Hasan Kamil and Talat Hasan are a successful non-resident Indian couple who have struck it big in the Silicon Valley, through the right amount of entrepreneurial skill, hard work and dedication. Kamil has over twenty-five years of experience in the software industry. Originally an academician, having taught at IIT Delhi and later at Stanford University as a consulting professor of engineering., he founded Hitek Venture Partners in 1995 to invest in early stage companies in the internet,e-commerce, telecommunications and enterprise software areas. Currently, he has a portfolio of 35 companies based in the US.

Talat Hasan is chairman and CEO of Sensys Instruments, a company she found in 1996 to market products for the semiconductor manufacturing industry. A charter member of the The Indus Enterpreneurs, she served in various senior capacities at Tencor Instruments and was the co-founder of Prometrix Corporation. She previously worked as a scientist in semiconductor characterisation for almost five years at Signetics Corporation/Philips Research Labs in Sunnyvale, California.

The couple spoke in detail to indiamarkets at their plush Saratoga home in Santa Clara county, California, USA, about the current trends in venture capital interest in the IT industry in the US and India alongwith the warning that contrary to popular notions, India stood at a vulnerable juncture as it was not developing an intellectual property in IT. Another important message they have for Indian states is to eschew running after big American names, and concentrate on making friendly overtures to small and medium sectors of the US economy. Following are the excerpts of the interview:

indiamarkets: With the recent dotcom bust, is it appropriate to say that the internet as a medium of business has not caught on?

Kamil: It will be wrong to say this outright. But business on the net has not met with expectations and is much slower than what had been expected. In the US, only those business entities that have a large brick and mortar presence have been successfully doing business through the internet and reach out to a wide cross-section of customers. The problem is that until now, entrepreneurs have not been able to create a model that would sustain business. Also, contrary to popular notion, hits are really not an indicator of buyer interest - most hits come from very young people who are not serious or may not have money to spend.

indiamarkets: Which are the areas within the IT segment that venture capitalists are serious about at the moment, in India and the US?

Kamil: Investors are keen on the following areas:

• Wireless infrastructure and equipment. This does not include hand held devices.
• Enterprise software.
• Supply-chain management. It is however, not clear whether these companies will be profitable in the long run.
• Medical devices.
• Service areas.

As far as wireless infrastructure is concerned, in India, this can be can be of great utility to telecom services in rural areas, as this will work out between one-tenth and one-fifth of the cost of copper wires.

indiamarkets: What do you have to say about India's eminent position in information technology?

Talat: The claim that India is strong in IT is built on a hollow basis. Indian information technology today is very vulnerable as it is not developing unique software products on its own. There is no intellectual property development at all in India. What all Indian IT companies are doing are routine service and customised software development for US companies. Once the US companies pull out these contracts, there will be no IT left in India. There is a huge threat from China and other south east Asian countries. Once these countries start offering the same services at lesser costs, what will happen to India?. The so-called IT revolution is nothing  at all. India should start developing new products and not merely provide cheap labour.

indiamarkets: What do you have to say about the quality of the software services provided by Indian professionals?

Talat: Full-fledged software engineers from IITs and other renowned institutions are good. But organisations which impart short-term software skills produce personnel who are certainly not up to the mark.

indiamarkets: The US economy is currently experiencing a downturn. Consequently all is not well in the Indian IT industry. When do you feel that the situation is going to recover?

Talat: The boom that happened in the last two years was unnatural. Right now, there are no real signs of recovery. We might get some sort of an upswing in the next 18 to 24 months, but we certainly do not expect any such boom all over again.

Kamil: The telecom industry is in a bad shape. The PC industry is still recovering. It is difficult to say when full recovery will happen.

indiamarkets: What is your message to Indian states who are vying with each other to attract investor interest of big IT American names into their soils?

Talat: I would like to point out that wealth at the US is generated mostly by the small and medium enterprises. It would be worthwhile for Indian states to invite these SMEs and provide them readymade infrastructure for doing business. This would entail employing a lot more people and cost-cutting by way of shared resources.
Most states tend to be interested only in the Fortune 500 companies.
This way other Indian states could be different from the Bangalores and Hyderabads and yet attract American investment. But these states need to do their homework and be ready for doing business with the US, by having a good pool of software engineers, guarantee infrastructure, facilitate paperwork, so that all work is done within one week of application.