India’s Earliest Product Entrepreneur: FACT CEO Arvind Agarwalla (Part 6)

Sramana: Have you lost clients to the companies that offer an SaaS model?

Arvind Agarwalla: We have not lost any clients to the public cloud. We offer our clients a private cloud option. We allow our clients to determine what kind of security they want. They allow what branches they want to connect to the system and how to secure them, via VPN or placement of firewalls.

Sramana: In your market geographies, the public cloud has not become a major issue yet. I think the public cloud is still a phenomenon in the West.

Arvind Agarwalla: It is a phenomena in the West. I would still like to see some numbers that show how many Western companies with over $5 million in revenue are going to the public cloud, where they have no control over the security aspect.

Sramana: What are some of the other strategic moves in your company’s history?

Arvind Agarwalla: We used to support our current version of software as well as the two versions prior to the current release. In 2001 we decided to only support the current version. Supporting two outdated versions caused us a lot of problems. When someone found a bug in the oldest supported version, we would then have to go and fix that bug in three versions of the software. We made a bold decision to support only the current version to optimize our operations. It was not a popular decision, and we faced a lot of customer backlash.

We also used to maintain two versions of the software. We had a DOS version and a Windows version. We had thousands of users on the Windows version and far fewer on the DOS version. Microsoft would not support the DOS version, but our customers where not willing to move. We made another bold decision to move to a Windows-only version.

Sramana: What has been your strategy in terms of financing? Have you organically built the company after your initial investment period?

Arvind Agarwalla: When we were in India, we had a partner in Singapore who used to buy stock from us. He would get bank financing on our stock. When I went and spoke with my bank to establish a line of credit, they told me it would not be possible. I could not understand why a bank in Singapore would provide financing, but one in India would not. It seems that at that time there were no product norms for financing.

Ever since we started the company, we have managed to grow organically. Once you have recovered the operating cost of a month, it is possible to earn enough money to make the necessary investments. We have never had a financing issue. Our challenge to growth has been human resources. If we were to open a new office today, I could write the check for that office very easily. However, I would need to send two key people to open that office. I would need a head of sales and a head of support. These people need to come from the head office. That is our challenge.

This segment is part 6 in the series : India's Earliest Product Entrepreneur: FACT CEO Arvind Agarwalla
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