Those Who Dare to Dream

The oft-repeated lament of the In dian technology sector has been the lack of

successful software product companies. While the services sector has moved from

strength to strength, success has eluded most product companies.

While the domestic market for software products is plagued by intense

competition and a highly price sensitive customer, few Indian companies have had

the resources to try out overseas markets. The lack of understanding of overseas

market trends and requirements also remains a major roadblock for most product

developers. Finally, the success of the services business model itself acts as a

deterrent for companies to focus their energies on other areas such as product

development. IT majors like Wipro and Mastek have long abandoned their product

businesses and now focus completely on the services business.

In this rather dismal situation, there are of course a few exceptions. Not

that these companies have been major successes, but at least they have persisted

with their product ideas and among them could be hidden the first major product

success story from India.

Cranes Software International



Cranes Software is a scientific and engineering products and solutions

provider, focusing on product development, consulting, distribution and

training. Cranes' clientele includes government institutions, academic

institutions and corporations across the globe. The company's services and

solutions division is a provider of software services in the area of wireless,

mathematical modeling and simulation, digital signal processing and real time

embedded systems but contributed only 3% to the company turnover. , offering a

wide range of services.

For the last quarter of the fiscal ended March 2004, the company reported an

impressive set of accounting figures, with revenues amounting to Rs 51.7 crore,

a 100% growth as compared to Rs 25.8 crore in the same quarter of the previous

year. The net profit for the same period stood at Rs 15.2 crore, up 182% as

against Rs 5.4 crore. Overseas revenues contributed 87% amounting to Rs 45.2

crore as compared to the balance 13% revenues contributed from revenues

generated domestically amounting to Rs 6.5 crore. The company's revenues for

the year ended March 2004 amounted to Rs 113.7 crore, registering 86% growth

over the previous year revenues, which were Rs 61.0 crore and the net profit

amounting to Rs 32.6 crore, up 132% as compared to Rs 14.1 crore.

During the fiscal March 2004, the company acquired the Sigma product line

from Chicago based SPSS Incorporated for $13 million, wherein Cranes acquired

the product line, 's customers, personnel and fixed assets apart from all

related intellectual property. The product line has an established base in the

pharmaceutical and biotechnology marketplace with annual revenue of $6.5

million. Cranes along with technical computing software developer, The MathWorks

Incorporated, announced the availability of SimPowerSystems 3 toolbox for MATLAB

to aid electrical engineers with a tool to model and simulate power systems with

their controllers in the Simulink environment. The share of Cranes Software

currently trades at Rs 364.

Subex Systems

Bangalore-based Subex Systems is a telecom software product company having

offices in US, Canada, Cyprus and South Africa. Subex's fraud management

system, Ranger is for wireless and wireline networks, designed specifically to

address fraud in roaming, pre-paid and post-paid environments. For the fiscal

year, Ranger grew from 54 installations in the previous fiscal to 65

installations.

The company reported healthy figures for the quarter ended March 2004, where

in revenues grew 28% amounting to Rs 25.1 crore as compared to Rs 19.6 crore

earned in the previous fiscal. Revenues form the sale of products and services

rendered contributed proportionately almost equally amounting to Rs 12.2 crore

and Rs 12.9 crore respectively. The net profit for the same period was Rs 4.9

crore, up 74% as compared to Rs. 2.8 crores, y-o-y.

Subex's clientele includes AmericaTel, Global Crossing, Sprint and

Teleglobe in North America, Cyprus Telecommunications Authority, Cosmorom and

MobiFon in Europe and BPL Mobile, Escotel, Hutch, Idea Cellular, DTAC Thailand,

JTB Brunei and MTN Sri Lanka in Asia Pacific.

During the financial year ended March 2004, Subex entered into a partnership

with BOCO Inter-Telecom, a Chinese software solutions provider to wireless

service carriers, by setting up sales and support office in Beijing to address

the growing telecom market there. Tata Teleservices, which provides wire line,

fixed wireless and CDMA mobile connections chose Ranger, Subex's Fraud

Management System to detect and manage the incidence of fraud in its network.

Going ahead, for FY05 the company expects product revenues to grow 30% to 35%,

while the services business is expected to grow by 7% to 10%. Net profit is

expected to grow by 25% to 30%. Subex is currently traded at Rs 246 per share.

Geodesic Information Systems

Founded in April 1999, Mumbai-based Geodesic Information Systems designs and

develops products and services offering solutions in the areas of Relational

Database Management System (RDBMS), networking applications and communications.

Geodesic's product - Mundu Messenger is considered to be an web based instant

communication tool available on the Internet with features like URL transfer,

cross-conferencing, easy portability and cross platform availability. The

company's products are available across desktop and wireless platforms of Palm

and Symbian.

Geodesic earned revenues of Rs 5.8 crore for the final quarter of the fiscal

ended March 2004, registering a 92% growth as compared to Rs 3.0 crore in the

previous year. The revenues for the full year grew 81% amounting to Rs 17.7

crore as against Rs 9.8 crore earned in the previous fiscal. The net profit for

the quarter stood at Rs 2.7 crore, up 154% year-on- year compared to Rs 1.1

crore.

Recently, Rakesh Mathur founder of Junglee picked up 2% equity stake in

Geodesic Information, joining the company's board of directors and

is expected to help the company with sales and marketing opportunities in

the US and global markets. Geodesic's Mundu's customers include Indiatimes

and Girvan, a NASA affiliate. The company expects to generate revenues of Rs 40

crore for the fiscal year 2004-2005 and a profit of Rs 17 crore during the same

period. The share of the company is currently at Rs 317.