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Our Investments Are Unparalleled For An Indian IT Services Startup: Ashok Soota
The next big idea in consumer technology will be Augmented Reality. Consumers will be able to interact with virtual objects and simulate experiences. The driving force behind Augmented Reality will be Artificial Intelligence (AI) which will also have a major influence in the enterprise space
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Ashok Soota, Executive Chairman, Happiest Minds Technologies, may be a septuagenarian but talk about the business of technology and he still displays the exuberance of a youngster. In an interaction with BW CIOWorld, Soota discusses, among other things, the reasons behind Happiest Minds’ stupendous growth and his future plans.
You claim that Happiest Minds is different from others because it focuses on disruptive technologies such as SMAC (Social, Mobility, Analytics and Cloud). But all major IT vendors are also focusing on them.
Indian IT companies born in the last decade are mostly in every segment of the IT Services space from mainframes to package implementation. It is, therefore, not correct to say that everybody focuses on disruptive technologies as they are everywhere.
Newer companies born in the last decade have tended to be mobility-only or analytics-only niche companies. To my knowledge, Happiest Minds is the only next-gen company which focuses only on integrating all the new disruptive technologies into digital transformation solutions.
The $50 million revenue rate, 100-plus customers base and team size of 1450 are all record levels for an Indian IT Services company in first three years from commencement of operations. What have you done different that others have not? Are you on track to be the fastest to reach $100 million?
The investments we have made are unparalleled for a startup in the India IT services space. From the outset, we created the organization we wanted to become -- three business units (Infrastructure Management Services & Security; Digital Transformation & Enterprise Solutions; and Product Engineering Services) as also global practices for each of the disruptive technologies. Our focus on development of our own IPs is also a significant differentiator.
Growth in absolute terms (but not in percentage) will be higher in next 2-3 years. Accordingly, having touched $50 million run rate in 3 years, we can say we are on track to be the fastest to reach $100 million.
But chasing growth year after year, without an eye on the profitability quotient is not sustainable.
You are right that a company cannot sustain itself without profitability. Q4 of FY14 was our first profitable quarter and FY15 will be our first profitable year. As Happiest Minds size and scale increase, profitability will reach the level of the better mid-size players in 3-4 years.
Another area of concern for Happiest Minds could be its over dependency on the US. Nearly 64 per cent of the company’s business comes from that market. How do you view this?
The US is about 60 per cent of the global outsourcing market. Most global Indian IT companies derive 60 per cent plus of their sales from the US market and so our percentage of the US business is not out of line. As we establish a greater presence in Continental Europe, Australia etc., US percentage share will come down somewhat.
Indian startups are laying off hundreds of employees. Leading a new venture yourself, do you believe we are looking at a startup bubble?
I have cautioned against complacency in good times and despondency in difficult times. Regarding the current startup boom in India, I would not call it a bubble. As many things are cyclical, we will probably get a period when valuations will become conservative, second round funding more difficult etc. And when you fear that the startup story is over, a new wave will emerge in another 3-4 years.
While Happiest Minds wants to drive 25 per cent of its sales through its own IP solutions, they are largely concentrated in the infrastructure and security space. How are you increasing the breadth of your IPs?
You are right in your observation that our Infra and Security IPs like CyberVigil, ComplianceVigil etc, have obtained early success and recognition. However, we have developed several IPs in our other areas of interest also. For example we have mCaaS, a Cognitive Content Management platform and a Case Management platform, both useful in the Digital Transformation space where we have also developed omni-channel solutions. Our IoT Platform, Midas, recently won the Gold Award from Financial Express.
What could be the next big idea in consumer technology and the next big thing in enterprise technology?
The next big idea in consumer technology will be Augmented Reality. Consumers will be able to interact with virtual objects and simulate experiences. The driving force behind Augmented Reality will be Artificial Intelligence (AI) which will also have a major influence in the enterprise space. Customer Genomics will also be a new area for IT demand. A huge disruptor in enterprise technology will be Automation. Manufacturing automation will be largely software and robotics driven, which will generate new demand.
You have said, “I was very happy in Wipro; happier in Mindtree because I founded and took it public. And, happiest in Happiest Minds because it’s a fresh challenge.” Where do you go from being ‘happiest’?
‘Happiest’ is a great state to be in. Rather than think of what next for me, the important thing is to spread Happiest Minds message of happiness evangelism for each other, our customers and society.