Mad Dog 21/21: Big Indians, Little Indians

IBM is pumping something like $6 billion (or nearly 20 percent of its net worth) into its operations in India. This bold move is a big step that could, if the services business follows the trajectory of the PC business, first make India the primary source of IBM’s services personnel and later allow an Indian company to acquire the whole division. But in its rush to capitalize on the Indians of South Asia, IBM and the many other computer companies facing east are overlooking the possibilities offered by some other Indians: Native Americans.

It’s easy to understand how this could happen. American Indians are little. Asian Indians are big. The Census Bureau says that in the year 2000 there were about 2.5 million Native Americans and another 1.8 million who report partial Native American ancestry. That makes their population miniscule in comparison to that of India, which the CIA says is more than 1 billion. There might be more PhDs in India than there are Native Americans. But that’s not the whole story.

Multinationals like IBM are hiring in India for a number of reasons. One big benefit is access to talent that would otherwise only be available to indigenous firms. These firms are potential competitors, and include some biggies with worldwide reach like Tata and Infosys plus countless other companies with less prominent profiles. But that’s not the only reason, not by a long shot. Americans and Europeans are also hiring Indians because they are smart and come cheap. Indian salaries are miniscule compared to what hotshots are paid in the wealthiest economies. Chinese scientists, engineers, and software geeks also work for low wages, but it’s a lot harder to find Chinese technologists who can converse in English.

In India, most educated people are fluent. They learn English alongside their official national language, Hindi or its cousin, Urdu. Many Indians also speak a regional language, which might be Bengali, Tamil, Gujarati, Kannada, Malayalam, or any or 22 major languages and more than a thousand less popular tongues that, depending on who you ask (and in which language), are either dialects or real languages in their own right (and possibly in their own writing, too). With English as India’s lingua franca, there is no way the Chinese can compete in business segments where verbal communication with English-speaking clients is at least a major advantage and sometimes an absolute requirement.

Bangalore: IBM thinks it means “more bang for the buck” in Kannada

If the South Asian Indians have the edge on the Chinese, American Indians have an even greater advantage when it comes to speaking English. Western slang and nuance reach Native Americans instantly, while Indians in India only pick up the latest way to speak from the media, which isn’t quite the same thing. But that ear for the current American culture is only one of the benefits Native Americans can offer the computer industry.

Native Americans, or, more accurately, their tribes, uniquely provide a chance for computer industry firms to get into some superb tax dodges. This is because Indian tribes, or a least the ones that are legally registered, are, in the law, not clubs or associations or societies; they are subsidiary nations. The United States government can reach through the wrapper of nationality provided by the laws governing Native American tribes and make individual Indians pay tax, but when it comes to the tribe itself, its land, plus a number of other tribal assets, rights, and investments, the federal tax collectors’ hands are tied.

A related set of rules allows Indian tribes to set up legal gambling operations that operate with a framework of federal and state laws that prohibit similar activities by non-Indians. Some tribes have been particularly adept at building legal havens for games of chance. There’s a big gambling resort complex in Connecticut called Mohegan Sun that is owned or mainly owned by an Indian tribe. We don’t know for sure just who owns all of Mohegan Sun or other Indian tribe gambling enterprises, because the law permits Indian tribes to cut outsiders in for up to 30 percent of a gambling operation. The tribes can also hire non-Indian companies to perform services or work as subcontractors. The way this all plays out, as you might guess, can raise questions about whether every aspect of the lucrative gambling operations is one hundred percent kosher.

Now and then, the Indians and the taxmen go on the warpath. In California, there always seem to be spats about Indian tribes and their gambling operations, but it’s hard to say what if anything all the sound and fury signifies. All Californians, including Indians, just love to fight with the state government about money. Nobody can say which side is right in any particular case. It all depends on whose Sitting Bull is gored. There are also plenty of wampum wars in other states, often over tobacco sales schemes based on Indian tribes’ tobacco tax exemptions. And of course there’s all that funny stuff that made it into the news when Jack Abramoff caught his pemmican in the tent flap.

It’s doubtful that an computer company would want to get in on the most exotic schemes that seek to exploit the legal status of Native Americans. We don’t think Bill Gates, even in semi-retirement, feels a strong need to open an offshore numbered bank account. But it seems somebody does, and a bank owned by an Indian tribe is, legally speaking, an offshore bank that just might want to provide such a service. In this particular case, there’s no question that American Indians have a big advantage of Asian ones: American Indians can offer bank accounts in the name of integers; the closest Asian Indians can manage might be an irrational and even transcendental account for a party named Pi.

