A Tale of Two Companies

Bangalore might be the undisputed IT capital of the country, but in recent
times many other cities are competing to bag the no 2 and no 3 slots. While
Gurgaon and Pune have moved ahead in this race, after years of indifference
Kolkata too has aggressively joined the fray. One of the factors why the city
lagged behind till now has been the lack of innovative companies. Though the
Eastern metropolis now has large names in IT services, it does not really boast
of home-grown product companies like those in Pune, nor does it have niche BPO
players like those in Gurgaon.

But this lacuna seems to be a thing of the past as a handful of emerging
home-grown companies seem to be addressing both these domains. While these
companies are yet to attain a sizable scale, two of them have shown the
significant potential to be counted among the IT giants of the future. What is
more heartening is that while both these companies have significant global
presence, their Indian operations are primarily based out of Kolkata. One of
them, netGuru, is even listed on the Nasdaq while the other, Ontrack Systems, is
listed on the Indian bourses.

Flying high

On the product front, the $40 mn netGuru, that traces its origin to the US
in the 70s, is a pioneer in the field of structural engineering with its
flagship product STAAD.Pro 2005. Acclaimed as a premier software tool for
structural engineering projects, STAAD.Pro 2005, developed by Research
Engineers, a division of netGuru, includes advanced analysis and design features
like static and dynamic analysis, nonlinear cable members, curved beam members,
P-delta analysis for plate, integrated section properly calculator, bridge
loader module and other international concrete, steel, tower, timber and
aluminum design codes.

No wonder S Bhanja, COO, netGuru, in charge of the Indian, Asia-Pacific and
Middle East operations, proudly claims that STAAD.Pro has been the choice of
design professionals around the world. Research Engineers boasts of an
illustrious roaster of clientele to support Bhanja's claims. On the domestic
front, STAAD.Pro has been adopted by leading government agencies like EIL, NTPC
and Military Engineering Services (MES), top engineering firms like L&T, MN
Dastur, Technimont ICB and RITES besides premier engineering universities like
IIT Roorkee and BE College, Shibpur among others. It has even been used in the
construction of the Gateway Tower, a new landmark in Gurgaon.

Nominated for Deloitte Technology Fast 500 Asia Pacific 2004 award, the Rs 26
crore Ontrack's product expertise is primarily centered on the mobile
applications front. It has developed a BI tool on the mobile platform called SMS
Express. Explains Anirban Basu, COO, Ontrack Systems, "SMS Express sits on
top of all enterprise applications like ERP or CRM and extracts relevant
information, and communicates that to a mobile workforce via the SMS
medium." Not surprisingly, this application has found popularity amongst
organizations that are increasingly having a large mobile workforce-in India,
Tata Steel is using it as a groupware communication tool. Even other large
enterprises like Ananda Bazaar Patrika and SOTC have adopted it.
Internationally, customers include Al-Noor Hospital in UAE, the Sheikh Palaces
in Dubai as well as BetFair, one of UK's largest betting agencies. It also
telecast live commentaries on the Indo-Pak cricket matches last year for
ABN-AMRO Bank customers in Dubai on mobile handsets. More critically, Ontrack,
which was a part of the recent West Bengal IT delegation to Europe, seems on the
verge of hitting pay dirt in Europe. While it already has a few mobile gaming
applications developed for Real Networks and Game Love, it is on the verge of
finalizing an agreement for delivering SMS Express and other mobile applications
to large telcos and handset developers in Scandinavia-an agreement with Telera
Soniera is already on the offing. Another deal for mobile applications is about
to close with a large media and healthcare organization in the UK-if
successful, this might catapult Ontrack into the real big league.

Future focus

Another similarity between netGuru and Ontrack is that apart from their
flagship products, both have interesting expertise in innovative areas-though
these are currently not generating high revenues, they do have the potential to
grow big in the future. And primarily, both ventures are now mainly catering to
the domestic front. Basu informs that Ontrack has a portal called Tendertimes,
for the last seven years, that specializes in providing e-bidding solutions
mainly for PSUs. Having started with the South Central Railway, it not only
handles procurement but also takes care of the entire tendering process. Today,
Tendertimes has over 20 PSU customers including South Eastern Railway and
Allahabad Bank.

