7 CMS COMPUTERS LTD:Going Steady With Integration

CMS grossed an annual turnover of Rs 317 crore, at a growth rate of 18 percent for 1999-00 and agency revenue contributed Rs 150 crore. This period also saw patterns similar to those in the previous year, reflecting the company’s inability to capitalize on opportunities thrown up by e-commerce and ISPs.

During 1998-99, CMS registered a growth of 25 percent, touching Rs 268.50 crore, despite the fact that it had set itself a growth target of 50 per cent. The reason for this lack of growth was because the company had failed to capitalize on the ISP and e-commerce businesses, almost exactly like it failed during 1999-00.

This year, CMS sold Compaq-related products worth Rs 39 crore and earned 90 percent of its revenues from the domestic market — Rs 285 crore — which was not much, compared to the 1998-99 figure. Systems contributed 36 percent to the turnover, notching Rs 114 crore against Rs 109 crore in 1998-99. Networking raked in Rs 59 crore of the overall revenue. The peripherals segment too saw a decline — from Rs 46 crore in 1998-99 to Rs 40 crore during the last fiscal.

CMS continues to be a systems integrator as well as a third-party maintenance company. Its skills in platforms like AS/400 make it an able partner for clients going in for complex systems. These skills have placed CMS as a strategic channel partner for server companies like IBM and Compaq. The company’s fortunes began picking up after tie-ups with Compaq for servers, 3Com for networking products and JD Edwards for ERP solutions. The company is now a multi-vendor integration company delivering end-to-end solutions.

CMS’ systems integration strength lies in its ability to handle different computing platforms, multiple vendors, and source people who can deliver such services. The integration client base has also been shifting rapidly for the company. Earlier, if it was the traffic system, now it is telecom, banking and finance, and manufacturing. The manufacturing segment is picking up due to ERP implementation.

It supports desktops, servers and networks and maintains more that 30,000 machines of its brands, providing 24-hour logistics facilities, phone and field support. Some of its customers include ABN-Amro, Citibank, Philips, Housing Development Finance Corp, National Stock Exchange, Reliance Bank of America and Wipro. With its expertise in supporting clients in heterogeneous environments in a cost-effective manner, CMS plans to dominate those markets.

CMS offered systems and network integration services for telecom, banking, manufacturing and service industries. These included Internet and intranet infrastructure, ERP, banking automation, mail and messaging systems, and infrastructure management solutions.

The company, which is among the top 10 solutions providers, is aiming for the top slot in the next couple of years. However, this could possibly be achieved only if it succeeds in tapping both the e-commerce and ISP businesses. Smart cards is another area which CMS could use to garner business, especially from banks, since it was part of the SMARS project.