Aftek’s growth makes for interesting reading. With the recent investment in a German search solutions company and its planned foray into wireless and mobile applications, it gets stronger
Easwaradas Satyan
Friday, May 30, 2003
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There is beauty in small things. True, even in the case of companies. In a
software services industry serving the global market, the Rs. 67.4-crore Aftek
Infosys is moving up the chain . Publicly listed way back in 1995, Aftek
recently made a strategic investment in Germany through a GDR issue. The company
continues to pursue a business strategy founded on a mix of IPR-based products
model and e-business service offerings, and has successfully exploited niches in
technology.
According to Aftek chairman and managing director Ranjit Dhuru, the company
believes in maintaining a scalable business model beyond products by building IP
and services in emerging areas of technology.
What
makes ‘Search’ so interesting?
According
to Cnet, "Examining search queries are the preferred way for
corporations to analyze Web site activity, to make sites more
responsive and profitable". The method has all but replaced
earlier techniques such as click-stream analysis, in which companies
attempt to follow a visitor’s journey from page to page.
Recent
reports have shown that corporate searches generally do a poor job
connecting users with the information that they seek. In a telling
gauge of the performance gap between enterprise and consumer search
services, for example, Google’s Webwide search was better 52 % of
the time at finding information on a corporate site than the site’s
own search engine, according to a Jupiter Research study released in
February.
Knowledge
workers spend 15-30% of their day searching for information,
according to IDC. But more than half of their online searches fail
to turn up the desired information. IDC estimated that a company
with 1,000 knowledge workers wastes at least $6 million every year
spending hours on fruitless searches.
Arexera
is rumored to have been in talks with a leader in the European
pay-per-click advertising market. With the search solutions and
technology that Aftek has acquired, it can hope to handle the
emerging market for these solutions.
There is mettle in Dhuru’s statement. Initially, a products-driven company,
Aftek saw growth getting restrained because of the obvious limitations of a
products-only model. Moreover, Aftek’s products were not application software
but packaged technology components. Technologically, the strength areas of the
company lie in embedded technologies, component architectures, and wireless and
mobile technologies. The company therefore builds IP in these areas.
Early on Aftek exploited a very small niche and gained glory in that space—the
software to provide an enterprise systems management the capability to manage
power equipment. Called Powersafe, the product saw movement in the market thanks
to its relationship with CA, the vendor for Unicenter, a leading product in the
ESM space. The success of the product would now help the company to extend the
same technology to HP’s Openview and IBM’s Tivoli, the other two prominent
ESM vendors. Call that as a near-complete global market coverage, albeit small.
The next niches being pursued are in the e-business space, where relationships
with large companies like HP, Acer, Schlumberger, and even Microsoft, which is
being explored, would provide traction.
Aftek acquired an entirely new capability in the area of knowledge management
solutions through a recent strategic acquisition. The motives behind the
acquisition were two-fold—from a business viewpoint, it was about geographical
de-risking; from technology perspective, it was about a new technology
capability. Aftek acquired a 49% stake in the Munich-based Arexera Information
Technologies GmbH in an all-cash deal for a consideration of Euro 8.86 million.
Aftek retains the right to acquire the entire 100% equity in Arexera based on
certain predetermined milestones over the next 3-4 years. Arexera has
considerable experience in solutions development in the fields of knowledge
management, data compression and content management. Arexera has a strong
product portfolio comprising six independent products catering to the knowledge
management space, in particular search engines for enterprises (see box).
The acquisition would also help in bagging sizeable service contracts from
Arexera’s big ticket clients, the likes of BMW, Axel Springer Publishing—Germany’s
largest publishing group, KPMG Beiten Burkhardt GmbH—the global law firm,
T-online—Europe’s leading Communications company and Datev—Germany’s
largest association of self-employed tax consultants, auditors and lawyers. In
addition, Aftek could market these products beyond the EU boundaries.
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