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Onward Dreams Upward

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DQI Bureau
New Update

Harish Mehta sounds very excited these days. It is not difficult to guess

why. The proprietor of Onward Group has just divested his 50% stake in Onward

Novell-the sales & marketing arm of Novell in India for more than a

decade. At one stroke of a pen Onward Novell ceased to become the flagship

company of the group. Instead, it has been replaced, by Onward Technologies.

Though Onward Technologies has existed all through the group's lifecycle, the

publicity beam has always been focused on Onward Novell.

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"We plan to reach Rs 100 crore and take our headcount to 1,000 in as

little time as possible," he informs. Considering Onward's current

revenues of Rs 55 crore and headcount of 650 people, this looks like a tall

order. However, taking into account the cash accrued through the sell-out of

Onward Novell, and Mehta's strategic roadmap for the company, it might happen

sooner than later.

Engineering Design



While Mehta is tight-lipped about financial details of the Novell deal, he

waxes eloquent on the future roadmap for Onward Technologies. "Engineering

design services would be our biggest growth driver; we are already service

partner to the worldwide manufacturing industry, with a range of engineering

services," he claims. The company already has a large center in Pune where

nearly 400 people are involved in engineering design services outsourced by

global automotive, aerospace and engineering companies. These include

illustrious names like Chrysler, Emerson, John Deere as well as Tier 1 auto

suppliers like Magna or Lear. Onward is also the exclusive distributor and

reseller of MasterCAM in India and its neighboring countries.

Harish Mehta

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Mehta recites impressive numbers to substantiate the future viability of

engineering design services. "Globally, engineering design is a $220 bn

market, out of which about $20 bn worth of projects are outsourcable. Again,

within this only around $7-12 bn can be delivered offshore and is, therefore,

accessible to Indian companies; more realistically, about $2 bn worth of work

should come to India in the next few years." Impressive numbers, and

considering Onward's early legacy, Mehta's optimism does not seem misplaced.

Leveraging Novell Association



Beyond engineering design, traditional IT services is another area Onward is

betting on big time. Onward caters to about 10 clients in the US and UK

specifically on Novell platforms-its Navi Mumbai development center with 100

people currently suffices for this. In the next six months, Mehta claims, the

focus would increase on identity management related solutions as well as

services on SuSe open source platform-coinciding with the two focus areas for

Novell globally.

"Banks and retail players, who are in the forefront of offshore

outsourcing, are seriously looking at identity management which would be driving

the next wave of computing. Another focus area for us on IT services would be on

migration to Linux, particularly the Novell variety." The Onward Competency

Center for Novell Technologies is what Mehta is clearly banking on; not only

does it provide the skill sets on Novell accrued through historical lineage, it

also provides a ready base of Netware customers.

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Banking on Domestic Front



Beefed up by the acquisition of Kale's banking business two years back,

the company has a fairly robust BFS business with about 40 clients in the

country. However, Mehta clarifies that the focus is entirely domestic and would

not change in future too.

Onward is blending modules from Kale's products into its core banking

solution -BancBrics. However, BancBrics is specifically targeted only at

high-end co-operative and semi-urban banks, where core banking is still deployed

only at specific branches. Currently, Onward banking solutions are deployed in

nearly 4,000 branches of 40 banks-this includes Ratnakar Bank, Cosmos Bank and

Silab. In addition, it has presence also in large PSU banks like UCO Bank and

Bank of Maharashtra, albeit only in their rural and semi-urban branches. Once

the product re-architecture is complete with incorporation of Kale modules, at

least 30% of business is expected to come through ASP mode or specialized

channels.

Potential Dreambusters



Though Mehta's enthusiasm is infectious, industry analysts still have

reservations about the planned roadmap.

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For one, more and more global players looking at utilizing Indian engineering

resources are setting up captive design centers. Even Surendra Agarwal, MD of

Neilsoft, one of the more established players in engineering design services

admits to competition from these captives. "Most MNCs like to keep their

design in-house, plus you require tremendous marketing muscles to compete."

Even global engineering services players like PTC, EDS or Plexion have large

operations in India; then you have bigger software players like TCS, Infotech

and Geometric with larger client bases already established. Plus, Mehta rules

out moving into products, especially those on the lines of PLM-this is one

area that has been particularly lucrative for Geometric or EDS. Even IT services

might not be such a smooth sailing for Onward-Novell itself as a technology

platform has seen dwindling fortunes; plus, identity management and open source

are domains where larger Indian IT service players are already cluttered.

The

Onward Chronology
Year Event
1991 Incorporated

as a private limited company under the name Onward Engineering.
1994 Renamed as Onward

Technologies and listed on the Indian stock exchanges.
1995 Recognized as the

in-house R&D unit of the Dept of Scientific & Industrial

Research, Govt of India.
1998 Released “Arthapranali”,

a multi-lingual banking software product.
1999 Entered into a global

partnership with Novell Inc, to provide e-directory-related

consulting services.
2003 Onward

Technologies is restructured. It identifies two focus

areas-engineering services and BFSI. Acquired the banking division

of Kale Consultants.
2005 Identified

engineering design services, banking and Novell Competency Center as

three growth areas to reach a target of Rs 100 crore and 1000 people
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Last but not the least, though Onward might have targeted the semi-urban and

co-operative banking sectors, areas where Mehta argues Infosys, i-flex or TCS do

not operate in, there are established players like Infrasoft, NextStep or Zenith

Infotech who are already ruling the roost there. And, by the time Onward is

ready with its re-worked product it might lose considerable ground.

Onward's

Three-Pronged Growth Strategy
-

Increase engineering design services by associating with bigger

clients for bigger projects; develop a company with a strong

front-end in this aspect
-

Increase IT services focus by leveraging on the Novell Competency

Center; target identity management and open source migration

particularly on the Novell platform (For both 1 & 2, focus on

increasing body counts)
-

Target rural, semi-urban and co-operative banks with small core

banking solutions for particular branches; offer customized

solutions as well as services on the ASP mode.

Overall, Onward's biggest drawback till date has been its reticence in

publicizing its solutions or offerings. That needs to change immediately in case

the company wants to succeed with its future roadmap. With the Novell

encumbrances now gone, the issue looks likely to be addressed in the near

future. How successfully that is done would determine whether Onward's graph

will go up as Mehta expects. That is going to be Harish Mehta's challenge in

the days to come.

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Rajneesh De

The man behind it all...

More than two decades ago when IT still meant Income Tax, Harish Mehta earned

a Masters Degree in Computer Science from Brooklyn Polytechnic Institute. Back

in India he was a vanguard who shaped the Indian computer industry, being

amongst the founder members of Nasscom. He, in fact, is credited with persuading

Dewang Mehta to come on the Nasscom board.

Mehta also brought reputed American companies to India. Amongst the first was

Digital, which entered into a joint venture with Hinditron where Mehta was the

first managing director. Later on he formed Onward Technologies and then tied-up

with Novell to market its products in India. Now in his third and latest avatar,

can he take Onward Technologies to dizzying heights?

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