But IBM or not, TCS was on the block once, reveals former CEO's book "The TCS story... and beyond"
The latest episode in the Mistry-Tata spat has brought into focus the group's past attitude towards Tata Consultancy Services, considered to be the crown jewel that continues to sustain and feed the conglomerate.
While Cyrus Mistry had on Tuesday alleged Ratan Tata once tried to sell off a young TCS to US-based hardware giant IBM, a day later, F C Kohli, former CEO and deputy chairman of TCS, denied any such move during his tenure, adding that only a "proposal for software work in India under Tata Burroughs" was considered during the time he underwent a cardiac surgery in 1984.
The office of Cyrus Mistry issued a statement saying that he did not wish to contest the statement made by Kohli. "Mr Mistry agrees with him that there was no intention of the Tata Group selling TCS to IBM or to any other company. The statement Mr Mistry made was based on information from sources who were close to JRD Tata who informed him that it was Ratan Tata's intention, and not the group's intention, to sell TCS. Mr Mistry did not say that the ultimate decision was not unanimous, but there were differences and reservations significantly, the fact that Corus was available for purchase at half the price in the recent past is undisputed," the statement said.
While one doesn't not know what the truth is, it now makes sense to revisit what S Ramadorai, its former CEO, revealed in his book "The TCS story... and beyond".
If not IBM, it was Borroughs, another US-based hardware behemoth from yesteryear, to which the Tatas once thought of selling TCS. And not proceeding with the license to manufacture Burroughs computers was a missed opportunity for TCS as well as India.
Instead, a marketing joint venture with Burroughs, he said, left TCS in a very awkward position.
"It could either be folded into Tata Burroughs – an option favoured by some Tata executives - or it could continue to exit as a separate entity undertaking non-Burroughs business," Ramadorai said in his book.
In 1977, TCS got the licence it had applied for that would have enabled the manufacture of Burroughs equipment in India.
"But after all the effort involved in getting it, Tata Sons decided the risk of computer manufacturing business was too high. Instead, in 1978, Tata Sons formed a formal joint venture with Burroughs that sold and maintained Burroughs equipment in India... I sometimes wonder if this was a missed opportunity for Tata and India. If we had taken up the licence we could have manufactured a wide range of IT equipment for the Indian market and perhaps exported it as well. As it turned out the only real loser from the deal was TCS. Borroughs got a foothold in India that it wanted and Tata Sons could look forward to receiving an annual dividend check from the new JV," Ramadorai wrote.
Meanwhile, the Tata-Cyrus saga got some new characters getting added.
While Kohli came out with his own statement, B Muthuraman, former vice chairman and managing director of Tata Steel, raised his voice, rubbishing Mistry's claim that the decision on acquisition of Corus was not well thought out but an outcome of Ratan Tata's bloated ego.
"Following the successful acquisition of NatSteel in Singapore and Millennium Steel in Thailand, Corus Group plc provided a natural fit for the portfolio especially since the Netherlands facilities, which are the gold standard in competitive positioning, were part of the asset perimeter," Muthuraman said.
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