The Hindu Business Line : Elitecore Tech hires Indian returnees

Ahmedabad, Oct. 2 It is a brain-drain in reverse. These dozen-odd Indian IT experts, who spent up to 18 years in the US Silicon Valley’s information technology companies, have returned to their roots in India. They were welcomed with open arms recently by the Ahmedabad-based Elitecore Technologies Ltd that makes IT security products. In the West, they were mainly engaged in the service sector of information technology, being little more than cogs in the great machine or even greater companies.

At Elitecore, they have regained their individuality and are engaged in creative work, like development of products. This is the beginning of the second phase of India’s IT revolution, after the country proved its mettle in the service industry like the BPOs and KPOs, Mr Nikhil Jain, Chief Operating Officer (COO) and President of the company, told Business Line here on Tuesday.

Elitecore Technologies, which recently appointed Chennai’s Redington (India) as national distributor for its Cyberoam UTM product as part of its strategic market expansion drive, is eyeing to double its revenues next year even as other IT servicing companies are faced with reduced revenues due to rupee appreciation. It is with these aims that it has roped in experienced Indian expatriate back home.

Fund source

Recently funded by one of the largest global private equity fund, The Carlyle Group, which has invested $10.3 million in this company in view of the emerging demand for its products, Elitecore is using this money in its ongoing product development, research and development, working capital, new products and infrastructure build-up.

Its current products are Cyberoam UTM, Crestel Convergent Billing Solution for Tier-1 service providers, and 24online Billing and Bandwidth Management Solutions for hotels, hotspots and Internet service providers.

The investment has come from Carlyle Asia Growth Capital Partners, a $680-million fund that invests in high growth companies in China, India, Japan and Korea. Carlyle expects to multiply its investment in Elitecore by 2.5 times in the next three years.

Expansion plan

With expansion of its market domestically and globally in the UTM segment, the company, whose revenue was Rs 35 crore with a net profit of Rs 8 crore in 2006-07, is also planning to enter West Asia, Asia Pacific and Africa in a big way through Redington.

Solutions gateway

The dozen-odd IT experts recruited have spent up to 18 yrs in Silicon Valley.Co plans to enter West Asia, Asia Pacific, Africa in a big way through partner Redington.Sees Unified Threat Management market growing at 40% CAGR in India.Mr Anand Chakravarthy, Head (Networking SBU), Redington (India), said Cyberoam, with its identity-based security, is recognised as the only next-generation UTM product. Elitecore, innovator of the Cyberoam-brand identity-based Unified Threat Management (UTM) solution for enterprises, is also exploring possibilities of making it available through broadband service providers to individual Internet-users. Mr Jain said the UTM market is now growing at 40 per cent CAGR in India. BSNL is set to increase its broadband network from the current three million lines by 10 times in the next couple of years and so are other IT service providers. This is expected to create a huge market for security solutions. "The global market size for security solutions like Cyberoam by 2009 is expected to be around $3.5 billion." In the US, Cyberoam's competitors are Fortinet and Sonicwal, among others, but it is the only product of its kind developed indigenously in India.He said the rupee appreciation, which has affected the bottomline of major IT service-providers, has affected Elitecore's revenues only by one per cent. "Sixty per cent of our product-offering company's market is mainly in India and adjoining countries and the US contributes less than 20 per cent to our revenue."This meant that innovating and product-developing companies would be less affected than the service providers due to the rupee appreciation. Redington is a global provider of branded IT products and support services, with over 500 security partners across India. The tie-up is expected to generate an additional revenue of over Rs 36 crore during the current financial year.Cyberoam UTM has a customer base of more than 2,000 installations, providing comprehensive network security to large, medium and small corporations, educational institutions and government organizations in more than 20 countries.

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