Spain-headquartered enterprise resource planning (ERP) firm Openbravo is looking for a four-fold growth in the country. Concentrating mainly on providing ERP solutions to small and medium enterprises in the country, the company is on the lookout for new channel partners for its open source software.
ERP is a system that helps companies integrate internal and external information to allow for efficient use of resources. It provides the management executives with a comprehensive overview of the complete business execution. Open source software can be downloaded from the Internet and used with the help of a passkey. Most open source software is not copyright protected.
Upbeat about the company's prospects, especially considering the country's growth potential in IT, Andreu Bartoli, Vice-President, Channels, Openbravo, in an interview to Business Line, speaks about the company's prospects and future course in India and the Asia-Pacific region.
Excerpts from the interview:
We already have a host of enterprise resource planning software companies coming up in India. In this context how different is your product? How does it work?
We are currently one of the leading ERP solution providers in the world. In India, we have significant presence. We currently offer both open source and Web-based software. In case of open source, one can download it from the Net for use. Web-based software need not be downloaded.
So how do you handle competition from Indian companies?
Most of the software currently on offer is cumbersome and not so user-friendly. We provide both open source and Web-based applications which remains our biggest advantage. Moreover, our products are agile.
Since we offer open source software, cost involvement is low. What the user generally pays is more of a cost of subscription than anything else.As regards our price, it is competitive. The software can be availed at around a few hundred dollars.
Are your products region-specific? Or do you follow a standard procedure?
While most of our products follow a standard procedure there is indeed a certain degree of localisation to ensure that our products suit the requirements of a particular region. So India-specific localisation is carried out. For this we have been working with our channel partners for the past year-and-a-half. Our basic aim is easy deployment of our software.
Has your ERP software found acceptance in India? How important is the Indian market for your product?
Yes, our ERP software is popular here with small and medium enterprises (SMEs). Last year, India saw around 5,000 deployments — an increase of over 138 per cent. We are expecting a 400 per cent increase in deployment (over 20,000 deployments) in the country by the end of this calendar year. India remains an important market for us. Almost 20 per cent of our global revenues come from the country. We believe India to be the most powerful country in the Asia-Pacific region.
Does it mean India contributes more to your revenue than China despite the varying size of the two economies?
Yes, of course. India alone accounts for almost 50 per cent of our revenues from the Asia-Pacific region, even higher than that of China or Japan. One-third of our global revenues come from the Asia-Pacific region of which India remains the major contributor.
Despite the growth potential in China you are not so upbeat about the Chinese market. Are Intellectual Property Rights (IPR) issues holding you back?
Not really. At the moment there are no IPR issues because of which we are holding back from moving into the Chinese market. We are an open source-based ERP software provider. Anybody can download it (the software) from the Net and by using a pass-key use it. However, we believe that there still remains a growth potential for the IT industry here. There are bound to be positive developments in the industry in the future. This is our reason for being bullish about the India market.
How is the ERP market expected to grow in the coming years?
There lies a huge growth potential in the ERP solutions market. While the large format ERP market is expected to grow at 5 per cent globally, annual growth in the SME segment will be 12-15 per cent. India, however, will grow higher than the global average. India is expected to witness an annual growth of around 20 per cent.
ERP business in small and medium enterprise is a $30 billion market globally of which open source business alone accounts for $8.1billion. About 84 per cent of the market will be moving towards open source by 2013.
On plans to increase India operations..
We have around 20 channel partners in the Asia-Pacific region, 10 of them in India. We plan to increase channel partners in the country to 30 by end of this calendar year.