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COMPUTER BUSINESS
Software Majors Reap
Booming Financial Harvest On
expected lines, the software bluechips Satyam Computer Services, Infosys Technologies,
NIIT, Sonata and Pentafour Communications have announced impressive results for the
financial year 1998-99. Profits have risen significantly, turnover has increased and
operating margins have jumped due to lower finance costs.
Leading the pack is Satyam Computer Services Ltd which has
posted a net profit of Rs 72.80 crore for the financial year ended March 31, 1999-143
percent higher than the previous year's Rs 29.99 crore. Revenue stood at Rs 378.13 crore
(inclusive of Rs 376.61 crore from software exports) against Rs 178.49 crore during the
last financial year. A major decision taken by the board was in favour of the merger of
the company's three subsidiaries-Satyam Enterprise Solutions Ltd, Satyam Renaissance
Consulting Ltd and Satyam Spark Solutions Ltd-with the parent company from April 1, 1999.
Announcing the results, the Satyam Computer chairman B.
Ramalinga Raju (photo), said, "During the year, we have taken certain initiatives
that augur well for the company. We are one of the few companies in the world which have
achieved SEI-CMM Level 5 assessment. This will further build customer confidence in our
ability to provide global standard of service. The merger with the parent company of three
subsidiaries further strengthens our company's service and product portfolio." Raju
said the management had decided that it was an opportune time to merge all the
subsidiaries, except Satyam Infoway, into the parent company. Y2K projects contributed 28
percent of the revenues.
Infosys Technologies Ltd reported a rise in its net profit
from Rs 60.37 crore in 1997-98 to Rs 135.27 crore this year. The total income also
registered a considerable increase from Rs 260.37 crore to Rs 512.74 crore. Infosys
chairman and chief executive officer N.R. Narayana Murthy said, "We had growth across
all out geographical and business segments. Investments during the earlier years in
creating marketing infrastructure and improving productivity levels have strengthened the
company and positioned it well for a market that continues to be competitive and
dynamic." Infosys' income from software exports stood at Rs 500.25 crore in 1998-98
against Rs 250.94 crore in 1997-98.
Global revenues for NIIT Ltd and its 18 subsidiaries for the
six-month period ending March 31, 1999, clocked Rs 419.09 crore, up from Rs 298.64 crore
in the corresponding period last year. The company recorded a 72 percent growth in its net
profit, up from Rs 16.60 crore to Rs 28.51 crore, during the period under review. Software
business recorded revenue of Rs 224.6 crore in the half-yearly period representing a
growth of 45 percent. Software revenue constitutes 54 percent of NIIT's global revenue.
Sonata Software Ltd registered a 48 percent increase in the total revenues and a 75
percent increase in net profit in 1998-99 over the previous fiscal. Total revenues were Rs
126.47 crore while net profit was Rs 9.75 crore in 1998-99. Pentafour Communications has
achieved a turnover of Rs 70.17 crore for the year ended March 1999 representing a growth
of 71.3 percent over the corresponding period last year (Rs 40.97 crore). On the other
hand, HCL Infosystems Ltd has reported Rs 13.99 crore net profit in the quarter ended
March 1999, indicating a 42.2 percent rise from Rs 9.83 crore in the corresponding quarter
last year. While the financial results have left the software industry cock-a-hoop with
joy, the hardware industry has little to rejoice. According to Manufacturers' Association
for Information Technology (MAIT) official, given the current set of circumstances, an
extraordinary performance is a pipe dream.
Motorola
Spins Off Networking Group Business into New Subsidiary
Motorola India Ltd, which had been planning a major
organisational revamp of its Indian operations, has affected a major change in its
Internet and Networking Group (ING) division based in Bangalore. Almost the entire staff
of the ING division has been transferred to a newly formed company-Convergent
Communications India Pvt. Ltd (CCIPL). The core team of network professionals will be
engaged in providing a comprehensive LAN/WAN networking solutions centred on Motorola
ING's networking products.
Informing this, Venkat Kedlaya, managing director, CCIPL
said, "The company has been appointed by Motorola as the national distributor for
India. We will also be providing services and support to all existing Motorola's
customers. Plans are afoot to launch new products and services through our
customer-focussed businesses." CCIPL's product line includes Vanguard routers, voice
over IP and voice over frame relay solutions, LAN solutions like hubs and switches,
besides modems and racks.
Convergent's core team of network professionals will be
engaged in providing a comprehensive LAN/WAN networking solutions centred on Motorola
ING's networking products in India. As a starter, it has announced the launch of
FastSURFR, a 56k high-speed data and fax modem. Kedlaya says, "This external desktop
modem has been tuned to suit the Indian conditions and sends and receives faxes at 57600
bps and provides Internet download speeds up to 56 Kbps. It is ideally suited for home PCs
and in office applications such as E-mail, remote LAN access and telecommuting. "With
newer ISPs investing in 56k infrastructure, FastSURFR would be the ideal choice. Users
would invest in a 56k modem rather than a 33.6k modem, which would soon be obsolete,"
Kedlaya said.
