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Mr. Arun Nathani, CEO and MD, Cybage Software Private Limited

India Infoline News Service | Mumbai |

The company has certain niche areas where they are in a position...

Cybage Software Private Limited is a leading offshore software services company, offering solutions that accelerate, simplify and enrich business processes to give its customers an edge over competition. The company?s success is built on a pool of over 1200 brilliant software professionals. Based on a remarkable record of quality, consistency, and outstanding technological prowess, the company has partnered with more than 100 global software houses of fine repute. Cybage?s expertise across domains, combined with our vast experience and a full-service portfolio, has helped create seamless solutions for a clientele spread across 4 continents. Cybage was founded in 1995 to develop innovative productivity tools for the world market. In August 1996, the company diversified from product development to providing offshore software development services to the US IT industry. It specializes in the implementation of what is popularly termed as the ODC model (Offshore Development Center). With a domain expertise that spans across several industry verticals such as finance and banking, telecommunications, retail, security, CRM packages, health-care and utilities, Cybage offers cost-effective, flexible and scalable solutions to its clients.

Mr. Arun Nathani is the CEO and MD of Cybage Software Pvt Limited. As a veteran in building alliances with information technology companies, at the macro level, he is the executive decision maker for the overall corporate development, strategy and company operations. He has led the growth of Cybage with his strong business acumen and managerial capabilities. Mr. Nathani brings years of Quality Management experience honed at ConnectSoft Ltd., a leading software company in India. Before he returned to India in early 90s, he worked at AFI Industries Inc., USA as a Senior Software Design Engineer for five years. Mr.  Nathani has completed his M.S. in Mechanical Engineering from Virginia Tech University, USA and Bachelor of Engineering from G. B. Pant University, India. 

`Replying to Anil Mascarenhas of India Infoline, Mr. Nathani says the company has certain niche areas where they are in a position to command a premium. 

From a product company you moved into service. How has this transition been? 

Cybage was founded in 1995 to develop innovative productivity tools for the world market. In August 1996, we diversified from product development to providing offshore software development services to the global IT industry. Cybage was at its infancy / formative stage, when the strategic decision to diversify was taken. Since, the scale of operations was fairly small the transition was very smooth.

What would you describe as your core competency? 

Our core competency lies in the development and maintenance of distributed and enterprise-wide robust applications using the latest technologies. Its vast portfolio of projects covers extensive work in the Internet and Intranet technologies, mission-critical web and enterprise n-tier applications, and systems programming. With a domain expertise that spans across several industry verticals such as finance and banking, telecommunications, retail, security, CRM packages, health-care and utilities, we offer cost-effective, flexible and scalable solutions to our clients. 

List some of the services your provide. How do companies benefit from your solutions? 

  • Our Service Offerings include: 
  • Software development 
  • Software maintenance 
  • Software re-engineering 
  • Quality Assurance and Testing 
  • Technical Documentation 
  • R&D and Technology Consultation 
  • Technical Support 

We are a one-stop solution provider to our clients. In this highly competitive offshore segment, we stand out as a leading cost-effective solutions provider, and offer our clients the following benefits:

Cost Savings: Cybage has a highly competitive pricing structure. We offer excellent resources at competitive rates while being second to none in our domain of expertise. 

Speed: Timing is of utmost importance in an industry where effective responsiveness gives you a cutting edge over your competitors. Clients can make optimum utilization of the ready infrastructure, a rich portfolio of reusable modular frameworks to jump-start its projects. This substantially shortens lead times for project start-up. At Cybage we have devised practical ways of dealing with communication bottlenecks and cultural differences. Our experience in interacting over the electronic workspace ensures perfect coordination between various project teams and the client. Our track record is testimony to complex projects delivered within and even before schedule. 

Quality: The Quality Assurance process has been modeled on the SEI-CMM Level 5 guidelines for allowing continuous improvement of processes and delivery of defect free software. Our transparent approach allows you ready online access to the QA system and tracks the quality status of the project throughout the software development cycle. 

