Being sunday most of the day is generally spent with friends or researching new business ideas. While trying to create a matrix for the organization to analyze product offerings vs market capitilization. Remembered about and 100 crore IPO of an organization called Accel Frontline. Though their offering was decent keeping in mind valuation 16 times their revenues, the objectives which they wanted to achieve kept most of big fund players away from it. Their 85% business at time of going to IPO if i remember right was comming from IT infrastructure services which is going good keeping in mind more computers more networking are getting installed which means more business for them. Though the money was being asked for creating sales infrastructure and to decrease dependency on IT insfrastructure services with increasing more focus on Enterprise solutions. Primarly the areas their software offerings are targeting : Education and Health. These two are one of the most crowded product offering with no organizations ability to establish clear leadership. Educomp again is targeting a single segment which does not come in direct competition with accel frontline offerings and they are riding high on government program implementation at school level. Though the stock is currently at time of writing this way above the IPO price company has yet to show sign of maturity and the news recently in market talked about their plans to acquire product IP in banking solutions sector.
Cyberica has been offering Education Sector Services since 2001 but after years of working with indian universities and colleges we would like to share bringing in new client is not so easy in this sector. Problems faced
– Lack of Initative
– People feel website/student portal is just about few HTML pages which can be done by the Computer operator or college students
– 60% of colleges in india are offering technical education hence more the reason not to bring in outside vendor as they feel faculty should be self sufficent
– number of holidays outnumber working days in a year
– unability to differentiate among vendor qualities and price a pressure point.
This leaves most of the companies with not more than 10-15 implementation of a product at universities/colleges. getting back to accel frontline if they are changing focus from their core product offerings they should bring in research and development wing which does not have lot of mention on their website. As currently the company shows lack of management to analyze which sector will be more fruitful for them and trying to keep infrastructure focus on anything and everything which comes their way. This may be good when an organization is like 20-30 people but once you grow in size and revenues it becomes essential to be clear on engagements and offerings. Idea of this post is not to discourage people to invest in Accel frontline but for those people who are invested in stock to hold on for some time before taking decision on getting out of stock. By entering Infrastructure management services company has proven ability to bring in new market offerings and capitalize lets see if external product IP can help them change their fortunes from software services.