Persistent Systems was set up in 1990, the pre-historic ages for the IT industry, when even getting a telephone connection was extremely difficult.
In that context, becoming a firm employing 1,000 personnel was just impossible. The Pune-based company, taking one step at a time, has now grown to $207 million (revenues in last fiscal), with an employee strength of about 7,000.
The mid-tier company, with about five acquisitions since 2011, the latest being in January this year (NovaQuest), is scouting for further with a long-term vision, said its Founder and Chairman Anand Deshpande.
The company is waiting for a technology wave to surf over to its next growth phase, said Deshpande, who is also the company’s Chief Executive Officer and Managing Director. Excerpts from an interview:
Has there been a slowdown from the industry point of view and how is this an opportunity for companies such as Persistent?
From the overall market scenario, yes, there is a slowdown. There are some structural changes in the business as well, driven by changes in technology, which are forcing companies to re-look at their priorities in a different way.
Irrespective of the slowdown, more people are starting to buy devices such as tablets and smartphones. So, it has challenges, but that’s one opportunity from our point. Cloud computing is happening in real earnest. Data, which have been growing exponentially for the last few years, are another opportunity. Others areas that are becoming relevant are collaboration and social networking sites.
Technology is emerging, devices are evolving and data are coming to the fore. Is Persistent positioned to take advantage of all these?
About four-five years ago, we identified four areas – cloud, analytics, collaboration and mobility – which we should focus on. Now, they have become mainstream. We are in the product development business, and we decided that the first step we should do is work with companies that are leaders in these four areas.
When do you expect your investments in these technologies to yield benefits?
Lot of growth for companies happens in waves, and I need to find a wave to ride it. I am hoping that cloud, analytics, collaboration or mobility, one of them is going to create a wave that we can ride.
So, you have been looking at these technologies ahead of the curve?
It has been a little bit of ahead of the curve in some sense. Like in any business there are stages, first is the people who build the product and then the people who deploy the product. We have been working with the people who build the products.
Would acquisitions and partnerships be the strategy going forward?
About 5-7 years ago, 100 per cent of our business came in from product development work for product companies. Over the last few years, we have changed the way we do our business and are primarily acquiring for the long-term objective of rapid growth. We are trying to acquire intellectual properties and co-investing with customers. We also want to be part of the customers’ product plans.
What is the ticket-size, time-frame, companies or geographies in mind?
No, nothing in particular, though we will look at geographies such as the US mainly, because that’s where the customers are and things are. I don’t have a real number in terms of how many acquisitions we need to go, but we will do these acquisitions in areas of cloud, analytics, collaboration and mobility.
Are you also planning to add headcount?
The overall objective is to grow the revenues faster than growing employees, and we are able to do that because of some of the IT-related strategies we have.
We are acquiring IT from customers. I think, we will hire about 500-700 freshers this year. We have an attrition of about 16 per cent, and total employee strength is about 7,000.
You have now grown to about $207 million in revenues in last financial year. What is your next milestone?
When set up 22 years ago, nobody ever thought we could be this big. Internally, we look at this as a 3-4 year window, one step at a time… The milestone is to touch $500 million.
rajesh.kurup@thehindu.co.in