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July 17, 2000


The Rediff Business Interview/Toleti Raj

'Indian Net firms are highly innovative'

Toleti Raj, president and chief executive officer, Cytura CorporationCytura Corporation, formerly Planet X Software, based in Orlando, Florida, is led by Toleti Raj, 33, president and chief executive officer, an Indian computer professional who now wants a piece of the Great Indian Infotech Pie.

Email this interview to a friend Cytura Corporation has picked up a 35 per cent stake in a new joint venture called Gayatri Interactive Limited which is based in Hyderabad, Andhra Pradesh. The remaining 65 per cent is held by Gayatri Digisoft Technologies Limited, a unit of the Rs 10 billion Gayatri Group, promoted by Thikkavarapu Subbarami Reddy, Lok Sabha member representing Visakhapatnam, industrialist, philanthropist and film industry luminary.

Gayatri Interactive will deliver high-end research and development services to support Cytura's portal software products in India. "Companies who want to launch portals can now hope to do it at reduced costs," says Raj. "There is an immense business potential in India for our products. We foresee an exponential growth in the number of Net companies."

Cytura Corporation, a privately held company, provides XML-powered e-business applications, infrastructure tools and related value-added services for the automated creation, deployment and management of content-rich, e-commerce-enabled Web portals (XML = Xtended Mark-up Language). Healthcare, media and other content-driven companies use Cytura's services.

According to a Cytura statement, Raj, who graduated in mechanical engineering, did his masters in information technology from the University of Central Florida. He has held senior technical management positions with Microsoft, Avio International Corporation, and the Embassy Group.

As a Microsoft Healthcare Consultant, he won the Excellence Award for 1998 among the Industry Practices of Microsoft Corporation. At Avio, a developer of Physician Practice Management Systems, he developed the first three-tier Windows-based application running under Microsoft Transaction Server in the healthcare industry. At Embassy Group, his team brought the best-of-breed medical claims review product to market.

Y Siva Sankar spoke to Raj during the launch of the joint venture in Bombay. Excerpts from the interview:

Your company officials are reluctant to part with business projections. Your business in India seems to be driven primarily by the hope that there is immense potential in the future. Have you researched the market?

Toleti Raj, president and chief executive officer, Cytura CorporationWe quantify and solidify some of the business models. It is actually a very quantified model because it is very sustainable. We have grown using this model outside India. Within the country, it is matter of how large we can stay.

Do you think the growing Net economy in India is on the right course?

There definitely is a lot of innovation, which is significant. There is a lot of value in the long term. The companies are on the right track as far as reducing risks and costs, associated with building these businesses, are concerned. I'm impressed by their ability to adopt and adapt to e-business quickly. I feel they are keen on building sustainability in the long term.

Which feature of India's Net companies impresses you the most?


Please elaborate.

Companies here innovate quickly. More than innovation, what strikes me is the ability to quickly come up and turn a concept, and adopt it into a business solution, and then take it for a road test, if you will. What we feel is that there is still some sustenance in the business models that need to be still proven.

One way to build a business is to build with sustainable value proposition. And I think having a framework to think that through, will help the e-business owners to better manage and deploy their e-businesses. So I think that is the gap, and we would like to address the gap.

You say you are impressed with Indian companies' ability to innovate. You are based in the US. Are Indian companies ahead of their US counterparts in terms of innovation?

It is not like comparing apples to apples. If I were to compare Indian economy to any other economy in the same scale, then, absolutely, India would come out with flying colours in terms of innovation. But the resources available in the US are just… it is a paradigm shift. So it is not right of me to compare India against the US.

The US is definitely in the lead.

Foreign investors often complain of red-tape, bureaucratic hurdles, etc, in India. What has been your experience? Did you encounter trouble from governmental agencies?

We have helped our own cause by picking a partner who can build infrastructure quickly, a partner who has an existing infrastructure. So the answer to your question is, no.

No hurdles? Has this come as a surprise for you?

Yes! Actually, back in the community, there is always a good feedback today about the infrastructure back here, at least to start something. Of course, there are always logistics and maintenance that we have to go through. But I am sure you are well aware of what you have to do to run a business.

All the wealthy Non-Resident Indians, who are returning to India as investors, say they want give something back to the Motherland. Is it really love for one's country? Do you think they would invest elsewhere, say China, if it were to offer better prospects?

I think it is more gratification. I would put it that way. For all NRIs, it is more gratifying to build something here. A businessman would treat a business as a business. But at the same time, the soft rewards of investing in India outweigh probably some of the resources that can be acquired elsewhere.

There is a view that Indian infotech companies are getting complacent by excelling at software engineering, that they should now move up the value chain. What do you have to say on this?

I agree. Able Indian companies should attempt to move up the value chain. That is part of this initiative, to truly differentiate ourselves because it takes us to the next level. Our task is to provide value proposition through intellectual property that is going to be built here. That is the motive behind this joint venture. And this joint venture, in turn, can help the system integrators to truly become the next generation e-business software service providers. So it is all an effort to take, hopefully, the big picture to the next level.

