Do It For Me Analytics: Anil Kaul, CEO of Absolutdata (Part 5)

Sramana Mitra: All your core customers today are based on your Mckinsey network essentially.

Anil Kaul: Not anymore.

Sramana Mitra: But that’s how it got developed.

Anil Kaul: In the beginning.

Sramana Mitra: Talk to me about the business dynamics. Typically, outsourcing companies have a certain model. There’s a certain profitability structure. They are not as profitable as a product company would be just because products get built once and sold many times. Even though it takes more investment to build a product company, once it starts to scale, it provides a better profitability structure.

What are the profitability dynamics of your business? I sense it’s a bit different from a regular outsourcing services company, isn’t it?

Anil Kaul: Yes. In terms of profitability, we’re in the middle of a typical services business and a typical product business. We are not as profitable as a product business, but we are certainly more profitable than a typical services business.

Sramana Mitra: Where are you in terms of revenue now?

Anil Kaul: We are somewhere between $15 million to $20 million right now.

Sramana Mitra: So $15 million to $20 million and your profitability is better than outsourcing services but not as high as a product company?

Anil Kaul: Exactly.

Sramana Mitra: What’s the next stage? What’s the next level of growth?

Anil Kaul: The next stage is where we actually have started building products, though in a very different way than a traditional product company. Let me explain what I mean by that. A traditional product company builds a software that it delivers to its customers and lets the customers use the software. What we are building is products that we deliver to a customer and a customer uses like a traditional software but behind the scenes, we still have a services piece that enables that usage. It’s a services-enabled platform that we built.

The reason for doing that is we realized that you can’t use a software-only product particularly when it comes to making the kinds of decisions that we work with our clients. You still need a combination of software and human intervention to be able to make those decisions in the most optimal way. We provide that ongoing support as well.

Sramana Mitra: If I’m hearing you right, there’s a trend right now in the market. I believe this trend is going to go up. It’s what I call SaaS-enabled business process outsourcing where you have software and technology, but the customers are not running these software. They are being run by experts from a different company who are actually outsourcing that entire business process and addressing whatever problems they’re addressing.

This segment is part 5 in the series : Do It For Me Analytics: Anil Kaul, CEO of Absolutdata
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