NetGuru, on the other hand, has an enhanced focus on the multimedia and
animation domain-Bhanja declares it to be the main focus area for the company
in the coming year. "We want to create our own identity as the biggest
animation and multimedia content developer in the Eastern Region," he
claims. And infrastructure and strategy wise the company seems to be on the
right track-it already boasts of the largest sound recording/audio editing
studio in Kolkata used by internationally acclaimed directors like Sandip Ray,
and has also signed an MoU with the University of Malaysia for a multimedia
training course.

On the projects front, it has developed multimedia presentations for the
Jharkhand Government, New Delhi Municipal Corporation, Orissa Government and
large ad agencies like O&M and Bates. Particularly notable were its
presentations on safety in coalmines for Coal India, a pap smear test for
reproductive health care for a Jharkhand NGO called KGVK and a project detailing
the causes for the notorious Rajdhani Express accident two years back for the
Eastern Railway. It has also completed some large animation projects-creating
animated versions of Panchatantra, Rabindranath's Shishu for Vishwa Bharati,
the Bengali alphabet primer Barna Parichay and TV commercials for Coca Cola
India. Besides, it also produced popular TV programs like Prapta Bayaskader
Janye, Bengal's Most Wanted, and Bhool for Doordarshan. It has also done a
major MMS-based project for a Kuwaiti company.

Innovations in BPO

A third striking similarity between netGuru and Ontrack is the innovative
approach they have taken on the BPO front. netGuru has what they claim to be
Knowledge Process Outsourcing (KPO) on the engineering design consultancy front.
Says Bhanja, "There is a focus towards outsourcing of steel detailing jobs
to professional Indian companies and we regularly undertake such assignments
from the US, UK, Canada and other parts of the world." It has also joined
hands with the Delhi-based Consulting Engineering Services to offer KPO services
to clients. The strategic alliance has been proposed to popularise the concept
of RCODE (RE-CES Online Design and Engineering), with the hope of providing
solutions to a number of niche segments. RCODE aims to offer a platform for
organizations in the US and EU to offload their design and engineering needs.

Ontrack on the other hand has embarked on an HR-related BPO services, what
Basu claims to be Recruitment Process Outsourcing or RPO. It facilitates
recruitment agencies in the US and UK by providing them the final hot list for
recruitment by stringent shortlisting from large databases. The coming year,
informs Basu, will see an increased focus on RPO, with Ontrack planning to work
not only with recruitment agencies but also directly forging partnerships with
companies looking at large scale recruitment. In addition, Ontrack also provides
technical help desk services as part of its BPO offerings. The company is
planning to acquire BPO units in the UK and Holland for Rs 20 crore for this
purpose.

The bread earners

Notwithstanding products and other innovations, both these companies have
certain standard domains which otherwise might not be so exciting but generate a
steady stream of revenue for them. netGuru has proven expertise in IT services
like Net applications, content management, ERP/MRP applications and ASP. In
recent months, it has delivered two large offshore projects in the healthcare
and automotive industry. Ontrack on the other hand maintains a large managed
services center which supports international clients like a large chip
manufacturer and two telcos of Europe and domestic organizations like West
Bengal Treasury, Ordnance Factory Board, BSNL Eastern Region, Allahabad Bank,
UCO Bank and the Airport Authority of India.

In the coming year Bhanja declares that amongst new areas, netGuru will focus
on e-government projects in conjunction with the Oracle center particularly in
Eastern India as well as on its realtime collaboration software product called
eReview. For Ontrack, the focus, according to Basu, will be on ERP
implementation-it wants to surpass PWC to become the no1 Navision implentor in
the East; plus it will launch Oracle Financials in June and SAP One in Q4.

Rajneesh De