Your business is primarily targeted at portals. What do you think are the prospects of the Indian market?

The market is pretty strong. For a tools provider, that is very good. So we are actually selling the tools in a rush. From that perspective, it is an area, a market-space, which is very active compared to other market-spaces around the globe. That is the initial feedback that I've got.

The second thing is, key vertical industries, whether it is pharmaceutical distribution on a global scale -- this is something that would really give us an edge because we build e-commerce solutions on a very large scale… like Priority Healthcare which is working with US Healthcare….their transactions are pretty significant. So if you have to take that transaction engine, if you will, and apply it to other markets around the globe, it is going to be a lot of value proposition in a very quick timeframe.

All said and done, your business is media-related…

I think, every e-business is media-related….

There is this theory about the early mover advantage in media business. How would you square up against the early movers in India? How will you maintain your lead?

We are definitely the first portal software company that is vertical industry-specific. There is no commerce management engine specific for healthcare today, there is none out there. We partner up with largest system vendors like the print media. So we have channels that are established in key verticals that will penetrate the market very rapidly. That would give us the dominance in the short term. But the value proposition of our tool sets and the strategies that actually take it to the next level…. the lead is going to be there….and this market -- it is quantified in our business that we have been conducting for the last couple of years -- is just starting.

You have got a $14-billion market out there in the US alone. All the tool providers together… all their revenues put together are less than a few hundred million dollars, less than $500 million or so. That gives you a kind of a yardstick, if you will, to measure the potential of e-business software tools requirement.

In the context of the Internet, there are conflicting views on the future of personal computers. Experts talk of wireless technologies, PC becoming outdated, obsolete and so on.…

When we are building a Web site, that Web site can be a wireless community, a broadband community. It is entirely browser-based and the applications and the functions that you see in the tool sets can be on any device. At the end of the day, basically as the transition happens to newer and newer modes of communication, the technologies are adaptable in multiple languages to deliver those functions in those mediums.

What is the kind of turnover you are looking at in India two years from now?

That is a tough question to answer because we will give you the quantification in the next two weeks. But let me give you a perspective, like, our business in the next fiscal year is estimated to be at least $50 million. If you look at the scales of economy, if you look at the US market and take a percentage of that as that of the Asian market… so it will be in that range.

What has been your experience as an Indian professional in the US?

It has been memorable. It has been stressful. It has been very gratifying. Indian professionals are more and more very well received. I think what the community has done in building a reputation…we all need to be proud of what we have done outside India. That is pretty significant.

Do you want to come back to India?



Because… I'd like to come back to India. Probably I would feel more at home here.

I mean, is it because of the glamour of the Net economy in India that you want to come back?


Why is this so-called reverse brain-drain happening?

It is more gratifying for professionals to be recognised here than there. That is what is probably driving NRIs back home. And also it is a way to build the economy, in fact bringing something back here which is what we are all passionate about, because we are all very proud of where we come from (India).

Even if it does not make much business sense….?

Yes. You say "much business sense". I think that is where the key lies. Does it make business sense or not is the first question. And how much, is the next question. So if it makes business sense, I think the probability of an entrepreneur coming back is quite high, even though the scales are not as huge as abroad.

Not very long back, people thought the hardware segment suffered because of governmental intervention. Do you think the Indian government should play a proactive role in promoting the software industry?

The industry is very young today. It probably needs some time to get to a steady state, if you will, especially in the e-business market. Obviously, the systems integrators market is very well quantified. There will be policies and regulations that need to be adapted and adopted. But there has got to be a good balance rather than a hands-off policy.

The natural ultimate destination for career-minded Indian infotech professionals seems to be the US, and, of late, Germany and Japan. At this rate, won't foreign infotech companies coming to India for business find local talent hard to spot and recruit?

I am seeing more engineers coming back. Actually, most of the engineers working for Gayatri Interactive are the ones who have come back to India. I don't know if the proportion of those going out and those coming in will match. But, at the end of the day, if you look at the value proposition of the people who went abroad and what they are bringing back to India as a whole, you will realise India will be well off. If we can strike a good balance, that will probably be the best scenario.

Are there any Indian companies or entrepreneurs who have impressed you in recent times with their performance and business practices?

Indian infotech industry is full of very impressive companies. As an entrepreneur, I really commend all other entrepreneurs who have actually built these world class businesses. They are all my favourites, there is no particular one. I'd be doing a grave injustice if I pick one.

Indian professionals bound for the US are often apprehensive of racism. What has been your experience there?

I think I have been very well received in the first venture I started. I've worked with some of the largest corporations like Microsoft. They have rewarded me well for what I have given to them. Even during the course of starting Cytura, there was significant community help. So I feel that the US is still the Land of Opportunity, very much so.

Which makes a better ultimate destination for an Indian infotech professional -- India or the US?

In terms of professional growth and technology adoption, the gap is narrowing very fast. But it is actually a question of resources available, lifestyle, public conveniences, culture, corporate systems and things like that. So it depends on what the professional is looking at.



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