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Issue dated - 17th March 2003

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Aftek Infosys: A company driven by change

Aftek has not just transformed itself from a hardware-focused company to a software-focused one, but has also leveraged its embedded software developmental skills to enhance its client-base and the bottom line. Srikanth R P analyses the strategies that make Aftek worthy of being called one of India's flag bearers in the global products space

Though technology companies are admired for their innovative products and technologies, only few manage to survive and adapt to changing business scenarios.

The strategy of tapping a large customer base of quality clients rather than marketing a product on its own has helped Aftek immensely, says Ranjit Dhuru

Mumbai-based Aftek Infosys is one such company, which has managed to change with the times and fine-tune its strategies vis-à-vis the marketplace. The metamorphosis is evident from the company’s new goal moving from being an affordable technology player to one ‘driven by change.’ From hardware, Aftek has moved on to becoming a well-known player in the Indian products space with strengths in embedded software.

The genesis of Aftek’s strengths in the embedded space lies in its rich experience in hardware. Aftek Infosys was set up in 1986 with the main focus on hardware. The company started with distribution and servicing of computers and microprocessor-based terminals. This fine-tuned the company’s expertise in the embedded software space and Aftek soon found itself customising and developing embedded software for a number of OEM players.

But the company’s presence in the embedded space was established when it developed a terminal controller for NICs. Having maintained its focus on the embedded space, the company is now positioning itself to play a big role in the wireless and mobile space, which are big sectors for deployment of embedded technologies.

The focus on developing hardware-related software continued till 1993, when the company decided to expand its portfolio to include software services, and thus cut down on its hardware exposure. But, this was not an easy task. Aftek not only required a major change in the mindset of its employees but needed funds for its new focus. During this time, the company approached IDBI, which sanctioned Rs 1 crore to enable it to implement its expansion plans. Aftek’s plans received a further boost when its public issue in 1995 was oversubscribed. The next two years were spent in building a reputable client base and developing its own intellectual property. Aftek’s moment of reckoning came when one of the bigger vendors in the software space, Computer Associates, approached it to develop a UPS product, which could be integrated with CA’s Unicenter-TNG, an infrastructure management solution. Aftek was chosen as it had already developed a domestic UPS monitoring solution. As that product was in a rudimentary stage, CA gave Aftek a detailed roadmap on how it could be adapted to make it suitable for Unicenter-TNG. This turned out to be a milestone in the company’s history.

Having been given the opportunity, Aftek spent a lot of time researching how CA’s Unicenter product suite worked. This hard work paid off when Aftek’s product, Powersafe, was chosen by CA to be integrated with Unicenter-TNG.

More bouquets were on the anvil when CA decided to award a gold-certified ranking to the product. This made Aftek the only company in the Asia-Pacific region to be awarded such a certification. CA’s selection of Aftek’s product gave the latter tremendous mindshare in the enterprise space. Further, it also increased the company’s reach far more than any attempt to market products on its own strengths could have done. CA holds a large chunk of the enterprise network management market, with the rest of the space being shared by players like IBM, HP and Novell. CA’s product, Unicenter-TNG, is installed by over 18,000 clients across the globe. The integration of Powersafe with such a well-established product turned fortunes around for Aftek.

As a Web-enabled product without similar competition, Aftek had a winner in Powersafe. Furthermore, the IPR for Powersafe is held by Aftek, and the company holds a non-exclusive agreement with CA. This means that Aftek is free to enter into marketing arrangements with other players like IBM or HP. Aftek has already developed Powersafe for HP’s Openview and efforts are on to make Powersafe available on IBM’s Tivoli.

After CA’s selection of Powersafe, Aftek discovered that a product that can complement other global products would have better market potential. The success of Powersafe proved just that. Rather than developing products and then marketing them, the company began following a strategy to serve as a complement to global product leaders.

Another product with exponential potential from Aftek’s stable is Jadoogar, which enables the management of diverse devices across enterprisewide networks. Explains Mahesh Vaidya, CTO of Aftek Infosys, “Billions of real-world devices like sensors and controllers, vending machines, security and access control systems, intelligent home and entertainment devices, office and home industries have been deprived of the advantages of a centralised, single-window management due to the disparate nature of their interfaces and protocols. This is where Jadoogar fits in perfectly. It connects all such devices to the backbone of
the enterprise management framework.”

