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Harish Mehta sounds very excited these days. It is not difficult to guess why. The proprietor of Onward Group has just divested his 50% stake in Onward Novell-the sales & marketing arm of Novell in India for more than a decade. At one stroke of a pen Onward Novell ceased to become the flagship company of the group. Instead, it has been replaced, by Onward Technologies. Though Onward Technologies has existed all through the group's lifecycle, the publicity beam has always been focused on Onward Novell.

"We plan to reach Rs 100 crore and take our headcount to 1,000 in as little time as possible," he informs. Considering Onward's current revenues of Rs 55 crore and headcount of 650 people, this looks like a tall order. However, taking into account the cash accrued through the sell-out of Onward Novell, and Mehta's strategic roadmap for the company, it might happen sooner than later.

Engineering Design
While Mehta is tight-lipped about financial details of the Novell deal, he waxes eloquent on the future roadmap for Onward Technologies. "Engineering design services would be our biggest growth driver; we are already service partner to the worldwide manufacturing industry, with a range of engineering services," he claims. The company already has a large center in Pune where nearly 400 people are involved in engineering design services outsourced by global automotive, aerospace and engineering companies. These include illustrious names like Chrysler, Emerson, John Deere as well as Tier 1 auto suppliers like Magna or Lear. Onward is also the exclusive distributor and reseller of MasterCAM in India and its neighboring countries.

Mehta recites impressive numbers to substantiate the future viability of engineering design services. "Globally, engineering design is a $220 bn market, out of which about $20 bn worth of projects are outsourcable. Again, within this only around $7-12 bn can be delivered offshore and is, therefore, accessible to Indian companies; more realistically, about $2 bn worth of work should come to India in the next few years." Impressive numbers, and considering Onward's early legacy, Mehta's optimism does not seem misplaced.

Leveraging Novell Association
Beyond engineering design, traditional IT services is another area Onward is betting on big time. Onward caters to about 10 clients in the US and UK specifically on Novell platforms-its Navi Mumbai development center with 100 people currently suffices for this. In the next six months, Mehta claims, the focus would increase on identity management related solutions as well as services on SuSe open source platform-coinciding with the two focus areas for Novell globally.

"Banks and retail players, who are in the forefront of offshore outsourcing, are seriously looking at identity management which would be driving the next wave of computing. Another focus area for us on IT services would be on migration to Linux, particularly the Novell variety." The Onward Competency Center for Novell Technologies is what Mehta is clearly banking on; not only does it provide the skill sets on Novell accrued through historical lineage, it also provides a ready base of Netware customers.

Banking on Domestic Front
Beefed up by the acquisition of Kale's banking business two years back, the company has a fairly robust BFS business with about 40 clients in the country. However, Mehta clarifies that the focus is entirely domestic and would not change in future too.

Onward is blending modules from Kale's products into its core banking solution -BancBrics. However, BancBrics is specifically targeted only at high-end co-operative and semi-urban banks, where core banking is still deployed only at specific branches. Currently, Onward banking solutions are deployed in nearly 4,000 branches of 40 banks-this includes Ratnakar Bank, Cosmos Bank and Silab. In addition, it has presence also in large PSU banks like UCO Bank and Bank of Maharashtra, albeit only in their rural and semi-urban branches. Once the product re-architecture is complete with incorporation of Kale modules, at least 30% of business is expected to come through ASP mode or specialized channels.

Potential Dreambusters
Though Mehta's enthusiasm is infectious, industry analysts still have reservations about the planned roadmap.

For one, more and more global players looking at utilizing Indian engineering resources are setting up captive design centers. Even Surendra Agarwal, MD of Neilsoft, one of the more established players in engineering design services admits to competition from these captives. "Most MNCs like to keep their design in-house, plus you require tremendous marketing muscles to compete."

Even global engineering services players like PTC, EDS or Plexion have large operations in India; then you have bigger software players like TCS, Infotech and Geometric with larger client bases already established. Plus, Mehta rules out moving into products, especially those on the lines of PLM-this is one area that has been particularly lucrative for Geometric or EDS. Even IT services might not be such a smooth sailing for Onward-Novell itself as a technology platform has seen dwindling fortunes; plus, identity management and open source are domains where larger Indian IT service players are already cluttered.

Last but not the least, though Onward might have targeted the semi-urban and co-operative banking sectors, areas where Mehta argues Infosys, i-flex or TCS do not operate in, there are established players like Infrasoft, NextStep or Zenith Infotech who are already ruling the roost there. And, by the time Onward is ready with its re-worked product it might lose considerable ground.

Overall, Onward's biggest drawback till date has been its reticence in publicizing its solutions or offerings. That needs to change immediately in case the company wants to succeed with its future roadmap. With the Novell encumbrances now gone, the issue looks likely to be addressed in the near future. How successfully that is done would determine whether Onward's graph will go up as Mehta expects. That is going to be Harish Mehta's challenge in the days to come.

Rajneesh De

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