Deal Radar 2009: Orangescape

By Guest Author Shailesh Otari

Orangescape is a platform-as-a-service (PaaS) company from India that facilitates business application development. Orangescape is essentially a production environment that allows techno-functional experts to convert their ideas into business applications and take them to market. The platform is provided through a cloud offering and caters to the needs of both entrepreneurs and enterprises. The public cloud offering is for entrepreneurs who are functional experts in a business domain and want to develop their ideas. Orangescape helps them to build, test, and launch their applications free and charges a percentage of their revenues when they go live. The private cloud offering is for enterprises who want to build specific applications.

The Orangescape rule engine provides a spreadsheet-like environment that can be used to model specific business behaviors that can be deployed as Web-based business applications. Working at product engineering at HP, Suresh Sambandam and Mani Doraisamy, co-founders of Orangescape, built end-to-end business applications using rule engines. While working with one of their insurance clients, they realized the power of spreadsheets as they saw that the entire underwriting system for this large health insurance provider worked perfectly on them. “There are powerful capabilities that spreadsheets have that a normal programming paradigm doesn’t have,” said Sambandam. This got the two thinking, and Orangescape was founded in 2003. Establishing a platform in those days was a capital-intensive undertaking, and Orangescape initially struggled. Orangescape thought of a centralized, large-scale adoption model and jumped right in once the concept of the cloud came along. “When we started, we had to explain a lot to customers. PaaS got defined clearly in last year. Azure and Salesforce established the concept. We are benefited by these companies spreading awareness,” said Sambandam.

Although it has faced a lot of challenges, Orangescape enjoyed first-mover advantage. It got early traction via a Chennai manufacturing firm for which it built an HR application. Moving from one client to another, Orangescape slowly established itself. Growth was slow because PaaS was a new concept and posed unique challenges to the company. Trying to keep the costs low, the company focused solely on India. Orangescape managed to survive the first year and has been cash flow positive for the past three years. Current clients include Pfizer, AstraZeneca, and Citibank, and Orangescape generates 95% of revenues from private offerings. The company reached $1 million in revenues in 2009 and its co-founders are hopeful that it can scale up further in 2010.

Since building and maintaining the platform is complex and requires a rules engine background, product management is handled by the co-founders. A team was built for marketing, but actual sales happen through partners such as Wipro. Although it is a small company of only 50 people, Orangescape believes that acquiring the right talent is key, and so they pay market salaries to all employees. Aiming to become the largest product company in India, Orangescape is aligning with Google apps and IBM stacks to grow faster in both its public and private cloud offerings.

An active contributor to entrepreneurship movement in India, Sambandam is deeply involved in organizations such as The Indus Entrepreneurs (TiE), Proto.in and the Open Coffee Club in Chennai. Although he applauds the entry of more VC funding, he is working with NASSCOM to channel more funds into early- and seed-stage companies. “We want to build [a] Silicon Valley in India,” he says optimistically.

A note from Sramana to readers: Readers, I would like to hear from you if you are an Indian startup and have hit the $1 million milestone. Please email Shailesh Otari [shaileshotari.mba AT gmail.com] with your information. Shailesh is working with me with a specific focus on Indian startups.

This segment is a part in the series : Deal Radar 2009