Pune Special - Local Ventures: Sons of the Soil

Pune as an IT destination shares a common trait with Bangalore. Though large
IT services companies, MNCs or BPO outfits are all setting up shops here, the IT
heart of the city still beats with the small companies dotting its entire
landscape. Most of these are innovative product companies, who owe their genesis
to some entrepreneurial bug biting some sons of the soil, and at the end of the
day they represent the true IT face of Pune. These companies might never have
zooming toplines or bottomlines, but through their innovation and spirit to dare
they would continue to inspire generations to come. Dataquest takes a peek at
few of them.

Donning the Consultant Hat

The film Banaras produced and scripted by Nihilent Technologies CEO LC Singh
flopped at the box office; his company had more of a mixed year. It did not fare
well locally but the saving grace was 40% growth in exports, mainly in the
consulting practice, where it added clients like Barclays/ABSA, MTN, Multichoice
and Development Bank of South Africa. This was part of Nihilent's overall
scheme of donning new robes, from being a software services developer to a
change management consultancy.

The company is in the process of reinventing itself as a consultancy company
specializing on change management. According to Singh, the company has been
fairly successful in this transition process. Founded in 2000, Nihilent closed
FY '06 with revenues of around Rs 45 crore. For the first three-four years,
business really did not take off and the company was under a spot of blue.
“When we started a few years back, we had succumbed to the temptation of
product development and IT services. After much deliberation, the writing on the
wall was clear, there was a clear-cut need to differentiate. A need to find our
DNA and focus on what we do best,” admits Singh.

Change management helps the companies to formulate strategies for future
growth, risk mitigation, etc. and implement them. “It is ironical that most of
the companies know what to do in terms of strategizing for the future but only
20% or so are able to implement them. We help formulate and execute the
strategic roadmap for a company, without any loss,” he says.” Incidentally,
Nihilent has patented the MC^3 change management framework.

The company has also decided to focus on emerging markets. “It is a
conscious decision. We have been quite successful in South Africa; where except
for a few, not many Indian competitors were present. It was a tactical move and
it paid off. We intend to focus on smaller geographical before reaching out to a
bigger market,” says Singh. Nihilent now has clients include South Africa Rail
Services, SASOL and South Africa Airways in the geography. It also added 8
clients overseas for its CMMI consulting practice in Middle East and Africa.

Despite boasting of products like ThirdWire for the domestic market that have
even won many awards, Nihilent's revenue stream locally have literally dried
up. Now the company is again looking at targeting the domestic market,
particularly with its electronic feedback gathering system CFS, that found SBI
as the first taker for its Mumbai circle. Nihilent is also targeting other
domestic clients, mainly in the banking vertical where it has IndusInd Bank as a
customer.

The company's holding structure also recently got realigned when Paracon of
South Africa acquired the 34.6% stake previously held by Nedcor. The company is
now planning to take the IPO route to expansion. According to Singh, Nihilent is
currently evaluating various ways to raise capital and one of the most probable
one, he admits, is through listing the company. The company could be listed in
the next two years in Indian bourses.

Nurturing the Sci-Fi Dream

Ajay Phathak, a first-generation entrepreneur, established Jopasana Software
& Systems way back in 1990. Jopasana is a product engineering and software
solutions company focused on real-time and embedded systems domain that operates
in multiple verticals like, automotive and aerospace, life sciences, networking,
telecom, energy, semiconductor, and others. In Sanskrit, the company's name
loosely translates as “to nurture”. Phatak too has nurtured Jopasana with
utmost care for close to 16 years and the company is now finally ready to break
new grounds.

