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Bharat Kumar
Raja Simhan T.E.

CHENNAI, Oct. 4

THE city-based Future Software Ltd has entered the embedded software sector. The company has formed a separate division with about 25 people, and has started doing pilot projects in the sector.

Future Software plans to invest about $12 million during the current year in research and development, sales and marketing, the company's Chairman and CEO, Mr K.V. Ramani, told Business Line.

According to Mr Ramani, embedded software is quite a large sector with applications possibilities such as factory automation, hand held devices and GPS (global positioning systems). "Embedded software is a new area that requires special skill sets. The company is in the process of identifying the focus area within the sector,'' he said.

When asked how the last year for the company was, Mr Ramani said that the telecom-networking sector was the worst hit, which in turn affected the company. ``We had a flat year in terms of revenue growth, and hope to see some more traction early next year,'' he added.

Mr Ramani said that client-companies have reduced their investment in R&D. Further, feature enrichment for a piece of equipment was done only when a client asked for it. While most vendor-companies have cut down their expenditure on R&D, and sales and marketing, as part of a cost reduction measure, Future Software had increased its R&D investment to about 14 per cent of the total revenue from nine per cent, he added.

Further, it had hiked salaries by 33 per cent to its 550 employees — the company reduces two to three per cent of the non-performers, and replaces that number with fresh candidates every year.

``Last year we could not give the raise. But, this year we managed to give a raise, as we see revival happening,'' he said. Last year, the company was leveraging its IPR business, he added.

According to Mr Ramani, the increased investment on R&D would facilitate the company to be ready to take on the demand from the IT companies when there was a turnaround. The time-to-market after the turnaround would be short. Investment in sales and marketing, R&D and IPR would help the firm during the IT turnaround, he added.

On the China experience - Future Software was one of the first Indian companies to have a centre in China - Mr Ramani said, China was a complex country. Further, the clients there ask for projects for as low as $1,400 per person per month (at 170 hours per month), which was below cost.

The zero-debt company, provider of communication software services and solutions, anticipates 10 per cent revenue growth in 2002-03, over the previous year.

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