Jadoogar is based on an ARM/7 processor running embedded Linux. On one side, it connects to various real-world devices on a range of wired and wireless interfaces like RS232/422/485, irDA, 802.11b and Bluetooth. On the other, it connects to other Jadoogars and enterprise management frameworks like Unicenter-TNG, Tivoli or Openview. Amongst the limitless applications of Jadoogar are Personal Area Networks (PANs). Imagine a network of tens of Jadoogars and Linux servers at a busy bus or railway station. Imagine commuters carrying 802.11b or Bluetooth enabled handheld devices with them. As soon as any such device comes in the vicinity of a Jadoogar, commuters can download and run simple and complex collaborative applications like arrival and departure timings, platform assignments, reservations and even games.

Aftek’s strategy is a perfect example of how a product company can continue to create high value products by positioning itself uniquely. Says Ranjit Dhuru, CEO of Aftek, “Scalability at a global level is possible only through products. And rapid scalability can be achieved through alliances and partnerships. This unique strategy of ours, wherein we strike a deal with successful companies, has paid off handsomely. Apart from the well known example of CA, we have a number of other alliances too.

Jadoogar connects devices with disparate protocols and interfaces to the backbone of the enterprise management framework, says mahesh vaidya

They are: Aether Systems (a market leader in enterprisewide mobile computing), Gemplus (a leader in smart card technologies and one of the largest smart card manufacturers) and Verdicom (a leading player in the biometrics space). (See box: Synergistic partnerships). This strategy of the company gives us an opportunity to tap a large customer base of quality clients, rather than market products on our own.” This has resulted in the company making huge gains. Not only does this strategy give the company immense savings on the marketing front but also gives it a chance to develop domain expertise in a wide range of verticals, with a protected market. The alliance route has also given the company a chance to offer its clients customised software services.

Having created a good referral base, the next step was to move more aggressively towards the global market. In line with this vision, the company incorporated Aftek Infosys (US). This company will drive the company’s product marketing activities in the US. To strengthen its US subsidiary, Aftek has enrolled Aftek USA as a TEN (The Enterprise Network) member.

TEN is a leading incubator and has been set up with assistance from NASA. As an incubator, TEN has been well known for promoting entrepreneurs and start-up companies. TEN has been instrumental in providing facilities, mentoring, strategic introductions to investors and essential support services. Being a part of such a network gives Aftek the much needed guidance and support it requires to crack foreign markets.

Further, till date Aftek Infosys was restricted and could not go beyond the referral base given by CA. But with the establishment of its US subsidiary, the company can aggressively push Powersafe to CA’s clients on its own too.

Acquisitions
To further its growth, the company is evaluating a German firm for acquisition, which not only has a strong presence in the knowledge management (KM) space, but also has a good client base. The German acquisition will reduce the company’s dependence on the US and give it a headstart in the European market.

The knowledge management space is huge. Research firm IDC expects the KM market to grow from $6 billion in 2002 to $12.9 billion by 2005. The company expects to fund its acquisition through the global depository receipts (GDR) route.

The company is also eyeing the 3G space, estimated to be worth $20 billion by 2005. Explains Vaidya, “We are looking at providing solutions for complete management of 3G infrastructure, along with solutions for managing and deploying 3G content.”
To tap the global 3G market, Aftek is looking at entering a joint venture with a company that has a good exposure in the area of wireless and 3G, and has strong relationships with existing 3G mobile service providers.

Conclusion
The success of Aftek Infosys is a reflection of timely changes in its strategies. Indian product companies should follow suit if they want to succeed in the global product space. Additionally, the company’s metamorphosis from a player in the hardware space, to a player known for its cutting-edge products and unique marketing positioning is an inspiring marketing lesson for India’s product-focused wannabes.

Synergistic partnerships

Vendor Solution developed
Computer Associates, USA
Aether Systems, USA
Gemplus, France
Philips, Holland
Verdicom, USA
E-Business management
Mobile computing
Smart card solutions
MiFare Technology
Biometrics

Aftek Milestones
  • 1986 - Incorporated by a group of IT professionals
  • 1987-92 - In-house R&D delivers embedded products for UNIX servers in the domestic market
  • 1995 - Successful IPO, listing on BSE and NSE
  • Software development centre at Pune
  • 1998 - Aftek Infosys (US) Inc established in San Jose, California
  • 2000 - Gold-certification of Powersafe by Computer Associates
  • 2001 - Achieved ca smart, a Computer Associates seal of excellence
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