Gupta's appetite for companies

Wednesday, 15 December 2004, 20:30 IST
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NEW YORK: Ever since he arrived in the US in 1971, Umang Gupta has thought big. When the Internet bubble burst, this engineering graduate from India was unfazed and decided to go on a spree of "strategic and measured acquisition" of smaller companies. In the last four years his Keynote System, based in San Mateo, California, has acquired 10 companies and added to his reputation as a man who thinks on his feet. Keynote helps some of the world's biggest corporations manage and improve efficiency of their websites as well as improve e-business. The latest example of Gupta's appetite for acquiring companies came when he began coveting at the Vividence Company since it offered Keynote an ideal platform to diversify into the business of supplying Internet service providers such as Yahoo or Google with the analysis on how their customers used and rated their sites. While Keynote had managed to enter the business by acquiring two small players in 2002 and earlier this year, it was Vividence that Gupta's eyes were set on since it was the market leader. After much jostling for five months, which included a poker game with Vividence's president and chief executive officer Peter Watkins, Keynote acquired the company in September for $20 million in cash. The acquisition of Vividence has given Keynote 130 large customers, including FedEx, Citicorp and Microsoft. With that one stroke Keynote has emerged as a leading provider of online research services. Compared to 2,700 customers that it had when the Internet bubble burst Keynote now has 2,200, some of which are Amazon.com, Blockbuster, IBM, Dell, Cisco and eBay. The New York Times carried a big profile of Gupta on Dec 2 under the headline "Deal done, with perseverance and a poker game". "Our strategy has been growth through technological acquisition. I would not call it aggressive acquisition but a more measured and considered approach," Gupta, chairman and chief executive of Keynote and an alumnus of the Indian Institute of Technology, Kanpur (India), told IANS in an interview from San Mateo. "There are a couple of ways companies in Silicon Valley buy out other companies - either through cash or using high stock value. When the Internet bubble burst we had a cash reserve of $350 million in April 2000. We decided to use some of the money for strategic acquisition, some to buy back our shares and some to acquire real estate," he said. Gupta, who has been a tech entrepreneur since 1980, says there has been a series of "mini bubble bursts". "In the 1970s Intel almost went under. Between 1983 and 1997 there was virtual tech depression. Things have changed from the IBM-led tech revolution of the mainframe computers to the Microsoft-Dell-Oracle revolution of software. The next big thing would be nano-technologies and bio-tech. We are reaching some balance. So it is an ongoing process," he said. According to Gupta, his first company Gupta Technologies was the first Indian American-owned company to go public in 1993. Since his arrival in the US in 1971 as a young engineering graduate, Gupta said he was always keen on harnessing the entrepreneurial environment provided by this country. Acquiring 10 companies in four years has brought its own set of challenges for Gupta and Keynote. Harmonizing different cultures and skill levels has been among the challenges that any acquisitive corporation faces. For a corporation that has acquired companies at the rate of over two a year in the past four years, the challenges are formidable. On the inevitable question of the outsourcing debate Gupta is business-like. "Outsourcing has always been part of the American industry for a 100 years. In the 1940s and 50s immigrants were brought in for cheap labour. In the 1960s electronics industry went to Japan and Taiwan. In the 1980s you saw China emerging as the manufacturing base. Even Henry ford had to explain why he brought people from Italy to work in his automobile plant." "In the next five years our plan is to become a $200-million company. I am motivated by cutting edge technology. I am also motivated by business creativity," he said. Umang Gupta is the recipient of siliconindia Lifetime Achievement Leadership Award (2002).
Source: IANS
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