Evolving For Sustenance

For a first generation technocrat, it has not been an easy journey. But
today, Vinayak Apte, CEO, Microline India can look back in satisfaction and say
that he had made the right decision by taking the plunge into the IT industry at
a time when it was beginning to spread its roots in the country.

Vinayak's father was a Central government employee. He was a happy man,
when his son graduated from the College of Engineering in 1983 and found a job
for himself as a service engineer at CDSS (Cummins Diesel Sales & Service).

Five years later, Vinayak took the plunge and joined Computer Point 'the
first retail chain of computer showrooms in India'. Computer Point was
building up a presence in Pune and Vinayak became its first employee. "It
was a major shift for me. As a service engineer selling diesel engines, I opted
for a complete change of career. My extensive work on computers at CDSS helped
tremendously," he recollects. Vinayak joined as a sales engineer at
Computer Point and was promoted as the sales manager by the year 1990.

PURSUING HIS DREAMS

"I always had this dream at the back of my mind to do something of my
own. I had no background in business. My parents and wife stiffly opposed my
decision, thanks to the typical middle-class mentality. But I persevered,"
says Vinayak.

Microline came into existence in 1990 with four young men - Vinayak and his
colleagues at Computer Point - Deepak Garg, T Shankar and Ashish Panchvarde
deciding to build their dreams. The four partners put in an investment of Rs 3
lakh obtaining the dealership of TVS Electronics and Sterling Computers. This
was the time when computer literacy was low. There were no MNC brands in India.
Was the going tough? "On the contrary, it was much easier then. We were
young and enthusiastic. Computer literacy was low. Although the volumes were
low, the margins were high," he explains. During the first year of
operations, Microline reported a turnover of Rs 15 lakh.

The journey was pretty smooth until 1996 when Microline decided to change it's
positioning. The market was crowded with a number of players in the same space.
Naturally, the margins got lower."We then decided to reposition ourselves
as system integrators. This also got us out of mere box pushing," recalls
Vinayak. A three-day road show called ML94 organized by Microline saw more than
10,000 visitors. Major projects started rolling in. Tata Honeywell was among the
biggest placing an order of Rs 80 lakh. Kalyani Sharp and Bakau Wolf (now Krupp
Industries) were among the others. This was also the time when the partners
divested and Microline came under the total control of Vinayak becoming a
private limited company.

CHANGING TRACKS

A niche created by another company Gateway Systems in the area of network
integration during this period saw Microline change track again and develop the
services business. "Not many players were in this space then. We decided to
fill this gap as service providers and began acquiring customers," says he.
Soon the company ended up with more than 20 SLAs (service level agreements) with
majors such as the Tata group of companies, Kirloskar Oil Engines, L & T,
John Deere and the Emerson group among others.

Two years ago, Microline also ventured into product development, developing
three applications for PDAs, a homegrown ERP system with modules for materials
management, sales force automation, service monitoring, payroll and HR
components. Eight customers are currently using the ERP system. But Apte is not
happy with the response. "Customers simply do not want to pay for software.
There is a tremendous amount of need in the market for these products. However,
barring Tally none of the other Indian products have done well in the domestic
market. This is due to the pricing factor. Customers expect good packages in Rs
500 without realizing the hard work that has gone into the development of the
product. More than 200 man-months have gone into the development of these
products," he argues. Apte has not lost hope. He firmly believes that the
product business is waiting to explode and he would then be in a position to
capitalize on the work done by Microline.

THE ROAD AHEAD

The market is ever changing. Pricing has become a major deciding factor for
most companies. The hype over IT industry notwithstanding, most companies are
going in for cost-cutting exercises. Taking this into account, last year,
Microline went in for another re-positioning exercise - this time as a service
company and consultancy organization. "We have just completed a major order
for the Maharashtra Pollution Control Board (MPCB) for a complete system study,
designing the software, system network and building the IT roadmap for the
organization," he explains.

EYE-CATCHING ACTION

Increasing competition forced them to start SI activities Slowly ventured in software product development and services To focus on consultancy and services in the next five years

"Our strategy is to go back to our old customers and offer a value
proposition in terms of voice, data and video. We are also talking about storage
technologies," says Vinayak. Microline is also venturing into C-class
cities outside Pune with the conventional line of business. The company has
built up alliances with IBM, Cisco, CA, Microsoft and Avaya. "I have never
believed in falling prey to rewards offered by principals. MNCs have never
looked at the benefits for the channel. I do not remember a single principal
asking me if I was making profits and if I needed any help," he says. The
IT industry tag does not help either. Potential employees walk in with high
expectations expecting similar benefits offered by the software industry.
Vinayak believes that the hardware industry should not be clubbed with the
software sector. "Position it as the digital electronics industry. MAIT and
NASSCOM should make special efforts in this regard," he feels.

The next five years should see Microline positioning itself as a consulting
and service company. The topline growth may not be spectacular, but the
profitability is expected to become healthier.

NANADA KASABE