sprylogic technologies ltd Management discussions

SPRYLOGIC TECHNOLOGIES LIMITED (FORMERLY KNOWN AS APLAB SOFT LIMITED) ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS a) Industry Structure and Developments: The subprime credit crisis has meant an overall slowdown in the ITES sector; Indian IT demand continues to be robust and this has more than made up for our business plans for the first year of operation. b) Opportunities and Threats: Staff attrition and lack of talent has been a major bottleneck in our growth plans, recent sign of IT hiring slowdown is encouraging, as the company plans on aggressively hiring through 2009 to build out our product and services portfolio. The IT and ITES industry in general is capital intensive, both in terms of manpower and infrastructure; most customers looking to outsource in this area are larger companies with mature IT processes and very little appetite for risk. Attracting business from such companies has been challenging; however, this has created some unique opportunities in the SMB marketplace, where new, but dynamic entrants like Sprylogic have a better chance, and were seeing a growing interest in our products and services from this market segment. Our go-to-market strategy over the last one year and at least for the next couple of years of leveraging business partners and OEM vendors has already been extremely successful; this has given Sprylogic the opportunity to focus on building its software portfolio and relying on their partners for market access. This, however, means that the company has little time for brand building and is sometimes a level removed from the customer. Our strategy is to quickly move to a direct sales model as soon as we reach meaningful level of software deployments. c) Company Achievements: Sprylogic has made some excellent inroads into the banking and retail automation segment. Over the year, the company has been actively scouting for international business, and initial responses have been quite encouraging. The Indian IT market has been extremely robust, and customer interest in our products has surpassed our most optimistic estimates. Over the year, Sprylogic has developed and offered a new line of kiosk software for the consumer retail and banking retail segments. Initial feedback on our early beta releases of our software has been well received. The company plans to gain some significant market share in the Indian kiosk business. Our kiosk software solutions are extremely modular, customizable and low- cost. Our strategy to license our software through OEM kiosk vendors has already seen some success. Despite its smaller headcount Sprylogic has already developed a comprehensive portfolio of technologies that span low- level logic designs to enterprise-level web based applications. d) Internal control systems: The Company is ensuring that proper and adequate controls are in place and all our software assets and intellectual property is adequately protected. New version control systems for all our software and IP assets have been introduced. Business processes with feedback and continuous improvement have been put in place over the year; this will also help to acquire CMMI certifications in the future.