Jopasana's claim to fame has been its work in a number of exciting and
emerging technologies. For instance, it is working in M2M space or
Machine-to-Machine technology. Like humans interact with each other, there would
be a day, when machines will be able to interact with each other. Essentially
that means that data will flow intelligently from one machine to another. It is
a big thing in the life sciences and semiconductor space. Though this might
sound like Bradbury or Arthur C Clarke sci-fi territory, Phatak is quite
enthusiastic about the concept of pervasive Internet, meaning that machines
should be able to log on to the Internet using whatever communication channels
like Wi-Fi, GPRS or even satellite communication. “Imagine a day when that
happens, quite like the futuristic science fiction Hollywood movies,” he
wonders.

Though Jopasana is sixteen years old, its growth rate has been fairly slow
till date since it wanted to consolidate its position initially and not just
jump into the fray. Though Jopasana has subsidiary companies in the US and the
UK, it is currently looking at external funding to expand its footprint
globally. Till date there has been only one external investor from the US, and
the growth has been mainly funded through internal accruals. However, Phatak is
now in the process of evaluating how the company is going to raise the funds.

Globally, the company has 20 active clients, of which 3-4 are significant
ones. “We have a decent spread in terms of geography both in the US and the
UK. We are keen to service the market of mainland Europe and recently another
board member from Sweden. We are in talks with channel partners in Italy and
other companies in Scandinavia, and other countries. A large part of our revenue
comes from SMEs in Europe and the US,” informs Phatak. In the domestic front,
Jopasana is working with a few clients in the energy and conservation domain,
mainly companies like Thermax and Westex Wind Energy.

Can FRED Push on the Accelerator?

With mobile solution developers currently high on demand, the time might be
right for the four-year-old Accel Tree, working in the mobile enterprise space,
to take the big leap ahead. The company is banking on FRED, or Front End
Application Developer, a framework developed for mobile enterprise application
development. The company is targeting verticals like sales, services,
distribution as well as banking and finance through its solutions and is
currently only targeting the domestic market. 

“FRED is a development environment that aids in building of complex mobile
applications. In this environment, it just takes anything from one to four weeks
for building an application which used to take up quite a significant amount of
time in the past,” says Vivek Mannige, CEO, Accel Tree. According to Mannige,
it took three years to build the framework and it is finding lot of traction in
the enterprise marketplace. After a few successful pilots, the company is ready
to market the environment in a big way.

'It is ironical that most of the companies know what to do in terms of strategizing for the future but only 20% or so are able to implement them. We help formulate and execute the strategic roadmap for a company, without any loss' -LC Singh, CEO, Nihilent Technologies

The company has sold till date 12 solutions based on this tool and has six
clients. BPL Mobile is using a solution based on FRED for front-end sales
collection. Even another big telecom service provider is also using it for sales
collection. Geologistics, a courier company, is also using an application for
delivery confirmation. “We hope to clock revenues around 1.5 crore this year,
what we call a pre-revenue year. We are also targeting 100 customers by the end
of next year. To achieve this growth we are looking at partners. We do not
intend to work on our own,” adds Mannige. The company has tied up with IBM and
integrated FRED with the company's mobile technology platform to further its
growth plans.

Accel Tree has 34 people as of now, with 24 in development. The company has
till date filed for a patent and is in the process of filing another. “Filing
for a patent is quite a hassle and is certainly not easy,” rues Mannige. The
company is also working with IIT Madras on a microfinance project. Mannige
traces his entrepreneurial roots a long way back when he set up Indus Software
way back in 1990, only to sell its controlling stake to R Systems in 2002 before
establishing AccelTree.

New Kid on the PLM Dossier

Tucked away in a small residential flat in one corner of Pune,
ProductDossier represents the archetypal Pune IT company-small and maybe
insignificant in size with a revenue of Rs 1 crore, but significant otherwise in
the products it has developed catering to some niche domain of PLM. Founded in
the year 2000, ProductDossier delivers PLM solutions and services-its
TouchBase suite of products helps organizations manage their complete product
development process from concept to design to manufacturing to customer
delivery.

