to handle all of their ITrelated
infrastructure—that they don’t want to deal with forty startups and twenty outsourced tech
vendors. The question is who does Pfizer feel comfortable outsourcing all of its IT to.”
COIN has taken on more than 20 strategic partners, out of more than 800 considered. A sizable
share come from the Bay Area, including Stanford University, Intel Corp., Hewlett-Packard, Cisco
Systems, Sun Microsystems, VC firms Kleiner Perkins and Sequoia Capital, and three startups—
San Jose developer of cloud computing software for data systems Cassat, Brisbane distributed
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