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Parallel careers that made their respective countries proud... Arun Jain of Polaris and Kris Canekeratne of Virtusa
 
 
End of an era for Polaris, marks coming together of two iconic Asian IT players

IndiaTechOnline Special: The people and the companies behind the  Polaris  acquisition by Virtusa 

By Anand Parthasarathy
Bangalore,  November 6, 2015:  The sale  of majority stock of Polaris Consulting & Services Ltd to the  US-based IT services  company,   Virtusa, marks the end of an era for  the Chennai- headquartered   global financial services  specialist.  The transfer of control is mostly driven  by divestments by  Polaris co-founder Arun Jain  and a few other  promoters.   That may soon signal the end of Polaris as we have known it since  1993.  But the company's DNA lives on --  in the entity  that was hived off the parent in December 2014:  Intellect Design Arena, a separate  company,  now specializing in   digital technologies for Banking & Insurance, rather than pure-play services.  Jain   continues to mentor and head  Intellect, though he  gave up the day to day  responsibilities of a CEO.
The story of Arun Jain and Polaris  is central to the making of India's reputation as a destination for world-class IT  innovation and services. Jain's transition from student to  employee to entrepreneur was telescoped into a few months in 1983. Fresh out of Delhi College of Engineering,with a BE (EE), he took up his first job in Pune with TELCO, the automobile arm of the Tatas  but left very soon for Delhi to join  two of his  college seniors   and start a company, International Information Systems. In 1986, they got a contract from Citibank to provide support to their consumer banking division to manage vehicle loans, loans against financial assets, ATM management and other banking services that at the time were unheard of in India. Jain and his partners set up a separate company, Nucleus Software to run this business, competing against the likes of TCS to bag this contract Nucleus Software set up the back-end system for the first ATM in India in December 1987 .
In 1990, Jain came to Chennai to help set up  India's first credit card system for Citibank (which  had its back office in the Tamil Nadu capital ).  Seizing the opportunity provided by the Citibank contract, Jain built up Polaris to become a global powerhouse of banking and financial innovation and deftly moved beyond services to solutions specialising in technology solutions for financial services. In 1993, he founded Polaris Software Lab  with  120 people in an office near the historic Thousand Lights Mosque, just off Mount  Road ( today, Anna Salai)  in Chennai and it  still remains  the company's global headquarters.    Polaris acquired Citigroup's software business in India,  the largest transaction of   2002 in the country.
"We are proud to be known as an Indian product company creating great world-class products", Jain told me recently, when I interviewed him for a book on India's IT Icons,  that Prof S. Sadagopan, Founder-Director, IIIT Bangalore,  and I are  writing, due   for publication in a few months time, "At Polaris, we have invested heavily in intellectual property and morphed over the years into an entity that is today more innovation than services." 

Another IT Icon
Now he has handed over the baton  to another IT icon -- with roots in India's neighbour, Sri Lanka. If Jain is an Indian IT Icon, Krishnan ( "Kris")  Canekeratne is a Lankan one, perhaps the best known head of a global  infotech company from the island-state.
A computer science graduate  from Syracuse University (US), he  co-founded  Virtusa and headquartered it in  Massachusetts, US, just 3 years after Polaris was born.
"The founders were my wife and I, close friends of ours from Westborough John and Sandy Gillis, and my parents", he said in a 2001 interview  in WB Journal, " ... The experiment that we started back in 1996, which eventually became Virtusa, was to see if we could innovate using a global team. We wanted to see if we could actually build, create, innovate and bring things to market faster by using a global team where team members were in an office park here in Massachusetts and an office park in Asia."  They succeeded .
Though technically an American entity, with a global presence in nearly a dozen countries, Virtusa  has most of its  5000-strong team  in  India  and a  team in   Colombo, Sri Lanka, headed by Madu Ratnayake, a leading voice of the burgeoning Sri Lankan IT industry.   The company  straddles  India  with offices in Hyderabad ,Bangalore, Mumbai, Pune and Chennai.   
Striking parallels
There are other striking parallels in the  Polaris- Virtusa stories. If Polaris helped one  US-based bank, Citibank,  to launch credit cards  in India, Virtusa  was similarly helpful to   JPMorgan Chase... by creating a mobile-banking app that changes how people can do certain mundane tasks like depositing a check. Instead of going to a bank branch to deposit a check, they can take pictures of the front and the back of the check with a smartphone or iPad and use the Chase  mobile app to deposit it. The app was a huge success, and other retail banks have since developed versions of that service, says Hansa Iyengar, an analyst at Forrester Research.  (Reported in Forbes )

Today's   Times of India  quotes Arun Jain as suggesting  what he will be doing with some of  the cash that his personal sale will generate. He intends to create a Rs  1 billion corpus to fund two trusts in education and health. That would be entirely in character of the Jain  I have known for   17 years.   Why 17 years? In 1997,  Jain  put his personal money into a corpus that today funds the annual  Rs 100,000 Polestar awards, arguably the  best-known award for IT and business journalism in India. This is by no means  the only instance of Jain putting his money where others put their mouth, but you can see why for an IT journalist this has more meaning!
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DETAILS OF THE DEAL: 

Polaris  Consulting  and Services Ltd. has  entered into a definitive Share Purchase
greement (SPA) with Virtusa Corporation,  whereby a subsidiary of Virtusa will acquire
approximately 53% of the paid up share capital  of  Polaris  from  certain  promoter
entities led by Arun Jain and certain  other  shareholders, including OrbiTech Private
Ltd. In  addition,  Virtusa  will  make  an offer to the public  shareholders  of Polaris to |
purchase up to an additional 26% of the outstanding shares of Polaris. The worth
about $ 180 million is  expected to close during the last fiscal of 2015-16.

 Upon closing of this transaction, Citigroup Technology, has agreed to designate |
Virtusa and Polaris as a preferred vendor for Global Technology Resource Strategy for
the provision of IT services to Citi on an enterprise-wide basis. The parties agreed to
amend Polaris’ master services agreement with Citi such that Virtusa Corporation would
|also be deemed a contracting party.
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