The integrated, Web-based, collaborative product development solution has
been installed in organizations such as Pari Robotics in Pune, KSI Bochum in
Germany and Systems Solutions in USA. With more illustrious names like Piaggio
Vehicles, Tata Ficosa, Transtech, Onida, DC Design and General Industrial
Controls in India added to its client roster in the last few months,
understandably, MD Sandeep Kumar is upbeat about the fortunes of the company.

“We are getting very good traction in the market and our products are more
and more accepted. We are making inroads into automotive, auto components,
electronics goods and EPC industries,” informs Kumar. Kumar might claim that
ProductDossier is redefining PLM as “IT backbone to improved business
processes for an organization”, but the crucial question is whether it can
stand up to competition from bigger players in Pune itself like Geometric
Software. At least it has succeeded till now thanks to it being a nimble and
lean organization and more importantly its products being able to mimic the
manual style of working of an organization and combine it with the foundation of
an IT back bone. The result is improved speed and quality for the user. For
players like Geometric who come with a bouquet of IT services, the turnaround
time and process might not be that simple.

Accolades have not been late in coming for ProductDossier. It was recognized
by Desktop Engineering magazine as Asia's leading PLM vendor and amongst the
top 50 PLM vendors around the world. It was also selected as one of the most
innovative and emerging companies by NASSCOM in 2004. Another advantage of the
company's flagship product TouchBase is ProductDossier's ability to deliver
TouchBase as a hosted on-demand service besides offering it for traditional
deployment as well. This enables it to bring the advantages of PLM to small and
midsize companies without the accompanying high cost of deployment.

'Jopasana's claim to fame has been its work in a number of exciting and emerging technologies. For instance, it is working in M2M space or Machine-to-Machine technology. Like humans interact with each other, there would be a day, when machines will be able to interact with each other' -Ajay Phathak, Jopasana

A couple of new product strains came up during this year. TouchBase-PLM
Release 3.1 was launched on July 1st 2006. The release includes new features,
AJAX technology and Support for MSSQL 2005 and Oracle 10g. Existing customers
under AMC are entitled to get this release as part of their AMC. This is in sync
with ProductDossier's future plans, whereby Kumar is looking at creating
integration between TouchBase and ERPs like SAP, Baan and People Soft and CAD
modelers like Pro/Engineer and Solid Edge, among others.

The Microsoft Touch

Cybage seemed to enjoy a symbiotic relation with Microsoft: it was involved
in MSDN testing from a facility in Redmond; it earned the Microsoft preferred
vendor status in FY '06 and it launched a development center in Hyderabad to
be in close proximity to the Microsoft IDC. However, though Microsoft
contributed more than half the revenues, Cybage still managed to attract clients
in healthcare, telecom and logistics sectors. Though the company has 91 active
clients, CEO Arun Nathani informs that the Top 10 accounted for nearly 65% of
its revenues.

This year the company has added 30 new customers into the client roster
including HSBC Bank. Also leveraging its traditional strength in Internet
advertising solutions, the company not only boasts DoubleClick as a customer but
also promoted tools like TestTrack Pro, Analytics, Banana Rama Wizard and
Beverage Tracker. Outside of Microsoft and Internet advertising, the company is
also involved in developing applications for embedded devices, URL filtering and
VoIP as well as supporting tier-2 CRM/ERP implementation, grid computing and
network management tools.

The company's growth has been commensurate with these new initiatives;
revenues have been growing in the 50-60% range for the last three years and
crossed the three-figure mark this year to reach Rs 106 crore. This year itself,
Cybage has added 800 new people to reach 1800 in total manpower; with the Pune
and Hyderabad centers reaching maximum capacity, the company is opening up
another new center in Ahmedabad at an investment of Rs 6 crore. In addition,
nearly Rs 80 crore is being spent, informs COO Deepak Nathani to set up more
development centers in Pune itself.

Rajneesh De & Shashwat Chaturvedi

rajneeshd@cybermedia.co.in