Exclusive interview with Shenoy, who sold IMC, Inc. to Calibre Systems.
By Raif Karerat
Follow @ambazaarmag
WASHINGTON, DC: Sudhakar V. Shenoy was Founder, Chairman and CEO of IMC, Inc. (a technology services company), a majority of whose assets were acquired by Calibre Systems in August of 2015. Following the dissolution of IMC, Shenoy folded the remaining portions of the business into Alyx Technologies, a software company at which he currently serves as CEO and chairperson.
Shenoy was named one of the Top 25 Most Influential People in the Washington, DC high-tech industry, as well as being awarded the 2004 Executive of the Year by the Northern Virginia GovCon Council, the Professional Services Council, and Washington Technology.
Along with a dozen other Fortune 500 CEOs, Shenoy was selected for several Presidential trade and development missions to India (1995), Spain (1995), and Berlin (1999). He also serves on the Board of Advisors for George Mason University School of Engineering and was appointed by the Governor of Virginia to the Board of Visitors at this same University.
In 1998, Governor Jim Gilmore appointed Shenoy to the State of Virginia Technology Commission. He has also been appointed by the governor of Virginia to the Board of Directors of the Innovative Technology Authority as the Chairman of the Center for Innovative Technology.
In 2000, the Speaker of the Virginia State Legislature appointed Shenoy to a five-member citizens committee on the Virginia Legislative Process. He was also the 2000 Campaign Chairman for the Fairfax-Falls Church United Way. He currently serves on the Board of Visitors of the Virginia Commonwealth University.
Shenoy spoke with The American Bazaar over the phone and offered his perspective on a variety of topics pertaining to his businesses, nonprofits, and how the years have changed the ever-evolving landscape of entrepreneurship.
You were one of the pioneers in entrepreneurship when it comes to Indian Americans community. How difficult was it to start a business in the late 1970s and early 1980s? What was the climate like at that time?
It was very difficult. As far as I know there were only one or two others of Indian origin who had started technology businesses. Of course, there were other types of businesses around; there was one grocery store here in Maryland and there were a couple of stores in New York, etcetera but not technology companies per se. So, what can I say? It was pretty risky. I remember some of my friends telling me that I was crazy to start up because no one would give their business to someone from a developing country or an underdeveloped country. I wouldn’t say it was scary, per se, but there was a lot of trepidation, if you will, before jumping into it. But call it craziness, bravado, whatever you want, I decided to do it.
By the way, when I first started, no banks would give me credit. I probably went to a dozen banks but I had zero assets to offer. I think the idea of private equity and people raising money was not that prevalent in those days. It was very difficult getting a credit line and finding money was extremely difficult. I remember going from bank to bank trying to get a credit line, and I eventually did get one from a small local bank. One of the reasons the banker gave it to me was because I had written a business plan that was a good 75 to a hundred pages. She said anybody could write a business plan with that many pages in it just to get $10,000 was good to go, and she gave it to me.
You have been a big supporter of a number of nonprofits. In fact, you helped expand the American India Foundation in the DC area. What inspired you to do that?
I’ve always believed we have to give back to the society we live in. I’ve always done that, as a matter of fact, from the time that we started we decided we’d set aside a few percentage points of every year’s profit to give to causes that we believed in or that were worthy. I’ve always been a supporter of giving back to the community that we live in or even to the community that we came from. So, yes, that’s something I strongly believe in.
Pan IIT is another organization you been closely involved with. We understand that you will be attending a major IIT Bombay event next month. Can you tell us a little bit about it?
It’s called a global business forum and it is put up by the IIT Bombay alumni. It’s hosted by Defense Minister Manohar Parrikar, who’s an alum of IIT Bombay and I believe there’s close to 2,200 or 2,300 people who have registered. There’s going to be about ten cabinet ministers who will be there at this event. The whole idea is to showcase the technological achievements and capabilities of the technology community and also to showcase what India is capable of doing vis-à-vis the Make in India and educational programs. So the minister of education is going to be there. It will also showcase what India’s achieved in the recent past. For example, we have a panel discussion with the CEO of Northrop Grumman International and the CEO of Lockheed Martin Asia-Pacific. There’s going to be quite a few very interesting programs that will be put forth over a two-day period.
