Partners sublime!
Sunil Kakkad and Vijay Mandora have taken Sai Info Systems to heights rarely scaled in the Indian IT channel space
By K R Nambiar
It all began way back in 1992. Vijay Mandora and Sunil Kakkad were fresh out of engineering college. Friends from their school days, the two young lads from Gujarat were keen to venture out on their own, and getting into the then-nascent IT sector seemed to make a lot of business sense.
“We were young then,” says Mandora. “Sunil and I had studied together since the 11th standard. We were classmates in engineering college as well, and figured that the field of computers offered a lot.”
Thus was born Sai Info Systems (SIS) in Ahmedabad, a firm destined for a sparkling future in the Indian IT channel space, reaching a turnover of Rs 412 crore by FY 2007-08. Indeed, SIS today dabbles in almost every conceivable area of IT business, covering distribution, systems integration, retail, manufacturing, IT and BPO services, and even consulting.
Humble beginnings
But it wasn’t always this easy. At the outset, some seed funding came from Kakkad’s father, and the rest was borrowed from friends and relatives. Gradually, the fledgling company started signing on new customers, mostly from the SOHO segment. To supplement their income, both the partners simultaneously took up part-time jobs. “I used to teach at a computer institute, while Sunil used to work for a local company,” reminisces Mandora.
The business slowly started expanding. SIS went into assembling and selling PCs, but it was still a hand-to-mouth existence. “By 1993 we were selling 3-5 PCs a month, and we hired our first employee—an office boy. This was followed by an engineer, and soon we were employing more people, and selling more PCs,” says Mandora.
PCL distribution
But the friends-turned-partners were still waiting for their big break. In 1995, the duo decided to take up the Gujarat-region distribution for computer vendor PCL. Soon after, PCL launched an aggressive marketing campaign, offering PCs at highly competitive prices. Almost overnight, orders for PCL machines started pouring in at SIS.
“We were picking up the cheques and paying PCL,” says Mandora. “But we figured out that PCL did not have the manufacturing capacity to satisfy all the orders for PCs.” Sensing a lucrative business opportunity, SIS struck a deal with PCL. Now, not only would the company book orders and collect the money, but also assemble the computers under the PCL brand name and deliver them.
But then the PCL empire began to crumble. The decline was rapid and the company wound up, failing to keep its commitments. “All of a sudden we were left high and dry,” says Mandora. Disgruntled customers were banging at the doors of SIS, even as the company’s capital was drying up.
At this crucial juncture, the daring duo did what a handful of others would have had the nerve to even attempt. Explains Sunil Kakkad: “Tough times also come with a fair share of opportunity. PCL had wound up, but their businesses remained. The employees of that company had not been paid and they were looking for new jobs.”
SIS stepped in. The company raised additional capital, hired the employees of PCL’s Ahmedabad branch, and took over PCL’s customer base. Soon SIS was handling large government accounts and enterprise clients of PCL. Business skyrocketed, and the turnover touched a crore of rupees in 1998.
Solutions integration
But SIS had no intention of resting on its laurels. At the time, hardware and software suppliers would invariably be different entities, especially in large accounts. “During implementation, the hardware and software suppliers would inevitably blame each other whenever anything went wrong. We saw this as an opportunity, started developing software applications, and re-invented ourselves as a solutions provider,” explains Mandora.
This was an important turning point for SIS. One of the first large orders was a billing application for BSNL in Bhavnagar, Gujarat. This single order was worth Rs 75 lakh, equivalent to almost the entire turnover of the company just a year or so earlier. The company was able to successfully deploy the solution and attract the attention of BSNL top management in the state. BSNL remains one of SIS’s largest accounts.
New heights
The turn of the century saw SIS scaling new heights. Leading vendors such as HP, Sun, Intel and Microsoft appointed SIS as a preferred partner. The turnover zoomed from Rs 2 crore to over Rs 400 crore in the short span of eight years, representing a CAGR of over 90 percent from 2000 to 2008! Bennett, Coleman & Co, promoters of Times Group of publications, now has a five percent stake in SIS, valued at around Rs 8 crore.
Today SIS has its own manufacturing plant, and is setting up a 100 percent EOU in Kandla on the Gujarat coast. On the retail front, SIS has a chain called eMall, with eight outlets currently operational. About a quarter of group revenues (Rs 100 crore) comes from the retail business. “People ask us how we are able to successfully manage the retail as well as the solutions business units, since each requires different acumen and focus,” says Mandora. “But the fact is that though the businesses are different, the supply chain and the people we interact with to drive the businesses are the same. Only the customers are different.”
A few months ago SIS set up its first operation overseas, with an office in Dubai catering to the Middle East market. Within the next six months, the company plans to branch out to Mauritius and Singapore.
Partners forever
The channel space has seen a number of partnerships faltering after brief periods of initial success. However, Sunil Kakkad and Vijay Mandora remain thick friends even after almost two decades of doing business together. “We have remained good friends in business, because we complement each other,” says Mandora. “Sunil brings in new ideas, and however crazy they might sound, it is my duty to find the practical side to them and implement them. In areas where I am active, he is passive, and in areas where he is active, I am passive, and thus we do not tread on each other’s toes most of the time.”
Mandora believes that the main reason for their success is that innovation has been a way of life at SIS. “The only way to succeed is by innovation. We could have continued being a dealer or partner of an MNC brand, running a successful business according to their diktat. However we chose to tread a different path, innovating all the way,” he says with pride.
Kakkad chips in: “As a student, I saw a proverb in Gujarati written on the blackboard, which literally meant—Failure is not a crime, but aiming low is. I made this the ruling philosophy of my life.”
Future perfect
The dynamic duo’s ambitions haven’t dulled over the years. By 2010, SIS intends to touch Rs 1,000 crore in turnover and have a presence in 15 countries. “How are we going to achieve this in a difficult economy? We are participating in tenders and other opportunities totally worth Rs 1,800 crore, and are a few steps away from being selected,” explains Mandora.
SIS expects its overseas operations to generate 20 percent of revenues by 2010. The company is revamping a plant in Kandla, where it will set up a 100 percent EOU to manufacture thin clients and servers. “We expect the manufacturing unit to account for 10 percent of our revenues,” says Mandora. “Once this is ready, we will soon start our solutions business in other countries.”
While solutions and systems integration will continue to be largest contributor, other segments the company is looking to tap are call center management and remote infrastructure management. As for retail, the company intends to double the number of its eMalls in the next two years, accounting for 16 percent of the revenue pie by 2010.
Given the track record of Mandora and Kakkad, it’s safe to assume that we haven’t seen the last of SIS yet. Not by a long shot, indeed. “We’re too young to think about retirement,” concludes Mandora categorically. The best is definitely yet to come! |