RS Software Inks
JV with Hanover Direct
 RS Software, the Calcutta based software services
company, has signed a 60:40 joint venture agreement with Hanover Direct Inc. of the US.
Under the agreement, a new company will be set up to develop software, systems and
programming for E-commerce applications. The JV would meet the requirements of Hanover's
Web services division, and would later focus on providing technical expertise and
consulting services.
R.R. Jain, managing director, RS Software says, "The
venture would allow RS software to offer the Hanover portfolio of Web initiatives with the
scaleable resources we need, including creative marketing, Web site creation, maintenance
and management." The JV would focus on Hanover's common system platform, which may be
applied to a range of products performing the full site of services required by E-commerce
firms in different retail segments.
Both equity partners expect to formalise the legal contour of
the JV agreement by June 30, 1999. Michael D Contino, senior vice president and Chief
Information Officer (COO), Hanover, would oversee the operations of the new JV company.
"Our operating partner is a US market leader in Internet-based direct selling, and we
see a huge opportunity in India with the number of Internet connections slated to jump ten
folds from 8 lakh to 80 lakh by 2002," Jain says.
ENTERPRISE
COMPUTING
Baan Launches 'India Localisation' ERP Initiative
 Baan Info Systems has launched "India
Localisation", a customised ERP module that addresses four key areas of Indian
legislation-central excise, sales tax, octroi and income tax deducted at source)-that
impact the operation of most manufacturing organisations in India. This module has been
developed indigenously at Baan's Development Centre in Mumbai, and is the first local
initiative by a global ERP major in the country.
Baan has already partnered with Sun Microsystems to offer an
all-in-the-box ERP solution which combines ERP software from Baan, hardware from Sun
Microsystems, and implementation services from Wipro. Speaking on the "India
Localisation" launch, D. Bharath (photo), CEO of Baan Info Systems, said,
"Indian tax laws are complex, requiring a multitude of documents and compliance
reports at each step in the process. In most cases, this cannot be supported by a generic
ERP software taxation module. With India localisation, we have taken a lead in providing
an ERP solution that incorporates the best global practices, while supporting local
statutory compliance."
In the Union Budget for the year 1999-2000, finance minister
had outlined steps aimed at reducing the burden of compliance faced by Indian
manufacturing companies, the most significant being that they would no longer be required
to maintain an extra set of records purely for the Central Excise Department. Welcoming
the step, Bharath said Indian manufacturing companies would still continue to face more
complex compliance requirements than companies across the world. According to Bharath,
Baan India was quick to understand this need and has developed a comprehensive India-based
localisation strategy which meets the requirements of local Indian tax and statutory laws.
The tax laws addressed in the localisation affect the
business function in the sales, purchase, accounts payable and receivables, shop floor
production and other areas.
L&T
Activates Asia's Biggest-ever ERP Net
In what could be the biggest operation of its type in Asia,
the electrical business group of Larsen & Toubro Ltd, a leader in low-tension
switchgear, switchboards and petrol pumps, has implemented the SAP R/3 brand of Enterprise
Resource Planning (ERP) software to integrate simultaneously its operations all over
India. The formal launch ceremony of "going live" in a "big bang"
mode, that is, activating various modules and locations simultaneously instead of
activating them in a phased manner, was held at the company's Powai Works in Mumbai last
month.
The "Go-Live" function was signalled by M.P. Wagh,
L&T's President (Operations), who pressed a computer key to generate a print-out of
the first-ever sale through the ERP system and handed over a box containing an L&T
Moulded Case Circuit Breaker to Vineet Mody, an L&T stockist, who had specially come
to receive this "historic consignment".
This is the first time that any company in Asia has
implemented an ERP project on such a massive scale and that too in a period of just 14
months, covering six modules (sales and distribution, production planning, materials
management, finance and controlling, quality management, and variant configurator. This
encompasses 35 locations including L&T's Head Office and two manufacturing facilities
in Mumbai, and one each at Faridabad and Ahmednagar, regional offices, branch offices, and
stocking agents. L&T's Control and Automation Business Unit has also integrated its
all-India operations into this ERP network. The ERP implementation, which required over
1000 man-months of efforts of middle-management cadre professionals, is designed to
modernise and revolutionise the methods of capturing data and information every second in
real time and to provide a tool for planning sales, production and capacities both in the
short and long run. The entire network is supported by the latest Compaq servers, Windows
NT OS and Informix database. All the operational sites all over the country have been
connected via a combination of LANs and a WAN comprising VSATs, leased lines and microwave
links. Online storage capacity of the more than dozen servers is in excess of 250 GB
spread over 65 ultrawide SCSI hard disk drives. |
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