Nihilent aims to fulfil SME dream with ThirdDream

Nihilent Technologies has always defied conventional wisdom. When every company under the Indian sun was deriving almost all revenues from software services, this start-up went ahead and started with IT consulting—considered the most high-end and risky option for pure-play software services companies. Now Nihilent is set to play an entirely different game in the Indian software product scenario with ThirdDream, a software product suite specifically built for the SME segment. SRIKANTH R P has the details on Nihilent’s ambitious game plan

ThirdDream can be the solution to help entrepreneurs transition their visions into reality instead of getting caught in operational problems, says L C Singh

L C Singh, CEO of Nihilent, has always had this burning desire to do something different. Be it launching a company during the slowdown or the strategy to focus on IT consulting—Singh has always been swimming against the tide. And now, Singh with ThirdDream wants the small and medium enterprise (SME) sector to benefit from using a software that can not only suit their pockets but help them manage the business and plan strategically just like they would have done with the help of a management consultant.

Says Singh, "Most large corporations hire the best people but they still hire management consultants to help them plan strategically. But what can companies in the SME sector do? We believe that ThirdDream can be the solution to help entrepreneurs transition their visions into reality instead of getting caught in operational problems. Besides bringing to the SME best management and consulting practices, we have also included modules that can help even a small company use the power of the Internet to not only collaborate with employees, suppliers and partners but also set up his site on the Internet using the same package."

The current product, ThirdDream, is probably everything that an SME could ask for at an economical price (Rs 11,000 currently). The package consists of four core sub-products: DreamPlanner, Dream Dialog, DreamDesigner and DreamWeb, packaged as a single product offering. The first product, DreamPlanner is a ‘planning for change’ software that allows an organisation to define role-based plans for different people and review activity, efficiency and goals set over a period. The second product, DreamDialog allows businessmen to collaborate with their partners, suppliers and customers. The same product also allows one to create e-mail-based campaigns. The third sub-product, DreamWeb, enables creation and management of websites. DreamDesigner is a wizard-based website creation tool and a user has a choice of more than a hundred templates to choose from for designing his site.

While there are software packages in the market that probably offer the same features, the combination is what makes Nihilent’s software product suite a potential winner. And Singh has ensured that the software has specific modules to address the problems of the typical SME. For instance, if an SME today wants a collaboration software to collaborate with just five customers, it would cost the company a bomb. Naturally, SME shies away from investing or buying such products. The same is the case with companies wanting to have a Web presence. Many small companies are not on the Web because of the cost associated, and this has effectively ensured that most small companies do business without a face on the Internet.

Says Singh, "Using ThirdDream, a company can create a professional brochure within minutes and send it using DreamDialog. Using the same product suite, the company can create a website from more than a hundred templates for specific industries. Within two hours a company can have its website ready. Besides this, Nihilent will also take care of the hosting issues."

The idea

L C Singh has always been recognised for his role in creating the software products market for TCS, especially during the launch of EX in the year 1991. But after EX, Singh saw that there was no serious product in the Indian market that could benefit the end-customer. Singh started experimenting with a lot of ideas and started thinking about software packages that would benefit the small businessman. Unlike the year 1991, the biggest difference today was the reach of the Internet. While Internet access was available to a few, the World Wide Web and the concept of a Web presence was just being developed. But Singh also knew that the idea to launch a Web-designing package would hardly create any excitement in the market. Singh then started looking at the basic needs of a small business and came up with four essential concepts that the products fulfil today. With this product, Nihilent wants to capture the SME sector, which is also the blue-eyed boy of IT vendors today.

And if one looks at the business opportunity and the software usage by the SME sector in India, L C Singh may have just made a master move with ThirdDream. For instance, a CII survey of nearly thousand SMEs conducted last year states that "Over the past one year period, small and medium enterprises are increasing their software resources. These are mainly in the areas of network security, low-end ERP, Linux-based mail and file servers and simple solutions like Tally and Microsoft’s small business server. This trend is likely to continue for the next two to three years." The same survey states that the expenditure on software among SMEs is estimated at around Rs 2,500–3000 crore. Further credence to the opportunity in the SME segment came from a survey conducted by Access Markets International (AMI), which was carried out in six major cities, namely Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai. The survey found that out of a base of nearly 4,50,000 SMEs only 17 percent had websites and only 3 percent had websites that allowed e-commerce. The survey also highlighted some key business issues that SME companies typically have to face.

Though Singh had an inkling of the potential, the survey confirmed his thinking. Singh could clearly see what the SME segment needed and that it was not available in the market. Entrepreneurs were reluctant to buy new IT packages due to the high costs associated with design, software procurement and training. Singh knew that if he offered the right features at the right price, there was a great potential to be tapped in the domestic market. For instance, even a small businessman can create his own electronic marketing campaign by designing brochures and use the same software to create his own Web page. The same software can be used by a fashion designer to conduct an online poll and get feedback on his designs.

From the initial feedback received from the test launch the company has conducted in Mumbai and Pune, the response has been encouraging. For instance, a small chartered accountant firm in Mumbai has bought the software suite for advising its clients on the financial status of their investments. Today the same firm is looking at advising global clients on India-specific investments. Another example is Genesis Advertise ments, a Pune-based firm. Says Sanjay Satalkar of Genesis Advertisements, "Our creative team was impressed with the huge number of industry-specific Web templates. The image bank, realistic starter text and a simple interface have made our job quite easy. We can also design and execute targeted e-mail campaigns at a low cost."

Channel strategy

Singh has been a veteran in the field of software product marketing and knows the importance of the channel community for the success of any software product. It was Singh who during his stint with TCS developed a pan-India distribution network for EX, which was the first IT product retailing initiative in India. Apart from offering attractive margins to channel partners, Singh is wooing channel players with the ‘recurring annual contract for services’. This means that if a customer wants to continue using the package, he would have to pay Nihilent a service charge for meeting expenses like, say, hosting the site and maintaining the domain name. Nihilent will share the revenues with the channel partner who has closed the deal. This is unlike a traditional product sale where margins are for a one-time sale only. To enhance the product suite, Nihilent will be adding more specific modules to enhance the features of the product and provide further revenue opportunities for the channel partner.

Branding

Even Nihilent’s brand marketing strategy is completely different from the traditional approach. For instance, Nihilent’s has appointed a brand communications consultancy firm, ‘Chlorophyll’. What’s different is the fact that a major part of Chlorophyll’s fees for the project are linked to the actual success of the product. Singh says this is a culture followed in Silicon Valley and will infuse extra energy into the project.

Says Anand Halve of Chlorophyll, "We are confident that we can create a unique brand for Nihilent with ‘ThirdDream’ since it is probably the first time that a brand of software has been created to address the needs of SMEs. Secondly, most software developers have stayed away from trying to build the intangibles that make a brand. Unlike this, we aim to position ‘ThirdDream’ as a brand specifically for SMEs."

Conclusion

While not many Indian software products have succeeded in the Indian market, except brands like EX and Tally, Nihilent’s strategy of building a product specifically for the SME segment is a bold and innovative move that can bring in the much needed energy to spur other companies to develop products for the domestic market.