Building a Made-in-India ERP Product Company: Ramco CEO Virender Aggarwal (Part 2)

Sramana: How big did that business become? How many customers did it have, and what revenue did it reach?

Virender Aggarwal: We had about 300 to 400 customers in Malaysia with a channel partner alone. In Singapore we had around 25 clients. The HR modules sold very well. The likes of Intel, Seagate, Avaya, and Caterpillar were all using the HR and payroll modules. Nobody else had payroll for that entire region except us. We were able to deliver capabilities that nobody else had.

Sramana: So, in Asia your key differentiator was a fully integrated payroll system?

Virender Aggarwal: Yes, an integrated payroll system and a modular product. From the very beginning it was designed so that specific modules could be sold and implemented. You could sell financials or you could sell payroll, and the client was not required to purchase the entire solution; they could buy only those elements which they felt were necessary. At that point the product was based entirely on SQL Server and Windows.

Sramana: What kind of revenue did the company reach?

Virender Aggarwal: It was doing about $25 million in revenue. There was another division that was networking. I believe by the time 2000 came around, the company had reached $30 million.

Sramana: What happened in 2000?

Virender Aggarwal: There was the realization that the client–server model we were following was a bit old fashioned. A decision was made to move it to a browser-based product offering. The mistake the company made was to stop selling the product that was selling like hotcakes. They had 800 people deployed in building a browser-based product.

Sramana: They took the other product off the market to build a browser-based product?

Virender Aggarwal: They did not take it entirely off of the market, but they stopped focusing on it. They did not reinvest money into developing it. The product and company were selling very well, but most of the effort was spent on the new version. The company went in for an IPO in 2000, and in 2002 the stocked crashed at such low levels. They had abandoned the proven product for an Internet-based product and cashed in the entire company based on that vision.

Sramana: What happened after the IPO?

Virender Aggarwal: They spent 2003 hiring some very expensive people all over the world. The rapid expansion was making money evaporate. The company started to stagnate at around $45 million in revenue. That is the story of the company until now.

This segment is part 2 in the series : Building a Made-in-India ERP Product Company: Ramco CEO Virender Aggarwal
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