Spotlight

Off the beaten track

By going in for software product development from India, Geodesic Information Systems has bucked the trend. By Kushal Shah

Indian IT companies are well known for the offshore development model. They have carved out a niche in the global market for low-cost development. The question is how long we can sustain a low-cost labour model. We aren’t far from losing that advantage with the emergence of competition in the form of upcoming offshore destinations such as Vietnam and other Asian countries. Sensing this situation way back in the day and in order to have an early mover advantage by planting its flag in the unexploited terrain of software product development in India, four seasoned professionals with expertise in various domains—Pankaj Kumar, Kiran Kulkarni, Mahesh Murthy and Prashant Mulekar—started a venture called Geodesic Information Systems Ltd in 1999.

The dictionary definition of the word geodesic is the shortest line between two points on a mathematically defined surface. It suggests a direct approach and that’s just what this company undertook by getting into product development. Two factors compelled the founders into establishing a product-based company. “The idea was to bring a product company out of India. Firstly we wanted to explore Indian intelligence in the product space which had not been exploited sufficiently and secondly, we as a country had failed in global market on the product front so we wanted to change that image. Our aim was to build a product company, hang around for long time, become experts in this niche and then to go retail and to the enterprise segment,” says Kiran Kulkarni, Managing Director, Geodesic Information Systems. Eight years down the line, the company is listed on the NSE and the BSE with about 24.76 percent holdings resting with its promoters and the remainder with other institutions. It has reported revenues of Rs. 177.06 crores with a profit of Rs. 93.75 crores for financial year 2006-07. Headquartered in Mumbai, India, Geodesic has offices in Bangalore, US, UK, Sweden and Hong Kong. They are looking for expansion in Europe and in the US east coast.

Layers of strategy

The idea was to build a product that would cater to the enterprise segment. “We wanted to build a tool that would aggregate content and manipulate information in the way that users wanted to. Along with that, we thought we should also launch a dissemination tool. An instant messenger provided a mechanism to aggregate and disseminate content,” says Kulkarni. Talking about the guiding principle of Geodesic, he says that the central idea is to build a global community without barriers. They even found that people usually do not wish to pay for desktop-based products but surprisingly they are ready to shell out money for a mobile platform. With these findings in hand, they launched a product under their own brand name called Mundu and retailed it out to channels and handset manufacturers. The product is sold to enterprises by making IM a platform-independent bundle of software.

Geodesic products are basically categorised in three layers—the communication layer, the productivity layer and the entertainment layer. These are stacked into a single product which can be configured as per the user’s requirements. Mundu serves as a gateway to your communication and productivity means. It is an instant messenger which lets you connect to all the leading service providers—MSN, Yahoo, Google and AOL. It even gives access to e-mail and VOIP services. The company plans to have an SMS gateway too in order to complete its communication portfolio by covering all four modes such as IM, voice, e-mail and text.

For productivity layer per se, they have something called Lets Share. Using this, one can share documents and images in real-time using any device and can even log in to the office network from home. This is device independent and caters to the enterprise audience. For entertainment, radio is available at this point of time. “The primary reason to launch the radio facility is that you can access a limited set of songs using normal radio or an mp3 player whereas Internet radio allows you to access 1,50,000 channels at a time which are on demand,” explains Kulkarni.

Making a splash

When Geodesic kicked off, instant messengers had already created a big bang in the market but they came with limitations. “At that point in time, cross connectivity did not exist. AOL did not connect with MSN and vice versa. We licensed our technology to Indiatimes and they did well by adding a few million subscribers in the first three months. So there was a need to have a single user interface to get access to multiple services and we got our share of the limelight,” says Kulkarni. He elaborates on the statistics associated with messenger usage. According to him, on an average people use about 2.3 services; be it MSN, Yahoo, Google or any other; and has at least 11 buddies on one service. Bringing all these together in a single product became Geodesic’s route to success. Via Indiatimes is succeeded in grabbing 15 percent of the Indian IM market within three months. Taking this success as proof of its concept, Geodesic approached other portals and convinced them to make use of its technology in the early days.

Acquiring to succeed

Acquisitions are commonplace in India Inc. Companies resort to mergers and acquisitions to grow quickly. Acquisitions may be undertaken to cut the time required for business expansion in terms of new technology, products etc.; sometimes a deal is done to enter into a particular region. Whatever the ends sought, mergers and acquisitions have become an essential tool in the arsenal of top management at small and mid-sized companies that are keen to catch up with their larger counterparts. Geodesic adopted this strategy and it has acquired five companies during the past three years.

To begin with, Geodesic acquired India-based PicoPeta a maker of Simputers in 2005. “These people had expertise in the handset business and applications for it and they created market for us. Convergence is happening all around and we thought PicoPeta would be very helpful for us and it has indeed paid off handsomely,” says Kulkarni. After this, the company looked beyond Indian shores to acquire Engage, a Hong Kong-based software development company. After concentrating on content aggregation and dissemination, it was looking out for a piece of software that would provide alignment and relationship management. Engage had a product called customer alignment and relationship management which led to its acquisition by Geodesic.

Next, the company moved to Europe to buy a 76 percent stakes in Swedish firm Clangula IT. This company basically served as an entry point into the European market. The alternative, setting up a new company there would have taken its toll on Geodesic’s resources. Entering Europe was imminent as top mobile manufacturers such as Nokia and Sony Ericsson are based out of Europe. Coming back to India, in 2007, they acquired a 60 year old publication house, Chandamama. This was a foray into the content arena. It gave Geodesic access to a massive database of stories that can be converted into multimedia formats and made to reach to people through SMS or radio or by other means. The company intends to use this data to create a new mode of interactive entertainment.

The most recent acquisition is that of Edot Solutions, a Web developer. This deal was consummated with the intention of facilitating the company’s retail dream. “It is a company with Web Technology expertise. When we will have our retail version, we will need expertise to handle the customer base and make the Web site interactive at any given point. These people have expertise in building sites such as moneycontrol.com, justdial.com and business standard.com,” explains Kulkarni.

The Right Mix

To run a product company, you need expertise across areas, be it technical, or marketing. Geodesic has a mix of employees in all fields. It has about 300 employees predominantly involved in development; experts in platforms such as Windows Mobile, Symbian, J2ME, Linux, and Web 2.0. Hiring takes place from IITs and the regional campuses of engineering institutes. As far as top management is concerned, people have been hired from top notch companies such as France Telecom, IBM, and Adobe. “It’s not only technology people, but we hire all sorts of people who are right for the company. We even have a biker photographer and people like that to help us get new ideas,” says Kulkarni. Being a product company, attrition is low since people working on a product are invested in seeing that their product gets launched with their name attached to it. Apart from that, the most important thing they look out at the time of hiring is the right mindset and attitude.

Establishing a brand

The company’s prime objective a few years from now would be to make its brand, Mumdu, famous across the globe. To date it was focused only on revenue and not on name, satisfied with being perceived as a technology provider and contented with one line saying ‘powered by Geodesic.’ Now it is looking to build a brand as the prime objective. Since a retail version will soon be out, it needs to look at branding and awareness. The company assures us that a strong brand will be in place by the end of this fiscal. It also plans to touch on the most happening thing on the Internet today, Social Networking.