The Hindu Business Line : Geometric Soft to rely less on products

"We are getting more work from Dassault and this is visible given that the Geometric team working on 3D-PLM was 120 last year-end and by mid-May this year increased to 180 people," Mr Parpia said.

Mumbai , Sept. 28

AT a time when the National Association of Software and Services Companies (Nasscom) strongly recommends software companies to move up the value chain through productisation efforts, Geometric Software Solutions is reducing its focus on product development.

While revenues from products were nearly 40 per cent a few years ago, the company now plans to limit it to the 12-15 per cent range.

"Sole emphasis on product development introduces an element of volatility in earnings. If focus on products is not big, then the volatility in earnings is reduced making earnings more predictable. So as a conscious strategy we have reduced our dependence on products while retaining the skillsets gained in product life-cycle management (PLM)," Mr Manu Parpia, Managing Director, Geometric Software Solutions, told Business Line.

With two to three products in the pipeline, the PLM solutions provider recently won its first US patent for Hole Recognition algorithm used in its flagship Feature Recognition technology.

While nestLib, CollabView and Feature Recognition form the mainstay technologies for Geometric, plans to broaden its offerings in the PLM segment and deliver more software services are on the immediate agenda of the company. The partnership with Dassault Systemes is aiding Geometrics on this front.

"We are getting more work from Dassault and this is visible given that the Geometrics team working on 3D-PLM was 120 last year-end and by mid-May this year increased to 180 people," Mr Parpia said.

The Indian software firm is working on core development and testing of certain product lines offered by Dassault and would scale up the group engaged in 3D-PLM.

According to Mr Parpia, a cash outflow of Rs 15-20 crore would be utilised for infrastructure expansion in a phased manner. "A new facility having a capacity to house 500 people would be inaugurated in Pune this October. We have not commissioned the entire facility as this will be done as and when required," he added.

As part of the derisking strategy, Geometrics ha also reduced its dependence on the US market. The financial results of the quarter ended June 30, 2003 recorded a reduction in revenues from the US from 71 per cent to 69 per cent. The PLM provider is actively seeking business from the Asian markets such as Japan, Korea, China, Taiwan and Thailand. "There is a lot of engineering efforts on in these markets and we are looking at getting big business here. We expect to have a 35 per cent CAGR (compounded annual growth rate)," Mr Parpia said.

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