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In a few years there will be no such thing as an e-business," says Vivek Y. Ranadivé (MBA '83). As founder, chairman, and CEO of Palo Alto-based TIBCO Software, Inc. (www.tibco.com), it would seem that Ranadivé is predicting the demise of his own company. Among other functions, TIBCO's software provides the infrastructure (or "middleware") that makes e-commerce work across disparate computer systems. His meaning, however, is just the opposite.
"The concept of e-business will disappear because every business will be an e-business," Ranadivé explains. "Physical stores won't go away; they'll be knitted into the fabric of how people buy and sell goods and services."
Skeptics might disagree with such a sweeping declaration, but they would be hard-pressed to disregard TIBCO Software's growth since its founding in 1996. Total revenues for fiscal 1999 were $96.4 million, an 83 percent increase over the previous year. The company, which employs about one thousand workers worldwide, went public in July 1999; an article that appeared last February in Red Herring's online edition (www.redherring.com) noted that TIBCO's stock had risen 1,200 percent from its initial public offering price. With a $15 billion market cap and a $300 million revenue run rate per year, TIBCO is one of the fastest-growing software companies ever.
Like any corporate executive, Ranadivé is concerned with the dollars-and-cents valuation of his company and how that affects future growth. But he drops the word "dream" in conversation more frequently than "market cap," "stock options," or "IPO." A native of Bombay, India, Ranadivé says he feels both international and American. "You can have big dreams here," he remarks. "The United States is a very multicultural and open country. When dealing with technology, open systems that can be leveraged by anyone will thrive over closed, proprietary systems; I think of the United States as an open system in that sense."
One of Ranadivé's earliest dreams was to study at MIT, which he learned of through a documentary film on the institution. Despite the economic and emotional difficulty of attending the faraway university, Ranadivé persevered, and in 1975 he arrived in Cambridge with fifty dollars in his pocket. He credits his parents for their support of his plans. "My family comes from a tradition of education and public service," he says, noting that his grandmother was the first female judge in India and that his father, who now lives in California, is involved in charitable projects in India and the United States. In four years, Ranadivé completed a bachelor's degree in electrical engineering and a master's in mechanical engineering. After a brief stint at Ford Motor Company and with the network equipment provider Linkabit, he decided to enroll at HBS.
"I wanted to get the best education, and I felt that Harvard was the best business school," Ranadivé states, citing the case method and the quality of the HBS faculty as among the School's strongest attributes. "In some ways the case method explains why 'Survivor' was such a popular television show," he laughs. "You throw a bunch of people into one classroom and see who shines. I wanted to learn more about people and human interactions, so HBS was an extremely valuable experience for me."
Not long after leaving Soldiers Field, Ranadivé had an idea that would transform the computer industry. "My background was as a hardware engineer," he says. "If you look inside a computer, there's a back plane, or bus, with cards that plug in to run the machine's functions. My idea was to create a software bus and plug applications into that." As simple as it sounds, this insight had a dramatic impact on the financial services institutions that were among Ranadivé's first customers. (TIBCO is an acronym for The Information Bus Company.) In 1985, investment banks were researching new systems for streamlining the flow of data. When Ranadivé arrived at Goldman Sachs, his first potential client, he was astounded by the complicated assortment of monitors, cable, and wire surrounding each trader—the mix even included strategically placed electric fans to cool overheated equipment. Former Secretary of the Treasury Robert Rubin, then head of Goldman Sachs equities trading department, hired Ranadivé's newly formed Teknekron Software Systems to consolidate this hodgepodge of data traffic to work within a single desktop computer. His software did just that, and before long Teknekron dominated the business of automating trading floors. In 1994, Ranadivé sold the company to Reuters Group PLC for $125 million; it now employs some twelve hundred workers and operates separately as TIBCO Finance Technology Inc.
Rather than retire at the ripe old age of 36, Ranadivé developed his software bus for other industries under the umbrella of TIBCO Software. "In many ways, the trading floor of the 1990s was a microcosm of e-business today," he observes. "Starting a company to automate the financial industry was the greatest training possible for the Internet revolution." TIBCO now provides software to a range of industries that includes high-tech manufacturing, telecommunications, energy, retail, e-business, and the Internet. Motorola, Intel, Enron, Cisco Systems, Procter & Gamble, Delta Air Lines, and Yahoo! are just a few of TIBCO's customers. Diverse as these companies may be, TIBCO's product performs the same essential function for all of them: delivering information across networks in real time. Ranadivé shares his expertise in his 1999 book, The Power of Now, in which he explores the impact on business of what is often referred to as "event-driven" software or "push" technology.
Beyond the wide-ranging influence TIBCO already enjoys, Ranadivé envisions a "metanetwork" of the future. "There'll be ubiquitous computing," he predicts, "with billions of sensors and microprocessors. For example, your lawn will determine that it's dry, and sprinklers will automatically water it." The more immediate task at hand, however, is keeping TIBCO on top.
"One of the biggest challenges is to make sure we continue to hire really good employees," says Ranadivé. "We have lots of millionaires around here—plenty of people who don't have to come to work every day. I need to have dreams that are big enough to keep them interested.
"Another concern is staying nimble," he continues. "Someone in a garage right now is inventing a product that could be threatening to me. It's important to stay paranoid and avoid complacency."
Which isn't to say Ranadivé doesn't find time to play tennis or bicycle with his two sons (ages 16 and 12) and his 7-year-old daughter. He also serves on the board of San Francisco's Jewish Museum (www.jewishmuseumsf.org). "I view Judaism as being the source code for Western civilization," Ranadivé remarks. Hindu by birth, he prefers to envision a world in which shared values take precedence over individual religions.
A strong belief in the advantages of open, accepting systems—whether technological or theological—underlies much of Ranadivé's philosophy, particularly when he considers TIBCO and his function at the company. "My role is to let people do their own thing and make sure that what comes out is music. It's more like leading a jazz group than a marching band. That's the job of a leader."