World’s highest paid CEO announces 4th JV in India

MUMBAI, MAY 16: The six billion dollar Computer Asssociates (CA) announced its fourth joint venture in the country with Satyam Computer Se...

MUMBAI, MAY 16: The six billion dollar Computer Asssociates (CA) announced its fourth joint venture in the country with Satyam Computer Services on Tuesday. CA will make an initial investment of $ 1.5 million — less than 0.25 per cent of chairman and CEO Charles B Wang’s annual paycheck — in the new venture.

Wang was one of the highest paid executives with a paycheck of $ 655.4 million (around Rs 2,870 crore) in 1999, according to a survey done by the US-based Business Week publication. CA’s investment in India, announced in 1997 and to be spread over five years, is roughly one-sixth of this amount at $ 100 million. With revenues of $ 6.3 billion in 1999, the company is the world’s third largest software firm.

Named as one of "America’s Most Admired Companies" by Fortune magazine, CA was founded by Wang in 1976 and is symbolic of the successes immigrants have enjoyed in the hi-tech sector in US. Wang, Chinese by birth, moved to the US in 1952. Both Wang and COO Sanjay Kumar have made donations towards charities in China and India in their personal capacity. Wang has donated $ 25 million for the high technology Asian American Centre at New York, and in February this year, CA India donated Rs 20 lakhs to victims of the Orissa cyclone.

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CA’s other joint ventures in the country are with Escorts, Pentafour and The Chatterjee Group (TCG). The joint venture with Escorts is for developing solutions for the telecommuncations and healthcare industries, and the joint venture with Pentafour is for developing accounting software. Its largest joint venture in the country is with TCG.

The new venture with Satyam will offer ASP services to small and medium enterprises. "Leveraging CA’s Jasmine-ii and interBiz technologies with Satyam’s business knowledge, local experience and expertise, the joint venture will help SMEs in India…," the companies said at a joint press conference.

The ASP model provides software on a pay-per-use basis as opposed to the more expensive and traditional method of buying software. "By removing the need for companies to individually procure, implement and manage their own infrastructure, we are encouraging faster adoption of new technologies driving e-business today," Wang said.

Both companies hold equal stakes in the venture. Satyam, which had revenues of over Rs 600 crore in the last fiscal, will also make an initial investment of $ 1.5 million (Rs crore) in the venture. The group’s ISP company, Satyam Infoway, will also play a strategic role in the joint venture. "For all practical purposes the joint venture is with the Satyam group," Raju said, "Capabilities of both Satyam Computer Services and Satyam Infoway (Sify) will be leveraged."

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The name of the new company is yet to be decided and the board constituted. In response to query on whether Sify would be represented on the board, Raju said he was also chairman of Sify.

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