Mid-tier IT firm Persistent Systems has been growing rapidly even as larger peers are showing signs of slowing down. In a conversation with BusinessLine , the company’s Chief Operating Officer Mritunjay Singh talked about how the company is using excess cash to invest in future technologies. He also explains how the dip in business for the larger players is turning into a boon for the Pune-based company. Excerpts:

What kind of impact do you see with slow economic growth globally and falling oil prices?

In general, there is an impact on the global economy with falling crude prices and with China slowing down.

But because of the impact, I feel there will be more spending on disruptive technologies, as then companies will have to figure out new ways of making money.

We might have some client-specific issues. The pre-Internet companies may have a problem but they will go through a change in business model. Then it will also open up opportunities for us.

The slowdown may impact the large companies, which were previously getting $30-40 million projects and are now down to $2-3 million projects. We are comfortable with anything from $200,000 to $10 million projects, and we are happy with that because that’s our sweet spot.

You’ve been aggressive on the acquisition front. How have the existing acquisitions fared for you so far?

We have acquired CloudPlatform from Citrix, which is being used by a lot of large companies as part of their private cloud.

The excitement we have about the platform is that over time, enterprises will be running multiple clouds and platforms such as CloudPlatform will become a way to manage multiple clouds that those companies will run.

This technology will be the backbone of the future.

What are your plans for future acquisitions?

Our acquisitions so far have been in the areas of cloud, workforce productivity, automation, etc. Strategically, we are playing in areas that are futuristic.

Some of the IPs that we are acquiring may not be having that roadmap. And that is the reason we are picking them at the right price point and extending them into futuristic areas.

For example, Aepona is a product that can be extended into IoT and we have launched an IoT roadmap. We will be a significant player in the IoT world once that market is ready to explode.

The strategy was to acquire a capability or market in these disruptive technologies that can help our offerings in the markets where we operate.

Will investors continue to see low margins as you push for more acquisitions?

We have been saying for more than a year that we want to maintain an 18-20 per cent margin range.

We want to make sure that we are able to invest back into the business because this is the market, which is changing colours right now.

We are moving from servicing software product companies to enterprises. In every quarter our enterprise business is expanding.

We want to go into enterprises with disruptive micro-vertical solutions and that requires investment upfront. If we want we can improve margin by cutting down on these investments, and we can get a 40-45 per cent margin.

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