The PanIIT initiative does a whole lot of things. I don’t know if you’re aware but there’s a program called Wheels Global Foundation. Wheels stands for for Water, Healthcare, Education, Energy, Lifestyles, and Sustainability. I co-chair this organization and am actively fundraising for it. The whole goal is to improve life in India in those sectors that I talked about. We meet very regular in my company’s office there are some people — all volunteers who are retired or semi-retired who are giving themselves and their wallets to this program. We are partnered with a few other organizations to dig water wells, to bring energy, to bring communications, and all those kinds of things to remote parts of India, where people basically don’t have access to these kind of things.
You ran IMC for 35 years. Why did you decide to exit?
We had three lines of business, basically. One was federal business, which was the vast majority of our work. Mostly in healthcare information technology and data analytics in the healthcare and homeland security areas. And some in the defense areas and also in the State Department.
The second part of the business was commercial and state and local business. We do a lot of work with financial institutions, with pharmaceutical firms, with hospitals, and other nonprofit institutions. We do a ton of data analytics work and we do it for state and local governments also.
The third business is our international business, which is primarily handled by my outfit in Pune. I decided that I needed to take some chips off the table.
We had just won some very large contracts, including a billion dollar contract, and it made sense to go out on a high, rather than a low. It was a definite high for us, so I decided to exit the federal business. I still have the commercial, state, and local and the international business.
So it’s not that I’ve completely retired, he’s very involved in the technology services business and I’m also involved in a couple of other business that I’m not allowed to talk about and I keep myself busy!
How did the Affordable Care Act affect your business?
In terms of winning us more business I don’t think it made much of a difference. However, our healthcare treatments did go up considerably and we had to water down some of the benefits we got. I don’t know if it can be directly attributed to the Affordable Care Act but there certainly were some discernible changes that took place in the care and benefits we were providing to our employees.
In that respect, I think many medium size companies felt some ramifications from the Affordable Care Act. After all, when you sign up millions of people someone has to pay, and it turns out businesses got his pretty hard. It did impact our cost structure and what kind of care we provided for our employees.
I can’t say that it was directly attributed to the ACA since healthcare costs were going up anyway, but we definitely noticed an impact on that side of the benefits program.
Is there any particular accomplishment you consider the magnum opus of your career to date?
It’s been one long journey! It’s been a fun journey, and every little bit counts, so I wouldn’t say there was any particular thing that sticks out as being huge. I’ll tell you one thing, though. The business that I sold, we had dozens of people who had been with me for over 20 years, and that is very unusual in the tech industry. The buyer actually noted that and was quite surprised that we had people with such long tenure at one company. In the tech industry, when you’re skilled, you tend to move around quite a bit. We were very lucky in that our people stayed with us for literally two decades or more. I think that makes me really feel good about it because we must have been doing something right if they decided to stick around. From time to time over 35 years I had to ask people to take major pay cuts to help keep the company going, and they willingly did it and I’m very grateful to them for having done that, because otherwise we may not be where we are. But they stuck with us and it was like one big family so it was hard to see the separation. But people realize that sooner or later all good things have to change.
What are your future plans? Are you starting anything in the technology sector?
Well I told you about the businesses I’m remaining in, and there are around 140 people remaining in those sectors. We intend to go at it very aggressively. I will still be chairman and CEO of the new entity, which is called Alyx Technologies. We are based in Reston, Virginia, and we just got some spanking new facilities that we’ve moved into. We have a great pipeline and great clients that we’re working with and we’re looking forward to seeing this grow. We’ll be focusing on the commercial and the state and local sectors but not so much on the federal side.
Alyx, in Greek, means “protector of humanity.” Very aptly, we hope we can use software technologies to bring about that goal.