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Crane Software International Limited : Making It Big

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DQI Bureau
New Update

The onward march of the Indian software product brigade is now increasingly

making more waves than that of its larger peers from the services side of the

business. As Indian IP oriented companies expand their operations via mergers

and acquisitions, as well as improve or at least maintain margins with

increasing size of operations, the new heroes of the Indian IT industry could

very well be making a major breakthrough in the global product markets.

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Among the companies that have been a pioneer in building an intellectual

property focused business model is Bangalore-based Cranes Software

International. The growth of the company from a distributor of scientific

software products to a dynamic software product company has been both dramatic

as well as inspiring.

Cranes Software International, incorporated in 1991 in Bangalore, began

business mainly as a distributor of scientific and mathematical software

products from Mathlab. The company has offices in the US, the UK, Germany,

India, Singapore, and UAE, and has a worldwide reseller network and a Web-based

channel. Cranes increased its global headcount to 715 engineers and scientists

as on March 31, 2007 and is actively investing in R&D initiatives in core

domains and other emerging technologies like MEMS and Nanotechnology.

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For the financial year ending March 2007, the company reported excellent

performance. Revenues were higher by 35% to reach Rs 284.86 crore, as against Rs

210.98 crore for FY 2006. Overseas sales went up by 38% to Rs 225.14 crore,

whereas domestic sales went up by 21% to Rs 58.59 crore. Net profit was up 39%

to Rs 87.12 crore from Rs 62.49 crore as achieved last year.

During the year, the company acquired intellectual property rights of Capella,

a business and enterprise-reporting product. Capella is an automated, report

writing, scheduling, and distribution tool, offering organizations a dashboard

for managing business information. Cranes merged Analytix systems and business

of Analytix would be reorganized to take advantage of Cranes brand equity to

attract fresh talent and build relationships with customers. The company also

entered into an agreement with Engineering Technology Associates (ETA) to

distribute and support ETAs, DYNAFORM, and VPG products across India. As part of

this alliance, the company will also distribute and support Livermore Software

Technologys LS-DYNA. The company launched new versions of NISA Civil version 15

for structural engineers, a Linux compatible version of NISA 14; SigmaPlot 10, a

scientific graphing and data analysis; SYSTAT version 12; and InventX Strategic

Project Portfolio Management 4.0, a customizable solution.

During the year, Cranes received several accolades for its performance and

innovative approach. Cranes was honored with the United Kingdom Trade and

Investment award as the new market entrant of the year. The company was also

recognized for its business model acquire-enhance-expand, as it received the

Innovation for India award, an award instituted by Marico Foundation and

Business World.

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For the third quarter ending December 2007, total revenues increased by 45%

from Rs 71.75 crore for the same quarter in the year to Rs 103.84 crore. Net

profit grew by 39% to Rs 31.38 crore, compared to Rs 22.50 crore reported during

the same period last year. Overseas revenues were up 47% at Rs 71.75 crore,

constituting 82% of total revenues. Domestic revenues rose from Rs 15.89 crore

to Rs 17.45 crore in the current quarter.

During the quarter, Cranes acquired Engineering Technology Associates, a

tier-1 vendor to the top three US car manufacturers. With this acquisition, the

Company has strengthened its foray into the Chinese auto market. The company

will have access to the established Chinese design centers and can leverage its

core design testing, virtual simulation, and product design skills across a

broader range of engineering needs. This acquisition will also enable Cranes to

expand distribution of its flagship NISA suite of FEA products. Earlier this

year, Cranes acquired Caravel Info Systems. The acquisition includes suite of

IPs that Cravel holds in its portfolio. The company also acquired Proland

Software.

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Cranes launched MYSTAT 12, a freely downloadable statistical analysis

software package designed specifically for use by students and the teaching

community. Cranes also released NISA 64 bit version (NISA V15.5x64) on Microsoft

Windows. This version is targeted towards the enterprise customers enabling them

to solve large size problems and also introduces the multi-core/multi-processor

computing capability to NISA. Recently, Fractal Analytics, a provider of

predictive analytics and Cranes, announced an alliance to develop Predicta, a

retail risk management software.

Shares of Cranes Software currently change hands at Rs 121 discounting its

fiscal 2009 revenues by 11 times and leaving sufficient scope for appreciation

in the medium and long term.



Outperformer.

Sushanto Mitra



The author is director, Techcap India



sushanto@techcapIndia.com


The views reflected here are of the author and not of this publication. No
liability is accepted for losses based on the information presented here

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