The Hindu Business Line : The early bird...

... gets the worm. Alopa (`flawless' in Sanskrit), whose revenues grew when the rest of the world experienced a slump, has near-perfected its technology strengths. Marketing is the focus for now.

G.R.N. Somashekar

Vijaya Verma

AS you walk up to Alopa Networks' office in Bangalore for the second time in three years, you notice a distinct difference. In 2001, the building, `Broadband Hub' had three names on the plaque announcing the residents - Ishoni Networks, Alopa Networks and Amber Networks. Of these, only Alopa remains.

You go in thinking you'd hear Vijaya Verma, Managing Director, Alopa India, say that she is merely relieved to exist in a bloody environment.

What you find is a near-jubilant Verma, who says that 2002-03 was when her company "hit it big". Surprising, coming from a company in the technology space, given the near wails of mid-sized and small firms in the software services space in the same period. So, Alopa's bet on a technology product seems to be delivering on its promise. Incidentally, all three companies in that building have a common promoter, Prakash Bhalerao. Ishoni had to shut shop, while Nokia bought over Amber. And what's more, Bhalerao is pumping more funds into Alopa. For details, here are the excerpts from eWorld's chat with Verma.

How different are things now compared to 2001?

In the last three years or so, we have grown - our customer numbers are up from about 5 or 6 to about 30 now. From revenues of a few hundred thousand dollars, Alopa, is now a few millions. The revenue growth is about 20 times. We will become profitable this year.

How has the manpower count changed?

As a product company we haven't had to rope in more. It's remained steady. Our count is now around 75 of which between 50 and 60 are in India. We have only increased the size of our marketing team. The business model is such that the same manpower strength is adequate to develop one product, then go on to develop the next few versions of the same product and then graduate to developing an entirely new product line.

Also, the nature of the product development business is such that employee attrition is less. About 75 per cent of our current manpower has been with us since 1999-2000.

Interestingly, the revenue growth came in a period when the industry was down in a slump. What worked for you?

We too felt the negative impact of the slump in the broadband access and cable service business. But the access and cable business is in nature dependent on the retail customer. It is true that subscribers didn't grow as expected. But from the point of view of the overall US economy, even if business dulled a bit, it didn't really die out. In addition, we tied up with Arris Corporation. They offer a cable modem termination system. Our solutions go packaged as a bundled. This relationship helped us win clients in US, Europe and Latin America.

What needs do your products address?

We address the needs of multiple service operators who typically provide broadband Internet access and cable services. We allow providers to easily create new revenue-generating services, automatically provide those services and ensure quality in the service. We also provide monitoring of service level agreements via security assurance. In addition to data services, our products allow voice services over cable. This year, we also see multimedia services - including gaming services - and security or policy management as extensions for our product.

What was the stumbling block for you in the last two years?

The most difficult part of the whole slow period was the "Trial to death." In other words, many customers never really committed to a project. They always found our offerings interesting but would only opt for trials. Only now have the trials been replaced by concrete projects.

Where does much of your development take place?

India. Be it design, development or quality assurance, we do it all here for the US market. We do have engineers in the US but doing front-end work. In fact, having this centre here has helped us tide over difficult times. High cost of manpower in the US contributed to the downfall of many of our competitors. We also have a full-fledged customer support centre in India. We are also talking to players in the China and Japan markets to make an entry there. Singapore, Hong Kong and Korea are on our radar for this year.

What is the key challenge for you now that you have made the best of the India model?

The key to have a successful product is to have a marketing team that is tech-savvy. It is critical to have the pulse of what our clients want - which in turn would determine the nature of our future work. In fact, one technology person moved from the development team to the sales team (apparently unwillingly). His presence contributed to many new order wins this year. We have a very strong technology team. Typically, a strong tech team needs a strong marketing team.

As to growth, wouldn't acquisitions have helped?

We are looking out. We are comfortable with our client base in the US. We would be interested in companies addressing Europe or Canada. We would look at companies whose products complement ours.

How comfortable are you with funds? How much have you raised so far?

So far we have raised about $21 million. Vantage Point invested in Alopa in 2002. Our promoter, Balerao, is bringing in more funds. By the end of this round of funding, we would have raised an amount less than $25 million.

bharatk@thehindu.co.in

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