Expertise: Our skilled team of project managers and software engineers trained locally and overseas are quick to embrace new technologies to keep pace with increasingly complex and dynamic requirements.

Tell us about your client concentration. How much revenues come from your top 5 and top 10 clients. Could you name them? 

Majority of our clients are based out of the United States. We have recently expanded our market reach to other strategic geographic areas like, UK, Europe and Asia-Pacific.  40% of our revenue is generated from our top 5 clients. 60% of our revenue is generated from our top 10 clients. Due to confidentiality reasons, we are unable to disclose the client names. 

What is the kind of growth you recorded in recent years.

Going ahead what is the outlook? What are your near-term goals?

Over the last 10 years, we have been consistently clocking an annual growth rate of over 70%. Continuing with the tradition, we are on track to exceed 60% growth rate yet again in the current financial year. We will continue business with our existing model. Currently, we have a development center in 
Redmond, WA. We plan to open marketing offices in United States and other parts of Europe. We also have infrastructure expansion plans. We have acquired 4 acres of land and are going to build an office campus with 3,00,000 square feet of space, which will have the capacity to house over 3000 personnel. 

How many repeat customers do you have? Have you witnessed any big-ticket deals? Are the deal sizes getting bigger? 

We have repeat business from almost 90% of our clients. A consistent record of repeat customers is a testimony of our remarkable track record, quality, consistency and outstanding technological prowess.  Yes, we have witnessed big-ticket deals with companies such as Microsoft. The sizes of the deals
are getting bigger. 

Which are the business verticals and domains you operate in? 

Cybage?s domain expertise spans across several business verticals like, Internet Advertising, CRM, Networking, Security, Healthcare, Telecom, Grid Computing, Logistics, Finance, etc.

Brief us on some of the projects you are currently working on. By when would it be completed?
Currently, we are working with over 60 clients on over 200 projects. Most of the client relationships are on a long-term ODC basis. We are unable to share the order sizes with you. 

Tell us more of the services you provide and the revenue from each service 
Our service offerings include:

Software development ? At Cybage, we provide turnkey software development on Time and Material basis. This may involve the development of new applications or new functions for existing software applications. Each development project typically involves all aspects of the software development process, including prototyping, design, pilots, programming, testing, installation and maintenance.

Software maintenance ? We provide maintenance services for large legacy systems. Maintenance services include major and minor modifications and enhancements as well as production support. Such systems are client/server and are typically essential to a client?s business, though over a period of time they become progressively more difficult and costly for the client?s internal IT to maintain. Cybage?s IT professionals take an engineering approach to software maintenance, focusing on the long-term functionality and stability of the client?s overall system and attempting to avoid problems from ?quick-fix? solutions.

Software re-engineering ? Our re-engineering services assist clients in migrating to new technologies while extending the life cycle of existing systems that are rich in functionality. Projects include re-engineering software to migrate applications legacy systems to client/server architectures, to extend existing applications to the Internet, to migrate from existing applications to UNIX or Windows NT, or to update from a non-relational to a relational database technology.

Quality Assurance and Testing - We also undertake core-testing projects. These include writing test-plans and test cases and executing the same or working on test cases provided by the client. Our test lab consists of up to 200 test machines, with various operating systems, utilized by various projects in any possible way. Apart from this, there are 200 user machines, which are also utilized for testing. Several Linux boxes, all Windows operating systems and some Macintosh machines are also used. High-end and low-end machines are used to rate performance levels of the products under development.

Technical Documentation - At Cybage we offer high-quality Technical Writing 
services to create well-designed, cost-effective and accurate online help, multimedia-based tutorials, getting started guides, user guides, administrator guides, installation guides, release notes, technical notes, API documentation and marketing collaterals using the latest and the most widely-used tools and technologies. We provide services for designing, structuring, and developing content for the client's product to create end-user documentation that is both informative and easy-to-use. Additionally, we provide face-lifts to existing documentation; and collaborate with the client's existing information development staff to maintain and update documents.

