Shrink wrapped product firm goes global

The final aim of a software company is to be a Microsoft, sell packaged software products, costing no more than a few hundred dollars a piece to numerous retail customers, shrink wrapped with both the product identity and the mystique of the company.

Bangalore based BSE listed Cranes Software International has successfully started out on this journey, not in mass market products used by the lay individual but those useful to the entire global scientific and engineering community. And in keeping with the hallmark of a product company whose offerings have been accepted by the market, its revenues are escalating.

The consolidated operating revenue of Cranes for the quarter ended December 2003 rose by 126 per cent over December 2002 to reach Rs 29 crore and net profit by 190 per cent to Rs 8.4 crore. On a nine-month basis, Cranes' operating revenue increased to Rs 61.9 crore, growing by 76 per cent.

Its 2002-03 turnover rose 81 per cent to reach Rs 61.5 crore. Deloitte Touche Tohmatsu has judged it the fastest growing technology company in India. Eighty per cent of the company's revenue comes from its own products and product customization and 20 per cent from trading and training.

"I do not know how many Indian companies have truly gone global with shrink wrapped, off the shelf, 'can be delivered on the net' type of products, with price per package ranging between $ 400-700," says managing director Asif Khader with obvious pride. Cranes now employs 270 people, of whom 56 are based overseas. It has a 20-member development team in the US and an 18-member marketing team in Germany.

Asif Khader and Mukkaram Jan started off in 1991 selling anti-virus software door to door costing Rs 600 per piece.

The business has successfully transformed itself since then by transiting through several stages - trading or reselling for others, then getting into training so that buyers of those software can easily access the skills to run them, thereafter taking a crucial leap into buying globally successful software products and lately launching successful new versions of those products and going into developing its own intellectual property.

Richard Gall, one of Cranes' directors and a former managing director of Texas Instruments India, says, "Cranes has come from a product orientation, selling a product like MatLab (it provides a platform for technical computing needs), to being an owner of products sold on a global basis."

How has Cranes, with no earlier product development experience, managed to successfully launch new versions of their acquired products? By acquiring people with products development capabilities and hanging on to them.

Says Khader, "We have decided not to disturb the team of designers coming from the acquisitions. So we have a very good development centre in the US now.

"We began as a Bangalore company and now have offices in US, UK, Germany and Singapore with a global network of distributors serving 350,000 customers."

Cranes has so far spent $ 20 million in acquisitions and $ 5 million in transition costs, setting up a global infrastructure. "The promoters' stake in the company is a little less than 50 per cent. Institutional investors hold 30 per cent and 20-25 per cent is held by small shareholders."

The company first moved overseas with the acquisition of AISN Software and its range of visualization software products like TableCurve 2D (automates the curve fitting process), TableCurve 3D (surface fitter which provides equations for three dimensional data) and PeakFit (non-linear data modeling and peak analysis).