Hemal Patel Living Out Of A Suitcase

A lot has changed since Hemal Patel migrated to the US for his IT
business, 25 years ago. But one thing has remained unchanged. Every fortnight,
while traveling to US and back, he still carries a suitcase filled with food,
toiletries and other things from his wife for relatives in Ahmedabad and vice
versa

Hemal Patel has spent half his life in India and the other half in the US. He
migrated to the States with a dream to make it big. Today he feels he has
achieved his dream. Currently, he is the CEO of Ahmedabad-based Elitecore
Technologies, a company worth Rs 35 crore. And this is just one of his various
business roles.

After graduating in electronics, Patel took an advanced computing course from
the Stanford University. He then worked with AT&T as a consultant for designing
large and new technologies for seven key financial firms. Close interaction with
financial companies helped him gain an insight on how to manage a business
house, fiscally.

It also gave him a leg up in ensuring good cash flow when he decided to cash
in on and become a 50 percent stakeholder in Eclipse Micro Computers. “We were
into systems integration business and I played the role more of a network
engineer because that is where my forte lay. But over a period of time, I
brought in more consultants on board to help us better sell our offerings,”
Patel recalled.

From SI to ISP

In 1995, the Internet popularity started sprouting in the US. Patel realized
that this was the right time to get into the Net service-providing mode and thus
started a company called IceNet in Puerto Rico. This initiative taught him some
really tough lessons.

“Selling service packages means that one has to be broad-based
geographically. Also, the marketing and sales strategy should also be well
aligned before starting an ISP venture,” he reminisced. IceNet suffered because
the billing solutions it was using was unable to handle the varied need of
customers. “There was a need to have an entirely automated billing solution.
Since we did not have an optimal one in place, there was some revenue leakage,”
informed Patel.

Rather than buckling under this business debacle, Patel worked at learning
from it. In 1998 when India ISP market was deregulated, he set-up IceNet in
Ahmedabad and corrected the mistakes he made in Puerto Rico.

This also signaled the start up of Elitecore Technologies in early 2000. “We
wanted to become a technology-oriented company, since there were very few
companies which were into selling core technologies overseas,” said Patel. The
reason behind his setting up the company in Ahmedabad

was not merely because he hailed from that city. He also shrewdly deduced that
the real-estate prices and cost of resources in Ahmedabad would always be lower
than any of the metros.

Since IceNet had burnt its fingers on billing solutions, the first solution
that Elitecore Technologies decided to design was an ISP billing one, called
Crestel. Shortly, it came out with Cyberoam unified security appliance. As
business grew, Elitecore too grew to its current strength of 280 employees.

“Learning, from past experience I did not want to pass financial controls of
my company to anyone. Till date our balance sheet has never been in red and
this, I feel, is my most important achievement,” Patel claimed.

In the initial years of Elitecore, Patel had approached some venture
capitalists to help him grow. But somewhere along the line he realized that
while helping him out, they might also become nosy and try to fiscally control
him; therefore he decided to rely on raising capital through his own means.

“I gathered some friends who put together the money and took stakes in my
company. But in all these years I have never paid them dividends. Instead I
asked them to let me reinvest the money in the business and they all agreed.
This is why Elitecore today is a Rs 35 crore company,” Patel proudly noted. The
ultimate testimony to his success comes from the fact that now he has venture
capitalists calling him and displaying interest in investing in Elitecore,
rather than the other way around.

Believing in UTM

Currently, Patel is putting every ounce of his business skills into
promoting Cyberoam's offerings. He believes a unified threat management (UTM)
appliance like Cyberoam is ideal for an SMB company. “All my business life, I
was an SMB myself, so I can empathize with the needs of my peer. Most SMBs today
have several security devices but managing them becomes an issue. This is why
UTM appliance is ideal for them in terms of management and return on
investments,” Patel informed.

With an increasing number of companies now operating on a global scale,
compliance to international security standards is also becoming an issue.
“Compliance has compelled companies to think about effective threat management,
which is further pushing the UTM business,” Patel noted.

He is now charting out new paths for Elitecore to grow. He does not rule out
going public in the near future, though no groundwork has been under­taken for
it as yet. In the meantime, he is concentrating on his well-entrenched business
in the US, where he has created a loyal customer base for Cyberoam. “I have
hired four people from rival UTM companies in the US to identify prospective
clients and position Cyberoam effectively,” he added.

Patel manages his work by shuttling between India and the US every fortnight.
His wife and children are used to seeing him only for one-half of a month and
his employees can rest assured he will be in India for the other half.

Living this life is tough, Patel concedes. But he adds that this is vital to
help the company grow. Right now, he has a manufacturing MoU with a Taiwanese
company, but over time he would like to shift the manufacturing base to India.
Till then, he will continue living out of a suitcase and shunt between the two
continents.