R&D and Technology Consultation - Cybage also takes pride in undertaking 
research and development projects. These involve developing prototypes, evaluating the use of a new technology for practical purposes and executing pilot projects to study the feasibility of large-scale implementations. We also provide technology consulting in terms of choosing the right technology for a particular requirement to create the most effective and efficient software solution. We leverage our expertise in multiple technologies for the same to evaluate the various options available for a given requirement.

Technical Support ? Cybage provides 24x7 technical support services. Being a 
software development company, Cybage has the best trained, experienced and industry certified engineers who work round the clock to provide technical support to our clients. Our customer care processes are customized specifically to our client needs and follow a structured process flow that provides the customer a seamless service. Cybage has the experience of handling technical support for a wide range of customers. Our customer care executives are trained to address the varied needs of geographically disparate communities.

The Percentage of revenue from Service Lines are: 
Software development- 41.20%
Software maintenance -14.11%
Software re-engineering- 7.52%
Quality Assurance and Testing -28.22%
Technical Documentation -2.82%
R&D and Technology Consultation -1.71%
Technical Support -4.42%

What is your Onsite, offshore and hybrid mix? 
Almost 90% of our projects are executed offshore and the remaining 10% projects are a mix of onsite and hybrid based models. 

Comment on your pricing models- what is your price range? 
We offer the following pricing models:
Time and Material 
Fixed Price
Build, operate and transfer (BOT) 
Due to confidentiality reasons, we will not be able to disclose our price range.

Any pressures on margins? What is your USP? Are you able to command a premium in any of the services you offer? 
Our fast paced growth and long-term relationships with most of our clients significantly reduce the pressures on our margins. Our USP is that we are a ?small-big? company - we have made a conscious attempt to incorporate a unique assortment of the best attributes found in both large and small organizations. We have the talent, infrastructure and processes at par with the professional companies of reckonable size. However, what we don't have is the redundancy - that massive marketing and management fat, which is generally associated with a bulky organization. Instead, we have retained a lean business model with a very personalized touch that is typical of a small, privately-held company. Indeed, most of Cybage growth has come not from scouting by top notch marketing professionals, but from the time-tested basic principle of retaining existing clients and growing through references. 
We do have certain niche areas where we are in a position to command a premium. 

What are the quality initiatives your firm undertakes?
For Cybage quality is a way of life. The quality program at Cybage integrates multiple quality approaches to deliver the best results to our clients, emphasizing on improvement at every stage to achieve world-class levels of quality service and consistency of delivery.
Cybage is a CMM Level 3 company (Currently, the assessment for CMMi Level 5 has already begun. By the time this article will be released we would have attained the CMMi Level 5 certification). We at Cybage believe that total commitment to quality and customer satisfaction is the key factor for the success of any organization. Extending this belief, Cybage provides high-quality deliverables through its "Quality Assurance" and "Quality Process" programs. The Quality Processes are SEI-CMM certified and implemented as per SEI guidelines.

How many development centers do you have? 
We have 4 development centers, 3 in Kalyani Nagar, Pune, India and 1 in Redmond, WA, USA. 

Tell us about your JVs and strategic alliances? 
Cybage has no Joint Ventures with any company. From a technical perspective, we do have strategic alliances with several leading technology firms. 

Any plans to grow inorganically? What is the deal size you are looking at? 
In the coming year, we are considering some acquisitions to the tune of USD 10 million to further augment our domain and geographical strengths.

Your capex plans for the next couple of years? How would they be funded? 
Our capital expenditure for the next couple of years will be focused on infrastructure investments. As stated above, plans are underway to construct a campus facility to house over 3000 personnel. This expenditure will be funded from internal accruals. 

What is the shareholding pattern of the company? Any private investors? Any plan to dilute  stake? By when? 

Cybage is a private limited company and the shareholding pattern is as follows:
Promoters - 99%
ESOP - 1%
There are no private investors. The stake will be diluted when the company goes public.

By when do you plan to get listed on the stock exchange? 
Yes, we plan to go public in the coming 2 years. The primary driving factors are Company Branding and ESOPS.



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