Geronimo: Doctor (or at least a medicine man), lawyer (or at least a great negotiator), and Indian chief, who served the Apache who now serve Web pages

But the financial adventurism that most often occurs in the computer industry isn’t the sort of stuff that brings out the lurid headlines. The kind of wild bean-counting that has figured in the history of Computer Associates is a rarity.

Still, large, prestigious financial institutions do participate in legitimate deals that involve American Indian tax breaks, and some of these deals involve capital assets, which could include computer systems. In the past, computer leasing companies have tried to reduce leasing costs using arrangements that included Indian tribes.

It’s unfortunate that the deals the public hears about are the ones that get into trouble, but the tax shelter business is by nature quite secretive. If everything goes right, the shelter succeeds and the sheltered party takes the money and tiptoes away.

Even computer companies that aren’t interested in tax shelters might still want to think about yet another kind of advantage offered by Native American tribes: their wonderful names. Just think how successful the Apache Web server has been. Whatever its technical merits, we don’t believe it would have caught on if it had been named after another group of people, even an important group, such as the Salvation Army, the Teamster’s Union or the AARP.

We would like to suggest, without reservation, that computer companies take a fresh look at the all the possibilities.

For starters, here’s a candidate for a top level Internet domain name that could attract vast sums of money because. It’s a natural for a wealthy profession. It’s something that could easily be set up by Internet establishment for the benefit of one and all. We are confident it would quickly gain worldwide recognition. We speak, of course, of the name Sioux. What litigator would not benefit by abandoning that boring .com URL and moving to the superior .sioux? There might even be some computer companies that would want a .Sioux address. Blackberry comes to mind.

That’s not the only top level domain we think the world needs to bring a bit more clarity to the Internet. For advertising and public relation firms, and particularly for the computer industry companies that thrive on publicity, there ought to be URLs in the form .crow. When .crow goes live there will be a big rush for name registration, and it would most likely be led by that star of Super Bowl advertising, GoDaddy.

Real estate agents and stockbrokers should examine every opportunity to calm their edgy customers in these uncertain times. They, too, might want a unique top level domain. We propose .hopi.

But top level domains are only one way to hitch a wagon or travois to a Native American name.

It would be hard to find a corporate name more boring than IBM Global Financing. With a little imagination and a little more negotiation, IBM’s private bank could adopt a brand name that points to its clientele, the way one of the company’s annual reports during the Gerstner era demonstrated Big Blue’s renewed concern for shareholders, employees, customers by using the word “You” all over the place. IBM’s moneylenders should show they are always thinking about lessees, resellers, and other consumers of corporate capital by adopting the trade name Pawnee.

The innumerable outfits that derive revenue from ads or searches run through Google and its ilk are long overdue to form a user’s group or, if they really think big, an industry association. Could they find a better name than Navajo?

Also on the customer side of the equation is the army of youngsters who have impoverished themselves and their families by downloading more music than anyone could reasonably afford yet show no sign of cutting back just because the bills are stunning. Apple is getting rich off these people. It should, at the very least, set up a club they can join. It might be called Arapahoe.

IBM’s future chief: One like this would be a feather in the corporate cap

Japanese semiconductor companies have lot a lot of ground to rivals elsewhere in Asia during the past several years. They probably cannot regain a cost advantage, but they could offset higher charges for their excellent products by proper branding. This isn’t a job for just one manufacturer; it’s a talk for the Japanese semiconductor industry’s trade association. It ought to greet the world under the brand name Chippewa.

There are lots of other tribal names suitable for exploitation. Once the world catches on, there’s going to be a rush for rights to all this intellectual property. In their haste, there will undoubtedly be mistakes, like the one made by the people who named a very large body of fresh water, from which millions might want to drink, Lake Huron.

Still, the risks appear to be worth it, not just for people who might want to powwow with American Indians about their tribal names, but also for companies like IBM, which expects to prosper as it submerges its services business in the increasingly nationalistic culture of India. What today is only a branch of its services business will inevitably grow. Like a plant cutting placed in nutritious soil, IBM’s Indian subsidiary could well grow into a complete company, which is where the gamble lies. If IBM’s Indian managers don’t rise to the pinnacle of the company’s management structure, the more enterprising ones will leave to start their own firms.

IBM undoubtedly believes that it can stay on top of things by controlling the sales process. Well, maybe it can, but the British once thought they had a permanent grip on the American colonies and India, too, and IBM once thought it could maintain its hegemony over the entire computer business. It all looks quite promising now, but that’s the way it always is on a honeymoon. The South Asian business culture, like its political culture, knows how to bide its time. For the moment, the Indians of India will do what their namesakes in North America might suggest: Yuma them.